hucks
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Biggest ever American banking collapse. This was fourth highest news item in the FT today.
global financial crash yay!
- Thread starter sufi
- Start date
Biggest ever American banking collapse. This was fourth highest news item in the FT today.
IdleRich
IdleRich
I agree. I mean, I don't understand the implications fully but I don't get the impression that they do either and they just seem to be trying to railroad it through in the name of being seen to do something and do it quickly. I can't believe that the consequences have been fully examined and it seems rich for Bush to be shouting about how it's the only thing that can save the world as if he knows something about what's going on.
vimothy
yurp
Problem with being a global economy: ok, so say the US government pays fire-sale prices for these assets (unlikely perhaps, but nevertheless). European banks then have to write down the prices of their assets in line with US valuations? Now, consider the reverse. US government pays over the odds. Some European banks (Barclays, e.g.) have enough US business to qualify and are laughing. Others, not so much.
IdleRich
IdleRich
What if they pay a fair price.... whatever that may mean? How likely is this to actually go ahead at present? What's the latest? How long term are the effects of this going to be?
Anyway, more importantly, you just posted a link in favour of regulation, now you're talking about the problems of globalisation - are you ok?
IdleRich
IdleRich
Round-up
Off the top of my head the following financial companies have all either ceased to exist or at least been greatly reduced because of the credit crunch:
Northern Rock, Lehman Brothers, Washington Mutual, HBOS, Merrill Lynch, Bradford and Bingley, Fannie Mae and Freddy Mac, AIG.
Wow - anyone major I've forgotten? Who's next, Fortis?
Off the top of my head the following financial companies have all either ceased to exist or at least been greatly reduced because of the credit crunch:
Northern Rock, Lehman Brothers, Washington Mutual, HBOS, Merrill Lynch, Bradford and Bingley, Fannie Mae and Freddy Mac, AIG.
Wow - anyone major I've forgotten? Who's next, Fortis?
vimothy
yurp
Already happened:
Belgian-Dutch financial services firm Fortis has been partly nationalized--or multinationalized--by a trio of European governments.
Belgium, the Netherlands and Luxembourg are pooling 11.2 billion euros ($16.3 billion) to rescue Fortis... which was feared to be on the brink of insolvency following large credit-related write-downs. Each country’s government will take equal-sized stakes in Fortis’ banking operations in that particular country. Belgium will acquire a 49% stake in Fortis’s Belgian banking units for 4.7 billion euros ($6.8 billion), and the Netherlands will buy a similar-sized stake in Fortis’s Dutch banking operations for 4 billion euros ($5.8 billion). Luxembourg is extending a loan of 2.5 billion euros ($3.6 billion) that can be converted into a 49% interest in Fortis’ banking business in Luxembourg.
Belgium, the Netherlands and Luxembourg are pooling 11.2 billion euros ($16.3 billion) to rescue Fortis... which was feared to be on the brink of insolvency following large credit-related write-downs. Each country’s government will take equal-sized stakes in Fortis’ banking operations in that particular country. Belgium will acquire a 49% stake in Fortis’s Belgian banking units for 4.7 billion euros ($6.8 billion), and the Netherlands will buy a similar-sized stake in Fortis’s Dutch banking operations for 4 billion euros ($5.8 billion). Luxembourg is extending a loan of 2.5 billion euros ($3.6 billion) that can be converted into a 49% interest in Fortis’ banking business in Luxembourg.
Wachovia are next...
No-one major. But IKB's bigger than Bradford and Bingley / Northern Rock - they should be on there. And there was a biggish US regional bank who went down earlier this year, too. Can't remember the name.
IdleRich
IdleRich
hucks
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matt b
Indexing all opinion
"The Icelandic government has taken control of the country's third-largest bank, Glitnir..."
http://news.bbc.co.uk/1/hi/business/7641753.stm
crackerjack
Well-known member
IdleRich
IdleRich
Does anyone understand the implications of this bail-out bill failure? I certainly don't. Obviously the markets wanted it as a quick fix and for the traders being interviewed on the news the vote down is a disaster. But are they right? Just because they've got the loudest voice does it really mean that we should listen to them over everyone else?
The package seemed put together so quickly that I don't see how anyone could fully understand what it means for the long-term, I'm suspicious of the certainty of the people who suddenly maintained it was needed but a few weeks ago said nothing of the sort. The way it has been voted down is weird as well with the democrats slightly in favour and the republicans strongly against - but with both parties blaming each other and everyone saying that the defeat was a disaster. If they are all saying that then why did they vote no - presumably because it's so unpopular with the man on the street. But is the man on the street right to oppose good money after bad being used to save the hide of reckless bankers or is he simply cutting off his own nose to spite his face?
well it's not a perfect plan - but the people debating it seem to be oblivious to that anyway to an extent and the thing hangs on partisan semantics. If not putting it through was about improving the plan, which it should be, then good, but the markets are still going to crash now anyway.
IdleRich
IdleRich
I guess he's talking, with some exaggeration, about the amount of Britain's GDP (about thirty percent I think) which is contributed by the fianancial sector - which obviously, as an aggregate, invests and bets in various complex ways on different markets and various types of security like a gigantic hedge-fund. As for its lack of ability to perform in a downturn I don't know if he is arguing from theory or just saying that there is a downturn and the GB Fund doesn't appear to be doing well.