Northern Rock
- Thread starter Aldaniti
- Start date
K
Kathy
Guest
You are fully entitled to your opinion, FU!
By the way, An whatever happened to that financial thread you started months or was it years ago. You asked people to nominate certain shares/investments to follow, remember? You couldn't even keep that going for longer than about a couple of weeks could you so please don't start asking me for 10 equities to follow now - as you may have made yourself a few quid if you had followed my advice then.
Bar the Bull won. He recieved his prize as he will confirm. You were way down the field. I didn't post your efforts to avoid publicly embarrassing you.
K
Kathy
Guest
I was probably having a break from this place at the time the winner was announced as nothing happened on it for weeks/months.
prince regent
Conditional
- Joined
- May 2, 2003
- Messages
- 588
ACROSS the City and Whitehall, bankers, politicians, regulators and investors are on tenterhooks. They hope, above hope, that the Lloyds TSB takeover of HBOS will mark the turning point, that some semblance of calm can return to the markets.
So far, the omens are not good. But it is possible now to begin to identify the winners from the most traumatic period in recent financial history. The City slicker has been banished.
The age of Gordon Gekko “greed is good” is over — for the foreseeable future anyway. Bankers who forgot what banking used to be about, who pursued global domination at the expense of safety first, are no more.
In the ascendant now are those they regarded with disdain as little more than nerds. Those who lacked their ambition and vision. The earthquake doesn't stop there. Edinburgh, once the proud centre of virtue and parsimony, an alternative to London, has lost its lustre and now faces huge job cuts — its second biggest bank falling, humiliatingly, into the arms of a more conservative English rival.
The lessons are also becoming clearer: globalisation cannot be underestimated; the bonus culture is an undermining, negative force; short-sellers must be curbed, possibly by making it more difficult for them to borrow stock; bankers are not the brightest and the best as they thought they were; they must not be able to fall back upon moral hazard; nothing, absolutely nothing, must come between depositors and their money.
Ministers, too, have had to absorb some salient truths. That was clear with the way Gordon Brown responded to HBOS's plight. His rush to encourage Sir Victor Blank, the chairman of Lloyds TSB, and Lord Stevenson, the chairman of HBOS, to seal the talks that had been taking place for a while was in stark contrast to a year ago. Then, as now, Lloyds TSB was prepared to act in a moment of supreme crisis, by taking out Northern Rock.
But then the Bank of England was not prepared to offer the guarantees Lloyds TSB sought, claiming they breached EU subsidy laws, and, faced with such inflexibility, the merger perished.
This time the Prime Minister, assisted by his chief of staff, Jeremy Heywood, himself a former banker, drove a coach and horses through the competition laws. The battering of the UK's biggest mortgage lender and holder of people's short-term savings on the stock market was a matter of national interest.
At a party on Monday night, hosted by another bank, Citigroup, Brown went into a huddle with Blank. Those who saw the two men thought it was a case of old muckers catching up — Blank had previously chaired the Labour supporting Mirror newspapers and was regarded by the Labour hierarchy as one of its few City friends. This conversation between the Prime Minister and the Lloyds TSB chairman in the glittering surroundings of Spencer House in St James's may in years to come to be seen as the high water-mark of the credit crunch. Equally, it may represent the moment when the cautious took charge, when old-style bankers reassumed control.
HBOS was part of a coterie of British retail banks that had grown at a ferocious pace in the financial services boom of the past few years. Others were its Edinburgh neighbour Royal Bank of Scotland, Barclays and Northern Rock.
As recently as 1999, Lloyds TSB was the biggest and most profitable bank in Britain and in Europe. But Lloyds TSB had slipped in the rankings to fifth — much to the amusement of its larger rivals.
The Sign of the Black Horse, to quote its advertising, was even in danger of being overtaken by an upstart from the North-East, a former building society called Northern Rock.
No bank was identical but they had recurring characteristics. Bank of Scotland and RBS embarked on an aggressive takeover policy — BoS bought the Halifax to form HBOS, RBS snapped up NatWest. They saw themselves as major international players, members of a banking elite, equal to the bulge bracket investment bankers of Wall Street.
Barclays, too, took on this mantle as did Northern Rock which, under its gung-ho leader Adam Applegarth, could not wait for depositors to bank their cash so that Northern Rock could lend it but instead turned to the money markets for funding.
HBOS did the same, borrowing short on the wholesale markets and lending long. Marketing men, such as Applegarth, were to the fore, putting greater emphasis on slick campaigns and promotions.
At HBOS, Andy Hornby, ex-Asda, took over the running of the giant bank. The strategy of Hornby — “call me Andy” — was not dissimilar to that of the supermarket group. He went big on consumer products and touchy-feely customer service, coupled with aggressive, expensive advertising. That was coupled, too, with a push by the bank into corporate lending, backing takeovers and huge property deals.
Those in the chairs ceased to be bankers — RBS is chaired by Sir Tom McKillop, formerly of Astra Zeneca, and HBOS is overseen by Stevenson, the ex-chair of publishing group Pearson.
RBS, in the shape of its dominant chief executive, Sir Fred Goodwin, continued on its relentless acquisition — even though it said it would stop — buying ABN-Amro of Holland.
In their haste to get ahead, some of the banks turned to other sources of profit. They charged into investment banking and corporate finance, handing out undreamed of sums at many times the value of the security being offered. They speculated on a grand scale, trading complex financial instruments and taking huge positions.
It's become apparent as the year has unravelled that many of those at the top had no idea what those below were up to. The result has been tens of billions of pounds written off — thanks to the folly of investing in mortgages extended to the occupants of America's trailer parks and other “sub-prime” properties.
This whirlwind of activity was replicated in America, where in 199 President Clinton repealed the Glass-Steagall Act that prevented banks from owning other financial companies. In an explosion of diversification, banks ceased to be straightforward banks but became all-singing, all-dancing financial combines, involved in deals far beyond their traditional confines. Leading the surge were Bear Stearns and Lehman Brothers. AIG, once an insurance group, began using customers' insurance premiums to fund forays into the financial markets. AIG, in effect, became a bank.
Profits and with them, personal bonuses, soared. The banks were the kings of the walk, preening and strutting, their influence and power knowing no bounds.
Throughout all this, in the UK, one leading banker stayed outside the throng. At Lloyds TSB, Eric Daniels, the American chief executive, prided himself on being different. The son of a German father and a Cantonese mother, he was born in 1951 and grew up in Montana, far from the glitz of the East and West coasts. He puts enormous faith in ensuring his workforce have the right values. “Either you think of your organisation as being like a huge machine and the people within the organisation as cogs,” he says. “The other way is to think about the organisation as an organism.”
Daniels stressed repeatedly what mattered: “It is easy for an organisation to forget that their reason for being is customers, and if we do not satisfy that customer better, the customer will refuse to do business with us.”
While others were bursting out everywhere, Daniels refused to budge. “I am confident that this is an organisation that can grow,” he told the City analysts who tried to urge him on. “What I am concerned about is the quality of that growth. I guess what I am interested in is sustainable growth that is underpinned.”
He was joined at Lloyds TSB, in 2006, by Blank. Like his chief executive, the new chairman puts great store by his roots. Everywhere he goes, a Lowry-type painting of the streets of Stockport where he was raised, follows with him. It has pride of place on his office wall.
Once, Henry Lewis, the former Marks & Spencer chief, who also grew up in Stockport, remarked that the Blanks had been a cut above. “I said that can't be so,” said Blank. “We had a tiny two-up, two-down house with an outside loo.” Lewis replied: “So did we, but we shared our loo with the neighbours.” Blank's maxim, as he is fond of saying, is: “You always have to remember where you came from.”
A natural, sharp deal-maker, Blank has built his career on spotting and seizing opportunities. He made his first fortune while at Charterhouse merchant bank when he persuaded the American parent of Woolworths to sell the British end. He was chairman of Trinity Mirror and GUS, before Lloyds TSB.
On taking up his new post, Blank was quick to praise. “Lloyds TSB is a super bank, with tremendous potential to grow, even thought it's a tough and competitive market. People point out that it has fallen to fifth position in Britain but they don't see the fantastic things going on behind the scenes ... What I do see is that Eric Daniels, the chief executive, has put together a superb team, which has perhaps not always been appreciated by the outside world.”
Lloyds TSB concentrated mostly on the UK high street, eschewing its rivals' headlong rushes into investment banking and the wilder reaches of financial trading. Neither was it tempted to make any merger move — believing prices were too high.
Once the US economy turned and borrowers found they could not repay their loans and property prices tumbled, the credit crunch kicked in. Banks, sent reeling by the downturn, started retrenching and hanging on to their cash — they stopped lending to each other.
A great domino effect, fuelled by waning confidence and the hedge funds and other short-sellers who placed bets on falling bank shares, took hold. First to go was Northern Rock, its business plan reduced to ruin by its inability to tap the money markets. After a sale to Lloyds TSB was blocked and other attempts to off-load the bank failed, the Government stepped in to nationalise it.
In the US, JP Morgan was leaned upon to buy Bear Stearns. Still, against a backdrop of a worsening economic situation exacerbated by a rising oil price, the downward ride continued. British banks turned to their shareholders for help. By the skin of his teeth, Sir Fred Goodwin, the RBS chief, who had led a consortium that paid £49 billion for ABN Amro when the warning signals of a slump were coming thick and fast, kept his job.
At HBOS, Hornby and Stevenson were forced to go, cap in hand, to their investors. They got their money but the bank's share price continued to fall. They blamed the short-sellers, saying their company was being unfairly singled out. Possibly, but those doing the shorting were also reading the runes and saw there was only one way HBOS was headed.
Sensing an opening, Blank talked to Stevenson. That was in the summer. This week, Lehmans' demise provided a final jolt. AIG was also going in the same direction.
In London, Brown went to his party and ditched his customary caution and told Blank what he was prepared to do. It was a mighty personal move — but he could not bear a repeat of Northern Rock. Not now, with his political ratings so low. He also spoke to Stevenson. HBOS had to capitulate. The hares were finished; the tortoise had overhauled them all.
Link to:
So far, the omens are not good. But it is possible now to begin to identify the winners from the most traumatic period in recent financial history. The City slicker has been banished.
The age of Gordon Gekko “greed is good” is over — for the foreseeable future anyway. Bankers who forgot what banking used to be about, who pursued global domination at the expense of safety first, are no more.
In the ascendant now are those they regarded with disdain as little more than nerds. Those who lacked their ambition and vision. The earthquake doesn't stop there. Edinburgh, once the proud centre of virtue and parsimony, an alternative to London, has lost its lustre and now faces huge job cuts — its second biggest bank falling, humiliatingly, into the arms of a more conservative English rival.
The lessons are also becoming clearer: globalisation cannot be underestimated; the bonus culture is an undermining, negative force; short-sellers must be curbed, possibly by making it more difficult for them to borrow stock; bankers are not the brightest and the best as they thought they were; they must not be able to fall back upon moral hazard; nothing, absolutely nothing, must come between depositors and their money.
Ministers, too, have had to absorb some salient truths. That was clear with the way Gordon Brown responded to HBOS's plight. His rush to encourage Sir Victor Blank, the chairman of Lloyds TSB, and Lord Stevenson, the chairman of HBOS, to seal the talks that had been taking place for a while was in stark contrast to a year ago. Then, as now, Lloyds TSB was prepared to act in a moment of supreme crisis, by taking out Northern Rock.
But then the Bank of England was not prepared to offer the guarantees Lloyds TSB sought, claiming they breached EU subsidy laws, and, faced with such inflexibility, the merger perished.
This time the Prime Minister, assisted by his chief of staff, Jeremy Heywood, himself a former banker, drove a coach and horses through the competition laws. The battering of the UK's biggest mortgage lender and holder of people's short-term savings on the stock market was a matter of national interest.
At a party on Monday night, hosted by another bank, Citigroup, Brown went into a huddle with Blank. Those who saw the two men thought it was a case of old muckers catching up — Blank had previously chaired the Labour supporting Mirror newspapers and was regarded by the Labour hierarchy as one of its few City friends. This conversation between the Prime Minister and the Lloyds TSB chairman in the glittering surroundings of Spencer House in St James's may in years to come to be seen as the high water-mark of the credit crunch. Equally, it may represent the moment when the cautious took charge, when old-style bankers reassumed control.
HBOS was part of a coterie of British retail banks that had grown at a ferocious pace in the financial services boom of the past few years. Others were its Edinburgh neighbour Royal Bank of Scotland, Barclays and Northern Rock.
As recently as 1999, Lloyds TSB was the biggest and most profitable bank in Britain and in Europe. But Lloyds TSB had slipped in the rankings to fifth — much to the amusement of its larger rivals.
The Sign of the Black Horse, to quote its advertising, was even in danger of being overtaken by an upstart from the North-East, a former building society called Northern Rock.
No bank was identical but they had recurring characteristics. Bank of Scotland and RBS embarked on an aggressive takeover policy — BoS bought the Halifax to form HBOS, RBS snapped up NatWest. They saw themselves as major international players, members of a banking elite, equal to the bulge bracket investment bankers of Wall Street.
Barclays, too, took on this mantle as did Northern Rock which, under its gung-ho leader Adam Applegarth, could not wait for depositors to bank their cash so that Northern Rock could lend it but instead turned to the money markets for funding.
HBOS did the same, borrowing short on the wholesale markets and lending long. Marketing men, such as Applegarth, were to the fore, putting greater emphasis on slick campaigns and promotions.
At HBOS, Andy Hornby, ex-Asda, took over the running of the giant bank. The strategy of Hornby — “call me Andy” — was not dissimilar to that of the supermarket group. He went big on consumer products and touchy-feely customer service, coupled with aggressive, expensive advertising. That was coupled, too, with a push by the bank into corporate lending, backing takeovers and huge property deals.
Those in the chairs ceased to be bankers — RBS is chaired by Sir Tom McKillop, formerly of Astra Zeneca, and HBOS is overseen by Stevenson, the ex-chair of publishing group Pearson.
RBS, in the shape of its dominant chief executive, Sir Fred Goodwin, continued on its relentless acquisition — even though it said it would stop — buying ABN-Amro of Holland.
In their haste to get ahead, some of the banks turned to other sources of profit. They charged into investment banking and corporate finance, handing out undreamed of sums at many times the value of the security being offered. They speculated on a grand scale, trading complex financial instruments and taking huge positions.
It's become apparent as the year has unravelled that many of those at the top had no idea what those below were up to. The result has been tens of billions of pounds written off — thanks to the folly of investing in mortgages extended to the occupants of America's trailer parks and other “sub-prime” properties.
This whirlwind of activity was replicated in America, where in 199 President Clinton repealed the Glass-Steagall Act that prevented banks from owning other financial companies. In an explosion of diversification, banks ceased to be straightforward banks but became all-singing, all-dancing financial combines, involved in deals far beyond their traditional confines. Leading the surge were Bear Stearns and Lehman Brothers. AIG, once an insurance group, began using customers' insurance premiums to fund forays into the financial markets. AIG, in effect, became a bank.
Profits and with them, personal bonuses, soared. The banks were the kings of the walk, preening and strutting, their influence and power knowing no bounds.
Throughout all this, in the UK, one leading banker stayed outside the throng. At Lloyds TSB, Eric Daniels, the American chief executive, prided himself on being different. The son of a German father and a Cantonese mother, he was born in 1951 and grew up in Montana, far from the glitz of the East and West coasts. He puts enormous faith in ensuring his workforce have the right values. “Either you think of your organisation as being like a huge machine and the people within the organisation as cogs,” he says. “The other way is to think about the organisation as an organism.”
Daniels stressed repeatedly what mattered: “It is easy for an organisation to forget that their reason for being is customers, and if we do not satisfy that customer better, the customer will refuse to do business with us.”
While others were bursting out everywhere, Daniels refused to budge. “I am confident that this is an organisation that can grow,” he told the City analysts who tried to urge him on. “What I am concerned about is the quality of that growth. I guess what I am interested in is sustainable growth that is underpinned.”
He was joined at Lloyds TSB, in 2006, by Blank. Like his chief executive, the new chairman puts great store by his roots. Everywhere he goes, a Lowry-type painting of the streets of Stockport where he was raised, follows with him. It has pride of place on his office wall.
Once, Henry Lewis, the former Marks & Spencer chief, who also grew up in Stockport, remarked that the Blanks had been a cut above. “I said that can't be so,” said Blank. “We had a tiny two-up, two-down house with an outside loo.” Lewis replied: “So did we, but we shared our loo with the neighbours.” Blank's maxim, as he is fond of saying, is: “You always have to remember where you came from.”
A natural, sharp deal-maker, Blank has built his career on spotting and seizing opportunities. He made his first fortune while at Charterhouse merchant bank when he persuaded the American parent of Woolworths to sell the British end. He was chairman of Trinity Mirror and GUS, before Lloyds TSB.
On taking up his new post, Blank was quick to praise. “Lloyds TSB is a super bank, with tremendous potential to grow, even thought it's a tough and competitive market. People point out that it has fallen to fifth position in Britain but they don't see the fantastic things going on behind the scenes ... What I do see is that Eric Daniels, the chief executive, has put together a superb team, which has perhaps not always been appreciated by the outside world.”
Lloyds TSB concentrated mostly on the UK high street, eschewing its rivals' headlong rushes into investment banking and the wilder reaches of financial trading. Neither was it tempted to make any merger move — believing prices were too high.
Once the US economy turned and borrowers found they could not repay their loans and property prices tumbled, the credit crunch kicked in. Banks, sent reeling by the downturn, started retrenching and hanging on to their cash — they stopped lending to each other.
A great domino effect, fuelled by waning confidence and the hedge funds and other short-sellers who placed bets on falling bank shares, took hold. First to go was Northern Rock, its business plan reduced to ruin by its inability to tap the money markets. After a sale to Lloyds TSB was blocked and other attempts to off-load the bank failed, the Government stepped in to nationalise it.
In the US, JP Morgan was leaned upon to buy Bear Stearns. Still, against a backdrop of a worsening economic situation exacerbated by a rising oil price, the downward ride continued. British banks turned to their shareholders for help. By the skin of his teeth, Sir Fred Goodwin, the RBS chief, who had led a consortium that paid £49 billion for ABN Amro when the warning signals of a slump were coming thick and fast, kept his job.
At HBOS, Hornby and Stevenson were forced to go, cap in hand, to their investors. They got their money but the bank's share price continued to fall. They blamed the short-sellers, saying their company was being unfairly singled out. Possibly, but those doing the shorting were also reading the runes and saw there was only one way HBOS was headed.
Sensing an opening, Blank talked to Stevenson. That was in the summer. This week, Lehmans' demise provided a final jolt. AIG was also going in the same direction.
In London, Brown went to his party and ditched his customary caution and told Blank what he was prepared to do. It was a mighty personal move — but he could not bear a repeat of Northern Rock. Not now, with his political ratings so low. He also spoke to Stevenson. HBOS had to capitulate. The hares were finished; the tortoise had overhauled them all.
Link to:
Grasshopper
Senior Jockey
- Joined
- Nov 14, 2006
- Messages
- 16,050
Just two points in response, prince regent.
Bank of Scotland did not 'take over' Halifax. Indeed, they emerged as very much the junior partner of the arrangement, with almost all of the combined Group's IT infrastructure (the central nervous system of any major financial institution) collapsed into the Halifax environment.
Secondly, if HBOS paid more than ten-bob a shot for those twattish adverts with fat Howard and various other no-mark arses, murdering songs from the worst of 1960's 'Top of the Pops' collections......frankly.......they deserved to go under.
Bank of Scotland did not 'take over' Halifax. Indeed, they emerged as very much the junior partner of the arrangement, with almost all of the combined Group's IT infrastructure (the central nervous system of any major financial institution) collapsed into the Halifax environment.
Secondly, if HBOS paid more than ten-bob a shot for those twattish adverts with fat Howard and various other no-mark arses, murdering songs from the worst of 1960's 'Top of the Pops' collections......frankly.......they deserved to go under.
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Shadow Leader
At the Start
- Joined
- Nov 9, 2003
- Messages
- 9,884
Post of the Year. Paddy Power are paying out on this market already.
M
martin
Guest
I'm happy to pay you compliments aswell, in private.
K
Kathy
Guest
Gareth, as you well know, it's not quite as simple as that is it? As an investor - now may be a time to look at Barclays, although I won't be one of them. I thought this was quite an interesting article. Yes, I have copied and pasted it, An.
Bet on Barclays to beat the crunch
Edmond Jackson
18.09.08
This may be simple investment analysis but it is axiomatic: about two years ago greed ruled the roost; and now it is fear. The banking sector is bearing the brunt of this, with some irresponsible lending practices and ruthless short selling of their shares trashing market prices. But a more positive view is possible: that from the turmoil will emerge fitter institutions and the time to consider buying is when news and sentiment is at its weakest. You can never be sure of timing but a turning point may not be far off.
Although Barclays (BARC) has experienced write-downs, it is not lumbered with the harsher problems of its peers; indeed it's expanding by acquiring Lehman Brothers' North American investment banking and capital market operations for £0.14 billion, and the New York headquarters of Lehman Brothers. This move suggests a group that is faring the worst financial conditions of recent history well enough to be taking advantage for the long-term. That is where Barclays and its shareholders will make real money.
The move does however raise the risk/reward profile of Barclays shares, so you need to understand your own appetite for risk. It
makes Barclays a key Wall Street operator for investment banking, whereas Barclays Capital has until now put more emphasis on debt markets. Furthermore, investment banking is largely a "people business" and unless Barclays moves quickly to assure and commit key individuals in the Lehman operation, they and their client relations may slip away. After raising £4.5 billion equity earlier this year, Barclays is pursuing a £750 million placing in order to conclude the deal. Time is of the essence. [Editors'note: Barclays confirmed it had raised £700 million on Thursday].
At least Barclays is avoiding the source of Lehman's woes, its sub-prime loans and impaired property investments. Investment banking involves corporate equity capital-raising and underwriting, and advice on mergers and acquisitions and other financial matters. It is a cyclical business, but with high quality earning power if managed well. On a two-year view, this is interesting for value.
Fitch Ratings has revised its outlook on Barclays to negative from stable, saying it understood management's objectives but viewed the expansion into investment banking as increasing earnings volatility and its overall risk profile. But arguably the shares' rating discounts this. The main uncertainty for equity investors more likely boils down to the duration of the credit crunch, although in citing a two-year view I am recognising some upside risk too: that stockmarkets classically anticipate economic recoveries before they happen.
Share price tells another tale
Company REFS shows analysts forecasting a consensus £5.9 billion pre-tax profit for Barclays this year, rising to £6.9 billion in 2009, which hardly suggests "the end of world is nigh", although the share price tells a different story. Even on the news of the Lehman move (if amid aggressive selling of bank shares generally), Barclays fell as low as 300p compared with a high near 800p some 18 months ago. On the basis of earnings being about 50p a share (respecting dilution), that implies a price earnings ratio of just six times for a leading brand name with substantive earning power.
A prospective yield of about 10%, despite brokers' continuing to project a total annual dividend of about 34p in 2008 and 2009, would appear to imply the market assumes it is less likely to be paid - at least in full. But it may reflect the kind of risk premium currently being exacted from bank shares given the high degree of uncertainty over fallout and extent of the credit crunch.
Barclays' first-half 2008 results showed pre-tax profit down by a third to £2.75 billion given lower profits from investment banking and investment management. Write-downs comprised £2.5 billion including US sub-prime mortgages and international retail and commercial banking bad debts. Although this looks like a determined attempt to clear the decks, it would be unwise not to be cautious. At least Barclays' earnings diversification and strength of balance sheet has allowed the group to take various hits in the credit crunch and still pursue growth. UK retail banking profit is up; commercial banking is stable; Barclaycard is showing very strong growth; and Barclays Capital is profitable despite £1 billion net losses in the second quarter as a result of the credit crunch.
Management cautions about tough market conditions for the foreseeable future, with the global economy slowing. The UK represents nearly 60% of group revenue with the rest mainly split between Europe, Africa and the US. With personal and corporate customers needing to reduce their debts, this will have an ongoing effect on activity levels. But arguably, on Barclays' P/E and yield ratios, this is priced in.
Bank shares are a good area of the market in which to exploit self-feeding bias, both ways. In recent months, various hedge funds have short sold the banking sector partly because it is vulnerable to fears that various firms may fail; the consequent impact on business can be self-fulfilling like we saw with Northern Rock, with a run on deposits. But the sell-off is also affecting shares in banks that are sound long-term players.
On a five- to 10-year view, London and New York - where Barclays is growing its strengths - will remain central to the global financial economy. With what appears like consolidation underway, i.e. fewer and bigger institutions, a long-term competitive issue for Barclays is its weaker position in the Middle East and China. The profits from oil are likely to advance the Middle Eastern financial centres in particular.
Overall, now looks a good time to be taking a closer interest in Barclays.
Tout Seul
Senior Jockey
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From The Times.24.09.08
"Ten leading investment houses had been poised to publish a joint statement of support for HBOS last Wednesday in an attempt to stem the collapse in confidence in the bank, The Times has learnt.
The institutions decided to make the unprecedented move in the face of a selling and short-selling binge that sent HBOS shares plummeting to only 88p at one point.
Before the button could be pressed, news emerged of the takeover approach from Lloyds TSB. “We were overtaken by events,” said one fund manager familiar with the plan, which was shelved."
The great and the good? Just a bit slow.
"Ten leading investment houses had been poised to publish a joint statement of support for HBOS last Wednesday in an attempt to stem the collapse in confidence in the bank, The Times has learnt.
The institutions decided to make the unprecedented move in the face of a selling and short-selling binge that sent HBOS shares plummeting to only 88p at one point.
Before the button could be pressed, news emerged of the takeover approach from Lloyds TSB. “We were overtaken by events,” said one fund manager familiar with the plan, which was shelved."
The great and the good? Just a bit slow.
Tout Seul
Senior Jockey
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- 2,628
The ten would have been the cavalry coming to support HBOS thereby stopping Lloyds being too strong. In routing the Hedgies( boo-hiss) they, the funds holding our pensions and savings, would have made money for us.It is the action I would have proposed as posted earlier.
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K
Kathy
Guest
Another one....
Bradford and Bingley possibly on the verge of being nationalised this evening if the deal hasn't been done already. Bank crisis, what bank crisis?
Bradford and Bingley possibly on the verge of being nationalised this evening if the deal hasn't been done already. Bank crisis, what bank crisis?
Colin Phillips
At the Start
Stop picking at that sore, Kathy.
What a great time to be working in the Insolvency Service.
If this recession really starts to bite there will be repossessions and businesses going bust left, right and centre, with the Treasury taking up to 1/3 of all assets in some cases, before the unfortunates even start to pay off their debts.
Individuals and businesses going bankrupt or into administration will often find themselves paying not only the original outstanding debts but having to make up the 1/3 that the Treasury has helped itself to, with another 20/25% in payment to the Insolvency Practitioner handling their case (depending on their charges).
If you want a license to print money, become an Insolvency Practitioner.
If you are in trouble financially, fight tooth and nail against being declared bankrupt or going into administration, it costs almost half as much as you owe again, as well as the various restrictions until you are discharged.
Cynical? Moi?
If this recession really starts to bite there will be repossessions and businesses going bust left, right and centre, with the Treasury taking up to 1/3 of all assets in some cases, before the unfortunates even start to pay off their debts.
Individuals and businesses going bankrupt or into administration will often find themselves paying not only the original outstanding debts but having to make up the 1/3 that the Treasury has helped itself to, with another 20/25% in payment to the Insolvency Practitioner handling their case (depending on their charges).
If you want a license to print money, become an Insolvency Practitioner.
If you are in trouble financially, fight tooth and nail against being declared bankrupt or going into administration, it costs almost half as much as you owe again, as well as the various restrictions until you are discharged.
Cynical? Moi?
Tout Seul
Senior Jockey
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Very true, Redhead. However the present problems in the real world arise from the reluctance of the banks to provide credit. Some on here recommend that many banks should be allowed to fail. Can you imagine what would happen then. Even if you were update on your mortgage you would not be able to renew it. If you wanted to move for a new job noone would be able to buy your house. Don't forget the the cash buyers keep their money in financial institutions and could loose great chunks of it if they fail.
You would have to multiply the current level of company and bankruptcies by a significant factor and the job losses too.Those that promote non intervention by governments would the see raw fangs of capitalism, starving people , civil unrest and a return to the dark ages, ( literally because who could generate electricity if nobody could pay for it). The 1930's recession was ultimately resolved because of WW11 which brought the British Empire to an end. Were the same to happen now these sceptred Isles would end up in the debris.
You would have to multiply the current level of company and bankruptcies by a significant factor and the job losses too.Those that promote non intervention by governments would the see raw fangs of capitalism, starving people , civil unrest and a return to the dark ages, ( literally because who could generate electricity if nobody could pay for it). The 1930's recession was ultimately resolved because of WW11 which brought the British Empire to an end. Were the same to happen now these sceptred Isles would end up in the debris.
Not unless it was a stupid piece of lending. (120% Northern rock buy to let or something) Vast majority of Mortgages would have been sold on to another bank. Probably a better run one too
Is this serious? Did the world come to an end when BCCi collapsed? It all depends what sort of intervention is suggested. Unfortunately there is probably a requirement for some guarnatees but it rightly disgusts people in real jobs and industry that this sordid trade is being bailed out. The goverment wont be bailing out Rosebys or Xl Airlines will they?
As for the far left, conspiicuous by their silence arent they? should have been a time for crowing at the very least and strong conifidence and promotion of their alternatives. but no one wants to know ....
USA rescue plan, Northern Rock, todays interventions in GB, Belgium and Holland.......
this is not a failure of the capitalism, it is a failure of the Democracy,
many inepts politician ruling the countries adopting demagogic decisions just to be voted by a huge mass of ignorants,
politcians in partnership with the very rich people voted by a mass of poor and ignorants people to be paid subsides and the subprimes by the medium class and small companies.
The market should have not been intervened , some of the big companies chief executives and the regulators that should not have allowed to bet the money of the funds like in the casino should be jailed and the people who has lost the money in the stocks should behave like adults and assume the losses as they do with the winnings.
this is not a failure of the capitalism, it is a failure of the Democracy,
many inepts politician ruling the countries adopting demagogic decisions just to be voted by a huge mass of ignorants,
politcians in partnership with the very rich people voted by a mass of poor and ignorants people to be paid subsides and the subprimes by the medium class and small companies.
The market should have not been intervened , some of the big companies chief executives and the regulators that should not have allowed to bet the money of the funds like in the casino should be jailed and the people who has lost the money in the stocks should behave like adults and assume the losses as they do with the winnings.