CREDIT SUISSE: ‘GET YOUR MONEY AND RUN’

People keep telling me that I am turning into a storyteller. In a way, this is ‘bad news’ but on the other hand it is also fun because your stories are safe: Those who could refute them are most probably all gone.😉

It was, thus, June 2008, in the midst of global financial exuberance. It was a majestic June really, when one would have to force himself to stay indoors. For shipping, the 2000s were the ‘golden decade’. Timecharters would go up to $100,000 per day, i.e., ten times higher than a ship’s breakeven point (assuming you could find a ship to rent). The shipbuilding orderbook (gross capital formation, as we economists say) was up to an unprecedented 50% of owned-tonnage, with delivery times up to 4 years!

Dark clouds were gathering, however. At a Terminal Operations Conference (TOC) in Amsterdam, among rivers of champaign, I had alerted the audience about the perils that were lurking ahead of us. Many had laughed at me and called me a Cassandra: «don’t you see what is going on around you, man? How can you say such things», was the usual retort (all this is well documented in my paper with Helen Thanopoulou[1]).

The following month, July 2008, we were savoring a sumptuous ‘aperitivo’ on the roof garden of the palazzo of the Martini family, on Geneva’s boulevard President Wilson, and in the good company of the ‘family’ and some Swiss bankers (yes; Credit Suisse too).

As we discretely receded to the corner of the terrace, to light up, away from the ladies, I couldn’t resist the opportunity to nonchalantly ask them for some good investment ideas. The most senior banker squinted, looked at me straight in the eyes, puffed on his Cohiba, and said, in a soft, calculative, voice:

"professor, get your money and run".

Luckily, I followed his advice.
Two months later, the Lehman Brothers ‘bomb’ exploded.
And then it all began.

HH

P.S. As I was writing these lines, Sunday the 19th of March, 2023, Credit Suisse was bought by UBS for $2 billion, together with a generous soft-landing pillow by the Swiss central bank. 

[1] Haralambides, H.E. and Thanopoulou, H. (2014). The economic crisis  of  2008 and  world shipping:  Unheeded warnings. SPOUDAI, Vol. 64, No 2, 2014.