View Full Version : The Credit Crunch Thread (7 Oct: RBS Shares Collapse, IceSave withdrawals blocked!)
Well big news in the financial markets, the US Government are taking over control of the two big US mortgage companies (back around 50% of US mortgages!) Fannie Mae and Freddie Mac at a potential cost of $25 billion or more to the US tax payers!
This makes the Northern Rock takeover look miniscule! This actually could kickstart the US mortgage industry again, but will be paid for in taxes.
So in the same these as the NR take over, should this really happen? It does have a potential worldwide effect on the finance/lending industry if the US mortgage availability eases causing the US housing market to firm up.
Brunodog
07-09-2008, 15:23
The implications of this are too wide ranging for me to comprehend. I thought that the Americans liked the markets to sort themselves out but this is the biggest intervention possible.
It will be very interesting to see how the markets react on Monday.
One potential positive is a devaluing of the dollar allowing me to safely order 3 Threadless t-shirts without being hit for customs charges.
Hitman2411
07-09-2008, 16:05
Saying costs could be as much as $3 TRILLION!!! According to news if these companies were to go 'bust' it would cause considerable economic damage right across the world, insane!
Well big news in the financial markets, the US Government are taking over control of the two big US mortgage companies (back around 50% of US mortgages!) Fannie Mae and Freddie Mac at a potential cost of $25 billion or more to the US tax payers!
This makes the Northern Rock takeover look miniscule! This actually could kickstart the US mortgage industry again, but will be paid for in taxes.
So in the same these as the NR take over, should this really happen? It does have a potential worldwide effect on the finance/lending industry if the US mortgage availability eases causing the US housing market to firm up.
The implications of this are too wide ranging for me to comprehend. I thought that the Americans liked the markets to sort themselves out but this is the biggest intervention possible.
It will be very interesting to see how the markets react on Monday.
One potential positive is a devaluing of the dollar allowing me to safely order 3 Threadless t-shirts without being hit for customs charges.
There are several British banks with hundreds of billions of dollars invested in the US subprime market, this is just the beginning, the results are expected to be pretty explosive on both sides.
... at a potential cost of $25 billion or more to the US tax payers!
This makes the Northern Rock takeover look miniscule!
Surely $25 billion is miniscule compared to NR?
Didn't NR cost £55 billion? Which would be about USD100 billion at today's prices?
$25bn for Freddie & Fanny seems tiny.
It nice to know that corporations are above everyone else in society. If I was to get into finacial difficulty then I would have to sort it out. These corporations get such a free ride in todays world. I'll stop now before I go into rant mode.
Surely $25 billion is miniscule compared to NR?
Didn't NR cost £55 billion? Which would be about USD100 billion at today's prices?
$25bn for Freddie & Fanny seems tiny.
No, the £55B is just the initial give away sum to all the big banks not just NR, the actual sums are far far higher, which bank got what will never be revealed to the public.
doesnotcompute
07-09-2008, 16:25
Argh, just as the dollar was starting to go the way I needed it! Monday will indeed be interesting.
It is somewhat ironic that it was government edicts to provide affordable lending that caused this whole thing. Then they subsidised the ongoing journey and now they're going to bail out the titanic. I'm glad it's not my taxes.
Well $25 billion will probably be the tip of the iceberg really, this is just the cost ot re-org them I would think (assets and loans are valued higher so its not the true cost to buy them)
Grandmaster
07-09-2008, 16:40
Surely we've gotta be looking at a massive drop in the value of the dollar starting from tomorrow?!
basegreen
07-09-2008, 16:57
The implications of this are too wide ranging for me to comprehend. I thought that the Americans liked the markets to sort themselves out but this is the biggest intervention possible.
It will be very interesting to see how the markets react on Monday.
One potential positive is a devaluing of the dollar allowing me to safely order 3 Threadless t-shirts without being hit for customs charges.
:lol:
Sammy709Sony930
07-09-2008, 18:33
Stupid names for companies anyway, no wonder they were going tits up:n0rty:
Stupid names for companies anyway, no wonder they were going tits up:n0rty:
'Fannie Mae and Freddie Mac' does sound like a really bad sit-com.
Peanuts compared to what's been spent on wars also.
Peanuts compared to what's been spent on wars also.
Reeeally...
Are you going to try and blame this on muslims too?
Stupid names for companies anyway, no wonder they were going tits up:n0rty:
http://news.bbc.co.uk/1/hi/business/7502310.stm
Fannie Mae is short for Federal National Mortgage Association, Freddie Mac short for Federal Home Loan Mortgage Corporation. :dork:
DVDWotcha
07-09-2008, 20:31
This makes the Northern Rock takeover look miniscule! This actually could kickstart the US mortgage industry again, but will be paid for in taxes.
So in the same these as the NR take over, should this really happen? It does have a potential worldwide effect on the finance/lending industry if the US mortgage availability eases causing the US housing market to firm up.
I'd expect it to go the other way. Expect some serious fall out from this. Not looking good. :(
Born2Bwild
07-09-2008, 21:23
Reeeally...
Are you going to try and blame this on muslims too?
:?:
I guess i missed something, but this looks like you are trying to prevoke a fight. He is right, $25bn is peanuts for the US govt, like he said, looks what been spent on wars.
Born2Bwild
07-09-2008, 21:24
I'd expect it to go the other way. Expect some serious fall out from this. Not looking good. :(
Not looking good how? Better saved than belly up - now that would be bad news.
Radiohead
07-09-2008, 21:36
$25bn is far from peanuts with the US economy as it is. This is a huge gamble and one that suggests things are far worse than we're being told. Not only are they taking on the liabilities of the 2, they're investing fresh funds to try and kick-start the US housing market (and with it renewed consumer spending).
I read the other day that several UK banks are very close to going under....
It looks like we're talking about $110bn as well:
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/09/fannie_freddie_cheshire_and_de.html
'The scale of the support being provided by the US Government to Fannie Mae and Freddie Mac is quite breathtaking - up to £110bn and the right to own 80 per cent of each of them.'
So much for the taxpayer not bailing out capitalist companies!!!
What happened to Laissez-faire?
mikegray
07-09-2008, 22:02
Dollar's moved from $1.76 to the pound to a little over $1.79 already. I take it the dollar is expected to take a hit from this?
Yes it will take a hit short term because markets do not like this kind of thing. The dollar has moved quite a lot today for weekend trading though!
Tomorrows market could go either way. financials may rally on the fact that the govt is backing the mortgages, but would expect FNM and FRE to fall hard as it sounds like the shareholders wont be left with much
Well oil has already started to climb, gone up $2 since the announcement this morning!
Well oil has already started to climb, gone up $2 since the announcement this morning!
Think thats probably more to do with the predictions that Ike is going to go straight through the Gulf of Mexico and cause damage to the oil rigs out there
Born2Bwild
07-09-2008, 22:30
Well oil has already started to climb, gone up $2 since the announcement this morning!
$2? Thats barely a reaction in todays oil market.
Think thats probably more to do with the predictions that Ike is going to go straight through the Gulf of Mexico and cause damage to the oil rigs out there
Yeah, I literally just saw that, probably best explanation
Born2Bwild
07-09-2008, 22:32
Yes it will take a hit short term because markets do not like this kind of thing. The dollar has moved quite a lot today for weekend trading though!
This is going to be interesting to see how the markets take this.
With the Govt stepping in, its going to add a level of stabalization to the situation. Its harder to go belly up with the backing of the Government.
Perhaps a special tax on the oil companies to help fund this rescue would be a good idea :)
RobDickinson
07-09-2008, 22:38
No, the £55B is just the initial give away sum to all the big banks not just NR, the actual sums are far far higher, which bank got what will never be revealed to the public.
I was understanding that £50bn was offered to all the big banks to cover bad debt/mortgages, and an additional £55bn was used to effectivly purchase NR.
I don't think any money was "given away" either. The government allowed banks to swap some bad mortgage debt for some good government debt. Whilst the government will take a considerable loss on that deal, they won't lose anywhere near the full amount in the long-term. The offer closes next month, but indications are the initial demand was around the $50-60bn mark, and not "far far higher" as Bender suggests.
My guess is the markets will respond postively to this news, as it's a stimulus to the US
economy, and it's further evidence that governments can't afford to let too many banks go to the wall, and will take extreme measures to protect them.
:?:
I guess i missed something, but this looks like you are trying to prevoke a fight. He is right, $25bn is peanuts for the US govt, like he said, looks what been spent on wars.
I'm not trying to start a fight, I'm trying to make a point that some people always feel the need to try and de-rail threads to the usual bitch-slapping arguments, that's all. I'm not going to say any more on this as I don't want to do the very thing that I'm moaning about.
Born2Bwild
08-09-2008, 07:28
Dollar has strengethed slightly to Fridays levels.
No big shift as some people thought.
i think the market already took into account that this was going to happen.
My guess is the markets will respond postively to this news, as it's a stimulus to the US
economy, and it's further evidence that governments can't afford to let too many banks go to the wall, and will take extreme measures to protect them.
World markets all look about 4% up on the day, not sure it will do anything for
George Bushs awful legacy.
NicolaUK
08-09-2008, 11:32
It looks like all the excitement has broken the FTSE:
http://newsvote.bbc.co.uk/1/hi/business/7603981.stm
So all the billions that were lost on the FTSE last week will be regained this week ? and the only losers will be anyone who sold at Friday's price. The Fannie and Freddie business is like capitalism being run on socialist principles.
ShakeyJake
08-09-2008, 11:40
Does all this mean someone might buy my house?
BigPappa
08-09-2008, 11:43
Freddie mac and Fannie Mae were an anomaly amongst Financial Institutions - they were government backed but privately owned (US Capitalism - just love it).
It's all free market and reduced government involvement unless the free market doesn't work in which case it's intervention. Kind of like democracy - fine if it's "our" democracy.
Seems the US market is taking this positively this morning.
I see UK market was doing well until a computer glitch crashed the whole LSE just after market opening :suspect:
Born2Bwild
08-09-2008, 14:56
And the dollar has strengthened too........$1.76
Yeah, I saw that the dollar had regained some :(
Brunodog
08-09-2008, 17:57
And the dollar has strengthened too........$1.76
I had better hold off that third threadless t-shirt in my basket for a bit then.
Just listening to World Service saying that it could cost upto $300 BILLION to the US taxpayer.
Explanation of what happened is on now ...
Isn't free market captialism great ? You can make billions (esentially from greed) in the good times and insist the market should be left to itself with minimal regulation. Then when you screw up through incompetence, greed and boderline illegality in the biggest way possible you get bailed out by the taxpayer. :nuts:
Aparently the regulation for Fannie May/ Freddie Mac got very lax (as well as for others) in recent times. One analyst has said that voters should be asking their elected officials how much campaign funding they were getting from Fannie and and Freddie in exchange for reducing regulation and oversight.
So we have incompetent and greedy bankers and politicians. A perfect combination.
There was quiet a good edition of the Hard Talk programme on BBC News last week with John Moulton (http://www.bbc.co.uk/iplayer/episode/b00df9vn/) a venture capitalist who says he was warning about what has happened in the financial sector a couple of years back. He explains why it happened essentially lax and confused regulation (in the UK FSA taking over regulation from the Bank of England), short termism leading to lack of responsibility, basic greed, and the invention of stupid debt packaged vehicles which could passed around like "pass the parcel" without anyone really knowing what they were.
Born2Bwild
08-09-2008, 18:27
Just listening to World Service saying that it could cost upto $300 BILLION to the US taxpayer.
Explanation of what happened is on now ...
That figure would not surprise me.
Born2Bwild
10-09-2008, 16:00
if its $25bn, its cheap......especially when you consider how mcuh they spend on things like this:
http://news.yahoo.com/s/nm/20080910/bs_nm/usa_tanker_dc
Dollar continues to strengthen - Around $1.75 right now.
KennyVader
14-09-2008, 20:06
Lehman Bros all set to go bankrupt tomorrow!
http://news.bbc.co.uk/1/hi/business/7615712.stm
That's huge news. I used to work for another company in the same building as their UK HQ and they were incredibly loaded back then, around 1999/2000 or so.
It's beginning to look like the only safe place to work is at an accountant that takes on official receiver duties! They always win!
mikegray
14-09-2008, 20:12
if its $25bn, its cheap......especially when you consider how mcuh they spend on things like this:
http://news.yahoo.com/s/nm/20080910/bs_nm/usa_tanker_dc
Dollar continues to strengthen - Around $1.75 right now.
Back at $1.80 today. Up and down like a yo-yo!
I find it astonishing that they are going to let Lehmans go. The whole banking system is so intwined that one big player going under is going to bring about huge amounts of what we call counter party risk losses. The ramifications on other banks is going to be huge and one of the reasons why JPMorgan purchased Bears Stearns. They still have until about midnight GMT to get something agreed before the Asian markets open but it is not looking hopeful.
Not looking very good for those of us in the banking sector. Might as well kiss goodbye to our bonuses :(
Radiohead
14-09-2008, 21:06
They have to draw the line somewhere surely - taxpayers can't bail everyone out. The hubris of the last few years is bringing down the house of cards.
Some interesting, if unlikely, thoughts from Will Hutton (http://www.guardian.co.uk/commentisfree/2008/sep/14/marketturmoil.economics) today.
Radiohead
14-09-2008, 21:20
The US authorities tonight appeared to be preparing the ground for the collapse of Lehman Brothers by sanctioning emergency trading in the Wall Street firm's most complex financial positions.
In an attempt to reduce the risk to the financial system should the fourth biggest firm on Wall Street file for bankruptcy, rival banks with positions in credit, equity, interest rates, foreign exchange and commodity contracts were allowed to trade in a two hour window even though the US financial markets were shut.
http://www.guardian.co.uk/business/2008/sep/14/lehmanbrothers.barclay
I must say that when the Lehmans issue kicked off early last week I never imagined they would be allowed to fail. We are talking about one of the biggest corporate failures in history about to happen.
Radiohead
14-09-2008, 22:08
Agreed, but what's the alternative.
My suspicion is that governments know there will be more and can't cover everything. So it stops here. Regardless, some of the bosses that allowed these things to happen should see the inside of a cell.
My cousin works for Lehmans in Hong Kong. I am not entirely sure what is going on here, Sky seems to be touting it as a major major deal.
Not entirely sure what effect it will have on the average man on the street like myself who doesn't work "in the city", jet set all over the world, and draw huge bonuses.
Have to say that judging just by my cousin's lifestyle - I cannot believe the amount of money she earns. If that's what all city people are creaming off, how on earth can that be sustainable?
d.boyd1uk
14-09-2008, 22:14
whats going to happen, i have about 12k in RBS shares, will it affect banks over here?
I can't advise on share prices - but suffice to say, the sector is not pretty at the moment and shares in bank can dive within days once traders get a sniff of trouble.
With all financial institutions, once the shares dive, the capital takes a dive and credit limits go. If that happens and the banks don't have the liquidity on their balance sheets, they won't be able to trade. This leads to an irreversible spiral.
RBS had a cash call a few months ago to shore up its balance sheet so should be OK.
gotidude
14-09-2008, 22:23
I need to buy something from the states, so at least this way the exchange rate will hopefully be better for me :)
Although maybe not so good news for my shares (not in Lehman but in other companies) :(
I know someone who works in Lehman in the UK and another who used to work there. Trust me, at least they make sure they get their money's worth - one had standard hours of about 9-9 (and he was a slacker!!). The other sometimes gets into work in the wee hours of the morning and sometimes goes home after the tubes and trains have stopped!
I personally think they should fail - yes massive shock to the financial markets, but that was the route lehman decided to go down, so it must learn by its actions and suffer. At least this way the ceo doesn't get any redundancy bonus either :nuts:
hardtofin
14-09-2008, 22:25
whats going to happen, i have about 12k in RBS shares, will it affect banks over here?
If you dont NEED to sell them mate, dont. If you are a long term investor you will be fine, just hang in their for 2-3 years. Dont panic and sell over this.
hardtofin
d.boyd1uk
14-09-2008, 22:28
I can't advise on share prices - but suffice to say, the sector is not pretty at the moment and shares in bank can dive within days once traders get a sniff of trouble.
With all financial institutions, once the shares dive, the capital takes a dive and credit limits go. If that happens and the banks don't have the liquidity on their balance sheets, they won't be able to trade. This leads to an irreversible spiral.
RBS had a cash call a few months ago to shore up its balance sheet so should be OK.
good, it makes you think though, we have shares with RBS because they should be safe, but in this climate who knows what can happen, its quite scary with all these big names going under.
What happens to the people in the USA who have big savings, will they lose them :thinking:
NicolaUK
14-09-2008, 22:30
Might as well kiss goodbye to our bonuses :(
Welcome to the real world :thumbs:
d.boyd1uk
14-09-2008, 22:31
If you dont NEED to sell them mate, dont. If you are a long term investor you will be fine, just hang in their for 2-3 years. Dont panic and sell over this.
hardtofin
we have been saving shares for 15 years, we buy into sharesave with my missus works, we did cash a lump a few years ago though, we have them for something to fall back on in an emergency.
hardtofin
14-09-2008, 22:33
are you up overall on your holdings?
i would imagine you are, in 2-3 years time this will look like a blip, just like 2003 did. Btw i was a stockbroker for 6 years and now im a professional investor for myself, so i hope i know what im talking about :)
hardtofin
EDIT: If Bank of America takes out Merrill then i dont think the market will tank that much. The market already knew lehman was next and it has been winding down for several months. The next bank to go would be Merrill and if that is merged with then it might not be as bad as the news is saying right now.
What happens to the people in the USA who have big savings, will they lose them :thinking:
Lehmans are not a retail bank - they are an Investment Bank.
d.boyd1uk
14-09-2008, 22:45
are you up overall on your holdings?
we were lucky, we cashed in a few quid just before they plummeted, one girl working with my missus had about 7k wiped off her shares (she had lots), we are probably down on the last batch, but we are waiting for them to rise over the years :suspect:
We have to keep for 5 years+
Not sure of the limit but i think we can save upto £250PM in the sharesave.
Born2Bwild
14-09-2008, 23:20
What happens to the people in the USA who have big savings, will they lose them :thinking:
Nearly every bank in the USA is FDIC insured, which covers them for $100k per person, and $100k per joint account (so thats up to $200k per bank, assuming they have a joint account and a seperate account).
If you have more than that, then your SOL
hardtofin
14-09-2008, 23:52
Its an investment, well actually "Merchant" bank, no public customers have money there.
Its an investment, well actually "Merchant" bank, no public customers have money there.
And if someone used them as stock broker, the stocks in there accounts belong to the customer not LEH
I bought some shares of LEH couple of weeks ago at $13 on a gamble they'd recover, oh well for that idea :doh:
Merrils have gone to BoA it seems! :nuts:
Crikey Dave ! :lol:
Born2Bwild
15-09-2008, 07:01
Merrils have gone to BoA it seems! :nuts:
Crikey Dave ! :lol:
And they paid a 70% premium too. :lol:
hardtofin
15-09-2008, 08:54
And if someone used them as stock broker, the stocks in there accounts belong to the customer not LEH
I bought some shares of LEH couple of weeks ago at $13 on a gamble they'd recover, oh well for that idea :doh:
If clients were broking through them their accounts should be ringfenced, so there shouldnt be a problem. The people who have lost their money is, as always, their shareholders.
The people who have lost their money is, as always, their shareholders.
People who are nearing retirement must have lost huge amounts from their pension funds this year and i doubt not all will have shifted them to cash funds.
in 2-3 years time this will look like a blip, just like 2003 did. Btw i was a stockbroker for 6 years and now im a professional investor for myself, so i hope i know what im talking about :)
hardtofin
But if people have lost £7,000 on thier investments, as has been mentioned on here, they'll have to regain the loss before they even can start getting back into decent inflation proof profit territory. Can you see that happening in 2-3 years time ?
basegreen
15-09-2008, 09:44
Remember folks, these ******* make money on the way up, and make money on the way down. Natural equilibrium.
Remember folks, these ******* make money on the way up, and make money on the way down. Natural equilibrium.
Huh?
I know someone who works in Lehman in the UK and another who used to work there. Trust me, at least they make sure they get their money's worth - one had standard hours of about 9-9 (and he was a slacker!!). The other sometimes gets into work in the wee hours of the morning and sometimes goes home after the tubes and trains have stopped!
I personally think they should fail - yes massive shock to the financial markets, but that was the route lehman decided to go down, so it must learn by its actions and suffer. At least this way the ceo doesn't get any redundancy bonus either :nuts:I worked in the UK office for a few months last year as a contactor and can concer with the above statement, they really take the **** with employees. They get guys over from india and make them work even harder than the rest of them. And even the the work experiance bods stay really late. I really didn't like what i saw. Saying that it was a lovely building and had the best canteen i have ever used :luv: (better than BarCap)
hardtofin
15-09-2008, 09:57
He's having a pop at stockbrokers, which i am no longer and to be honest i always did everything i could to help a client when he was down, i used to charge a flat £10 commission rate! so we are not all robdogs.
Regarding the £7k, if they are a FTSE 100 bluechip like RBS then i would say yes, in 2-3 years they will have the money back. But dont forget this is capitalism gents, im sure he didnt complain when the banks shares rose and he made far and above what you would get by putting your savings in a bank. You have to take the rough with the smooth in the stockmarket. If you dont like the risk, put your money in the bank.
All sorts of rumours flying about with regards of other potential failures on the way. Its going to be a very volatile week on the financial markets this one.
DVDWotcha
15-09-2008, 10:56
Not entirely sure what effect it will have on the average man on the street like myself who doesn't work "in the city", jet set all over the world, and draw huge bonuses.
The problem is it's like dominoes. Once 1 falls the knock on means others follow. All the banks have been lending money they don't have to each other to fund unrealistic deals.
Next time I speak to my Dad he'll give me a smug "told you so".
Of course this opens the way for the big sovereign wealth funds to buy up everything cheap. So expect the UK to be owned by the Arabs/China soon enough.
BigJonnyB
15-09-2008, 11:23
FTSE is currently 5% down today alone - HBOS (Halifax) are down nearly 37%. You have to wonder which bank will be next now, and the market seems to be pointing at Halifax...
Anyone who thinks we're anywhere near close to the end of 'the credit crunch' or the housing market collapse will surely start reconsidering their position...
JB
Sandeep C.
15-09-2008, 12:09
Absolutely crazy. I knew Lehmans were in trouble, but honestly never thought it would come to this. Just shocking.
lewisrichard
15-09-2008, 12:39
off to the states in a few weeks, will this make the exchange rate better or worse??
wondering if its best to buy now or wait it out. should of bought a few months back :(
KennyVader
15-09-2008, 13:22
Amazing that Merril Lynch have effectively fallen over too (but persuaded Bank of America to buy them up wholesale as a last gasp for survival), but Lehmans have stolen all their thunder! What a day.
Suddenly the seven figure annual bonuses don't seem too clever.
It's amazing that everyone hears the term 'Credit Crunch' every 30 minutes through media, but rarely is it dissected into components and mechanics describing what it is.
I have a question. If the Credit Crunch is all about containment of bad debt, and thus impacts inter bank lending, has anyone come across figures measuring the global inter bank lending and potential percentage of this which is toxic debt? Are efforts by central banks to inject capital merely p-ing into the global financial wind ?
It's amazing that everyone hears the term 'Credit Crunch' every 30 minutes through media, but rarely is it dissected into components and mechanics describing what it is.
I have a question. If the Credit Crunch is all about containment of bad debt, and thus impacts inter bank lending, has anyone come across figures measuring the global inter bank lending and potential percentage of this which is toxic debt? Are efforts by central banks to inject capital merely p-ing into the global financial wind ?
I think thats why Lehmann has just gone under; looks like US Gov't just pulled the plug on bailing them out and has decided (riskily, in some quarters) to let the market forces take their course.
This would appear to have had a reasonably desired effect; i.e. the interbank lending pool being setup in the US.
neilalford
15-09-2008, 14:00
I'm kind of tempted to pick up a few shares in Lloyds TSB at the moment, already got a few and the dividend return has historically been very good, even compared to their price a year back, they're currently half that price and have been bouncing up and down quite rapidly over the last weeks (20%-30% in a week), so thinking I can buy some now, if they bounce up quickly I can sell them off again and get a nice return, if they don't they should be a fairly good long term investment. Well, unless Lloyds go bust, but that seems unlikely, doesn't it...?
Merrils have gone to BoA it seems! :nuts:
Crikey Dave ! :lol:
Luckily US allows you to offset the loss against your taxes
And probably more luckily I just left BoA equities business last week which I suspect they may now replace with Merrils
Sandeep C.
15-09-2008, 14:36
Everyman and their dog knew Lehmans were in trouble, but I honestly never thought it would get to this stage. The collateral effect of this will be HUGE. If anyone's read the comments on BBC, there are all sorts of divs posting in saying stuff like "wahay, greedy bankers finally got what was cummin to dem!!!!!!11111". But in truth, it's the guys who had nothing to do with Sub-Prime stuff that will get hurt the most. The middle and back office workers who slave day in day out doing all the boring, unappreciated, mundane stuff that has to be done, else the bank dies. Those are the ones who don't get 6-figure bonuses and now have to work out how they're going to put food on the table, and how to save their homes.
P.S. Any chance one of the mods could change the subject to include Lehmans?
Born2Bwild
15-09-2008, 18:07
Its going to be interesting to see how the financial markets evolve from this.
People can be so narrow minded. Some of the quotes on the BBC news site are unbelievable. Saying that the employees deserve it and that the bankers have had it coming for ages! What they fail to grasp is the fact that 90% of the employes are on a fairly average wage; they are the ones truly affected! The traders will have money to live on and no doubt find another job easily enough anyway!
What they fail to grasp is the fact that 90% of the employes are on a fairly average wage; they are the ones truly affected!
from BBC: PWC told a news conference in London that it is unclear whether Lehman's UK staff will get paid the $75m (£42m) that they are owed in wages this month.
There are approximately 5000 employees in the UK. That's an average of 8400. Some people don't earn that per year!
You do realise that most of the traders are on at least £60,00pa?
Do we know if that £42m is an average taking into account the bonuses awarded each year?
lewisrichard
15-09-2008, 20:59
doesnt look too good for AIG does it heh! a 60% drop!
There are approximately 5000 employees in the UK. That's an average of 8400. Some people don't earn that per year!I'd say about 70% of people working a Lehmans UK get between 20-30K a year
I'd say about 70% of people working a Lehmans UK get between 20-30K a year
I'd imagine 25-50k pa is more likely. Not exactly earth shattering salaries, and the average will be signficantly distorted by a few serious earners
Radiohead
15-09-2008, 21:21
And the serious earners will walk away for a nice long holiday. The average employee in the meantime faces uncertainty due to the hubris of those at the top. 'Twas ever thus.
You do realise that most of the traders are on at least £60,00pa?
Do we know if that £42m is an average taking into account the bonuses awarded each year?
They said at the PWC press conference that the figure didn't include bonuses, it was just the basic payroll.
Drysolder
15-09-2008, 22:10
People can be so narrow minded. Some of the quotes on the BBC news site are unbelievable. Saying that the employees deserve it and that the bankers have had it coming for ages! What they fail to grasp is the fact that 90% of the employes are on a fairly average wage; they are the ones truly affected! The traders will have money to live on and no doubt find another job easily enough anyway!
Why? As far as I'm concerned, as someone who really doesn't understand the ins and outs of the financial market, suffice it to assume that this situation is entirely the fault of the banking sector itself with years of foolhardy lending, (and flame me if you wish) and being on the receiving end of short shrift from banks, that I have little sympathy with what's happening. A taste of their own medicine if you will.
And don't tell me that even today, there are traders who haven't made a profit speculating against the market position.
Why? As far as I'm concerned, as someone who really doesn't understand the ins and outs of the financial market, suffice it to assume that this situation is entirely the fault of the banking sector itself with years of foolhardy lending, (and flame me if you wish) and being on the receiving end of short shrift from banks, that I have little sympathy with what's happening. A taste of their own medicine if you will.
And don't tell me that even today, there are traders who haven't made a profit speculating against the market position.
Entirely the fault of the traders and their bosses for letting it happen, not normal person in the office (who far outweigh the big boys) who are now at risk of losing their jobs throughout the banking sector and beyond.
Although even the culprits are probably no more guilty than the current government for milking it while the going was good and being thoroughly unprepared when it all went wrong...
Of course there are people who have lined their own pockets on the back of other peoples misery but 90% of the workers have nothing to with the actual trading, its all paperwork and middle/back office employes that will suffer!
You said yourself you don't understand the ins and outs but i can assure you the buildings are not full of traders throwing millions of pounds round without a care (although thats not to say a few don't) (95% of the offices i have worked in are standard desk jobs, the trading floor is sometimes only 30 or so computers). Admittedly Lehman Brothers in Canary Wharf was a bigger percentage of traders than others.
Its the management that make the decisions on lending and they will be least affected whilst those who process all the paperwork etc will suffer.
It's another ropey day on the money markets (bring back the money/finance forum).
HBOS seems to be on a bit of a run over the last 2 days.
farmroad38
16-09-2008, 13:08
HBOS is in absolute freefall by the looks of it. Lots of stories in the market about them having a funding shortfall - also not helped that the LIBOR rate has doubled overnight.
I can't believe that HBOS will go under. Bloody hope not anyway, as I've just bought a couple of hundred shares as a speculative punt!
Stig MK2
16-09-2008, 15:49
Geez,
looks like the real fallout is happening now!
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4767140.ece
What does this mean for those with savings in AIG isa's/accounts etc? What about the insurance products people buy? :thinking:
BigPappa
16-09-2008, 16:03
What about if you have an Insurance policy with AIG.
I just realised that!
DVDWotcha
16-09-2008, 16:11
What if you have an insurance policy with a company who use AIG to underwrite the policy ?! :nuts:
:help:
BigPappa
16-09-2008, 16:14
I have a medical insurance plan with AIG. Based in UK Ongoing claim. I just called them they said the money was secured as they were a separate company registered in the UK.
BigPappa
16-09-2008, 16:20
Just called AIG Direct UK - they said they are insulated from the US woes as they are regulated by the FSA. All claims ongoing at the moment will be honoured as the money has been set aside.
Dick Long
16-09-2008, 16:40
John Lewis 'free' extended warranties are underwritten by AIG, so just pray your 50" mega plasma TV doesn't go kerpuff ...
Stig MK2
16-09-2008, 16:51
ok, looks like the Uk is secured. But what was all that about Lehmans sending money from the UK to the US every night and then the US sending "operating money for the day" back to the UK each morning?
NicolaUK
16-09-2008, 17:01
Talk about panicmongering :nuts:
Born2Bwild
16-09-2008, 17:01
I'd want to read up a little more on HBOS, but they do seem to be a good speculative buy since i think this could be a market over-reaction.
Does this mean Man Utd won't go down the crapper then ?.;)
What about the people in Texas that were insured by AIG?
What about the people in Texas that were insured by AIG?
What about them?
What about them?
My comment my have been uncalled for...
I am talking about those people who lost property in the hurricane...
Dick Long
16-09-2008, 18:26
You know, this forum is rapidly becoming one of the most ignorant on the Internet...
Well do please enlighten us. Does AIG do a lot of retail Home insurance in Texas? I rather thought their role was in underwriting commercial and industrial financial transactions ...
raymondlin
16-09-2008, 18:36
I think a picture is worth a thousand words
http://www.boston.com/bigpicture/2008/09/the_short_but_eventful_life_of.html
Dick Long
16-09-2008, 18:48
I think a picture is worth a thousand words
Well not if it doesn't tell us whether or not Texan homeowners will be affected by AIG commercial insurance's problems, which this thread is about.
Mustn't add to our ignorance :nono:
NicolaUK
16-09-2008, 19:14
Now talk of Barclays buying part of Lehman's out :nuts:
http://www.nytimes.com/interactive/2008/09/15/business/20080916-treemap-graphic.html
wheeeeeeeeeeee :nuts:
Well do please enlighten us. Does AIG do a lot of retail Home insurance in Texas? I rather thought their role was in underwriting commercial and industrial financial transactions ...
I edited that comment... :D
It was a bit ott eh? :nuts:
KennyVader
16-09-2008, 20:34
What about the people in Texas that were insured by AIG?
Aren't they all screwed anyway? Home insurance always seems to exclude "Acts of God" and I think Hurricane Ike probably qualifies for that.
Now talk of Barclays buying part of Lehman's out :nuts:
Cherry-picking the good parts/assets (inevitable I suppose) but it looks like they're going to screw all the former UK Lehman Bros employees in the process.
Born2Bwild
16-09-2008, 20:37
Well not if it doesn't tell us whether or not Texan homeowners will be affected by AIG commercial insurance's problems, which this thread is about.
Mustn't add to our ignorance :nono:
They do all sorts of insurance. I have my life insurance through them (i better not die any time soon). I know they also do Car insurance so i think its safe to assume they do all kinds of insuring here in the USA.
Born2Bwild
16-09-2008, 20:38
Aren't they all screwed anyway? Home insurance always seems to exclude "Acts of God" and I think Hurricane Ike probably qualifies for that.
Cherry-picking the good parts/assets (inevitable I suppose) but it looks like they're going to screw all the former UK Lehman Bros employees in the process.
Why would they want to assume the liabilities if they don't have to? Saving any part of it will be something.
Now talk of Barclays buying part of Lehman's out :nuts:Well not entirely surprising since they were considering buying the whole lot at the weekend.
hardtofin
16-09-2008, 21:52
Lunch is for wimps!
Well not entirely surprising since they were considering buying the whole lot at the weekend.
Works out nicely for Barclays, now they get to cherry pick the best parts of the business and leave the bad toxic debt part of the company alone. And they get to pay a cheap as chips price for it
Matt.Wild
16-09-2008, 22:43
Anyone know who owns Thinc Destiny?
Anyone know who owns Thinc Destiny?
Quick google suggests it's Thinc Destini and they're owned by Axa since 2006.
d.boyd1uk
16-09-2008, 22:52
Were does the money go? Lehmann lost lets say 220 billion, were has that gone, who has had the money?
HBOS is in absolute freefall by the looks of it. Lots of stories in the market about them having a funding shortfall - also not helped that the LIBOR rate has doubled overnight.
I can't believe that HBOS will go under. Bloody hope not anyway, as I've just bought a couple of hundred shares as a speculative punt!
Who do you use as a broker?
hardtofin
16-09-2008, 23:01
Were does the money go? Lehmann lost lets say 220 billion, were has that gone, who has had the money?
Its just evaporatedinto thin air mate, it probably never physically existed anyway, its just on paper. Every day on stock markets, more money than exists in the world is traded about a million times over.
It's hard to say where money has gone as such but it would be a mixture of shareholder and other stakeholders in the companies (incl staff) when the company was doing well.
You could almost trace it right back to the root cause and say that the distribution of wealth would have been to the people who gained out of the American housing market boom - homeowners and housebuilders.
One thing people also forget is that the big losses and writedowns we have been seeing are purely accounting entries. The problems lie with hits of these losses on capital (required to do business) and credit ratings - hence cost of borrowings - hence liquidity issues.
Banking, especially Investment Banking is hugely complex.
Drysolder
16-09-2008, 23:01
I can't believe that HBOS will go under. Bloody hope not anyway, as I've just bought a couple of hundred shares as a speculative punt!
Well, Robert Peston says it won't, so it must be true! :|
d.boyd1uk
16-09-2008, 23:11
so when will the shares go up, is it when interest rates are high for savings?
I was talking to my missus earlier as she is in control of our money, we bought the rbs shares for £6 each, now worth £1.95, so we have lost thousands, not too happy, will have to play the waiting game and hope the shares rise back upto nearer £6 again to get our money back.
d.boyd1uk
16-09-2008, 23:17
I think a picture is worth a thousand words
http://www.boston.com/bigpicture/2008/09/the_short_but_eventful_life_of.html
and they still drive around with huge cars, eat most of the food :thumbs:
They dont give a toss about anything but themselves. :nono:
Born2Bwild
16-09-2008, 23:27
and they still drive around with huge cars, eat most of the food :thumbs:
They dont give a toss about anything but themselves. :nono:
Not anymore. I live in the US, and theres been a big shift here in habbits. You can now pick up a new truck for 40% off list price because they are not moving, in fact i plan on picking one up for my business - 1200 miles on it, 2008, list price $28k, paying $16k or there abouts.
Theres a waiting list for hybrids, especially the Prius.
Bearhorn
17-09-2008, 00:30
Works out nicely for Barclays, now they get to cherry pick the best parts of the business and leave the bad toxic debt part of the company alone. And they get to pay a cheap as chips price for it
Nicely is to understate. This works out beautifully (at Gisele Bundchen levels of beautifulness) for Barclays if they can put the deal together. Upsides - they get to hand craft a much more meaningful presence in America and from a public relations point of view they will be seen as the white knights coming to the rescue of the former Lehman bankers. Downsides - I guess they continue to operate in a market where no one seems to really know where it is heading but that's the same for everyone and even then that's offset, as someone pointed out above, considering the alternative method that Barclays were considering over the weekend to achieve the same upsides.
KennyVader
17-09-2008, 02:49
Looks like AIG is saved, but at a high price; "The plan involves a loan in return for an 80% public stake in the company."; http://news.bbc.co.uk/1/hi/business/7620127.stm
And the Barclays cherry-pick of the US parts of Lehman Bros appears to be confirmed going ahead too.
So Wednesday's news is going to be whether Halifax Bank of Scotland can survive to the end of the day :nuts:
American socialism. Gotta love it :lol:
USA might as well go commie and be done with it at this rate!
You are gambling when buying / selling shares. No real work for massive gain or loss. It is even worse when traders/speculators bet on their bets!!
farmroad38
17-09-2008, 07:34
Who do you use as a broker?
Selftrade.co.uk - £12.50 per trade. I assume it's a percentage and that's the minimum, but as I'm only ever trading the odd couple of hundred shares here and there that's what I pay. If you are holding shares long-term, they can also run an ISA for you so you don't pay tax on the dividends, but there's a monthly fee so it's not worth it for me.
I'm already in profit following the slight rally in yesterday/this morning, but I'm going to keep hold of them for a while. Some analyst or other (I'm hopeless at remembering where I read these things!) has put a target value of 400p on them for the next 12 months, which would net me tidy sum as I paid 177.
farmroad38
17-09-2008, 08:08
Oops... HBoS down nearly 40% already today. Looks like my speculative punt may go horribly, horribly wrong!
If they do got tits up though, I suspect my losing a few hundred quid will be the least of my worries, as it would put the entire economy into pretty dire straits.
Oops... HBoS down nearly 40% already today. Looks like my speculative punt may go horribly, horribly wrong!
Lucky you didn't buy in early 2007 then!
http://uk.finance.yahoo.com/q/bc?s=HBOS.L&t=2y
HBOS and LLyods in merger talks!
Lloyds and HBOS to merge (http://news.bbc.co.uk/1/hi/business/7620483.stm)
At the end all this turmoil there will probably just be a few "big" banks left.
Barclays are sniffing round the remains of Lehman's for any decent scraps they can find.
basegreen
17-09-2008, 08:34
HBOS and LLyods in merger talks!
Talk of price being around 300p, yet hbos is down well below that at the moment! Very odd times.
Didn't see that one coming, that 2 day run on HBOS may be halted.
Large job cuts and less branches then?
Monkey3000
17-09-2008, 08:40
Huge retail bank would have thought some monopoly commision would stop it but given the markets probably waved the idea through!
degeneration
17-09-2008, 08:41
Sorry a little unknowledgable about my banks, but is HBOS anything to do with Royal Bank of Scotland and in turn Nat West?
Rather than have everyone scouring the www.bbc.co.uk finance pages to start threads every 3 minutes over how doomed we are, here's one all-purpose thread for all your impending global financial catastrophe needs.
No, rather confusingly, there's the Royal Bank of Scotland, and (formerly) the Bank of Scotland which merged with Hallfax a whiles back.
I wonder if Barclays will make many changes to the Lehman's Building in NY? It's a pretty cool building to get as part of the deal. Apparently $250m for most of the assets and will see Barclay's become the third biggest investment bank in the US.
degeneration
17-09-2008, 08:44
So Nat West is OK at the moment?
Monkey3000
17-09-2008, 08:47
Natwest is ok although the shareprice has taken a hammering. If the merger goes ahead the RBS/ NW would be the smallest bank!
Problem at the moment is the short selling causing runs on share prices.
Even in the credit crunch traders are still making their money.
Ravenger
17-09-2008, 08:52
Could have made quite a bit of money this morning if you'd been quick about buying HBOS shares, considering how down they were. They've recovered somewhat now.
KennyVader
17-09-2008, 10:20
I find it amazing how Barclays can buy Lehmans, Lloyds TSB can merge with HBOS etc, after just a few days of talks. Normally even £5m-sized company mergers take months to research and agree with all the due dilligence that goes on. How are these banks managing to do it so quickly, and are the Monopolies commissions (on both sides of the Atlantic) just being tossed aside and ignored, "for the greater good" or something. I would have thought, when everything calms down, a Lloyds-TSB-Halifax-BOS combo could be quite formidable; what happens if NatWest RBS then kicks off saying its unfair and demanding L-T-H-BOS gets broken up again?
Also does anyone know, obviously personal savings are guaranteed up to a certain amount (£30k-ish) against a bank going under, but what about company funds that are lodged with a bank? HBOS being one of the biggest Small Business banks, just say they were to go under, would all the small businesses that have funds in their business accounts just lose them? That would be utterly devastating for the country surely.
Sandeep C.
17-09-2008, 10:32
I find it amazing how Barclays can buy Lehmans, Lloyds TSB can merge with HBOS etc, after just a few days of talks. Normally even £5m-sized company mergers take months to research and agree with all the due dilligence that goes on. How are these banks managing to do it so quickly, and are the Monopolies commissions (on both sides of the Atlantic) just being tossed aside and ignored, "for the greater good" or something.
When they announce a merger on BBC news it's not like they're hammering down the Lehmans signs and replacing them with Barcap. It still will take months and months for it to become official.
KennyVader
17-09-2008, 10:33
When they announce a merger on BBC news it's not like they're hammering down the Lehmans signs and replacing them with Barcap. It still will take months and months for it to become official.
So it could all still fall apart then
NicolaUK
17-09-2008, 10:37
So how long will it take for the Lloyds/HBOS merger to take place? After months of going through the books or will it be pushed through quickly to avoid any potential problems?
pyrogena
17-09-2008, 11:42
Rightly or wrongly I moved my savings out of IF fianance today (part of Bank of Scotland, and therefore HBOS). It may be a panic move but quite frankly I don't care. It's everything I've got and my future situation means I'll rely on my saving. Even thought they would be guaranteed by the Bank of England if it all did go tits up, I don't want the hassle.
I've moved it to a nice man who emailed me called Dr Manhoo Umngara. I think everything will be safe with him :thumbs:
Monkey3000
17-09-2008, 11:47
The take over will be approved probably quite quickly for the greater good of the financial markets. The intergration and job cuts will inevitbaly take a while until you see a single branded company. i imagine they would keep the halifax name as the brand is strong which unfortuantly means those annoying ads will continue!
For example the RBS/NW led take over of ABN AMRO is not completed and the banks have not been approved to break up the entity yet.
Its just evaporatedinto thin air mate, it probably never physically existed anyway, its just on paper. Every day on stock markets, more money than exists in the world is traded about a million times over.
It does physically exist if you try to sell. If (say) last week you had £20,000 of stock and you wanted to sell them this week you'd probably get a check for about £18,000, so you'd've obviously lost a lot of cash.
Prufrock
17-09-2008, 12:07
Rightly or wrongly I moved my savings out of IF fianance today (part of Bank of Scotland, and therefore HBOS). It may be a panic move but quite frankly I don't care. It's everything I've got and my future situation means I'll rely on my saving. Even thought they would be guaranteed by the Bank of England if it all did go tits up, I don't want the hassle.
I've moved it to a nice man who emailed me called Dr Manhoo Umngara. I think everything will be safe with him :thumbs:
I was considering doing that yesterday. I tried to call them, but was on hold for so long, I gave up.
pyrogena
17-09-2008, 12:17
I was considering doing that yesterday. I tried to call them, but was on hold for so long, I gave up.
I got through very quickly, but the lady I spoke to sounded very hassled.
which reminds me, money out of kaupthing edge. I fear the Kaupthing fiasco will be Martin Lewis's undoing
Radiohead
17-09-2008, 12:31
UPDATE 12:34PM: I now know more about how the competition obstacles to this deal will be surmounted. The government will announce that in the interests of financial stability it will legislate to over-ride the powers of the Office of Fair Trading and the Competition Commission to block the deal.
And it won't be long before the formal terms of the takeover are announced. Both boards are meeting right now to give their approval.
http://www.bbc.co.uk/blogs/thereporters/robertpeston/
Who owns Egg these days?
EDIT: Found it, Citigroup
farmroad38
17-09-2008, 12:34
which reminds me, money out of kaupthing edge. I fear the Kaupthing fiasco will be Martin Lewis's undoing
Kaupthing fiasco? What's happened there then - please tell me nothing's gone wrong with them as I've got a fixed term account?
I think it's going t go pete tong tbh. ML has recommended it to the world and there seems some confusion over whether 35k is actually protected or just 75% of the first 15k. It has also been a bit in the papers suggesting it as a risky investment.
farmroad38
17-09-2008, 12:40
I think it's going t go pete tong tbh. ML has recommended it to the world and there seems some confusion over whether 35k is actually protected or just 75% of the first 15k. It has also been a bit in the papers suggesting it as a risky investment.
Any references for that? I know that there has been speculation over the Icelandic banks being fragile, but everything I've seen has said that Kaupthing were fully signed up to the UK compensation scheme. Icesave aren't, but they are signed up to the Icelandic equivalent.
NicolaUK
17-09-2008, 12:40
I think it's going t go pete tong tbh. ML has recommended it to the world
He's a lovely fella though :thumbs:
farmroad38
17-09-2008, 12:56
He's a lovely fella though :thumbs:
I can't stand the bloke either, but to be fair it isn't just him that's touted Kaupthing Edge - it's been recommended in most papers, due to having (one of) the leading interest rates in the market.
Coolio - I've just logged onto KE, and they specifically have a section in their FAQs that states they are fully signed up to the UK compensation scheme, which means your savings would definitely be covered. I would have thought that they'd have been in deep **** if they'd put that but weren't covered (but heck, what do I know? I've just bought HBOS shares... :nuts:)
http://forums.moneysavingexpert.com/showthread.html?t=1066481 is what confused the hell outta me
pyrogena
17-09-2008, 13:00
I've just set up the Bank of Pyrogena and it's location is under my mattress.
On the radio earlier there was a 'financial spokesman' and his tone was pretty depressing, even in these weakened times.
Anyone with LTV ratios over 80% were in a poor situation he suggested, and especially those people needing to renew the mortgage deals they got with the likes of Northern Rock.
It all feels like a ball of string unravelling badly, and yet still we get government spinmeisters suggesting we have weathered the worst of the storm! Have we really?
farmroad38
17-09-2008, 13:04
http://forums.moneysavingexpert.com/showthread.html?t=1066481 is what confused the hell outta me
Different entity - that's an offshore account held in the Isle of Man, although it's run by the same Icelandic parent company. Presumably the advantage of having an account in IoM would be that there is no tax to pay.
I've just set up the Bank of Pyrogena and it's location is under my mattress.
Wouldn't this be rather squeaky if there was a run on your bank? :shrug:
Mr Flibble
17-09-2008, 13:07
I've just set up the Bank of Pyrogena and it's location is under my mattress.
Low interest then eh? :p
It all feels like a ball of string unravelling badly, and yet still we get government spinmeisters suggesting we have weathered the worst of the storm! Have we really? I think were in the eye of the storm at the moment, there going to be some claim for a couple of weeks then a couple more banks go under, then we'll be over the worst
pyrogena
17-09-2008, 13:17
Low interest then eh? :p
No, but very safe as no-one except the Bank's founder goes near it. :(
welshy213
17-09-2008, 13:23
I find it amazing how Barclays can buy Lehmans, Lloyds TSB can merge with HBOS etc, after just a few days of talks. Normally even £5m-sized company mergers take months to research and agree with all the due dilligence that goes on. How are these banks managing to do it so quickly, and are the Monopolies commissions (on both sides of the Atlantic) just being tossed aside and ignored, "for the greater good" or something. I would have thought, when everything calms down, a Lloyds-TSB-Halifax-BOS combo could be quite formidable; what happens if NatWest RBS then kicks off saying its unfair and demanding L-T-H-BOS gets broken up again?
Also does anyone know, obviously personal savings are guaranteed up to a certain amount (£30k-ish) against a bank going under, but what about company funds that are lodged with a bank? HBOS being one of the biggest Small Business banks, just say they were to go under, would all the small businesses that have funds in their business accounts just lose them? That would be utterly devastating for the country surely.
Kenny,
From what I remember, having asked Barclays, who hold my LTD account, that company money is not covered.
Cant say this is 100% true, as some of the people I speak to in there are muppets. Worth checking up on though if you have a fair chunk in there.
KennyVader
17-09-2008, 13:34
UPDATE 12:34PM: I now know more about how the competition obstacles to this deal will be surmounted. The government will announce that in the interests of financial stability it will legislate to over-ride the powers of the Office of Fair Trading and the Competition Commission to block the deal.
And it won't be long before the formal terms of the takeover are announced. Both boards are meeting right now to give their approval.
http://www.bbc.co.uk/blogs/thereporters/robertpeston/
So just like with Northern Rock they can change the rules and re-legislate at the drop of a hat but any new laws to tackle illegal immigration or benefit fraud take years to achieve. Hmmmmmmmmmmmmmmm
So it could all still fall apart then
As Lehman are now in bankruptcy the courts now have to decide if the deal can go ahead they need to consider if they are getting a fair price and will be acting in the creditors best interests
Problem at the moment is the short selling causing runs on share prices.
Even in the credit crunch traders are still making their money.
After all this is done and dusted, very likely that the SEC will reinstate the short sale uptick rule which they did away with a few months ago
Basically the uptick rule said you could only short sale if the trade before moved the price up, now people can just short sale and beat the price down as much as they want.
Hopefully the SEC will also ban naked short selling, as to this day I cant see why it should be allowed actually they just did
http://biz.yahoo.com/rb/080917/shortselling_sec.html
I can't stand the bloke either, but to be fair it isn't just him that's touted Kaupthing Edge - it's been recommended in most papers, due to having (one of) the leading interest rates in the market.
Coolio - I've just logged onto KE, and they specifically have a section in their FAQs that states they are fully signed up to the UK compensation scheme, which means your savings would definitely be covered. I would have thought that they'd have been in deep **** if they'd put that but weren't covered (but heck, what do I know? I've just bought HBOS shares... :nuts:)
have you got a link to that bit on KE? Can't find it. I don't know whether to transfer money in or out of the flaming thing at the moment :doh: Not sure anything is safe these days :nuts:
farmroad38
17-09-2008, 15:32
have you got a link to that bit on KE? Can't find it. I don't know whether to transfer money in or out of the flaming thing at the moment :doh: Not sure anything is safe these days :nuts:
Point 11 on this page: http://www.kaupthingedge.co.uk/help/Faqs.aspx?id=03
I'd say that your money is as safe with them as anywhere, because of the compensation guarantee. The question is whether you think they are more likely to fold than another bank, and if they are whether you are willing to go through the process of reclaiming the cash.
I think were in the eye of the storm at the moment, there going to be some claim for a couple of weeks then a couple more banks go under, then we'll be over the worst
Thanks for your insight.
Born2Bwild
17-09-2008, 15:51
HBOS keeps dropping. Is there news out there to support such a big happering or is the market over-reacting?
HBOS keeps dropping. Is there news out there to support such a big happering or is the market over-reacting?
Think there has been some dubious activity going on with this whole thing. Look at the share price around 8.45am 120p , 9am 88p then rocketing to 214p at 9.45 before settling down for this rest of the day. Some site's saying hedge funds involvment. :suspect:
pyrogena
17-09-2008, 16:12
Think there has been some dubious activity going on with this whole thing. Look at the share price around 8.45am 120p , 9am 88p then rocketing to 214p at 9.45 before settling down for this rest of the day. Some site's saying hedge funds involvment. :suspect:
Lehman Brothers in last ditch attempt to save themselves...:suspect:
Some site's saying hedge funds involvment. :suspect:
There's a lot of talk of Hedge fund redemption going on. ( Hedge fund clients giving notice their pulling there money out) The hedge funds are having to ditch whatever assets they own to cover the pay out money to these clients
Born2Bwild
17-09-2008, 16:27
Think there has been some dubious activity going on with this whole thing. Look at the share price around 8.45am 120p , 9am 88p then rocketing to 214p at 9.45 before settling down for this rest of the day. Some site's saying hedge funds involvment. :suspect:
Holy c**p, 88p?
d.boyd1uk
17-09-2008, 16:38
Holy c**p, 88p?
apparently they were £12.00 a few years back, incredible how these things happen.
farmroad38
17-09-2008, 16:39
Holy c**p, 88p?
Yep! Two days ago they were at nearly three quid!
Point 11 on this page: http://www.kaupthingedge.co.uk/help/Faqs.aspx?id=03
I'd say that your money is as safe with them as anywhere, because of the compensation guarantee. The question is whether you think they are more likely to fold than another bank, and if they are whether you are willing to go through the process of reclaiming the cash.
Thanks, and yes, yet another concern :lol:
basegreen
17-09-2008, 16:43
As I said in another thread - they've pulled money out of oil/commodity futures and it'll be going into the better finance stocks shortly.
pigpicker
17-09-2008, 17:17
I'm confooosed.
What's the difference between the Bank of Scotland (HBOS) and the Royal Bank of Scotland?
Sick Boy
17-09-2008, 17:18
Knowing my luck one of them will go under. Planning on my interest to pay most of my rent for the next 12 months, this could scupper that.
Thems the breaks I suppose. If you are lucky enough to worry about having to submit a claim to get your £35k savings back (which you will get back at some point), then you really ought to re-evaluate your thought process.
Sick Boy
17-09-2008, 17:20
I'm confooosed.
What's the difference between the Bank of Scotland (HBOS) and the Royal Bank of Scotland?
2 different banks, that's the difference.
Halifax/Bank of scotland (HBOS)
Royal Bank of Scotland (RBS) They did merge with Natwest, but still have both names I think.
Even in these dark times, BBC's 'Have Your Say' boards still throw up comedy gems:
It's my belief that this global credit crisis is entirely manufactured, partly so that various people will become even richer and partly to recreate the environment that spawned Hitler's dramatic rise to power in the 30's. It was the devaluation of the Mark brought about by the Wall St. Crash, the austerity that followed and scapegoating the Communists and Jews etc. that enabled the Nazi Party to gain credence in Germany & elsewhere. Don't forget, Hitler was funded by multinational corporations
pandatank, london (recommended by 88 people)
Thems the breaks I suppose. If you are lucky enough to worry about having to submit a claim to get your £35k savings back (which you will get back at some point), then you really ought to re-evaluate your thought process.
Why? I am saving for a house and to move abroad. i don't want my plans scarpered by years.
Sick Boy
17-09-2008, 17:36
Why? I am saving for a house and to move abroad. i don't want my plans scarpered by years.
Well worry then.
Other people may have just wanted to be able to stay in their house and hold onto their job.
Just stick all your money in national savings then and take 2%+ drop in interest and relax.
It's your life though, if you want to complicate it with stress and worry. Things rarely go to plan, but they could be a lot worse.
Holy c**p, 88p?
Yep, some people might have made a shed load of on that price.
You can see the price variance here. Its so only 15 mins so can say what happened in between the times.
http://www.hbosplc.com/investors/detailedshareprice.asp
If you are lucky enough to worry about having to submit a claim to get your £35k savings back (which you will get back at some point), then you really ought to re-evaluate your thought process.
I don't understand this comment, people with savings need to re-evaluate their thought processes ? because they are not in debt and should have spent it all rather than be stupid enough to keep it as savings :?:
MrSpoons
17-09-2008, 18:24
If HBOS get merged with Lloyds then will Howard be out of a job?
http://uk.youtube.com/watch?v=sVwx69Qqkgc
Mandrill
17-09-2008, 19:33
If HBOS get merged with Lloyds then will Howard be out of a job?
http://uk.youtube.com/watch?v=sVwx69Qqkgc
He has already been sacked
http://www.thisislondon.co.uk/news/article-23528450-details/Halifax+dumps+Howard+from+its+TV+ads+because+he%27s+too+jolly+for+a+recession/article.do
Sick Boy
17-09-2008, 19:43
I don't understand this comment, people with savings need to re-evaluate their thought processes ? because they are not in debt and should have spent it all rather than be stupid enough to keep it as savings :?:
Yeh. but in context. If you have a lot of savings, you might lose out, but you are also in a much better position, so why stress your self out even more. You might not get what you want, but you would still be comfortable. I am not critisizing savers in anyway, I play it safe myself.
Just my opinion. OK not wine and roses, but there are other people that are far worse hit. Not everyone without savings is a spendaholic debt ridden junkie. They just live hand to mouth and the recent events have and are going to hit them a lot harder.
Save for a rainy day?? well it's ********* down at the moment, and that is what we should save for.
pyrogena
17-09-2008, 20:13
Yeh. but in context. If you have a lot of savings, you might lose out, but you are also in a much better position, so why stress your self out even more.
But why take the risk? Savings = money, no matter how large or small. I haven't got much, but as I said earlier in the thread, what I do have is very important to my future. I'm sure Coolio's is very important to her future too.
If someone prefers to take there stash out of a certain bank and sit on it/save it/hide it - that's their choice. Personally I'm not about to risk even 1 pence of my savings. The bottom line is it's my money and I'm willing to sit about and wait whilst I get it back under some guarantee system if the bank goes under.
Sick Boy
17-09-2008, 20:28
But why take the risk? Savings = money, no matter how large or small. I haven't got much, but as I said earlier in the thread, what I do have is very important to my future. I'm sure Coolio's is very important to her future too.
If someone prefers to take there stash out of a certain bank and sit on it/save it/hide it - that's their choice. Personally I'm not about to risk even 1 pence of my savings. The bottom line is it's my money and I'm willing to sit about and wait whilst I get it back under some guarantee system if the bank goes under.
I'm opting out.
I never said it wasn't choice. Just that It wasn't something to worry about. And your choice is the best and safest choice about. The good news is that savers should be offered good deals as banks want our cash.
As I said in my initial post, my savings are very important to how I've mapped out my next 12 months at least. But, I am also aware that if things don't go as planned, then my losses will still leave me with a large sum of money.
Radiohead
17-09-2008, 21:00
The merger is a done deal
http://news.bbc.co.uk/1/hi/business/7622180.stm
232p per share
mikegray
17-09-2008, 21:19
The merger is a done deal
http://news.bbc.co.uk/1/hi/business/7622180.stm
232p per share
So does that mean people who have shares in Halifax are forced to sell them at that price? Or do they just get some shares in the new company?
basegreen
17-09-2008, 21:24
Noticed again the BBC in cahoots with the govt with their reporting of this deal being "assisted" by careful leaks (and may even lead to legal action, the rumours suggest)...
ascender
17-09-2008, 21:24
The merger is a done deal
http://news.bbc.co.uk/1/hi/business/7622180.stm
232p per share
So that means I'll either have lots of work for the next while or be looking for a new contract by the end of the month :)
Even in these dark times, BBC's 'Have Your Say' boards still throw up comedy gems: At least we can see what BrianJD is up to these days.....
Born2Bwild
17-09-2008, 23:06
The merger is a done deal
http://news.bbc.co.uk/1/hi/business/7622180.stm
232p per share
When they were 1.30-something today, i was wishing i had a few k spare to throw at HBOS. That was a nice opportunity, but i am sure there will be many more.
That is a very good price TBH if you were a short term investor. Takes it to the value a couple of days ago before it dived. If you think about Lloyds could have had them over a barrel but I'm guessing the Gov had a hand in getting the deal done.
Perhaps I'm being too cynical as usual. But it seems quiet convenient that on Sunday Barclays were trying to pick up the juicy bits of Lehman Brothers on the cheap while getting the US taxpayer to bail out the loss making bits. That fell thru bit because the US government weren't willing to use taxpayers money to hand Barclays a bargain, though since Barclays seem to have acquired some bits of Lehmans.
Today Lloyds/TSB pick up HBOS for a third of its value from a year ago with the combined group becoming home to a third of UK's mortgages and savings.
In the US Bank Of America pick up Merril Lynch again pretty cheaply.
Yeah sure these compaines are in trouble and some have conducted their business in a grossly incompetent way, and their share prices are driven up, or down, by greedy and again essentially incompetent speculators, who don't care for the companies involved, just their own bonuses. But as I say it does seem convenient that you can pick up very big companies very cheaply.
Not only that but with Llloyds/TSB/HBOS you have the Prime Minister actively campaigning for the deal to go through when at any other time the govt should have been investigating the merger to see if it was in the interests of the country and consumers.
Interesting comments by Alex Salmond :
Mr Salmond praised both HBOS and Lloyds TSB, but said any merger between the two should be based on measured discussion, not a "shotgun marriage" driven by unwarranted speculation.
..
"I am very angry that we can have a situation where a bank can be forced into a merger by basically a bunch of short-selling spivs and speculators in the financial markets," he said.
"We should not have situations where well capitalised, properly funded financial institutions are subject to incredible speculative attack, and that drives them into decision making which they otherwise might not have done.
"You have got to put the hems on that sort of activity, otherwise we will have a succession of companies going through the same process. All financial regulators have got to wake up to where we are at the present moment."
The merger is a done deal
http://news.bbc.co.uk/1/hi/business/7622180.stm
232p per share
That report has an excellent graphic showing how the value of some these companies has changed over the last year and half.
http://img174.imageshack.us/img174/8224/bankmarketvaluesxo0.gif (http://imageshack.us)
Any way if you had some gold it seems to be doing well up $33 today.
Will the shareholders get a say in this?
HBOS, until Wednesday morning, were said to be a decent bank. Well capitalised and with a good asset book. There's been some bad news in the last 6 months or so though. The amounts HBOS have admitted lending to the building industry and buy to let markets were quite large figures. Earlier this week their credit rating was knocked down a place and their credit default swaps figure was seen to be a bit worse than other banks. They also have a higher loan to deposit ratio then other UK banks. But still, HBOS said they were fine and so did the FSA.
Either HBOS were fine and it was just their share price taking a hammering so this is a gross over-reaction, or something has become seriously wrong with their business model. Perhaps savers been leaving in droves. I would be very surprised if they had got into the same position as Northern Rock - that interbank lending had become too expensive for them to continue.
The behaviour with the share prices is a little odd. Something caused HBOS to sink yesterday, only for Pesto's amazing info to see the shares surge upwards. If the talks between HBOS and Lloyds TSB were at an advanced stage shouldn't the stock market have been informed and possibly the shares suspended? Especially once Brown was involved and someone leaked the info to the BBC.
I'm struggling to think of anything good coming from this deal. A massive bank, bigger then the law ought to allow. Huge amounts of duplication so we could expect substantial job losses and a deal done in a very shoddy and shady way.
If the new bank is outside the scope of the competition and fair trading laws I guess it would be in a position to take the remnants of Northern Rock off the taxpayers' hands.
Born2Bwild
18-09-2008, 03:33
Perhaps I'm being too cynical as usual. But it seems quiet convenient that on Sunday Barclays were trying to pick up the juicy bits of Lehman Brothers on the cheap while getting the US taxpayer to bail out the loss making bits. That fell thru bit because the US government weren't willing to use taxpayers money to hand Barclays a bargain, though since Barclays seem to have acquired some bits of Lehmans.
Today Lloyds/TSB pick up HBOS for a third of its value from a year ago with the combined group becoming home to a third of UK's mortgages and savings.
In the US Bank Of America pick up Merril Lynch again pretty cheaply.
Yeah sure these compaines are in trouble and some have conducted their business in a grossly incompetent way, and their share prices are driven up, or down, by greedy and again essentially incompetent speculators, who don't care for the companies involved, just their own bonuses. But as I say it does seem convenient that you can pick up very big companies very cheaply.
Not only that but with Llloyds/TSB/HBOS you have the Prime Minister actively campaigning for the deal to go through when at any other time the govt should have been investigating the merger to see if it was in the interests of the country and consumers.
Interesting comments by Alex Salmond :
Mr Salmond praised both HBOS and Lloyds TSB, but said any merger between the two should be based on measured discussion, not a "shotgun marriage" driven by unwarranted speculation.
..
"I am very angry that we can have a situation where a bank can be forced into a merger by basically a bunch of short-selling spivs and speculators in the financial markets," he said.
"We should not have situations where well capitalised, properly funded financial institutions are subject to incredible speculative attack, and that drives them into decision making which they otherwise might not have done.
"You have got to put the hems on that sort of activity, otherwise we will have a succession of companies going through the same process. All financial regulators have got to wake up to where we are at the present moment."
That report has an excellent graphic showing how the value of some these companies has changed over the last year and half.
http://img174.imageshack.us/img174/8224/bankmarketvaluesxo0.gif (http://imageshack.us)
Any way if you had some gold it seems to be doing well up $33 today.
asadmm, with all due respect, i think you have touch with reality and watched maybe one too many conspiricy movie. Are you seriously suggesting that this was planned? That these bigger banks set the wheels in motion for a global financial meltdown so they could kill off their competition and pick up their assets for cheap?
Born2Bwild
18-09-2008, 03:36
share price for HBOS is showing as 147.10 right now, unless that $2.32 price was after trading hours. Days range was 88-214.
He has already been sacked
http://www.thisislondon.co.uk/news/article-23528450-details/Halifax+dumps+Howard+from+its+TV+ads+because+he%27s+too+jolly+for+a+recession/article.do
so some good news then.
really does look like this is being rushed through without any concern for the rules and regulations. Which means massive job losses are coming.
We have a Halifax and Llyods within a few doors of each other here and that's probably similar across the country.
Good time for financial companies to do their business then as the laws just don't apply.
All I need to know is:
Is my wife's and my savings account and ISA with Halifax safe?
thank you.
From MSE:
All UK deposits in bank or building society savings products are covered by the Financial Services Compensation Scheme (FSCS). This is an independent fund set up by UK financial bodies and regulated by the Financial Services Authority (FSA) which promises that, in the event of a bank collapsing, you'd get some of your money back. This applies to everyone, no matter their age, including children. Remembering the exact amount you get is so crucial, it needs to be writ large.
"The first £35,000 you have saved per financial institution is protected."
http://www.moneysavingexpert.com/savings/safe-savings
douglasb
18-09-2008, 09:55
No.
Yes it is.
Stop scaremongering ;)
KennyVader
18-09-2008, 09:55
really does look like this is being rushed through without any concern for the rules and regulations. Which means massive job losses are coming.
We have a Halifax and Llyods within a few doors of each other here and that's probably similar across the country.
Good time for financial companies to do their business then as the laws just don't apply.
Indeed, I think the implications of this rushed merger a few years down the line when people look back at the job losses and the subsequently lessened competition in the market will be massive ... yet another mess being left for the Tories to sort out.
I can only think that competing financial institutions are not kicking off about it now because they all know they're vulnerable, and might need similar "assistance" in a few weeks' time; or they are kicking off behind the scenes and it's not being reported. Or it'll all come out a month or two from now when protestations from other institutions force the merger to be prohibited so HBOS fails then instead of now.
http://forums.moneysavingexpert.com/showthread.html?t=1162353&highlight=halifax+current+account
KennyVader
18-09-2008, 10:14
From MSE:
All UK deposits in bank or building society savings products are covered by the Financial Services Compensation Scheme (FSCS). This is an independent fund set up by UK financial bodies and regulated by the Financial Services Authority (FSA) which promises that, in the event of a bank collapsing, you'd get some of your money back. This applies to everyone, no matter their age, including children. Remembering the exact amount you get is so crucial, it needs to be writ large.
"The first £35,000 you have saved per financial institution is protected."
http://www.moneysavingexpert.com/savings/safe-savings
In theory consumer savings are protected yes but I do not believe the protection has ever been tested, not in recent years anyway? So in practice nobody knows how it will work. The money is not sitting there waiting to be paid out; when a bank goes down, then and only then do the others have to put their money in to the pot ready to pay out to people. So what happens if one or more of the institutions left in the scheme do not have the ready cash to put in to the protection pot? Maybe the whole lot comes tumbling down at that point and the very act of having to put their share in the protection pot to cover someone else's failure starts to bring more institutions down. Whatever happens, although I'm sure consumers will all get their money eventually, expect it to take weeks/months or maybe even a year before the protection pays up, therefore I would think it worth spreading savings around a couple of places, and making sure they're places with lots of counters on the high street that you can go to to get money, not places where you have to do everything through crappy websites that go down as soon as more than 52 people try to use the site at once.
I think the deposits protection scheme was invented to cover the failure of one single institution at once, for instance if the directors were up to no good or a foreign bank (though legally trading here) which might be affected by factors localised to their home country. I don't think it was intended to cover what's going on now and I don't think it will easily cope. I think this is why Captain Darling and co. are bending the rules to rush through the Lloyds-TSB-HBOS thing because they know it'll be an utter disaster if the consumer's deposits protection scheme gets called upon.
Don't forget that if any bank or building society does go down then any companies with current accounts at that institution will lose their money, I've looked into it and there doesn't seem to be any protection at all for company accounts. So the failure of any bank of whatever size will likely bring down a whole heap of unrelated companies if their cashflow is already close to the edge. If your employer banks with an institution that goes down then you probably won't get paid for a few months, if ever.
Scaremongering? Well maybe, but just trying to look at the practicalities of the thing. I would not put all my eggs in one basket and rely upon the deposits protection scheme to pay out quickly.
unrealnils
18-09-2008, 10:18
He has already been sacked
http://www.thisislondon.co.uk/news/article-23528450-details/Halifax+dumps+Howard+from+its+TV+ads+because+he%27s+too+jolly+for+a+recession/article.do
:clap:
Loads of people queuing to get money out of the small Halifax bank just up the road from me this morning. Panicking once again which may not help things.
Radiohead
18-09-2008, 12:06
BofE and 5 other central banks release £100bn emergency funds to attempt to ease funding crisis.
Mattie F
18-09-2008, 12:13
The thing I don't get is that HBOS is a responsible lender (no silly >100% mortgage deals like Northern Rock) and therefore whenever a mortgage defaults they have the security of the property. Yes the value of properties have dropped a bit but still, assuming the majority of their mortgages were at, say, 90%LTV then they should have little trouble getting most or all of their loan back.
I suppose the issue is their borrowing to back up their mortgage book but you would have thought that if that book is of good quality then there wouldn't be a big problem securing the funding.
Maybe it's just a confidence thing - my understanding is that a run was starting - and so the merger had to be hurried through. Still, I'm not convinced there was much wrong with HBOS as a company and the worry is that if it could happen to them, who else could it happen to when the rumours start flying?
KennyVader
18-09-2008, 12:28
The thing I don't get is that HBOS is a responsible lender (no silly >100% mortgage deals like Northern Rock) and therefore whenever a mortgage defaults they have the security of the property. Yes the value of properties have dropped a bit but still, assuming the majority of their mortgages were at, say, 90%LTV then they should have little trouble getting most or all of their loan back.
BM Solutions is/was a well known lender that specialised in "tricky" mortgages; sub-prime lending, i.e. people with CCJs, discharged bankrupts, self-certs etc. BM Solutions is a part of Birmingham Midshires who are a part of Bank of Scotland.
They were still doing "creative" lending, they just partitioned it off from the main high street brands.
They've all been at it, I don't think you can say HBOS is really any more responsible than the others, just because Halifax Howard hasn't been on TV adverts cheerily flogging self-cert mortgages himself.
daveb_dvd
18-09-2008, 12:40
The thing I don't get is that HBOS is a responsible lender (no silly >100% mortgage deals like Northern Rock) and therefore whenever a mortgage defaults they have the security of the property. Yes the value of properties have dropped a bit but still, assuming the majority of their mortgages were at, say, 90%LTV then they should have little trouble getting most or all of their loan back.
Think I read that around a third of HBOS mortgages are greater than 90% LTV
(found it buried in here. (http://ftalphaville.ft.com/blog/2008/09/16/15945/markets-live/)). This proportion will rise as UK house prices fall too.
I don't understand - on the BBC website the PM says we must get faith back into our banking system - but it was the banks fault in the first place, so why the hell should we trust them, when we all know the greedy sods will probably do it again in another cycle.
I think the time has come to keep your money stowed away under the flame retardent matress!
pyrogena
18-09-2008, 14:46
I don't understand - on the BBC website the PM says we must get faith back into our banking system - but it was the banks fault in the first place, so why the hell should we trust them, when we all know the greedy sods will probably do it again in another cycle.
I think the time has come to keep your money stowed away under the flame retardent matress!
He has to come out and say something like that otherwise the people withdrawing their cash and stashing elsewhere will rapidly increase, leading to banking meltdown and one very sad PM.
He has to come out and say something like that otherwise the people withdrawing their cash and stashing elsewhere will rapidly increase, leading to banking melt