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About as exciting as watching paint dry, but unbelievably informative. To sum up - in the new Olympic Event of Sneaky Financial Shitfuckery Australia has a really good medal chance in Mr Greensill.
@David Rosenberg Mark Blyth the Political Economist from Brown U. and many others are calling it "Socialism for the Rich and Capitalism for the Rest of us." I suspect the next group of billionaires who cry poor and call for assistance are going to be met with some ferocity not seen in decades. I truly hope I am wrong but I suspect next time it wont be "Occupy Wall Street" it will "Burn Wall Street." I truly hope I am wrong but I think we'll see mob violence not seen since the French Revolution. I won't be surprised when they drag lawyers and bankers and stock brokers out of their offices and hang them from the nearest tree.
@David Rosenberg Do you watch any of Mark Blyth the Political Economist at Brown U? He was one of the very few who got both Brexit & Trump right. He just wrote a book called Angrynomics. This is his 4 minute primer on it -> ua-cam.com/video/MXJD5rE4omY/v-deo.html There's a for longer talks on it as well. Recently he mentioned a Rand report that said the top 1% of America have made of with over $47,000,000,000,000 since 1975. Here's the Time article on it and the link to the actual Rand report. time.com/5888024/50-trillion-income-inequality-america/ www.rand.org/pubs/working_papers/WRA516-1.html If you can't get your head around what 47 Trillion looks like try this. There used to be a game show called "who wants to be millionaire and on it the had a box with $1,000,000 in cash in it. That box was just over 1 cubic foot. A standard 20 ft container has just over 1,100, which means a 20ft container could be filled with a billion dollars. The 20ft container is the actual standard the measure ships with - TEU (twenty foot equivalent). The Ship that was caught in the Suez canal recently is the largest container chip ever built. The previous generation where 11,000 TEU and the current generation is 24,000 TEU. So basically the top 1% of America have made of with 2 boatloads of cash. Its only 2 boatloads because the current generation of container ships is twice as large as the previous generation. If you try and use smaller vessels you need a fleet. 🤷♂️🤷♀️
@David Rosenberg There's a great piece by a BBC journalist recently about representation and how disproportionate it is. It actually bordered on racism, but the presenter knew that and explained it upfront. It was some basic statistical truths. Its actually incredible across a wide range of subjects how disproportionate some groups are represented.
"Possibly used a database too, so they are a tech company" - as a techie myself, I must say database usage is surely a defining factor of whether a business is tech or not :D Your content is a gold mine! Keep up great work mister Patrick.
Patrick was joking! This is clear from his reference to WeWork, which tried to justify its outrageous valuation on the theory it was a tech company, instead of a mundane low margin office rental company.
"I don't think this story is very well explained in the press right now" "Lots of embarrasing ties to the British Government" There's your reason right there. And I assure you the British taxpayer will front the cost as per usual
@@jpbrindamour5467 misusing the word fascism is why we have such extreme right wing political parties in America. I would tone that rhetoric down a bit.
@@ausbrum : Lex Greensill is about as unAustralian as you get. He's a 'Woke' elite pile of Bovine Excrement. He's left a broad trail of damage everywhere he's gone. We are ashamed of him and his kind. That said I feel that we should pick up our share of the damage his done here as someone Australian let it happen. Also we still have the Gupta problem ongoing. Grrrrr
@@davidjohansson1416 I think you’re taking the above humour too seriously... The funny thing is I was trying to fall asleep listening to this as well but ended up reading the comments and so it didn’t end up working as a sleep aid at all.
We Indians have skipped the growth phase of US from 60s to 90s and directly jumped to its fraud phase of the 2000s, that's why we keep showing up in so many international scandals now.
Great video Patrick. How a supply-chain middleman business that was founded in 2011 can be allowed to amass such enormous insured debts is mind boggling. Regulators really learned nothing in 2008 did they.
Some German towns parked their money in greensill bank accounts, maybe losing it now. Because putting it in an index fund is evil stock market stuff, better put it in some weird bank.
Tbh if all local German governments put their money into index funds, such as the DAX, Germany would end up with a similar ratio of government money in the stock market as Japan. At least in the big companies Now if they invested it in local businesses that would be another story. But why would you invest into businesses that you are responsible for ruining with the lockdown
I honestly never understood how people deposit their money to small banks which offer higher rates than the industry thats like literally begging for trouble.
The failure of a financially large business and the complex banking instruments backing it. Saying it aloud sounds boring, but it's like you're watching a train wreck happen and other people literally can't see it.
"(...) stories of epic failures are more interesting than epic successes." They are also more educational as no conclusion can be drawn from sheer _luck_ in a market. Which is 'deserved', of course only by the _frugal_ ... ('Oh Fortuna') ua-cam.com/video/GXFSK0ogeg4/v-deo.html
I disagree. Tesla, Google, Microsoft, Amazon, Nvidia, Ark Invest, and blockchain etc are far more interesting and impactful than financial scandals. Nevertheless, Patrick makes this scandal into an entertaining learning opportunity. I hope he continues to follow it and share what he finds.
Imagine working for one of these insurance companies and not knowing if you're about to become a multi-billion dollar bag holder. That would be an interesting morning meeting!
It's interesting that China is aware of the lack of regulation in Fintech companies and is now requiring that they downsize or get formal banking status. They must be aware of many "Creative financing that doesn't look right". Q. Who ends up with all the cash if nothing is left at the end of the day? Well done Mr. Boyle
I'll adapt what someone else said: Came to learn about finance Heard in depth story about Grensill's financial fraud. Stay for Patrick's humor about naked swimmers
Apparently, some of the German states and cities kept money with Greensill, for the slightly elevated interest rate. No one is going to feel, or will be held responsible for the potential losses^^
and deposit insurance works only for private individuals, not entities like cities, so their money is lost. A city in north rhine westphalia will probably loose investments around 40 mil euro
The explanation of a terribly complicated subject shows why Patrick is such a revered teacher. Step by step. In order. Perfectly explained, interesting, AND entertaining. Well done.
I personally suffered from fraudulent activities from Indian tech companies based in Dubai and ended up covering refunds out of pocket to my end suppliers. Learnt my lesson never to do business with any Indian company or individual. They’re professionals in the fraud industry.
Thanks for shedding light on this story! It's surprising how many large players were involved in this scandal. Then again, like you said, Credit Suisse always finds a way to get involved 😂
Just to put that "billions" numbers you mention in perspective (and as many of your viewers might have born late - too late to remember the exact numbers) the 2008 financial crisis arose around losses reported by Lehman Brothers which wre somewhere betwwen 2.8 and 4 Billion USD. So this Greensill case already now is bigger than Lehman Brothers ever was.
This is crazy. Why is a random youtube recommendation the way I learn from this?!? Just for the people at home, how big is this bag we are talking about? It sounds similar to 2008. I hope it is more like a coin purse compared to the hiking backpack we were holding back then.
3 роки тому+9
This is such a beautiful display of international corruption and incompetence that I am surprised there is no spanish company or "enterpreneur" involved in any step
That's a very 2008 collapse. Do you think any market fallout would be limited to the European markets or could it potentially rattle US and Asian markets as well?
It’s not the old times, a 1 or more % dip in the S&P also (mostly) causes a ripple effect dip in Asian and other markets. If any great crash was to come in the West, it would have ripple effects all over the world.
As an Australian, anyone who approaches you in an Akubra hat and factory worker overalls who doesnt work in a factory (or on a farm) is immediately suspect.
It is a very interesting point. I once visited Australia and I was amazed that so many people (who had no need to) wore the high visibility worker overalls. It seems to be an informal uniform that marks you out as a true Australian. In the same way that a suit and tie marks you out as a true British person in central London.
This is terrifying. Also funny in a way. But as a German also terrifying. Also what a clusterf**** of a mess. Great explanation. Maybe include some infographics in an update. Since this is really really messy a visual aid would be helpful actually
Really enjoyable and informative video. Thank you for this! The only constructive piece of criticism I want to offer is that you kept replaying the Supreme Cash clip too much. I would've preferred if you had instead shown more images of the individuals involved such as Credit Suise everytime you mentioned them or the German flag as part of the German government or even Tokio Marine. I can understand how this may take more time for editing and how the Supreme Cash clip is probably easier for casual viewers to gravitate towards.
These tales of rampant silliness (disguised as "financial technology") makes me not want to invest in stuff. Even if I buy index funds, it seems like so many of the managers of these companies are either scammers or idiots or both. It is a miracle the market works at all.
You Sir Patrick are spot on! in the last year or so I have seen a lot of UK based Factoring companies popping up everywhere, also selling themselves as Technology Companies... they typically advance 90% of the funds (invoice face value) at 11%/year + 0.32% of credit insurance so if they are repackaging at 150 basis of Libor they are making a killing.
I learn a lots of stock trading in your videos. You are one of the best teacher I come across in time of what is going on in trading world. You made me understand the real stock market . Thank very much.
Incredible story. Lots of lack of due diligence all around. PS -Story includes everything but the kitchen sink. The only things missing is DeFi, blockchain and crypto, but there is still time! PS2- June 2022 article - Credit Suisse announces agreement with Justice’s Bluestone Resources so at least one bag is deflating even though it may have only been pushed off
This is my favorite Patrick Boyle video, so i figured I would provide an update. TLDR is that, as you would expect, everyone is suing each other and insisting they will not be holding the bag. It'll take many years to sort out. Bag will be held by Credit Suisse (or UBS I guess) and its clients, Insurance Australia Group, or Tokio Marine. The long part: Reading some of the financial statements from IAG and some articles, here's what I understand: BCC is a second party underwriter who was owned by IAG, buy was sold to Tokio Marine in 2019. BCC apparently spent alot of its time writing way too much coverage to Greensill, which as we know has blown up. Right now, Credit Suisse (UBS) owns a large amount of the loans Greensill wrote, the ones that aren't getting paid back. They and Greensill (I think) are suing IAG, claiming that IAG is liable due to the insurance BCC wrote on IAG's behalf. IAG is claiming that: 1. For a number of reasons, including that BCC mightve written too much coverage for Greensill behind IAG's back, IAG should not be responsible for these policies 2. Even if IAG is responsible for these policies, they aren't relevant to these losses (I don't get this argument, but it says this in IAG's financial statements) 3. If IAG is responsible for the losses, they're actually not, because the sold BCC to Tokio Marine Now, since I work in insurance, here are some things I find funny about this: 1. In a move of based arrogance, Tokio Marine didn't even mention the Greensill situation despite the fact that, if they end up holding the entire bag, it will certainly bankrupt the company 2. According to IAG's annual statement, BCC has other massive losses unrelated to Greensill that IAG is on the hook for. Makes me wonder what the hell was going on with the underwriters at this underwritering firm, and why Tokio Marine wanted to buy the company (I guess cuz it hadn't blown up yet and the premiums were probably high) If I had to guess, there's a 60% chance Credit Suisse holds the bag (of course...), a 35% chance IAG holds it, and only a 5% chance Tokio Marine holds it
I’ve learned a ton from you. Mainly that I should save my money, and invest very sensibly without betting it all on one company! It’s been working fantastic so far! Thank you!
Factoring or whatever the old name happens to be seems like one of those boring things that tends the be really low risk and hard to screw up. What was greensills incentive to royally screw it up?
"Credit Suisse CEO Thomas Gottstein signaled he’d consider further separating the asset-management unit from the rest of the bank after the Greensill Capital collapse, as he steps up efforts to limit the reputational damage from the supply-chain finance scandal" from bloomberg/hempton blog sounds like they didnt do their own due diligence.
Agent 47 has found a target. Loaded the sniper rifle. Cocked the trigger and performed a surgical strike on what seems to be a big financial scandal in which Germany, unfortunately, again, is holding the bag. To be this precise so early in the morning must mean just 1 thing : like, comment, and subscribe. 10/10 And he has such an average name, so fitting for a killer of mists and clarification in dubious financial workings. Did you know he also teaches? And has books about finance? Go and check his other videos. You will not regret a minute.
What did you expect from Greensill, Patrick? We Aussies are all descended from criminals deported (exported?) from Britain. I suppose it was only the successful criminals that stayed in the Mother country - they weren't caught!
That’s nice! I would like to get 10x in loans for fake invoices. Then I would offload those loans on insurance companies and investors for LIBOR + 1.25%!
Your Tie is amazing Mr. Boyle. Greetings from Northern California. I always learn a lot from your stories on finance. You're awesome sir. God Bless. John
The best explanation I have come across so far of this story. You could've added a further comment or two on the British government/David Cameron angle here. Thanks anyway for decluttering the story.
On a more serious note, "technology" is a very broad concept (and even broader for economists) but for some reason, the term "tech company" has a much narrower meaning than a company using and/or developing technology.
@@PBoyle Construction Technology is a thing, though Kattera may do more constructinh than developing new technology. Likewise the wheel is transport technology, thich means that an ancient Sumerian had the opportunity to go zero to one in founding an innovative and disruptive transport and logistics tech company to generate synergy efficencies buzzwords buzzwords buzzwords... But does that make any company using our making wheels nowadays a tech company?
@@chrish.942 construction technology is still technology, even if it deals in commonly understood technology. People have repurposed the word to mean high growth.
Good summary. One thing that you could develop is the difference in the risk profile of factoring versus reverse factoring (supply chain factoring), People use the terminology as if the two products are close, but they have very different risk characteristics. Factoring, supported by credit insurance, has survived many financial crisis because the customer of the finance is different from the trade credit exposure. In the reverse factoring model they are the same entity. Traditional factoring typically results in a well diversified basket of risks for both bank and insurance company whereas supply side financing ends up in poorly diversified exposure for both bank and insurance company since the counterparty exposure is the same entity, and typically a company that is scrapping the barrel in terms of finance.
As soon as I heard you mention the Gupta family I remember all the corruption scandals they were a part of in South Africa, They seem to be quite a big player in global business. And I haven't heard much good news about them.
@@orangeblubber2181 True. I know one of the South African Guptas when he was in India. Not related to Rajat Gupta either. Gupta is as common in India as Smith or Jones.
Excellent video .. I'm working now on bed sheet diagram because one in the video is crap ... also ... "...all loans can't be as bad as ... " ... hold my beer
No invoices, should see the Bank that handled transfer of payments. Would be huge if this was owned by Greensil. That means they can basically launder money to infinity without being checked out. No trace, No case.
Nice video. the techniques of Supply chain/reverse factoring are not the villain here. For example, most US railroad companies hold a % their assets (freight cars etc) and invoices in SPVs and factor them. It helps the working capital cycle etc. It is a legitimate business practise. Buffett’s own railroad uses it, for instance. The issue here is fraud, greed and a lack of oversight, especially in certain European banks, factoring was just the tool used.
Patrick your content is absolutely astonishing, hope you never stop posting! I have a question, are you or were you ever involved with FX markets? Would love to see some content on this if you consider part of your expertise!
How is there a patent on this process? I have seen fly-by-night wealth courses over "factoring receivables". Lots of people are doing this but at a smaller scale.
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Please do a follow up
About as exciting as watching paint dry, but unbelievably informative.
To sum up - in the new Olympic Event of Sneaky Financial Shitfuckery Australia has a really good medal chance in Mr Greensill.
@David Rosenberg Mark Blyth the Political Economist from Brown U. and many others are calling it "Socialism for the Rich and Capitalism for the Rest of us."
I suspect the next group of billionaires who cry poor and call for assistance are going to be met with some ferocity not seen in decades. I truly hope I am wrong but I suspect next time it wont be "Occupy Wall Street" it will "Burn Wall Street." I truly hope I am wrong but I think we'll see mob violence not seen since the French Revolution.
I won't be surprised when they drag lawyers and bankers and stock brokers out of their offices and hang them from the nearest tree.
@David Rosenberg Do you watch any of Mark Blyth the Political Economist at Brown U? He was one of the very few who got both Brexit & Trump right.
He just wrote a book called Angrynomics. This is his 4 minute primer on it -> ua-cam.com/video/MXJD5rE4omY/v-deo.html
There's a for longer talks on it as well. Recently he mentioned a Rand report that said the top 1% of America have made of with over $47,000,000,000,000 since 1975. Here's the Time article on it and the link to the actual Rand report.
time.com/5888024/50-trillion-income-inequality-america/
www.rand.org/pubs/working_papers/WRA516-1.html
If you can't get your head around what 47 Trillion looks like try this. There used to be a game show called "who wants to be millionaire and on it the had a box with $1,000,000 in cash in it. That box was just over 1 cubic foot. A standard 20 ft container has just over 1,100, which means a 20ft container could be filled with a billion dollars. The 20ft container is the actual standard the measure ships with - TEU (twenty foot equivalent). The Ship that was caught in the Suez canal recently is the largest container chip ever built. The previous generation where 11,000 TEU and the current generation is 24,000 TEU.
So basically the top 1% of America have made of with 2 boatloads of cash. Its only 2 boatloads because the current generation of container ships is twice as large as the previous generation. If you try and use smaller vessels you need a fleet. 🤷♂️🤷♀️
@David Rosenberg There's a great piece by a BBC journalist recently about representation and how disproportionate it is.
It actually bordered on racism, but the presenter knew that and explained it upfront. It was some basic statistical truths. Its actually incredible across a wide range of subjects how disproportionate some groups are represented.
"Softbank is of course involved and a financial scandal wouldn't be a financial scandal without Credit Suisse" *lol*
Made my evening
Only Ernst and Young is a missing puzzle))
This statement will become a classic 😀😀
All that's missing is HSBC.
@@robertathari Deutsche, definitely Deutsche. 😆
“It’s not sure what the tech in this thing is”
I’m sure there’s an excel sheet in the mix somewhere
„A financial scandal wouldn‘t be a financial scandal without credit suisse“ aged like fine wine
"Possibly used a database too, so they are a tech company" - as a techie myself, I must say database usage is surely a defining factor of whether a business is tech or not :D Your content is a gold mine! Keep up great work mister Patrick.
The SQL conspiracy.
As a software developer i try and avoid databases like the devil, so i wouldn't qualify as tech anything.
Database.xlsx
I use xml. It's webscale because it doesn't use joins.
Patrick was joking! This is clear from his reference to WeWork, which tried to justify its outrageous valuation on the theory it was a tech company, instead of a mundane low margin office rental company.
"I don't think this story is very well explained in the press right now"
"Lots of embarrasing ties to the British Government"
There's your reason right there. And I assure you the British taxpayer will front the cost as per usual
As they are oppressed under covid fascism
An Australian paying back the motherland is what it is lol.
@@adrianfleming3437 An Australian seeing how easy it is to pay back the motherland----where the first words a baby learns are "mustn't grumble"
@@jpbrindamour5467 misusing the word fascism is why we have such extreme right wing political parties in America. I would tone that rhetoric down a bit.
@@ausbrum : Lex Greensill is about as unAustralian as you get. He's a 'Woke' elite pile of Bovine Excrement. He's left a broad trail of damage everywhere he's gone. We are ashamed of him and his kind. That said I feel that we should pick up our share of the damage his done here as someone Australian let it happen. Also we still have the Gupta problem ongoing. Grrrrr
"Couldn't find evidence of invoices", everyone knows you look down the back of the sofa!
Great content as always!
Behind the desk in my case
Or down in the seat cushions of the Lamborghini.
@@Syncopator Absolutely right 😂😂😂
The sofa is also a magical blackhole that has swallowed all the things that weren't relevant at the time but now you need it 😅
This is a perfect bedtime story. Please do more like this!
Do you really fall asleep to stories about financial ruin? 😂
@@austinmahony168 😂
@@austinmahony168 It's just an exchange of money in the end. I don't really have any emotional attachment to it. So yes, since it's narrated well.
@@davidjohansson1416 I think you’re taking the above humour too seriously... The funny thing is I was trying to fall asleep listening to this as well but ended up reading the comments and so it didn’t end up working as a sleep aid at all.
@@ilikenicethings UA-cam comments is a minefield of stupidity. I'm just saying If I can learn while sleeping, it's a good story.
"And of course a financial scandal wouldn't be a financial scandal without Credit Suisse" I laughed out loud - Hilarious.
🤣🤣🤣
Yeah, lotsa gems in this one. He could have slipped in SQL.
This is wild
But it’s a Fintech!
Because they... use computers.
@@maxfuchs3387 And databases.
@@maxfuchs3387 can I use my commenting on this channel as critical contributions in a fintech business then?
@@chrish.942 you're officially a fintech company
@@dabd8175 Okay. I'll go looking for a SPAC.
We Indians have skipped the growth phase of US from 60s to 90s and directly jumped to its fraud phase of the 2000s, that's why we keep showing up in so many international scandals now.
also, there is a lot of Indians.
Great video Patrick. How a supply-chain middleman business that was founded in 2011 can be allowed to amass such enormous insured debts is mind boggling. Regulators really learned nothing in 2008 did they.
Easy. Start out rich, get VC funding, get a mortgage, use friends in high places.
Some German towns parked their money in greensill bank accounts, maybe losing it now.
Because putting it in an index fund is evil stock market stuff, better put it in some weird bank.
Tbh if all local German governments put their money into index funds, such as the DAX, Germany would end up with a similar ratio of government money in the stock market as Japan. At least in the big companies
Now if they invested it in local businesses that would be another story. But why would you invest into businesses that you are responsible for ruining with the lockdown
I honestly never understood how people deposit their money to small banks which offer higher rates than the industry thats like literally begging for trouble.
@@wv9529 greed
@@wv9529 to me that always smells of ponzi
@@wv9529 In the US, at least, the deposits are insured, so unless your deposits are greater than the insurance limits, why bother?
For some reason stories of epic failures are more interesting than epic successes.
The failure of a financially large business and the complex banking instruments backing it. Saying it aloud sounds boring, but it's like you're watching a train wreck happen and other people literally can't see it.
Very often they are the two sides of the same coin ...
"(...) stories of epic failures are more interesting than epic successes."
They are also more educational as no conclusion can be drawn from sheer _luck_ in a market.
Which is 'deserved', of course only by the _frugal_ ...
('Oh Fortuna')
ua-cam.com/video/GXFSK0ogeg4/v-deo.html
And you learn more
I disagree. Tesla, Google, Microsoft, Amazon, Nvidia, Ark Invest, and blockchain etc are far more interesting and impactful than financial scandals.
Nevertheless, Patrick makes this scandal into an entertaining learning opportunity. I hope he continues to follow it and share what he finds.
Financial scandal wouldn't be financial scandal without Credit Suisse - Patrick Boyle
Imagine working for one of these insurance companies and not knowing if you're about to become a multi-billion dollar bag holder. That would be an interesting morning meeting!
You could ask someone at AIG. They're experienced unwitting bag holders.
Besides the stomach acid my head hurts to realize that these criminals won't see the inside of a jail.
It's interesting that China is aware of the lack of regulation in Fintech companies and is now requiring that they downsize or get formal banking status. They must be aware of many "Creative financing that doesn't look right". Q. Who ends up with all the cash if nothing is left at the end of the day? Well done Mr. Boyle
Very fair point, and when China does take quite logical steps it's being framed in most western media as communist meddling into the free market.
@@funkyjazz123 : That is because it is. Do they allow foreign interference in their markets? Absolutely not.
Seems they're drunk at the wheel with their real estate sector
Evergrand?😇
I'll adapt what someone else said:
Came to learn about finance
Heard in depth story about Grensill's financial fraud.
Stay for Patrick's humor about naked swimmers
So, in case of the German municipalities, once again the German tax payer will foot the bill twice. And the BaFin plays a weird role again.
Again?! Shocking
Apparently, some of the German states and cities kept money with Greensill, for the slightly elevated interest rate. No one is going to feel, or will be held responsible for the potential losses^^
and deposit insurance works only for private individuals, not entities like cities, so their money is lost. A city in north rhine westphalia will probably loose investments around 40 mil euro
@Rodo Sandoval monheim unter anderem
The explanation of a terribly complicated subject shows why Patrick is such a revered teacher. Step by step. In order. Perfectly explained, interesting, AND entertaining. Well done.
The Iggle Piggle / David Cameron joke made me snort my morning coffee. Excellent video as always.
I personally suffered from fraudulent activities from Indian tech companies based in Dubai and ended up covering refunds out of pocket to my end suppliers. Learnt my lesson never to do business with any Indian company or individual. They’re professionals in the fraud industry.
Wait till you get to China
Patrick could improve his credibility by learning to tie a Windsor knot.
Is a tie required in 2020 plus
Thanks for shedding light on this story! It's surprising how many large players were involved in this scandal. Then again, like you said, Credit Suisse always finds a way to get involved 😂
Just to put that "billions" numbers you mention in perspective (and as many of your viewers might have born late - too late to remember the exact numbers) the 2008 financial crisis arose around losses reported by Lehman Brothers which wre somewhere betwwen 2.8 and 4 Billion USD. So this Greensill case already now is bigger than Lehman Brothers ever was.
'We know that there is a bag, but we haven't yet identified the bag holder'
Last time I was this early, stocks were printed on paper.
I watch UA-cam and use a mobile phone. I must be a tech company
This is crazy. Why is a random youtube recommendation the way I learn from this?!?
Just for the people at home, how big is this bag we are talking about? It sounds similar to 2008. I hope it is more like a coin purse compared to the hiking backpack we were holding back then.
This is such a beautiful display of international corruption and incompetence that I am surprised there is no spanish company or "enterpreneur" involved in any step
Basic business idea: create the bag and sell it to holder
"...whatever construction technology is...." LMAO
That's a very 2008 collapse. Do you think any market fallout would be limited to the European markets or could it potentially rattle US and Asian markets as well?
It’s not the old times, a 1 or more % dip in the S&P also (mostly) causes a ripple effect dip in Asian and other markets. If any great crash was to come in the West, it would have ripple effects all over the world.
“So of course, softbank are involved” you had me howling!
"They use a database, so they must be a tech company"
As an Australian, anyone who approaches you in an Akubra hat and factory worker overalls who doesnt work in a factory (or on a farm) is immediately suspect.
Well said, pope of bitcoins.
It is a very interesting point. I once visited Australia and I was amazed that so many people (who had no need to) wore the high visibility worker overalls. It seems to be an informal uniform that marks you out as a true Australian. In the same way that a suit and tie marks you out as a true British person in central London.
Which reminds me of the El Jazeer set-up of those two One Nation knobs a year or so ago by the bushie wearing the Akubra.
Hi viz that looks brand new is always slightly dodgy.
@@jamesrobertson9149 Haha yeah heaps of tradies wear their hi vis 24/7 in Australia and NZ
As a degenerate ... so what is it we should short because of this? Or alternatively, shoot to the moon.
"the Bag" Sounds like a bag you light on fire before leaving on doorstep and running away!
😂🤣😂
One with dog shit in it...
“I suppose they use a database so they are a technology company as well” haha dead
That one dislike by Greensill 😂
Patrick, I can’t make heads or tails of this, but listening to you talk helps me fall asleep. Thank you!
This is terrifying. Also funny in a way. But as a German also terrifying. Also what a clusterf**** of a mess. Great explanation. Maybe include some infographics in an update. Since this is really really messy a visual aid would be helpful actually
Really enjoyable and informative video. Thank you for this!
The only constructive piece of criticism I want to offer is that you kept replaying the Supreme Cash clip too much. I would've preferred if you had instead shown more images of the individuals involved such as Credit Suise everytime you mentioned them or the German flag as part of the German government or even Tokio Marine. I can understand how this may take more time for editing and how the Supreme Cash clip is probably easier for casual viewers to gravitate towards.
Return to base agent 47
These tales of rampant silliness (disguised as "financial technology") makes me not want to invest in stuff. Even if I buy index funds, it seems like so many of the managers of these companies are either scammers or idiots or both. It is a miracle the market works at all.
They don't! Nobody told you 👀
You Sir Patrick are spot on! in the last year or so I have seen a lot of UK based Factoring companies popping up everywhere, also selling themselves as Technology Companies... they typically advance 90% of the funds (invoice face value) at 11%/year + 0.32% of credit insurance so if they are repackaging at 150 basis of Libor they are making a killing.
This is some Free real estate kind of shit
Is that 1.5%
This is Financial Engineering on Steroids!! Wonder which B-School teaches that course🧐🤨🤔🤔
I learn a lots of stock trading in your videos. You are one of the best teacher I come across in time of what is going on in trading world. You made me understand the real stock market . Thank very much.
I love the humor Patrick. Such well-researched and insightful content.
"A financial scandal wouldn't be a scandal without Credit Suisse". A direct blow, very painful. Amusing indeed.
Incredible story. Lots of lack of due diligence all around.
PS -Story includes everything but the kitchen sink. The only things missing is DeFi, blockchain and crypto, but there is still time!
PS2- June 2022 article - Credit Suisse announces agreement with Justice’s Bluestone Resources so at least one bag is deflating even though it may have only been pushed off
Came to learn personal finance
Stayed to hear in depth exposes on financial fraud
Patrick for head of SEC
No one wants that position
@@chrisE815 Patrick for the head of FCA, then.
@@seneca983 I vote for Patrick as the head my finances. Where do I sign?
Loans secured by future potential sales? Nice surprise for the low-yield supply chain finance investors.
Any entity that reneges on debt payment terms is loathsome. They destroy good companies, and downstream families' lives.
This is my favorite Patrick Boyle video, so i figured I would provide an update.
TLDR is that, as you would expect, everyone is suing each other and insisting they will not be holding the bag. It'll take many years to sort out. Bag will be held by Credit Suisse (or UBS I guess) and its clients, Insurance Australia Group, or Tokio Marine.
The long part: Reading some of the financial statements from IAG and some articles, here's what I understand: BCC is a second party underwriter who was owned by IAG, buy was sold to Tokio Marine in 2019. BCC apparently spent alot of its time writing way too much coverage to Greensill, which as we know has blown up.
Right now, Credit Suisse (UBS) owns a large amount of the loans Greensill wrote, the ones that aren't getting paid back. They and Greensill (I think) are suing IAG, claiming that IAG is liable due to the insurance BCC wrote on IAG's behalf.
IAG is claiming that:
1. For a number of reasons, including that BCC mightve written too much coverage for Greensill behind IAG's back, IAG should not be responsible for these policies
2. Even if IAG is responsible for these policies, they aren't relevant to these losses (I don't get this argument, but it says this in IAG's financial statements)
3. If IAG is responsible for the losses, they're actually not, because the sold BCC to Tokio Marine
Now, since I work in insurance, here are some things I find funny about this:
1. In a move of based arrogance, Tokio Marine didn't even mention the Greensill situation despite the fact that, if they end up holding the entire bag, it will certainly bankrupt the company
2. According to IAG's annual statement, BCC has other massive losses unrelated to Greensill that IAG is on the hook for. Makes me wonder what the hell was going on with the underwriters at this underwritering firm, and why Tokio Marine wanted to buy the company (I guess cuz it hadn't blown up yet and the premiums were probably high)
If I had to guess, there's a 60% chance Credit Suisse holds the bag (of course...), a 35% chance IAG holds it, and only a 5% chance Tokio Marine holds it
I’ve learned a ton from you. Mainly that I should save my money, and invest very sensibly without betting it all on one company! It’s been working fantastic so far! Thank you!
Factoring or whatever the old name happens to be seems like one of those boring things that tends the be really low risk and hard to screw up. What was greensills incentive to royally screw it up?
Just catching up on some old episodes... Love your dry sense of humor. Thank you
"Credit Suisse CEO Thomas Gottstein signaled he’d consider further separating the asset-management unit from the rest of the bank after the Greensill Capital collapse, as he steps up efforts to limit the reputational damage from the supply-chain finance scandal" from bloomberg/hempton blog sounds like they didnt do their own due diligence.
Agent 47 has found a target. Loaded the sniper rifle. Cocked the trigger and performed a surgical strike on what seems to be a big financial scandal in which Germany, unfortunately, again, is holding the bag.
To be this precise so early in the morning must mean just 1 thing : like, comment, and subscribe.
10/10
And he has such an average name, so fitting for a killer of mists and clarification in dubious financial workings.
Did you know he also teaches?
And has books about finance?
Go and check his other videos. You will not regret a minute.
This is such a weird amalgamation of sass, in depth economics and current affairs. I love it.
What did you expect from Greensill, Patrick? We Aussies are all descended from criminals deported (exported?) from Britain. I suppose it was only the successful criminals that stayed in the Mother country - they weren't caught!
Thanks very much. Truly well explained. These guys make Alan Bond look solvent
That’s nice! I would like to get 10x in loans for fake invoices. Then I would offload those loans on insurance companies and investors for LIBOR + 1.25%!
Your Tie is amazing Mr. Boyle. Greetings from Northern California. I always learn a lot from your stories on finance. You're awesome sir. God Bless.
John
The most painful losses will be suffered by the remnant Australian steel industry.
They can't all be loans this bad.
Hold my beer!
Hold my invoices!
The best explanation I have come across so far of this story. You could've added a further comment or two on the British government/David Cameron angle here. Thanks anyway for decluttering the story.
There are so many overlapping scandals in this story.
I personally found the sotry of a state owned virginia construction company runned by the governor's son as the most promising angle
A bit disappointed there were tax havens involved. Yet ?
@@PBoyle Looks like we could get 3 different hedge fund scandal videos in a row.
@@wv9529 Throws wide open the door to African-style and sized corruption - see Congo, see Angola..
Love your content, Patrick.
A thought...perhaps just some simple stock video and stock images w/ voice-over might be really effective....
"What ever construction technology is..." LOL
It is really not clear to me what is new about Katerra.
On a more serious note, "technology" is a very broad concept (and even broader for economists) but for some reason, the term "tech company" has a much narrower meaning than a company using and/or developing technology.
It's the brick in the bag that nobody in this mess wants to be left holding.
@@PBoyle Construction Technology is a thing, though Kattera may do more constructinh than developing new technology. Likewise the wheel is transport technology, thich means that an ancient Sumerian had the opportunity to go zero to one in founding an innovative and disruptive transport and logistics tech company to generate synergy efficencies buzzwords buzzwords buzzwords...
But does that make any company using our making wheels nowadays a tech company?
@@chrish.942 construction technology is still technology, even if it deals in commonly understood technology.
People have repurposed the word to mean high growth.
"They possibly use a database too, so they are a tech firm" LMAO, I ve been cracking with all this talk about "fintech" :'D
You were right, this is a complicated story!
Good summary. One thing that you could develop is the difference in the risk profile of factoring versus reverse factoring (supply chain factoring), People use the terminology as if the two products are close, but they have very different risk characteristics. Factoring, supported by credit insurance, has survived many financial crisis because the customer of the finance is different from the trade credit exposure. In the reverse factoring model they are the same entity. Traditional factoring typically results in a well diversified basket of risks for both bank and insurance company whereas supply side financing ends up in poorly diversified exposure for both bank and insurance company since the counterparty exposure is the same entity, and typically a company that is scrapping the barrel in terms of finance.
And there we were heckling SPACS the other day. A SPAC just for dodgy loans to other SPACS seems like a good idea. Hit me up for other great ideas 👍🏼
I’m looking for the Madoff character in all of this!
Thank you Mr. Boyle for putting the complex Greensill saga in an understandable 18min video! This has not been done before.
You missed the 2008 Financial Crisis it seems....
I'll rewatch this over and over again until i might get a clue on what stocks to short cause this smells like another wirecard.
Do we know who yet?
To get an idea on whom to short consider and investigate all the participants of this scandal an and their potential creditors.
This level of fraud.. Surely someone is going to prison.
Lmao just the part which he presents the participating characters is enough to know you are dealing with a massive scandal
As soon as I heard you mention the Gupta family I remember all the corruption scandals they were a part of in South Africa, They seem to be quite a big player in global business. And I haven't heard much good news about them.
I don’t think they’re the same family as Gupta is a very common Indian surname.
@@orangeblubber2181 True. I know one of the South African Guptas when he was in India. Not related to Rajat Gupta either. Gupta is as common in India as Smith or Jones.
Plz don't involve India into this he was completely brought up in England he was just born in India
How many of your Analysts do you have preparing your vids? They're absolute gold
Love the dry humour and clarity.
I use a database... so I'm a tech company! I wonder how much I'll IPO for...
Very much looking forward to part 2 of this story!
I predict you will IPO for $69B in market cap. Just do it right now
...had about 10% of assets invested in US treasuries, so that money is safe
FED: hold my beer
An undesirable bag - loads in Blackpool.
Yup, tough to get your head around this, but your discussion was not only informative but entertaining. 18 minutes well spent!
Excellent video .. I'm working now on bed sheet diagram because one in the video is crap ... also ... "...all loans can't be as bad as ... " ... hold my beer
Please do another one just like this about the recent collapse of Archegos with use of CFDs at prime brokers would be really nice!
Oh SoftBank the moment I heard your name, I just cant help but say: you cant catch a break...
No invoices, should see the Bank that handled transfer of payments. Would be huge if this was owned by Greensil. That means they can basically launder money to infinity without being checked out. No trace, No case.
Always always make the executives who made bonuses for high sales, the bag holder.
Nice video.
the techniques of Supply chain/reverse factoring are not the villain here. For example, most US railroad companies hold a % their assets (freight cars etc) and invoices in SPVs and factor them. It helps the working capital cycle etc. It is a legitimate business practise. Buffett’s own railroad uses it, for instance.
The issue here is fraud, greed and a lack of oversight, especially in certain European banks, factoring was just the tool used.
So can I extrapolate that the bag contains dog shit wrapped in catshit?
So, a British businessman known as the "Man of Steel", doing business with a guy called Lex..... whoever thought that could end well.
Patrick your content is absolutely astonishing, hope you never stop posting! I have a question, are you or were you ever involved with FX markets? Would love to see some content on this if you consider part of your expertise!
Knock knock*
Whois there?
Patrick.
Patrick who?
Patrick Boyle knowledge.
These folk sound like Emile Savundra type characters with heavy tones of Ivar Krueger .
How is there a patent on this process? I have seen fly-by-night wealth courses over "factoring receivables". Lots of people are doing this but at a smaller scale.
It is quite surprising to me. Here is a link to the document. patents.google.com/patent/US6167385A/en