fineleg Posted October 6, 2008 Posted October 6, 2008 Will this elicit yet another yawn from ICF? Whoa! These are big declines. Dow off by 700+ 'yet again' today.
Lurker Posted October 6, 2008 Posted October 6, 2008 Will this elicit yet another yawn from ICF? Whoa! These are big declines. Dow off by 700+ 'yet again' today. Thats one side of the equation. The other side of the equation reads: a) Citigroup and Well Fargo are fighting over Wachovia. Considering Banking industry is supposed to be in a mess why are the companies fighting for a larger share? Is it merely ambition or is it ambition backed by cold hard assetts? b) Retail industry is not showing much signs of downturn. Atleast not as much as the Finance Industry is tanking. Malls are full, theatres are packed. People are out there buying their Lexuses and Acuras. c) Those who have good credit are generally okay. Havent heard anyone with good credit having issues. The campaigns for new credit cards, refinancing mortages/loands are still stuffing the mailboxes. The issue, I think, is largely for people with bad credits and greedy bankers. And on that front nothing has changed much really. xxx
kablooee87 Posted October 6, 2008 Posted October 6, 2008 On a related note: http://news.bbc.co.uk/2/hi/americas/7655178.stm "Corporation: an ingenious device for obtaining individual profit without individual responsibility"
Dhondy Posted October 7, 2008 Posted October 7, 2008 Meltdown takes pace. UK banking shares absolutely hammered for the second day running. Never been adventurous, have never invested a penny in the UK stock markets. Yesterday, after some of the best banks in the world such as HSBC, Royal Bank of Scotland and Barclays took a hammering, I asked my wife if we should buy some shares, because surely, they could only go up from here. She said no. Today, shares of the Royal Bank of Scotland group in the UK, which includes Natwest, plunged by another 39%. This is a Fortune 500 company, the 12th biggest bank in the world, has almost 2 trillion dollars on its balance sheet, and last year alone, made a profit of 15 billion dollars. Its crime? Along with Fortis, the Belgian bank that's been taken over by BNP Paribas, and Santander, it paid $98.5 billion for the Dutch Bank ABN-Amro, which has 450 branches spread across 53 nations. That proved to be too high a tariff in the current market conditions. Fortis has already paid the price, now it's RBOS' turn. Santander is immune because it has no sub-prime exposure, which is the other area where RBOS took a hit. Today, the share price of the banking giant dipped under a pound. It stood at 90 p when the market closed today. One year ago, it changed hands at £4.50, three months ago, at £2.40. Madness is drving the markets. The shares are falling because they are falling, journalists and pseudo experts are spreading panic by predicting doomsday. These are wonderful opportunities to buy stocks in some of the best companies in the world at knock down prices. But who dares?
Dhondy Posted October 7, 2008 Posted October 7, 2008 Here's how little the pundits know. The other company that bid for ABN Amro and failed was Barclays. Digging up the archives, this is the comment I found on BBC : Barclays' failure to pull off the deal will inevitably raise question marks about its future strategy. Barclays is in fact now streets ahead of RBOS in investor estmation. It recently bought the US assets of Lehman, and retains its AA+ rating, while Standard & Poor have downgraded RBOS, the "victor" in the ABN Amro takeover battle. What about the smaller companies? How are they being affected? A year ago, I bookmarked this page on BBC on a dealer of used cars, whose share price was falling because new car dealers were aggressively undercutting their prices. http://news.bbc.co.uk/1/hi/business/7016634.stm You'll notice that the company featured was a used car firm called Pendragon. Almost exactly a year ago to the day, the stock was changing hands at 55 p, having fallen from 125 pence a share in the preceding 5 months. Just checked the share price today. It's trading at 7 pence. The once promising company has become a penny share.
Lurker Posted October 7, 2008 Posted October 7, 2008 Never been adventurous, have never invested a penny in the UK stock markets. Yesterday, after some of the best banks in the world such as HSBC, Royal Bank of Scotland and Barclays took a hammering, I asked my wife if we should buy some shares, because surely, they could only go up from here. She said no. Good time to buy Yes, but only if you have some good information OR if you have some money that you can spare. For example, a close friend I know bought shares of Washington Mutual the night before it tanked. Amidst the rumour that it was going to be purchased by JPMC, the couple spent almost 20 grand and bought shares at a pittance. During the night the company tanked, went to FDIC, and was then taken over by JPMC. In this technical step the share of Wamu ceased to exist and the couple lost 20 grand. So if you invest in a company make sure its not gonna go under or else.... xxx
Dhondy Posted October 7, 2008 Posted October 7, 2008 Good time to buy Yes, but only if you have some good information OR if you have some money that you can spare. For example, a close friend I know bought shares of Washington Mutual the night before it tanked. Amidst the rumour that it was going to be purchased by JPMC, the couple spent almost 20 grand and bought shares at a pittance. During the night the company tanked, went to FDIC, and was then taken over by JPMC. In this technical step the share of Wamu ceased to exist and the couple lost 20 grand. So if you invest in a company make sure its not gonna go under or else.... xxx There is no "good" information. You can't trust anybody under the current circumstances. It is safe to say that banks like RBOS are too big to fail. The UK government simply can't let it fail because the run on banks would destroy the economy. In fact, the government is about to use taxpayers' money to buy 50 billion pound worth of shares in the biggest banks, although this would ironically further dilute shareholder value. It's the same for house prices. Those who say who can predict the market are oafs. You should know. Your native Phoenix has seen some of the biggest house price falls in the US.
Lurker Posted October 7, 2008 Posted October 7, 2008 It's the same for house prices. Those who say who can predict the market are oafs. You should know. Your native Phoenix has seen some of the biggest house price falls in the US. Yeah and I was the one shouting hoarse for 3 years now that Phoenix real estate is ready to tank much before this happened :--D Atleast one fellow poster(who shall remain unknown) had contacted me regarding getting property in Phoenix. You are correct about certain banks being too big to fail. Then again Washington Mutual is one of the largest US banks, and I wouldnt be surprised if they were larger than most English banks(apart from HSBC). Although RBOS is also a pretty daunting biggie. So considering Wamu flopped I am not sure if big is neccessary comforting anymore. What may go in favour of British banks is that typically they are conservative in spendings. So quite possible they did not splurge a la US financial investors. In fact this (conservatism) is currently killing Financial consultants. I have friends in Accenture UK who are ready to get their pink slips if things continue as they are. UK Accenture's strength is Finance and with the domain tanking they have people ready to go on bench by piles. So whatever you do dont buy Accenture shares for a while
Dhondy Posted October 7, 2008 Posted October 7, 2008 Y You are correct about certain banks being too big to fail. Then again Washington Mutual is one of the largest US banks, and I wouldnt be surprised if they were larger than most English banks(apart from HSBC). Although RBOS is also a pretty daunting biggie. So considering Wamu flopped I am not sure if big is neccessary comforting anymore. What may go in favour of British banks is that typically they are conservative in spendings. So quite possible they did not splurge a la US financial investors. In fact this (conservatism) is currently killing Financial consultants. I have friends in Accenture UK who are ready to get their pink slips if things continue as they are. UK Accenture's strength is Finance and with the domain tanking they have people ready to go on bench by piles. So whatever you do dont buy Accenture shares for a while No, in fact, RBOS is 4 times bigger than Wamu was. But that's not relevant. Wamu didn't end up like Lehman- wasn't it taken over by JP Morgan? At times like these, governments can't be thinking of shareholders. I believe that given the consequences of letting Lehman go, if things were to transpire again, the US government would act to stop it from falling, although Lehman was an investment rather than a retail bank. The European governments have learnt the lessons from Lehman going down- the massive loss of confidence in the financial sector that they generated. As a result, no bank will be allowed to fail in Europe. They will either be taken over, like Wamu (Bradford & Bingley, Fortis, HBOS), or nationalised in one way or the other. And thanks for the Accenture tip, Lurker, but I wasn't going to buy anyway. Old dog, new tricks, etc.
fineleg Posted October 7, 2008 Author Posted October 7, 2008 Dhondy, You are right to some extent this is a good time to buy stocks if you are selective and buy good companies (not necessarily financial companies) with a long term view. However, it is really hard to "time it" - so you may lose in the short term. Regarding 'real estate investment' - that looks really dicey in US at the moment. Not sure how it is in UK.
Lurker Posted October 7, 2008 Posted October 7, 2008 No, in fact, RBOS is 4 times bigger than Wamu was. But that's not relevant. Wamu didn't end up like Lehman- wasn't it taken over by JP Morgan? At times like these, governments can't be thinking of shareholders. Yes JPMC did buy WaMu but not before WaMu had first went to FDIC. It was basically a Govt brokered settlement which ensured JPMC bought WaMu without buying its heavy debt. This helped the FDIC not to pay money to customers due to bank default(customers are guarantted 100,000 K), something they would have had to do otherwise. So a win-win for FDIC and JPMC(under the circumstances). A loss for WaMu investors and WaMu itself.
fineleg Posted October 8, 2008 Author Posted October 8, 2008 500+ drop today for Dow. While like Dhondy says stocks are getting cheaper, make slow entry into buy positions if you want. Becos is still very turbulent. In anycase, seems like many are more concerned abt SG retiring (when he shud have a while back anyway) rather than this financial events :D
fineleg Posted October 8, 2008 Author Posted October 8, 2008 In other news, Asian markets are crashing as well. Here is the Sensex in free fall: http://in.rediff.com/money/2008/oct/08sensex.htm
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