Lehman Bros.

[Mad Cyril]

This is going to make my task of trying to find a graduate job in London all the more harder.




Great

It's going to make some peoples task of paying their mortgage and buying food for their family all the more harder.

If you can't find anything do a postgrad degree. You will be in a stronger position when the market picks up.

 

[Mad Cyril]

I have noticed RBOS, HBOS and LTSB are all up 35-40% today.

 

[sufcintheprem]

Apparently,

If you had purchased £1000 of Northern Rock shares one year ago
it would now be worth £4.95, with HBOS, earlier this week your
£1000 would have been worth £16.50, £1000 invested in XL Leisure
would now be worth less than £5, but if you bought £1000 worth
of Tennents Lager one year ago, drank it all, then took the
empty cans to an aluminium re-cycling plant, you would get £214.

So based on the above statistics the best current investment
advice is to drink heavily and re-cycle.

 

[SARF]

I have noticed RBOS, HBOS and LTSB are all up 35-40% today.

Rumours of a big U.S. based scheme to take all the toxic structured loans rubbish off the banks books.. Basically the U.S. government takes it.. The banks take one final big write down but they dont care as half the competition has gone and margins are 5 times what they used to be.. Takes the uncertainty of revaling banks books out of the game..

 

[* ORM *]

This is a crunch weekend for global markets which could ultimately affect you. The market cannot currently support another Lehmans collapse and the effects would dwarf all other historical market events in terms of its size and domino effect implications.

I'm on standby to jump in a car to work at any time over the weekend apart from Sunday morning. If the rescue package isn't ratified quickly the downfall of at least one major global player may be accelerated and could happen over the weekend. This would have ramifications far beyond the downfall of Lehmans.

Quite frankly I've seen some of the toxic waste being discussed in the media at first hand over the last few days (pleasingly not held by the company I work for) and I am utterly gobsmacked at both the extent and content of it most of which is priced by Mickey Mouse. The value of it on books and records is nothing like the true value of it in the marketplace, assuming someone was idiotic enough to buy it. There must be some over-inflated balance sheets out there.

Let's assume the US Federal Reserve takes it all in exchange for cash either in short term loans or outright purchases which they've virtually promised they will. We've already seen investment banks making the step in the last week to becoming full banks as the man in the street would understand them. My guess is that changing their status was a big concession to potential financial support by the State but at the same time the State gets to see the true state of utter crap masquerading as "assets" and will work very quickly to find better ways to regulate the marketplace and squeeze out much more transparency than currently exists.

Lehmans were one of my clients. Though there are at least 4 names in the frame for potential insolvency the bank perceived to be next in the firing line is also my client. Blame me for the credit crunch. I have limited liability. :D

 

[Holy Joe]

FT is reporting that Bradford & Bingley will be either nationalised or bought - announcement to be made before the market opens on Monday morning. Not a global player but another one bites the dust.

BBC reporting B&B will be nationalised and then sold on. Obvioulsy there are no details but if this is similar to the Washington Mutual deal last week it is very worrying as not only are equity holders wiped out - but bond investors can/will be as well. It's a very dangerous game as why would any bank buy another one - all they have to do is wait for it to go bust and then cherry pick the assets and dodge the liabilities. Can't see why any investor would invest in any part of a banks capital structure in this "new world".

 

[Holy Joe]

ORM - are you talking about Morgan Stanley? or Fortis?

 

[* ORM *]

ORM - are you talking about Morgan Stanley? or Fortis?

We're getting into dangerous territory here, particulary as I'm FSA regulated. Let's just say the Fed wouldn't be bailing out a Dutch bank but there's little expectation that the European Central Bank will. That is definitely not suggesting that Morgan Stanley is the name in the frame.

ORM has been working all day on this and speaking to/emailing the bank in question for most of it :( Current situation is looking good but that can change in an instant.

 

[Andyhsufc]

Interesting to see that with B+B being swallowed up in some form that every BS that demutialised has now been swallowed up/folded. So the question is, was the demutialising a good idea?

 

[* ORM *]

Interesting to see that with B+B being swallowed up in some form that every BS that demutialised has now been swallowed up/folded. So the question is, was the demutialising a good idea?

What is a good idea is getting back to concentrating on what institutions were always good at. Biggest is clearly not always best. High street banks cannot be run electronically with call centres in Asia. Building societies thrived for years as building societies.

 

[OldBlueLady]

Saw somewhere in something I read today, well, yesterday now that they're talking about merging B&B and Northern Rock. ORM, you are so right about the call centres, at the time I left HSBC, our call centre was in Harlow and it was so much easier talking with someone who understands you as well as you understand them, and has a bit of basic knowledge of the country's geography. Both types of institutions should just get back to looking after their customers rather than concentrating on selling every product under the sun.

 

[Holy Joe]

So far today

B&B - nationalised and partially sold on
Fortis - Belgium, Lux and Dutch govts taking 49% stake
Giltnir - Iceland govt taking 75% stake
Hypo Real Estate - bailed out by other german banks

 

[Napster]

More bad news

Sterling puts in worst performance for 15 years

Sterling put in its worst intra-day performance against the dollar for fifteen years while the euro also suffered as banking bail-outs in the UK and Europe put pressure on sterling and the pound currency.

The pound fell 2 per cent to $1.8022 against the dollar, its largest single session drop since 1993, while the euro lost 1.2 per cent to $1.4346, with the dollar also rising on hopes of progress in the US government’s rescue plan to bail out the country’s stricken financial system.

Figures from the Bank of England showed net mortgage lending stood at just £143m in August, down from £2.9bn in July and £7.9bn at the end of 2007.

This was the lowest level since the series began in April 1993 and was substantially below the £4.7bn monthly average for the previous six months.

“The dire Bank of England mortgage data show that housing market activity is being decimated by the highly damaging combination of stretched buyer affordability and tight lending practices,” said Howard Archer at Global Insight.

Meanwhile, the European Commission revealed business confidence in the eurozone dropped to a five-year low in September.

Analysts said the figures would add to the pressure on the European Central Bank to abandon its hawkish stance on interest rates at its policy meeting this week.

 

[MK Shrimper]

How many more these private banks & building societies can be nationalised at the expense of everything else? Surely there's a tipping point?

 

[Napster]

How many more these private banks & building societies can be nationalised at the expense of everything else? Surely there's a tipping point?

Yes, when the government runs out of money.

 

[Holy Joe]

also today

Wachovia - partly purchased by Citigroup although has a deal that limits losses.

 

[fatshrimp]

http://www.independent.ie/business/irish/dublin-71-with-paddy-power-for-riot-on-economy-1486484.html

Paddy Power taking odds on civil unrest. Classic!

 

[Yorkshire Blue]

Paddy Power in headline grabbing stunt shock.