FTSE drops under 3900 and things not looking good for RBS!

Dolph · 10 Oct 2008 at 20:00

Kitchster_uk said:
Apparently the government amd fsa have been tapping hsbc to buy rbs or at least keep them afloat. As the only bank with any real liquidity it makes sense but would hsbc be prepared to take on a bank with £100bn shortfall?

If HSBC have any sense, they'll stay well out of it. They've done well so far by doing the right things, they shouldn't start dragging themselves down now.

LordSplodge · 10 Oct 2008 at 20:07

Dolph said:
If HSBC have any sense, they'll stay well out of it. They've done well so far by doing the right things, they shouldn't start dragging themselves down now.

They had better not bother. I bank with them and my credit line is good. I'd rather they kept their liquidity and kept out of it all.

Dolph · 10 Oct 2008 at 20:10

LordSplodge said:
They had better not bother. I bank with them and my credit line is good. I'd rather they kept their liquidity and kept out of it all.

Indeed, my thoughts exactly

scorza · 10 Oct 2008 at 20:14

Northern Rock was given every chance to survive as an independent company by the government - it failed. The government only nationalises as a last resort - and rightly so. NR shareholders are lucky to be getting 5p imho - they owned an insolvent company.

What makes me particularly angry is that the CEO's of RBS and HBOS still haven't done the honourable thing and fallen on their swords. I mean, Sir Fred Goodwin, CEO of RBS has taken, what now looks to be one of the worst decisions in business history when they bought ABN AMRO. That alone should be enough to prompt a shareholder rebellion. Even Adam Applegarth hung around like a bad smell once Northern Rock's liquidity problems became common knowledge. Do these people really think they can help sort out the very mess that they created? :mad:

Ev0 · 10 Oct 2008 at 20:18

Dolph said:
If HSBC have any sense, they'll stay well out of it. They've done well so far by doing the right things, they shouldn't start dragging themselves down now.

Agree also

There was some article I saw today with some CDS tables and HSBC were the strongest with HBOS and RBS the weakest out of the uk banks.

All paled in comparison to the scores the icelandic banks had though!

Wish I could find the article now.

Participant · 10 Oct 2008 at 20:25

Fusion said:
I agree. mr tommo, you obviously lack even a rudimentary knowledge of share dealing, I would recommend that you stay away. It's been easy enough to get burnt when you know what you're doing, never mind for a novice.

Nah, everyone can get burnt. Even the best sometimes. "Knowing what you're doing" is only slightly more valuable than "knowing what you're doing" on the roulette wheel.

And as for the banking crisis, the credit scoring agencies have a lot to answer for!

bigredshark · 10 Oct 2008 at 20:27

Dolph said:
If HSBC have any sense, they'll stay well out of it. They've done well so far by doing the right things, they shouldn't start dragging themselves down now.

I think they'll stay well out, they're ultra conservative after all. Whether they should or not if more difficult, if I made the decision I'd stay well clear in the knowledge that HSBC will be a decent bank on the other side of this mess. Against that, if they could afford it then it would be a huge asset to have, which will merit at least a glance.

Kitchster_uk · 10 Oct 2008 at 20:50

LordSplodge said:
They had better not bother. I bank with them and my credit line is good. I'd rather they kept their liquidity and kept out of it all.

Doubt it would be a full buy out, but a senior figure was saying he could see a situation where part-private and part-government buy-outs may have to happen. Guess which parts we as tax payers would get... Then again, RBS have Coutts under them - certainly an attractive buy for anyone.

scorza · 10 Oct 2008 at 20:54

Why would anyone buy a bank now? If you're ok you may as well wait until the target goes into administration and pick up the parts you want for cheap, and not the bits you don't want.

I suspect Lloyds TSB only agreed to buy HBOS as a personal favour between the LTSB CEO and Gordon Brown, so expect the LTSB guy to be made a Lord or something in the new year.

Flying Gribble · 10 Oct 2008 at 21:00

mrbios said:
A little off topic but where is lloyds in all of this? they pretty stable at the moment? them nationwide and hsbc seem to be the only ones i havent heard any mention off in this whole situation

HSBC are apparently comparatively healthy and haven't felt it necessary to use the government money. First direct issued a statement about it.

GSXRMovistar · 10 Oct 2008 at 21:37

Been told to prep for working this weekend as the banks may trade on Sunday, so much for a weekend away from work!

teaboy5 · 10 Oct 2008 at 21:39

GSXRMovistar said:
Been told to prep for working this weekend as the banks may trade on Sunday, so much for a weekend away from work!

May trade on a sunday? Surely thats not normal?

lookitsjonno · 10 Oct 2008 at 22:54

if all this money is being wiped off stock markets, surely it is going somewhere? would people be making mega bucks from this misfortune?

HangTime · 10 Oct 2008 at 23:00

It just reflects the price of shares, so it's not as though actual money is 'going somewhere'. Similar to how if the value of your house drops from £300k to £250k, that doesn't mean that someone has just trousered 50 grand.

MattU · 10 Oct 2008 at 23:09

Hmm with shares surely it does, since the price only falls on selling - Someone has to have cashed in some shares and realised the loss for the price to fall.

Jokester · 10 Oct 2008 at 23:11

From reading around todays falls were caused by people cashing in (and at first it was automated selling because sell trigger points had been reached by the decreasing market).

Nullvoid · 10 Oct 2008 at 23:42

Does anyone know how big a part these "credit-default swaps" are likely to play in the coming months? I gather RBS and others will be impacted upon by the Lehman Brothers auction that happened today but does anyone know to what extent? I see talk of the CDS market having a combined worth of $58 trillion yet they also say it remains unregulated, and then there's the following:

The market for credit derivatives is now so large, in many instances the amount of credit derivatives outstanding for an individual name is vastly greater than the bonds outstanding.

That's from wiki but I've also seen it mentioned elsewhere. Perhaps I'm being incredibly naive here but are all of our economies based on this and other similarly dubious methods of generating wealth?

HangTime · 10 Oct 2008 at 23:59

MattU said:
Hmm with shares surely it does, since the price only falls on selling - Someone has to have cashed in some shares and realised the loss for the price to fall.

I nearly put a caveat on because I suspected someone might post such a response.

Yes, a small volume of actual money is going somewhere. But there is no real significance to the volume of that sale, only the value of the last bid/ask prices. If a firm is valued at £100m and following a big drop in the bid price it is valued at £30m, that doesn't mean that someone has taken £70m in cash.

Floyd · 11 Oct 2008 at 00:11

Was scary watching it unfold today (I write the infolect and tradelect gateways for an ISV so get the full live level 2 feed). The people who bought HBOS and RBS shares earlier in the week must be kicking themselves thinking the price couldn't drop further. The price swings are not helped by the amount of algo trading applications that are running on these markets

Hades · 11 Oct 2008 at 00:14

How's it now looking for the LTSB buyout of HBOS? Surely with recent drops that deal is now looking quite bad for LTSB?