It took me a while to realise that money doesn't get lost in the system. One someone makes a huge loss, it's another one's gain!
Lehmans goes down, global banking in crisis
- Thread starter durruti02
- Start date
It took me a while to realise that money doesn't get lost in the system. One someone makes a huge loss, it's another one's gain!
JohnnyOrange
All The World...
Unlikely, because another institution will probably buy their debt - one of the most attractive parts.
And the deal with BoA buying Merrill's for US$ 50 billion?
Paying 60% more than today's market value? (Still 60% less than the recent price.)
But all paid for by BoA shares?
What will they be worth in 3 months?
And AIG, FFS?
US$ 45 billion losses over the last few quarters and now has a US$ 20 billion handout from the US taxpayer.
I know the person that bundled these mortgages for them, got the "AAA's" and exposed them to this risk.
Senior management have known about the problem since at least 2005 and were worried then and trying to mitigate some of the risk while keeping it very quiet - and predominately trying to maintain the gravy train.
They essentially did nothing but keep making tens upon tens of billions of US dollars, despite being hugely concerned about the consequences.
They knew the risks.
They didn't care.
It's fraud on the grandest scale.
And now they get a US$ 20 billion taxpayer handout?
Class!
Woof
Paying 60% more than today's market value? (Still 60% less than the recent price.)
But all paid for by BoA shares?
What will they be worth in 3 months?
And AIG, FFS?
US$ 45 billion losses over the last few quarters and now has a US$ 20 billion handout from the US taxpayer.
I know the person that bundled these mortgages for them, got the "AAA's" and exposed them to this risk.
Senior management have known about the problem since at least 2005 and were worried then and trying to mitigate some of the risk while keeping it very quiet - and predominately trying to maintain the gravy train.
They essentially did nothing but keep making tens upon tens of billions of US dollars, despite being hugely concerned about the consequences.
They knew the risks.
They didn't care.
It's fraud on the grandest scale.
And now they get a US$ 20 billion taxpayer handout?
Class!
Woof
bi0boy
Power User
I think you will find that it's been allowed to take a $20 billion loan from it's subsidiaries, not from the government.
I see there's a few other posters on here who either work, or have worked in the City, so I thought I'd repost this. It hardly made a ripple in P & P, some of you folks might be interested though:
UK holding of U.S. Treasury securities. In the space of a year, the UK has increased its holdings from $50 billion to $280.4 billion. Since June 2007 the country has gone from being the 8th largest foreign holder to the 3rd largest.
Figures here
UK holding of U.S. Treasury securities. In the space of a year, the UK has increased its holdings from $50 billion to $280.4 billion. Since June 2007 the country has gone from being the 8th largest foreign holder to the 3rd largest.
Figures here
pinkychukkles
Feed Your Head
Evan Davies and Robert Peston from the BBC host a live discussion tonight @ 8pm in The Credit Crunch Mess - What Next? on Radio 4 from the 22nd floor of the newest of the City of London skyscrapers, The Willis Building:
http://news.bbc.co.uk/1/hi/business/7612607.stm
Should be worth listening to.
http://news.bbc.co.uk/1/hi/business/7612607.stm
Should be worth listening to.
Just wait and see, OK?
Read my post, AIG are fucked. I should know.
And the Bush administration was not "asleep at the wheel" in all of this, it was at best totally complicit and at worst driving this fucking madness.
The US Treasury Secretary is live on TV right now......
.... he is stuttering worse than he ever did and looks terrified.
Anyway....
....Start growing your own vegetables peeps - there's much worse to come.
Woof
EastEnder
Brixton Barnacle
Yup. Like me who's trying to start his own software business. I just spent my own money travelling to new york to attend a conference where we were going to show off the product for the first time and it's been cancelled. Gutted.
Even after Bear I thought it was going to be tough but possible, now I'm not so sure. I'm going to have to have a long, hard think about whether I can afford to continue.
FabricLiveBaby!
Live Baby Fabric!
....Start growing your own vegetables peeps - there's much worse to come.
Woof
Aye it's true. My boyfreind and loads of his firends work in the city. A year and a bit ago (start of August) I was in a pub and said that banks would collapse and house prices would drop 50% in 5 years. Then I said by that point house prices will be the least of all our worries.
Everyone laughed at me and called me a nutter.
Now when i mention it they look kind of sad and sigh.
They honestly believed that there was no problem and that I was a "doomongerer" or some shit.
These people work in the city in various positions, I have never taken a course in Economics, nor do I work anywhere near the city or in finance or anything to do with money. I just read.
It's amazing how blind some of these people in the middle of it all are. They honestly believed that there was no problem and everything would be fine even tho their figures weren't adding up.
Sad really.
hipipol
Peckham Wry
Good Stuff
I assume that we are talking about sovreign, ie Govt ownership, well BoE holdings (all central banks hold others debt as part of their reserves)?
It should be pointed out that Govy debt is often taken up as a synthetic FX trade - essentially though you are paid a fixed rate of interest on the security you can also make a capital gain on the FX exposue, in this case USD/GBP. Since the GBP has lost around 12% against the USD over the last year or so, it was in fact a very clever play 12% of 280 billion, lots of spare dosh, maybe helping to offset Northern Crock!!
What it also says, and its not something I recall from any of the monetary policy statements is that the BoE took the view that the GBP would sink against the USD and rather than try to prevent it, they would in fact take a position!!!!!
I doubt its specifically prohibited but, ye Gods, what if the trade went the other way? Have they hired all the old Goldmans Cable boys who got the sack for being sexist and only half human?
hipipol
Peckham Wry
Oh yeah as far as the start date for all of this crap, Bernanke claimed to have stopped the rot vis a vis the sub-prime mkt in March of last year - I thought him a twat at the time but I didn't realise just how great a twat.
Frabic not everyone blind - many of my then clients, when being honest after a few in the pub were shitting themselves, but none could see what could be done to avert it - most of them were just getting out of those markets and trying to develop biz in Asia - ie running away from the Tsunami of crap from the west
Frabic not everyone blind - many of my then clients, when being honest after a few in the pub were shitting themselves, but none could see what could be done to avert it - most of them were just getting out of those markets and trying to develop biz in Asia - ie running away from the Tsunami of crap from the west
What it also says, and its not something I recall from any of the monetary policy statements is that the BoE took the view that the GBP would sink against the USD and rather than try to prevent it, they would in fact take a position!!!!!
I doubt its specifically prohibited but, ye Gods, what if the trade went the other way? Have they hired all the old Goldmans Cable boys who got the sack for being sexist and only half human?
Innit. What an insane risk to take in the current climate.
kyser_soze
Hawking's Angry Eyebrow
...just in time for the shit-tsunami to start ripping through Asia. Dunno how serious it is, but I read a loong report on the Chinese commercial and residential property markets, both looking a bit ropey - and the story of Wenzhou, where 90% of the world's lighters were made, where something like 700 factories have shut, leaving only 100...
david dissadent
New Member
I guess there will be no suprises as a few hedge funds go under over the next couple of weeks. Just caught up with the thread now and seen someone posted about them. They are highly leveraged (i.e. they've borrowed shedloads) and lightly regulated. Many of them are very heavily into derivatives so will be exposed (i.e. have an awful lot of people looking for money from them) to any derivative positions that have been 'triggered' by the collapse of Lehman. They will also be vaulnrable to a loss of confidence, there wealthy invetors taking there money and going into something safer.
The federal reserve has made $70 billion more available to the banking industry today, probibly to allow it to swap assets (I believe the actualy types of securities were mentioned earlier in the thread) for effectivly cash. This will allow the banks to remain 'capitalised' (i.e. having money somewhere under the matress) while they sort out the fall out of Lehman.
Paulson seems to have turned down AIGs request (begging) for more cash. Not being willing to put something into Lehman and AIG is probibly everything to do with Fanny and Freddie. The US government is now the holder of about half of the mortgage debt in the US. People will be turning up to the homes of poor, middle class and wealthy Americans all across the country to throw them out of there homes on behalf of the orginisation they owe the home loan too i.e. the US government. That orginisation can hardly be seen bailing out yet another bank now.
Well now we wait. Wait to see what the real fall out of the collapse of a biggish bank will be. We wait to see who will go next, but I would say its most likely to be Washington Mutual and that is very likely to see the US government promising to top up the FDIC fund for all banks, otherwise it will suffer a genuine bank run.
One things for sure, the lawyers will be laughing all the way to the bank for years to come of off this one.
Good luck to all urbanites (actualy all people) caught up in this directly or inderectly.
Edited to add, just seen this.
link
Roubini is just talking about bank runs on US TV.
The federal reserve has made $70 billion more available to the banking industry today, probibly to allow it to swap assets (I believe the actualy types of securities were mentioned earlier in the thread) for effectivly cash. This will allow the banks to remain 'capitalised' (i.e. having money somewhere under the matress) while they sort out the fall out of Lehman.
Paulson seems to have turned down AIGs request (begging) for more cash. Not being willing to put something into Lehman and AIG is probibly everything to do with Fanny and Freddie. The US government is now the holder of about half of the mortgage debt in the US. People will be turning up to the homes of poor, middle class and wealthy Americans all across the country to throw them out of there homes on behalf of the orginisation they owe the home loan too i.e. the US government. That orginisation can hardly be seen bailing out yet another bank now.
Well now we wait. Wait to see what the real fall out of the collapse of a biggish bank will be. We wait to see who will go next, but I would say its most likely to be Washington Mutual and that is very likely to see the US government promising to top up the FDIC fund for all banks, otherwise it will suffer a genuine bank run.
One things for sure, the lawyers will be laughing all the way to the bank for years to come of off this one.
Good luck to all urbanites (actualy all people) caught up in this directly or inderectly.
Edited to add, just seen this.
link
Roubini is just talking about bank runs on US TV.
A Dashing Blade
Takes horses to water but can't make donkeys drink
Bond markets getting very very pannicky, my guys making stupid spreads and still getting hit. Assumption in the market atm is that AIG will default imminently. ECB just announced it's pumping another 40bn into the market.
What do you thinkthe consequences of that will be?
A Dashing Blade
Takes horses to water but can't make donkeys drink
Blood on the streets, potential domino effect. Total siezure of bond/credit markets as no one will want to trade because of counter-party risk.
serious!
fogbat
The Talibum
If Citigroup go will my credit card debt with them go as well?
I think you should see if you can get the government to bail you out for your financial mistakes
Spymaster
Plastic Paddy
Fedayn said:
This is a comparison. Do you have difficulty with simple English?
Great, you don't give a fuck about the "bigwigs". Big deal. I doubt anyone is shedding many tears for the super rich.
But hopefully you realise that they are in the minority of those who'll be hurt.
Do you think Lehman and other banks going tits up is a good thing or in any way desirable?
If so why? if not why the fuck are you arguing with me?
TopCat
Putin fanboy
No they sell the debts on and you get letters from a succession of wankers ineffectually demanding the money back.
Is this not the internet?
I hope that lessons are learned from this but take little pleasure. Shows up the greedy of course but equally gloating will not help much.
I am sure that the 'big-wigs' will have the least trouble finding work. Simply because they have the most inside knowledge.
TopCat
Putin fanboy
The inevitable demise of Capitalism...
Spymaster
Plastic Paddy
Unfortunately Skimix, there are people who at best, don't consider your situation nor that of others like you. At worst, they just don't give a fuck so long as a few City "bigwigs" get fucked in the process.
All those who were in favour of the smoking ban have got a LOT to answer for.
Spymaster
Plastic Paddy
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