Switzerland's biggest bank, UBS, is buying Credit Suisse in an emergency rescue deal, but what makes it significant is that this story is a part of a larger narrative of financial market panic.
Credit Suisse Group AG is a global investment bank and financial services firm founded in Zurich in 1856. UBS will pay more than $3 billion and assume up to $5.4 billion in losses.
The slow demise of Credit Suisse culminating in the merger will not surprise many people. The FT - Clock ticks for Credit Suisse video provides useful background, contextualising it's downfall.
All of this is reminiscent of Lehman's collapse and the Bank of America / Merrill Lynch merger in the financial crisis more than a decade ago. History repeats itself, despite changes in financial regulation and "lessons learned."
What does this mean for the man on the street?
Share prices will continue to fluctuate. The economy is spiralling. Jobs are at risk. More businesses will fail.
This is not a ripple. The collapse of Credit Suisse has vast implications, not to mention impacting the fragile foundation everything sits upon - confidence - which is crumbling.
UBS' involvement stems the tsunami but the rain is coming and it will continue in a bleak and depressing way.
What can individuals do?
Delay major investments. Cash flow is key in these difficult times. Try not to raid the rainy day funds and top up where possible.
Those already struggling should seek help from charities, friends and family. Share your stories with news outlets & social media to put pressure on governments to help with electricity & rising costs, because they aren't doing enough.
Recession
Whether we technically have a recession doesn't matter. Expect revisions to growth forecasts following this Credit Suisse saga. Times will be tough. Be kind and compassionate to others. Realise that this has physical and mental effects on everyone, no matter what their circumstances.
Health and Happiness
In economic downturns, it can be hard to focus on health and happiness. It is probably more important than ever.
The standard food and fitness advice prevails. It's easy to deprioritise and let stress overwhelm us. I highly recommend mindfulness and finding free activities that help you to relax.
Happiness can be found in simple things - a walk, a conversation with someone or listening to your favourite song. Incorporate these into your routine and do something everyday as being happy is a matter of practice, practice and practice.
Wishing you beauty, health and happiness.
C7.
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- What is the secret to happiness?
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