But a weird thing happened this weekend where people looked at the chart of Credit Suisse CDS prices, saw them going up a lot, and said “Aha! This proves that Credit Suisse is in distress!” But, no. It proves that a [probability of default] number went up a lot, but remains, in the scheme of things, low.
On the other hand the problem with stuff like this is that then Credit Suisse has to put out a statement saying that everything is fine, and nothing is worse for a bank than putting out a statement saying that everything is fine. (Bagehot: “Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone.”)
...[H]igh on the list of calls that you never want to get is “hi, this is your bank, we just wanted to tell you that everything is fine here, how are you?”