Lehman Bros

[communistworkethic]

Aye, 'tis why the word "confidence" is used so often in relation to the market place and individual companies.

Indeed, don't pretend to know whether the individual Building Societies were "failures" or the legislation didn't allow them to operate in a manner that could work, but there's a whole host of other reasons for M&A activity other than just business A is a failure.

again that's just wrong, sorry but it is. Banks failed, banks that had been building socities. Banks that operated under exactly the same legislation as other banks, building societies did not fail.


Bradford and Bingley was going tits up becuase it's put all its cash in to low grade Buy to Let Mortgages - the nobbers who've seen a few TV showa bought a couple of houses and went the rents not being paid they can't pay the mortgages. Then because of that of the banks know it will struggle as it'll have it's profits wiped by write-downs, so they won't lend it anymore. As someone in the City said to me today "you won't lose your job for not lending to them even if it does create an issue that wasn't their which causes their downfall". Rescued because nobody wants another Northern Rock.

The tail end of that is what's happened to HBOS in the last 2 days, but in this case too much rumour, not enough action from HBOS and everyone was about to refuse to roll-over debt that was due, thus creating a liquidity issue that should never need happen. HBOS was a perfectly solvent well run business except that its treasury boys have been giving it the big I am and have lost out of funding deals, teh investor relations guys who speak to other banks analysts have been shit for years and the pr people have done a crap job with the media through arrogance and losing too many senior people. Mereger forced through by Gordon Brown to avoid another Northern Rock . Expect a 7am stock exchange announcement tomorrow to say it's been agreed. It basically had to happen as soon as GB's spin doctors leaked it all, there's little way back for HBOS now.

[Worthy4England]

Aye, 'tis why the word "confidence" is used so often in relation to the market place and individual companies.

Indeed, don't pretend to know whether the individual Building Societies were "failures" or the legislation didn't allow them to operate in a manner that could work, but there's a whole host of other reasons for M&A activity other than just business A is a failure.

again that's just wrong, sorry but it is. Banks failed, banks that had been building socities. Banks that operated under exactly the same legislation as other banks, building societies did not fail.


Bradford and Bingley was going tits up becuase it's put all its cash in to low grade Buy to Let Mortgages - the nobbers who've seen a few TV showa bought a couple of houses and went the rents not being paid they can't pay the mortgages. Then because of that of the banks know it will struggle as it'll have it's profits wiped by write-downs, so they won't lend it anymore. As someone in the City said to me today "you won't lose your job for not lending to them even if it does create an issue that wasn't their which causes their downfall". Rescued because nobody wants another Northern Rock.

The tail end of that is what's happened to HBOS in the last 2 days, but in this case too much rumour, not enough action from HBOS and everyone was about to refuse to roll-over debt that was due, thus creating a liquidity issue that should never need happen. HBOS was a perfectly solvent well run business except that its treasury boys have been giving it the big I am and have lost out of funding deals, teh investor relations guys who speak to other banks analysts have been shit for years and the pr people have done a crap job with the media through arrogance and losing too many senior people. Mereger forced through by Gordon Brown to avoid another Northern Rock . Expect a 7am stock exchange announcement tomorrow to say it's been agreed. It basically had to happen as soon as GB's spin doctors leaked it all, there's little way back for HBOS now.

You are not reading what I said, to declare it wrong or anything else....You seem to be arguing with some fictitious person that hasn't posted

"Indeed, don't pretend to know whether the individual Building Societies were "failures" or the legislation didn't allow them to operate in a manner that could work" Is not wrong or even remotely wrong - I haven't looked specifially at any of the BS "failures" or particularly studied the legislation regarding demutualization so I don't pretend to know whether their takeovers were due to failure or some other reason.


"but there's a whole host of other reasons for M&A activity other than just business A is a failure."

Is not an incorrect statement. I've been closely involved with enough M&A activity to know this.

[Lord Kangana]

Radio 5 financial 'expert' this morning:

"HBOS share drop and subsequent takeover wasn't so much to do with the liquidity of the business or its ability to fulfil its obligations, more to do with market confidence in it in the current climate".

Take from that what you will.

[Worthy4England]

Radio 5 financial 'expert' this morning:

"HBOS share drop and subsequent takeover wasn't so much to do with the liquidity of the business or its ability to fulfil its obligations, more to do with market confidence in it in the current climate".

Take from that what you will.

It's not much different with AIG at the moment.

[Verbal]

Radio 5 financial 'expert' this morning:

"HBOS share drop and subsequent takeover wasn't so much to do with the liquidity of the business or its ability to fulfil its obligations, more to do with market confidence in it in the current climate".

Take from that what you will.

I was reading the metro today (not the FT exactly I know), but there was a bit in it with someone saying that HBOS was a good bank which had been brought to its knees by speculators.

[David Lee's Hair]

I was reading the metro today (not the FT exactly I know), but there was a bit in it with someone saying that HBOS was a good bank which had been brought to its knees by speculators.

I think that was more referring to March where the shares plummeted due to rumoured short selling on the markets and rumour of HBOS asking for an emergency loan from the BoE - the FSA investigated this and found nothing. This definitely had an effect on what happened yesterday for me, as it weakened there position going into this recent extra decline.

For what it's worth, short selling is, roughly translated, selling securities/shares the seller does not own, in the hope of repurchasing them later at a lower price. This is done in an attempt to profit from an expected decline in price of a security. So basically speculators. Also very..



That said I know Alex Salmond has made an outburst about the "spivs and speculators" bringing HBOS down, and prior to being the First Minister of Scotland he was an Economist, so he has an idea what he's talking about.

[Hoboh]

All i'm interested in is;

Will my cash be safe in Lloyds TSB if they have bought a lame duck with bad debts
or
Is the position of my bank greater than before by picking up a bargin?

[blurred]

Do you have less than £35,000 in cash in the bank? If so, it doesn't matter either way.

[David Lee's Hair]

All i'm interested in is;

Will my cash be safe in Lloyds TSB if they have bought a lame duck with bad debts
or
Is the position of my bank greater than before by picking up a bargin?

The second

HBOS has multi-billions locked in long term investments, there in lies their major issue, its locked in and given their problems in March, then the Lehmann bros problems they couldn't get short-term finance. The government didn't want another run on a bank - which given the previous performance of the press with Northern Rock basically goading the public into it - they suggested the merger.

Notable that Barclays have also taken a load of the Lehmann Bros. assets today - about a billion, with first option on more of them once they've looked into the risk.

[Hoboh]

All i'm interested in is;

Will my cash be safe in Lloyds TSB if they have bought a lame duck with bad debts
or
Is the position of my bank greater than before by picking up a bargin?

The second

HBOS has multi-billions locked in long term investments, there in lies their major issue, its locked in and given their problems in March, then the Lehmann bros problems they couldn't get short-term finance. The government didn't want another run on a bank - which given the previous performance of the press with Northern Rock basically goading the public into it - they suggested the merger.

Notable that Barclays have also taken a load of the Lehmann Bros. assets today - about a billion, with first option on more of them once they've looked into the risk.

ta thought that was the case.

BTW Blurred I'm saving up to buy the club got 2s 6d in there now

may be a while yet

[wandering]

You know what - feck 'em!

[communistworkethic]

If anyone has any questions about HBOS/Lloyds TSB and/or the current market and their savings etc. please PM me and I will with the help of the mods set up a sticky thread with answers to them all, including why WFE is still wrong And DLH has interpreted what's in the press correctly but it's not the real story ........

[Worthy4England]

If anyone has any questions about HBOS/Lloyds TSB and/or the current market and their savings etc. please PM me and I will with the help of the mods set up a sticky thread with answers to them all, including why WFE is still wrong And DLH has interpreted what's in the press correctly but it's not the real story ........

Tou still haven't told me what I'm "wrong" about Commie

[communistworkethic]

If anyone has any questions about HBOS/Lloyds TSB and/or the current market and their savings etc. please PM me and I will with the help of the mods set up a sticky thread with answers to them all, including why WFE is still wrong And DLH has interpreted what's in the press correctly but it's not the real story ........

Tou still haven't told me what I'm "wrong" about Commie

because you're talking about building societies in a conversation about HBOS, Abbey etc,none of whom are building societies. No building society has failed, three have announced mergers this year, none have failed. Two have questions over their ability to survive without merging but at no point have you referred to either Derbyshire Building Society or Cheshire Building Society.

Those two had issues created by partaking in activities that the Building Scieties Act 1986 allowed them to get in to so that they could compete with the banks - commercial lending and buy to let. For reasons known best to the Boards of those societies they decided to do most of their lending through these routes rather than the lending their were founded to do - homes for their members. Both are far riskier than retail lending but much more profitable in a rising market, except it's not been a rising market for a year. Neither had the size to absorb the size of write-downs they were likely to have on the value of the properties on their books, they were likely to eat well in to, if not totally consume, their Teir 1 (free) capital not just their profits.

[Worthy4England]

Accepted - They were ex-Building Societies, just assumed that was clearly understood, as the whole conversation was about them demutualizing and then "failing" (as I saw it). But yes indeed it was whilst they were banks that they went through M&A.

I never mentioned the Derbyshire or the Cheshire as they haven't Demutualized. Nor did I mention some others that did Demutualize...

[Worthy4England]

For anyone interested, there's some commentary on short selling (some of which has temporarily been clamped done on by the FSA) here

http://news.sky.com/skynews/Home/Busine ... rchresults

As the article mentions, the downward spiral we've just seen wasn't caused by short selling (and I think they're correct it wasn't), but once there was a run on some of the financial institutions, it probably accelerated the process somewhat.

One view is held that if it's ok to bet on market prices rising (as shareholders do when they make an investment), then it's equally appropriate to bet on market prices falling.

For me it's a bit like betting on horses to lose. It's probably easier to engineer a situation where a horse loses than it is to engineer a situation where it wins.

[sluffy]

If anyone has any questions about HBOS/Lloyds TSB and/or the current market and their savings etc. please PM me and I will with the help of the mods set up a sticky thread with answers to them all, including why WFE is still wrong And DLH has interpreted what's in the press correctly but it's not the real story ........

A very generous offer Commie.

I do have a general question that you might like to consider which is this.

As I understand it the greatest 'free' economy in the world - the USA started the whole financial problem that we are currently in due to lending money somewhat indiscriminately to people with poor credit ratings so that they could purchase their own homes. After lending this capital for these people to buy their own piece of America the banks sold on these 'debts' to other bigger banks who in return provided more funds for the original banks to fund further people with even worse credit records to buy their own houses. These 'debts' were again 'packaged' up and sold on for even more money to the other banks who again provided more capital for the banks to lend money to people with yet even worse credit ratings to buy their own house, etc, etc.

Obviously there then came a point were people who had borrowed the money to buy their houses (who had a history of poor credit ratings) found difficulty in making their mortgage payments and started to default. Their homes were repossed but could not be sold as the scale of repossessions were such that there became a glut of houses to sell - so house prices began to fall - and no one but people with even worse credit ratings than the people in default prepared to buy them (funded by the banks!) who in turn defaulted on their mortgages and compounded the problem.

The original banks were still able to carry on giving out mortgages until the time the bigger banks behind them found out that the 'repackaged' investments were in affect bad debt which meant that they had massive write offs to make which in turn prompted the credit crisis of banks lending to each other which meant that those institutions with liquidity problems began to fall.

Now as I understand it the head of the Banking system in America is in affect attempting to 'nationalise' this bad debt to free up the banking system.

Added to this a lot of the funding to do this may needed to be borrowed from China (which is still a communist country) also apparently China's state directed banking system as been investing heavily in financial institutions in America - and probably elsewhere in the western capitalist society.

Therefore if the American economy is in affect taking on all these mortgages aren't they basically nationalising the land? Isn't ownership of the land one of the major elements of a Communist state?

Is it not communist China's money, which is potentially behind the financing of this buying of the land by the American Government?

Is it not the banking system itself that as single handily brought on the ‘communisation’ of America?

Does this really mean that the banking industry as all along been working secretly to bring about communism?

Don't you work in the banking industry?

Does this mean that you and your colleagues have all the time been working towards communism?

Does this fully explain why you call yourself - Communist work ethic!!?

[Lord Kangana]

As someone far better positioned than me said "Profits are privatised, liabilities are nationalised".

Some people have made a hell of a short term gain out of this, but in the long run us poor schmucks will pay for it.

[Montreal Wanderer]

Last I heard, Sluffy, was that China was investing a billion dollars a day in the US (that's one thousand million btw). Getting a bit scary.

[Worthy4England]

If anyone has any questions about HBOS/Lloyds TSB and/or the current market and their savings etc. please PM me and I will with the help of the mods set up a sticky thread with answers to them all, including why WFE is still wrong And DLH has interpreted what's in the press correctly but it's not the real story ........

As I understand it the greatest 'free' economy in the world - the USA started the whole financial problem that we are currently in due to lending money somewhat indiscriminately to people with poor credit ratings so that they could purchase their own homes. After lending this capital for these people to buy their own piece of America the banks sold on these 'debts' to other bigger banks who in return provided more funds for the original banks to fund further people with even worse credit records to buy their own houses. These 'debts' were again 'packaged' up and sold on for even more money to the other banks who again provided more capital for the banks to lend money to people with yet even worse credit ratings to buy their own house, etc, etc.

Now as I understand it the head of the Banking system in America is in affect attempting to 'nationalise' this bad debt to free up the banking system.

I think you've not quite yet got to the bit where the Banks "insured" their debts using derivatives through AIG to the tune of around $450 Bn. Global GDP is sat at about $54 Trillion, AIG's balance sheet made up about 2% of that...

We also need to throw Freddie Mac and Fannie Mae into the general discussion, as these two organisations guarantee approx $6 Trillion dollars worth of the US Mortgage market.

All three are "effectively" now owned by the US tax payer....

The issue around Lehmans was small beer compared to these guys which is why there was an apparent shrug from the Fed that it went tits up. As was the issue around HBOS/Lloyds TSB