On March 18, 2023, Tom Luongo (@TFL1728) claimed that there is a banking crisis ongoing due to a rivalry between the Federal Reserve Bank (Fed) and the World Economic Forum (WEF). Luongo explained that Credit Suisse (CS) is a strategically significant player, and the support it receives from the Fed is crucial.
The Swiss National Bank (SNB) holds a significant equity portfolio, mainly comprising of US large-cap stocks valued at around $139 billion. Last summer, Luongo faced criticism for suggesting a potential conflict between the Fed and the WEF after the Fed provided billions of dollars in aid to the SNB, which in turn supported Credit Suisse (CS). This occurred around the same time as Blackrock's influence on the Bank of England, resulting in the replacement of Prime Minister Liz Truss with Davos-affiliated Rishi Sunak.
Additionally, the two European banking jurisdictions outside of European Central Bank (ECB) control were simultaneously targeted. Since then, CS has faced ongoing attacks, with the latest move occurring while the Fed appeared to weaken Silicon Valley Bank (SIVB) and Signature Bank, indicating a game of move and countermove.
Credit Suisse (CS) is a key driver of the Swiss National Bank's (SNB) monetary policy, much like JP Morgan is for the US. If CS were to face instability, it could trigger a run on the SNB. As the Fed recently caused a surge of instability in the Eurodollar system, the SNB is a crucial partner for the Fed, as they offer critical liquidity to US equities like Apple (AAPL).
Therefore, it's reasonable to assume that the Fed will back CS through the SNB to support US equity markets, as the Fed aims to allow global capital to flow into US stocks, which are viewed as safe havens.
For the WEF, it's crucial to block any potential escape routes from the capital flight triggered by Powell's Bank Term Funding Program (BTFP) and the decision not to bail out Silicon Valley Bank (SIVB). The SNB and CS play significant roles in achieving this goal. Volatility is Davos' primary weapon, and they can increase it by drying up trading volume.
Danielle Booth (@DiMartinoBooth) confirmed this, stating that at least four major banks, including Société Générale SA & Deutsche Bank AG, have put restrictions on their trades involving Credit Suisse Group AG or its securities, according to five sources with direct knowledge of the matter.
If the WEF aims to retaliate against the Fed after being hurt by them, a logical move would be to continue attacking CS. It's likely that the World Economic Forum (WEF) ordered this assault at this moment in time.
It's important to understand that the Fed is willing to pay specific costs to achieve more significant strategic goals. Unfortunately, many individuals fail to grasp this concept and instead react impulsively with baseless accusations like "BACKDOOR QE!" or "IT'S ALL A CLUB!" To fully comprehend the situation, one needs to analyze relationships and incentives.
In conclusion, the Fed will likely continue to support CS as the chess game unfolds. Whether this benefits those outside of the Marriner-Eccles building or Wall St. is uncertain. However, this is the current situation, as explained by Tom Luongo.