Credit Suisse feels the sting of betrayal

Plus: Covid strategies and SVB aftermath. [Bloomberg]( Follow Us [Get the newsletter]( sThis is Bloomberg Opinion Today, a massive leak of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - [Credit Suisse]( is pure chaos. - The best [pandemic strategies](, ranked. - America [gives Europe]( billions. With Friends Like These … Friends can be so cruel sometimes. Even, or maybe especially, if they're just work friends. Say you have an office buddy, let's call him Johnny, who's been really down lately. So you go to Johnny's work BFF, who's sat in the desk across from Johnny for [167 years](, and say, “Hey, let’s take Johnny to lunch!" And he says, “[Absolutely not](, for many reasons outside the simplest reason.” You might think: What in the —?! What's wrong with Johnny’s friend? If you’re confused, let me help you out. Johnny is Credit Suisse. And his work friend is the chairman of Saudi National Bank — aka Credit Suisse’s biggest shareholder, who[told Bloomberg Television]( that he was “absolutely not” open to further injections if there was a call for more funds. Matt Levine’s [reaction says it all](: “Why would you just go around saying ‘hey FYI if Credit Suisse needs to raise equity, it won’t have us as a buyer’? Not helpful!” Now, Credit Suisse is feeling [the impact of betrayal](: The stock dropped as much as 30% today — a record low. At one point, it was worth less than 2 Swiss francs ($2.17), which, in this economy, wouldn’t even buy you a stick of gum. In the wake of Silicon Valley Bank’s collapse, investors are feeling oh so delicate and vulnerable. Everyone’s on high alert, sussing out any and every bank that smells even slightly rotten. “They are worried about deposit flight and the pain caused by rising rates. And Credit Suisse is at the top of the list of banks to bet against,” Paul J. Davies writes. You see, this isn’t Credit Suisse’s first [PR nightmare]( rodeo. It’s had to deal with a swath of sandals, from [money-laundering drug dealers]( in Bulgaria to a [massive leak of client data]( to the media. And these mishaps have already caused many clients to flee: The irony here is that Credit Suisse, for all its imperfections, is actually a relatively well-rounded, responsible bank that would be good lunch company, especially compared to a delinquent like SVB. When all those people started fleeing late last year, the bank was smart and rebuilt its cushion to protect against more withdrawals. “More than half of those liquid assets are plain cash,” Paul writes. Which means that even if deposits start getting yanked, the bank might be able to weather substantial bouts of turbulence because its balance sheet is in much better shape than SVB’s. But clients and investors actually need to trust that that’s the case, otherwise things could go downhill faster than [Pirmin Zurbriggen](. Relationships are all about trust! Duh. Read [the whole thing](. Bonus Bank Reading: - There has got to be a better way to do these [government bailouts](. — Bloomberg’s editorial board - Expanding the Fed’s oversight is going to take a minute. But there might be [a simpler way]( to spot the next SVB. — Shuli Ren - After a banking crisis like this, the Fed is going to have to walk [a teeny, tiny tightrope]( to tackle inflation. — John Authers Covid Strategy Session The weekend before Saint Patrick’s Day in 2020 was beyond weird. I was sitting in my apartment in New York, hoarding cans of cannellini beans, wondering whether the bridges and tunnels were about to close. Meanwhile, some of my friends in Chicago were celebrating, wearing shamrock beads and drinking green beer (as evidenced by Instagram). We were on the precipice of a global pandemic, but on social media, not much seemed amiss. Yet. At that point, pandemic protocol was nonexistent. There were no mask mandates. No Lysol wipes. No knowledge about whether Covid-19 was airborne or not. But in the following weeks, months and, eventually, years, various nations issued a variety of restrictions and policies, to varying degrees of intensity. Three years later, can we say we learned anything? This [bubble chart evaluating excess deaths]( from Elaine He offers some clues: On one end of the spectrum, there is [New Zealand,]( which pursued some of the tightest lockdown measures in the world, David Fickling writes. Of course, such measures had consequences: a tumbling economy, soaring government debt and a dried-out tourism industry. But it saved so many lives. Astonishingly, Kiwis managed to skip their usual flu season altogether, which netted them fewer deaths than normal: On the opposite end, there is [Mexico](, which Eduardo Porter says “got walloped” and then some. When a deadly virus collides with “a decaying public health system, little in the way of a social safety net, and a penny-pinching president bent on dismantling a state he deems irretrievably corrupt,” everything that can and will go wrong … goes wrong: Smack dab in the middle, there is the [United Kingdom]( and the [United States](. Therese Raphael says the UK had a lot of things going for it: “It was the first country in the world to approve an mRNA Covid vaccine for emergency use and had one of the fastest rollouts in the world,” she writes. But Boris Johnson fumbled the first lockdown, and the “test-and-trace” system was a confusing mess that set the nation back by £37 billion. The US, for all its wealth and resources, failed majorly. The nation suffered far more deaths per capita than other developed nations, and a large number of those deaths occurred after vaccines were made available. “The vaccine was free, but many unvaccinated people died because they didn’t trust the public health system,” Faye Flam writes. Feel free to put this chart in your [Marjorie Taylor Greene Was Wrong]( evidence pile: To learn more about [which strategies worked best](, check out these countries: - “[Singapore]( showed that deciding when to end successful restrictions is never an obvious call.” — Daniel Moss - “[Sweden]( proved that shoring up wealth, health and social infrastructure before an outbreak can significantly lower the human cost of pursuing a more relaxed strategy.” — Andreas Kluth - “[South Africa]( trusted wealthy nations to fulfill their vaccine promises — and paid dearly when they didn’t.” — Lisa Jarvis Telltale Chart The US is emptying boatloads of cash into its effort to address climate change ($369 billion, to be exact). Instead of trying to top that bill, Chris Bryant argues, [Europe should welcome that kind of cash](: Further Reading Meta layoffs are a serious case of [corporate whiplash](. — Beth Kowitt and Parmy Olson You could be making [the same mistake]( as SVB with your 401(k). — Allison Schrager Smaller banks are about to launch [a bidding war for depositors](. Watch out for traps. — Alexis Leondis Please keep your [“anti-woke” legislation]( as far away from my pension as humanly possible. — Aaron Brown Jeremy Hunt is giving us all a [masterclass in minimalism](. — Marcus Ashworth In the [world of farming](, bigger is not always better. — Amanda Little The [Nord Stream sabotage mystery]( is putting undersea infrastructure at risk. — Leonid Bershidsky Honeywell’s [new CEO]( is all over the place. — Brooke Sutherland ICYMI A Chinese billionaire’s [billion-dollar fraud](. A member of [Japan’s parliament]( never showed up. A US drone [crashed]( in the Black Sea. A sea change for [seaweed](. Kickers America’s new [favorite dog breed](. Your [heartbeat]( may shape time itself. A tale of [two translators](. AI is bad at writing [Instagram captions](. Notes: Please send superior dog breeds and feedback to Jessica Karl at jkarl9@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Bloomberg Opinion Today newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022