So is it over lads? Its seems alot of it was based on the US sub prime market. i came accross this today though.....not looking good http://www.telegraph.co.uk/money/ma...A1YourView&xml=/money/2008/06/18/cnrbs118.xml
Over ? - you must be joking mate, it's going to get worse before it gets better I'm afraid. Cutting to the chase: - Bank's are afraid to lend to each other, given the fear of the bank they lend to going bust on the back of too much risky (primarily US) lending. - The result of the above is, almost all banks are struggling to raise cash to lend, or protect themselves with by strengthening their Balance Sheet - hence the big push on deposit raising by all the Banks, the various Rights Issues you've seen announced worldwide etc. - The lack of funds with many banks, means they don't have money to lend out, which in turn means less dosh in the economy ... which in turn will slow businesses down / grind them to a halt, in some cases. - Several Central Banks (including the Fed, the Bank of England & the European Central Bank) have all previously tried putting funds into the Banking system, but this has been short term and not enough dosh to really make a difference. They all need to do it at the same time, leave the dosh there until confidence returns between the Banks' etc. Sorry to bring bad news, but I'm strongly of the belief that: * This problem will get worse, before it gets better and we're stuck with it for at least 12 months * The problem will in turn, put pressure on various Economies which will push many countries into Recession * Hard times are coming for us all, I'm afraid to say.
One thing I have noticed is its a good time for savers as banks turn to the old way to get cash the good old savers its safe.Some good offers going on the market if you look around now.
True mate, The only problem there is they are paying higher rates because they have to ... * To raise funds to lend * To raise funds to shore up their Balance Sheets (and help absorb large losses on US CDOs etc) Bottom line here is very simple.... The Bank's only pay what they have to, to get deposits in ... & in addition, the ones considered the bigger risk, pay even more to try and encourage those depositors who may be concerned about the Banks. If your bored,you'll find Bank ratings from such people as Standard & Poors on Google no doubt ... and see how many have been downgraded etc (now I've got you worried about you millions, don't I >... just remember - the Government G'tees the first 90% of the first €22k you deposit with each Irish Bank. Other EU Bank's are covered under their own country's guarantee, which can vary quite a lot so check it out ... just incase )
Very true - alot of the financial institutions out there are trying to outbid each other with interest rates which can only be a good thing for the likes of us. I also agree with the sentiment that the next year, or even more, will see some serious belt tightening when it comes to spending money. Its not going to be anything that folks won't get through like, but expect shorter queues in Marks & Spencers and longer queues in Tesco's.
Yes its a fine line between getting a good rate and getting a good rate while your bank/cash is safe.
On the same line,I am not major into Stocks & Shares but I keep my eye on things.Do you lot think Bank of Ireland is undervalued...?Two years ago it was trading at €18 and now its down to €6/€7.....if only I had loads of cash to invest and not be bothered about the risk.
S&P mate are part of the problem.They rate companies without checking them and more importantly all the banks that ran into the problems with sub-prime were all given AAA ratings by S&P. The days of this company having any credibility is long gone. The company directors of some of these firms are inextricably linked. Energy costs to rise by 40% over the winter. stagflation is back for the first time since the 70's and we have no control over our interest rates. If they are raised it further depresses the housing market and if they remain on hold or fall then inflation and spending both rise. We are in a no win situation. A mate whose cousin has just retired from a top banking job in England has said that he thinks the next credit crunch squeeze could be the credit cards as the banks try to rein in the funds they need to keep themselves liquid. Speculators on the commodity market can buy a barrel of oil for 70 cents down and the food market is going the same way. One hedge fund head last year earned a pay packet of $24,000,000,000 (yes 24 billion) for his annual salary as he called correctly the downturn in the sub- prime market. Returning to the industrialists of the 17th century where a few owned everything. To much to go through, but suffice to say it hasn't even started yet. There is l money that was made in the good times still been spent.This will soon run out and then we will see a major recession. Govt is main culprit.5/6 billion surpluses annually for the last 7 odd years could have paid off our entire national debt but no they spent it all because they knew they wouldn't be about when the shit hit the fan.
You have to look at the reason it was valued this highly.It was making over a billion a year in a growing world economy with little or no risk as it loan to value( LTV) of it borrowings was substantially greater.With the downturn this situation has reversed and is in an impossible situation as the loans in some cases are greater than the value of the security. The banks have no money to lend as they cannot now borrow from each other due to their financial difficulties. Not saying you shouldn't buy but just that I think they will go lower as the economy worsens and their bad debt increases hence lowering profits and share price.
well to be honest i know its alot worse than people think and there is going to be big losses by the end of the year. I didnt want to scare anyone and thought id bring it to their attention softly softly but you lot have blown that out of the water !!! on a serious note i have read some reports recommending people buy gold. I watched gold rise 30% from spetember last year to march this year before it fell back and was kicking myself i didnt invest in it at the beginning. some reports are say even to put half your savings in gold.......what do you lads think? that sounds very bad to me....
Again this is advice that comes to late.Not long ago it was just under 300 an ounce and now it is over 1000. A lot of money has been invested in it and although it is impossible to call the top or bottom of any market it is again a risk. Also no self respecting advisor would recommend you put half your savings into one particular investment. As the old saying goes.Once your neighbour starts talking about it, it is time to get out of it.
yeah i suppose its too late now alright but surely it would rise again with more banks going bust? anything else you could put you money to keep safe? seems like a mods only discussion in here am i the only mod who doesnt own a bank or wha!?!?!
Nobody knows mate.Some are saying commodities but the one sure thing is ,your cash is king at the moment.It is the most valuable asset as it leaves you open for any opportunities that arise and it is scarce. Not over by a long way so for what it is worth my opinion is to hold onto it and see what happens. One commodity that seems to be a sure thing at the minute is food. The oil/gold prices may come back but the food prices in the short term are only going to increase.
heres a great documentary on it. was on channel 4 a while ago. Very informative, it will leave you a little angry aswell. there are 8 parts in total How the banks spent your money part 1 [YOUTUBE]<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/wmPH56aScDA&hl=en"></param><embed src="http://www.youtube.com/v/wmPH56aScDA&hl=en" type="application/x-shockwave-flash" width="425" height="344"></embed></object>[/YOUTUBE]
if you like documenteries go to google video and watch "The money makers" its 3 hours but excellent information on banks and their history
It would be great to see these guys prosecuted and jailed.They play with peoples lives and think they can get away with it.More brokers should held accountable for misinformation to clients. Ex-Bear Stearns duo arrested over funds collapse While in a separate sweep, more than 400 Americans are charged in a coordinated investigation of mortgage fraud Tom Bawden, New York FBI agents swooped on Ralph Cioffi and Matthew Tannin, two former Bear Stearns hedge fund managers, arresting them at their homes yesterday and making them the first Wall Street executives to be formally charged by the US Government in relation to the credit crunch. Within hours of their arrest, the Government’s Justice Department announced that it had also charged more than 400 people, including 50 in the previous two days, in a three-month sting operation relating to cases of mortgage fraud that have collectively cost their victims an estimated $1 billion. Mr Cioffi and Mr Tannin were led away in handcuffs from their homes in Tenafly, New Jersey, and Manhattan, respectively, processed in the FBI’s New York office and transported across the East River to a Brooklyn federal court. Each faces nine counts of conspiracy, securities fraud and wire fraud for allegedly misleading investors over the true health of two Bear Stearns hedge funds they managed. The funds collapsed last summer under the weight of loss-making sub-prime mortgage related investments, losing about $1.6 billion of their investors’ money. The Bear Stearns charges represent the first big case against Wall Street, while the other arrests concern those players in the housing industry, such as mortgage lenders and estate agents, who have exploited the housing bubble. Prosecutors allege that the two Bear Stearns’ executives believed that the funds were "in grave condition and at risk of collapse" as early as March 2007, but failed to communicate this to investors, according to the indictment. "Rather than disclosing the true state of the fund to investors and lenders, thus allowing an orderly wind-down of funds, Cioffi and Tannin agreed to make misrepresentations in the ultimately futile hope that the funds’ bleak prospects would change and that their incomes and reputations would remain intact." Much of the prosecution’s case is thought to rest on an email exchange between Mr Cioffi and Mr Tannin. Robert Mintz, a former federal government prosecutor who now runs the white-collar division of McCarter & English, the US law firm, said: "This is a very significant test case. The charges show that the US government is determined to prosecute Wall Street wrongdoers. But sub-prime mortgages are so complicated and Wall Street’s behaviour may be found to have been so systemic, that it could be difficult to secure a conviction." "Proving that they knew they were wrong, but covered it up, rather than that they simply got it wrong, could be difficult," he added. A successful conviction would prompt a flurry of similar cases, while an acquittal would probably put an end to these kind of cases against Wall Street executives, Mr Mintz said. Susan Brune, a lawyer for Mr Tannin, said: "He is being made a scapegoat for a widespread credit crisis. He looks forward to his acquittal." Edward Little, Mr Cioffi’s lawyer, said that "we are shocked and disappointed" the government decided to bring against men and "look forward to the day they will be vindicated" in court.
Scary times ahead indeed. I defo agree that it will get worse in the coming months and I'd say we're in for at least 2 years of tough going. I have to say as a child of the 80's, we really got a raw deal. Born into recession and unemployment and just as we're coming of age to enjoy the Celtic Tiger, it foooks off and we're back to unemployment and recession again! I personally believe the banks have a lot to answer for. They were giving out ridicilous money left right and centre to anybody who wanted it. Now the banks have stopped handing out the dosh and people realise that they are not as rich as they thought they were and all those loans they took out for fancy cars and holidays have to be paid back, all the while energy and food costs are going through the roof because of the price of oil. I really believe that much of our "boom" over the last few years was fuelled by the banks, in a way, fooling us into thinking we had more than we actually had. An overly credit based and reliant economy is what we had.
Maybe there is something to that argument. But its not like the warning signs weren't there. Three years ago there was constant news reports that credit card spending was gone completely off the scale, and here we are almost three years later and its finally hit home that people were indeed spending beyond their needs. Its definitely buckle up time right now, hopefully folks in debt won't be affected too much by the current goings on and will come out unscathed at the other end.
i still firmly believe it the federal reserve not the banks who are the root cause. Banks take lead from the reserve. Will anyone from the federal reserve be arrested ? not a chance!!!