Careless Talk Costs Money

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Careless talk costs money

Careless Talk Costs Lives, went the World War II poster.

It can also cost money – just ask Credit Suisse.

Last week the bank was clearly floundering, but not yet dead. What it needed was unequivocal backing from a serious investor, preferably not the government.

Instead, when Saudi National Bank (SNB) chairman Ammar Al Khudairy was asked if it would increase its stake in Credit Suisse on Wednesday last week, he replied: “Absolutely not”.

And that was pretty much that.

We can’t be sure if Credit Suisse would have got through had Al Khudairy said nothing, or something else.

But it seems to me it had a fighting chance.

As others have pointed out, SNB “shot itself in the foot”, since it was among those with much to lose.

To his credit, Al Khudairy gave an honest answer. He told the truth and plainly had not just emerged from a media training session designed to find any evidence of humanity and remove it.

In hackland we prefer his approach.

But there’s no denying the world might look a bit different had he merely mumbled “we’ll see”, or “we’ll rule nothing out”. That isn’t exactly an endorsement, but it is better than what he did say.

During the last financial crisis I recall flaks getting cross about what they saw as reckless reporting. Us saying so-and-so was in trouble, immediately meant that they probably now were.

I think we mostly got it right. But none of us had seen the like, and everyone was winging it.

This time there’s definitely a case for hacks to be cautious and bankers to say as little as possible.

Press release of the day

The first two months of this year have produced the lowest number of residential property transactions since April 2020 when the UK was in Lockdown, says leading advisory firm Blick Rothenberg.

This is “evidence of the destruction wrought by Liz Truss and Kwasi Kwarteng financial mismanagement. Mortgage rates shot up and households lost all confidence in their ability to fund a monthly budget that included mortgage payments increasing exponentially”.

Stories that will keep rolling

1) Has the Fed got interest rates all wrong? Should Jerome Powell go?

2) Do our inflation figs give the Bank of England any wiggle room?

3) Which sectors are going to see the most job cuts in the end? Banks?

4) What blockbuster has Bloomsbury got up its sleeve?


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