Gordon Brown... is back?

Thought through the actions? Looks like just the one action -- buy shares in banks.

Where's the road map? Where's the rationale? One action doesn't make a strategy. There's no indication either that they acknowledge the scale of the problem -- Brown can't rely on people reading into his action that he knows it's vast & just therefore doesn't need to say so.

This could be somewhat akin to spitting into a bonfire ... waste of time & spit.

The fat lady's not even got her make-up on yet.

Regards
 
Unless ive misheard, they have put some well thought out conditions to the buy out. Thats the key
 
I'm not convinced.

HMG has basically thrown billions of tax-payer money into bank shares, with no real knowledge about the extent of the liabilities that these Bank's have built-in further down the line.

I have some sympathy with the line that suggests something had to be done, but I think it's too nearly to be saying whether it has made a jot of a difference, let alone calling it a "blinder".
 
Of course its made a massive difference. Confidence increases and they should start lending to each other again, which is the key to all of this. I would agree that its expensive common sense rather than any genius. Handled it well, but wouldnt have expected any other past team to have behaved differently
 
I'm half wondering if we aren't likely to see something of a re-run of 1930 where share prices recovered for 6 months before we realised that all the banks had done was plug the holes in their liabilities and simply go phew!!! that was close!!! The end result was they still didn't lend money, as they'd only made good their shortfall and didn't have a war chest as such. Also consumers who'd enjoyed a credit boom in the late 20's were basically pursued to pay off their debt. The result was that expenditure dried up, and ultimately so did production, which plunged us into a so called 'great depression' (an oxymoron if eve r there was)

I expect lesiure, entertainment and non food retail to take a panning in the next few months (post Xmas). Also expect to see something of a shake out of small businesses as these are traditionally easy targets for banks to hit, and many are dependent on larger firms who can delay payment due to their size for cash flow
 
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clivex said:
Of course its made a massive difference. Confidence increases and they should start lending to each other again, which is the key to all of this.
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My apologies, clivex.

I was foolishly looking at the actual facts, rather than forecasting some Utopian hinterland where all the banks share prices recover, the Government makes a big score, lending is freely made but expertly regulated, and where it transpires that all UK banks future potential losses amount to 12p total.

I can see that being cautious was foolish, and would like to take this opportunity to thank you for pointing out the error of my ways.

On a related topic, I'm looking to relieve myself of some shares in HBOS and Lloyds TSB, which have somewhat "tanked" (I think that's the fashionable term) of late.

Despite their current market value (presently down 10 and 13% respectively from yesterday's close), I assume you will want to pay me a bit over the odds, due to the "massive difference" the "increased confidence (sic)" has made?? :p
 
Do the share-buying conditions stipulate no more buying crap and creep CD swaps? Exactly what are they going to do about the barrow boys running their trading desks?
 
I'm just wondering how likely it is that 3 Icelandic banks can run up debts of £50bn and our 3 have managed just £37bn, half of me can't quite reconcile the idea that they're not telling us the whole truth. If all they're doing is using the £37bn to plug the gap, then there's no real reason to believe they're about to start lending again in any huge quanities and this could prove something of a false dawn. Having said that, I don't know enough about the technical operations of banks, but I'd have expected the British banks to have had a greater exposure to property related bad debts than the Icelandic operations?
 
They aren't British though are they? Hong Kong & Shanghai Banking Corporation?

HSBC and Barclays aren't in play; it's the HBOS, RBS and Lloyds TSB triumphrate I was refering to. So far as I can gather, the damage has been done in the US, although I'm sure it stretches much deeper by now.

As an aside, and again I don't know the answer, what would the effect have been for an independent Scotland? Or would it be negligable given the international flows of capital? I'm guessing that Scots must have a disproportionate number of RBS accounts, and about 2.75 - 3 million taxpayers to underwrite their losses?

The intervention itself just looks like an exercise of 'lender of the last resort' and is basic common sense as much as anything. The early indications are that Brown is coming out of it well in comparison to some of the other world leaders who've given passable impressions of startled rabbits. Did the 'man with a plan' ever tell us what his plan was incidentally?
 
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I realise that, but surely that's the point. Their activity in the far east would easily eclipse any suboridinate activity attributable to the Midland, purely because they aren't British
 
Warbler said:
As an aside, and again I don't know the answer, what would the effect have been for an independent Scotland?
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Fer fex sake, Warbler - don't go feeding clivex ammunition likes this!

Actually, it's a fair question.

One assumes that RBS shareholders would have been "royally" fooked-over, if Scotland were independent, and the company had chosen to remain headquartered there?

There's only so much whisky and shortbread you can sell, to try and make-up for a £20Bn shortfall, I suppose.
 
One would imagine that an independent Scotland would have looked to history for the answer and requested a union with England to bail them out.

Or they might have been able to pay for it through their oil money. Who knows.
 
Well, if the SEC chairman's estimate of $58 trillion (58 thousand billion) in CDSs being out there, do you think any major bank will be unexposed to what he says are unquantifiable levels of liability, Chinese or not?

Isn't it the the whole point that banks got involved in trading these things, when they had little knowledge of the underlying liabilities? And those might be quite devastating?

As he says:
"The reason for this aggressive enforcement investigation into credit default swaps is the significant opportunity that exists for manipulation in the $58 trillion credit default swaps market. It is a market that is completely lacking in transparency, and virtually unregulated. The regulatory black hole for credit default swaps is one of the most significant issues we are confronting in the current credit crisis, and it requires immediate legislative action.
The over-the-counter market in credit default swaps has experienced explosive growth in recent years. One reason is that the total amount of credit default swaps outstanding far exceeds the total value of what the swaps are meant to insure. So when entire asset classes fall in value, the exponentially larger losses on credit default swaps can work to amplify the risk to the financial system.
To put into context this $58 trillion of value that credit default swaps insure: $58 trillion is more than the gross domestic product of every country on earth, combined.
The market for CDS is barely 10 years old. It has doubled in size since just two years ago. It has grown between the gaps and seams of the current regulatory system, where neither the Commission nor any other government agency can reach it. No one has regulatory authority over credit default swaps — not even to require basic reporting or disclosure.
The over-the-counter credit default swaps market has drawn the world's major financial institutions and others into a tangled web of interconnections where the failure of any one institution might jeopardize the entire financial system."
 
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Or they might have been able to pay for it through their oil money. Who knows.
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The oil rigs would have been militarily seized

A bankrupt scotland would be amusing i suppose. Could it effectively be wound up? Can the population be sold off by the liquidators? Would that have any value given the appaling health due to deep fried creme eggs with curry sauce and buckets of tonic wine?
 
BBC news ought to give me an editorail job having just featured the very same question on their 10 O'clock broadcast. Salmond didn't look good in truth, and is asking for £1bn for Scotland. They even dug out some footage from 2006 when he was espousing an arc of independent states taking in best practice models citing Norway, Ireland and Iceland
 
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