‘Bank’ Archives
FCNK – Fur Coat, No Knickers
British politics are cyclical and there are two views as to the nature of the cycle. One is that Labour is in power for a bit and then the Conservatives come along with lots of shovels and clear up the mess. The other view is that it is Labour politicians who wield the shovels after the Conservatives' turn. There is another other great political constant , not-only in British politics but worldwide. Ultimately, all party leaders fail - as do their parties. Then the other lot make an [...]
Goldman Sachs on the run
"Hey wise guy! Wanna buy any synthetic collateralised debt obligations?" Over the last few years, I have written a great deal about Goldman Sachs and its Svengali-like hold over successive U.S Governments. Some of what I've written remains on this site. Hopefully, President Obama's current initiative, in tandem with the SEC is the dawn of a new relationship between Government and the banking industry. It seems that the "minders" Goldman Sachs used to have at U.S. Government level [...]
William Hague – a tribute
The article below appeared in the Daily Mirror on 5th March 201o and is reproduced here with the full permission of the author Brian Reade. When you have finished reading about William Hague, you may perceive that Brian Reade is probably not the Chairman of Hague Fan Club - and you would be right. I have been Socialist-bashing ever since I could open a notepad but for the sake of balance I do believe that we should have an insight into the lives and more-importantly, the characters of [...]
Octavius – over to you.
Badger Brown There are people who will vote for a politician because he has a pretty face, looks honest or has a good voice. What fires an important section of the electorate is not logic but emotion. Perception, prejudice and superficiality are the new Gods and it is only in recent years that politicians have become conscious of the fact that complicated economic and social policies are not the primary route to votes from an increasingly apathetic and intellectually [...]
Octavius’ trouble and strife.
You may be forgiven for thinking that someone with a monicker like Octavius Black was a either a mad musician chained to a Gothic cathedral pipe-organ, a Hogwarts Master of the Dark Arts or maybe even a Transformer. He is none of those but he is quite a strong Centre of Influence within the Conservative Party. Here are some clues: He is a multi-millionaire who lives in Notting Hill. He is an Old Etonian and for a long time has been a frequent dinner guest at the Camerons'. Oh yes, [...]
Transparency?
There is every likelihood of yet another banking scandal and it seems that yet another piece of the banking jigsaw has fallen into place. This particular piece indicates that at least two banks were near-bankrupt at the end of 2008. Not just "in trouble" but BUST. The Bank of England extended secret emergency financing to Royal Bank of Scotland and to HBOS during the banking panic last September and October - without telling the taxpayer or shareholders. Lloyds shareholders were being [...]
Eliot’s Mess
Financial Services Authority So the toothless old tiger that is the Financial Services Authority is going to be ripping up the contracts of those investment bankers who are taking unacceptable risks. More empty gesture politics from Gordon Brown and his band of drowning funsters. Not so many years ago, professional investors, fund managers, hedge funds and even those City screen monkeys who are now being targeted were investing in a series of investment "instruments" which "spread risk". [...]
It will be long and hard.
" We all lose interest after making a deposit and a withdrawal" We are all looking forward to the banking industry's return to communication through facts and figures. In the last year-or-so they have all shown an increased predilection for the medium of the euphemism, metaphor or cliché. The RBS Chief Executive Stephen Hester is our favourite banking boss - a straight-down-the-line guy with whom you can shake hands without having to count your fingers or look for your watch. [...]
Out of the Frying Pan
THE VERY UNDERSTATED GM HEAD OFFICE The General Motors announcement that the deal to sell the company to Canadian spare parts manufacturer Magna went down very well with the unions yesterday morning. That is because Magna had previously announced that after the sale they would be cutting as many as 10,500. The unions' and workers' euphoria was very short-lived because GM has now announced that it will be cutting 10,000 jobs. In addition, the German government is demanding from GM a repayment [...]
Vauxhall-Opel Safe?
VAUXHALL - The future? General Motors has announced that it has changed its mind and that the impending sale of Opel and Vauxhall to Canadian car parts firm Magna will not proceed. It seems that most people are very happy with the last-minute decision. Opel emplys 54,000 pople across Europe and Vauxhall employs 5,500 people in Luton and Ellesmere Port. In spite of promised backing by the German and British governments, there would have been substantial job losses as a result of proposed [...]
The new Ponzi Scheme.
THE BRITISH ECONOMY Twenty months ago, I was the only commentator (to my knowledge) to predict nationalisation of our banks. SEE HERE. Here's another prediction: The Ponzi scheme that is the global economy will soon come crashing down - and it will be quick. Governments everywhere - but especially in the United KIngdom and the United States are bankrupting themselves and destroying paper currency. The crash of the dollar is weeks away. In six years, the dollar is already down one-third [...]
Handouts with Conditions
21st Century Banking The British government said that following improved market conditions and extensive due diligence announced in February, Lloyds will no longer participate in its Asset Protection Scheme and instead will raise additional private sector capital and pay a fee of £2.5 billion to the taxpayer for the protection provided to date. Lloyds has also announced plans to raise £21 billion through a combination of a £13.5 billion rights issue, and £7.5 by swapping existing [...]
Another handout
Darling's unique approach to the banking industry. Alistair Darling is going to announce that the government will spend £30 billion on "buying bank shares". One presumes that it is now called "buying shares" because the government does not want to keep using the word "handout". (By the way, he is not using "our" money. This will be a combination of recently-produced or borrowed money). The government will thus be increasing its equity in the banks and so diluting the share [...]
Back to the Future (again)
There is potentially great news in the banking sector- and about time. The government is to create three new bank chains by selling-off divisions of RBS, Lloyds and Northern Rock. By 2015, our High Streets may once again see old and trusted brands such as the Trustee Savings Bank, Williams & Glyns and Cheltenham & Gloucester. Could this be the best thing that this government has done? It looks like it - but once again, the new policy looks contrary to what Gordon Brown was saying only [...]
Joint-up Government
Two executives at the Royal Bank of Scotland have been suspended after alleged corruption at its overseas mortgage operation. The bankers were allegedly asking foreign estate agents for payments worth tens of thousands of pounds in return for referring customers. Many of the suspected practices have taken place within the last 12 months and since the government bail-out. (more...)
Naughty pirates
DANGER-POLITICIANS NEGOTIATING Who said this? "Piracy and the taking of hostages is unacceptable in any circumstances. We call on those people who have taken the British citizens hostage to release them as soon as possible. They should abide by international law." Those Somali pirates must be really crapping themselves now that Gordon Brown has told them that they should "abide by international law". Gordon, you muppet - these are pirates and NOT abiding by the law is not-only implicit [...]
Didn’t he do well?
" Oh F*** it!" Quite a lot has already been written about the Nimrod crash which killed 14 crew. Charles Haddon-Cave QC who led the enquiry said that the crash happened because because "defence chiefs put cost cuts before safety". He also referred to "a systemic breach of Covenant brought about by significant failures on the part of all those involved." and "a story of incompetence, complacency and cynicism" Mr Haddon-Cave's comments will hopefully be recycled as fitting [...]
Take any card
Credit card companies now appear to be competing not only with each other but with back-street money lenders. If you are in the habit of paying only the minimum monthly payment on your credit card, it could take you up to 50 years to repay the balance. However, the good news is that if you do only repay the minimum, the credit card company is very likely to increase your borrowing limit from time to time. However, if you are one of the naughty people who repays their balance every month, you [...]
Merv the Wise
"Bless you all. The economy will soon crash land again- so please adopt the correct position. Stick your head between your legs and kiss your ass goodbye." (more...)
Postman Prat
Royal Mail is going to hire 30,000 workers to "help" during the impending strike. Usually the Post Office hires only an additional 15,000 staff for the Christmas rush. Let us hope that this blatantly provocative gesture by the Royal Mail management does not backfire. Let us also hope that in their haste, they do not forget to run proper background checks on the people that they hire and so keep the number of thieves and terrorists to a minimum. Expensive temporary labour plus the millions in [...]
It’s those Banks again
The government shouldn't issue mandatory executive-pay guidelines and although Gordon Brown may think that it's a smart move to somehow link bank executives' pay to share price, he is introducing yet another element of risk. (more...)
Conservative Party Conference week.
Boris Johnson once again has showed his leadership credentials by being approachable, witty and engaging. He does make the rest of them look a little bit pedestrian. In spite of his shambolic image, you can sense a rod of steel running through both his speech and personality. One to watch for the future. Imagine a TV debate between Boris and Gordon Brown. It will never happen - but what a prospect. Boris Johnson and friend George Osborne's [...]
Friday October 2nd 2009
Ethiopia has suddenly become the focus for all anthropologists. An ancient skeleton was found in 1992 and it has taken 17 years for the research team to rebuild it. Why all the excitement? The skeleton belongs to an in-between species of humanoid about 4.4 million years old. It has been designated Ardipithecus Ramidus. It is not “the missing link” but by extrapolation, it appears that it is probably about 9 million years since the division between apes and humans. So where was John [...]
Thursday October 1st 2009
A survey has just been published of the world's top Broadband Countries - taking into account speed etc. The United Kingdom is languishing in 25th place. The top country? South Korea. Is this another indicator of the rise of the East and the slow eclipse of the West?. The Daily Mirror has adjusted its reportage of the Tories today - presumably in response to the Sun's decision to back the Tories. It's going to be a right mess leading up to the election. The gloves are off [...]
Wednesday September 30th 2009
So the Sun will not be supporting the Labour Party. No real problems there, except the usual one. Why should an Australian like Rupert Murdoch have any say in which newspaper supports which Party. The Sun is read largely by the drooling classes who are very susceptible but regrettably, there is very little that can be done. The Sun’s sister paper , the News of the World, no doubt is poised with some salacious Labour politician scandal ready-to-go. The Sun will not just be [...]
Tuesday September 29th 2009
Interesting statistic which doesn’t appear to be receiving the publicity that it deserves: In the United States, a house is foreclosed or repossessed every 7.5 seconds. As usual, the politicians are taking care of business at the macro-level, while the grass-roots are burning. It is an excellent idea for Gordon Brown to take-on the other two Party leaders in televised debates. Any future Conservative or Liberal vote should be a “pro” Conservative or Liberal vote and not an [...]
Monday September 28th 2009
Excellent headline grabbing by that jug-eared gargoyle Andrew Marr. He is without doubt a supreme journalist but his questioning of Gordon Brown yesterday was inexcusable. Suggesting that Brown needs prescription drugs to get through the day, followed by Brown’s admission that he has trouble with his eyesight was a direction that no journalist should steer. There is a real danger that if the Tory Press goes down the ” Brown’s a sick man and therefore unfit for office” route, there [...]
Sunday September 27th 2009
Just down the road in Brighton THEY are arriving for the Labour Party Conference - or should that be the New Labour Party Conference. Did we elect Labour or NEW LABOUR? Anyway, that’s now just a technicality or a long-forgotten dream of how things could or might have been. Here’s a Labour FACT, given to me by a friend who used to be Chief Barman at the Grand Hotel. More Champagne is consumed at the Labour Party Conference than at all other conferences and he told me stories of vintage [...]
Saturday September 26th 2009
The American Fed has issued the following statement: “To provide support to mortgage lending and housing markets, and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt.” Now we can watch the demise of the once-mighty American Dollar. Fund Managers and Investors will now start dumping dollars like confetti. A TRILLION is a million millions [...]
Friday September 25th 2009
Friday September 25th 2009 The mole who leaked the MPs’ expenses information to the Daily Telegraph has revealed what motivated him to do so - apart that is, from the £110,000 fee that he was paid. It now appears that his primary motivation was not money but the fact that serving soldiers were “moonlighting” at the House of Commons. They were working in the Security department and protecting the Civil Servants who were dealing with confidential matters - one of which was [...]
Thursday September 24th 2009
The Government has criticised the Football Association for not reforming itself. It has also asked the F.A to spend more time and resources on ethnics and women as well as telling them that they should provide better leadership. Perhaps when the F.A has completed its restructuring it can then give H.M Government a few tips. Talk about Pot-Kettle. A recent U.S survey shows that many Americans think that Tony Blair is the British Prime Minister. Someone ought to tell them who the real UK [...]
You calling me a banker?
"Move over, Darling. Please!" Banks are currently reducing their assets and hoarding cash because of liquidity requirements. Put in simple terms, that means that the magic conjured-up money - the so-called Quantitative Easing is making it in through the banks' back doors but the front doors remain only slightly ajar. No amount of media-blackmail or Government arm-twisting is going to persuade the banks to start lending to commerce or to the private sector in reasonable volumes or at [...]
Wednesday September 23rd 2009
Apparently, there is a small but statistically significant rise in patient deaths when junior doctors start work in August. Perhaps the same survey should be done with slightly different parameters: Before pubs open and after closing time. A friend sent me a cartoon yesterday which, for the first time, explained the constant Midde East conflict . Jewish man looking up at the sky saying, “Now, let me get this straight God. The Arabs get the oil and you want us to cut the end off [...]
Tuesday September 22nd 2009
Did you see Darth Mandelson being questioned on the subject of bankers’ bonuses last night? As Business Secretary, he has the power to stop the bankers in their tracks. But he cannot and he would not answer any bonus-related questions. General Stanley McChrystal, the top US commander in Afghanistan has warned that the war there could be lost unless there is an increase in troops within a year. He is asking for an additional 30,000 troops. This is truly developing into another [...]
Monday September 21st 2009
It now appears that Womens World 800m champion Caster Semenya was tested ages ago and there has been concern over her sex for months. The issue did not suddenly materialise at the last Word Championships. The whole thing has been handed so badly that there is every likelihood of IAAF resignations. Baroness Scotland will probably resign this week. If every politician who made a mistake resigned, Westminster would be empty by now. It looks as if Megrahi is going to be the first [...]
Monday September 7th 2009-Friday September 18th 2009
Friday September 18th 2009 There has been some concern that Romell Broom may have suffered mental anguish when two Ohio State officials failed to find a vein in order to deliver a fatal injection. According to Broom’s lawyer, Broom had suffered both “mental and physical injuries” and apparently became distressed and appeared to cry. Broom was convicted of raping and then killing a 14 year-old girl. We’re too fat, we drink too much alcohol, we’re unfit, we ingest female [...]
The Phony Economy
The approximate position of the British Economy One of the great questions of our age is "Have the billions handed over to the banks had any affect on the economy?" Some say "YES", some say "NO" and others say " IT'S TOO EARLY TO TELL" Currently , we appear to be living through what can only be described as a Phony Economy. The Footsie looks much healthier and there is sort of "whistle in the dark" pretend-confidence in the markets. Pundits are talking-up the markets, politicians [...]
What Recovery?
TOOLS OF THE TRADE: INVESTMENT BANKING Since 2007, there have been at least three announcements which declared an end to the economic crisis. Today, we have the latest pronouncement of a slight ”recovery” and the fact that a survey shows “increased confidence” from consumers. All a bit nebulous but nevertheless welcome. The FTSE 100 is trying to muster the courage to break through the 5000-barrier and there are predictions that it will be well over 5000 by [...]
Antonio Polverino scores again!
There are two types of organisation that have made such huge financial rods for their backs that it looks as if they are beyond help. At first, it appears that they have little in common but if you look closely, you will see that they do share two very basic elements. The first is a weak and often unskilled boardroom and the other is direct access to the public's money. Another interesting similarity is that their personal incomes bear little relation to how they perform long-term. [...]
Why are we waiting?
There used to be a saying: " Brazil is the country of the future - and it always will be." That's not so funny now because it looks as if the Brazilian and Chinese economies are the ones in pole position, poised to take off like a rocket while the West wallows in Depression-scale unemployment and debt. (more...)
Hell on a Bonus Starter.
"City Slickers are holding onto their bonuses so tightly that the Queen's tongue is hanging out!" (more...)
Goldman Sachs – Fiscal Frankenstein.
It was a few months ago that I realised the size of the divide between us ordinary Earthlings and the government-venerated banking royalty had gone past the tipping point and that we were now separate species. Survival of the fittest? Darwin was right. We are the peasants with pitchforks gathered below Frankenstein's castle where mysterious new things are happening. (more...)
Naughtiness or Incompetence?
There is a very unpleasant ripple which is in danger of growing and engulfing the banking–world. One has already seen the first stirrings of Madame Défarge-like blood-lust being directed at the “evil” bankers. (more...)
Where’s the New World Order?
A twisted fusion of capitalism and socialism is being forged in the white-hot heat of political panic. No-one should complain because we are all being forced to run blindfold towards a world where profits are privatised and losses are nationalised. We cannot lose. Competition within financial services will be a quaint throwback to the last century because both the US and UK governments have now demonstrated that if a company is big enough, it will have Federal and Treasury [...]
Darling has the solution in his hands.
If you have read a good balance of the reporting and commentary on yesterday's budget, you will have realised by now that this was a political budget. The Chancellor and his puppet-master know that their stewardship of the economy has a maximum of 12 months to run and then , as is the fashion nowadays, the lecture and non-exec circuits beckon. There is light at the end of the tunnel for some but unfortunately, not for all. There is no point in raking through the coals of yesterday's return to [...]
The Scam of the Millenium
The Government has a vested interest in allowing us to assume that suddenly the comparatively modest bailouts and part-nationalisations of our banks have somehow solved our economic woes. They would have us believe that we can now sit back and await the often-mentioned green shoots of economic recovery to somehow poke their way through the concrete of economic failure. We have even had "estimates" as to when the recovery will kick-in. Where were these soothsayers one year ago? I am using [...]
Socialist? Moi?
The current Labour government is having a very tough time and a very bad situation is made worse by what appears to be a lack of leadership and management skill. Gordon Brown seems to feel that you can manage by changing the rules or by organising enquiries. You can imagine Brown being informed that more and more people are on the breadline and solving the problem by having an enquiry whose purpose would be to confirm that the breadline is in the right place and if not, recommending where [...]
The Brown Delusion
"Now down again. Slowly." The G20 conference was the most orchestrated, pre-determined piece of theatre that we have had the privilege of seeing since the 1968 Morecambe and Wise Christmas Show. The primary motivators were to somehow please the banks, instill confidence in both the markets and the voting public and lift Gordon Brown's approval rating. The three main devices used were the over-wide smile , the already well-tried method of "let's throw more money at it" and a long [...]
Dunplaying
"Ooh look - something has bounced off the fan and it appears to be coming my way!!" The Dunfermline Building Sociey had the temerity to go cap-in-hand to the Government. The Chairman Jim Faulds was rude about the Chancellor and accused him of making the wrong decision, based on erroneous information. Bad move. The truth is that the Financial Services Authority has been hawking the Dunfermline around the indutry for a few weeks - without too many takers. Jim Faulds' outburst was nothing more [...]
Oink!
The perfect line of curly tails has temporarily stopped flicking with pleasure because it seems that the trough of plenty is about to be removed. The squealing and slurping has stopped because the Mama Pig that is the taxpayer needs some respite. There is a real danger of drought - and it is not the drought predicted by the Global Warming Mullahs - it if the financial drought caused by the double-whammy of "on the take" bankers and their avaricious politician chums. The Home Secretary, Jacqui [...]
Bear necessity.
We have entered a long-term bear market and equity prices are heading towards Ground Zero. All that Governments have managed to achieve so far, is to delay the decline. The currently established pattern is very simple - investors wait and see what the government is going to do. Then there's a short Stock Market rally. That is usually followed by another business admitting losses, bad debts or a cash shortage and shares move down again. Then the cycle is repeated. The whole [...]
A very dangerous precedent.
"Sit on this and swivel , you bastards" Let's get one thing straight - when an Executive is hired by a Board, a contract is signed. That contract will contain information about remuneration, bonuses, pension contributions and a hundred other things that cannot be settled by a handshake. Sir Fred Goodwin will have agreed such a contract with the Board of the Royal Bank of Scotland. Furthermore, the shareholders will have ratified all pensions contributions for his benefit and that [...]
Revenue and Misappropriation
What the Banks really mean It is about time that the taxpayer was told exactly.what the banks have done with the money that they have been handed by the Government. Vague statements such as "plugging holes in the balance sheet" mean nothing to most people (including politicians). "Restoring confidence" in inter-bank lending is also a meaningless phrase as is "toxic assets". Alistair Darling has just asked the banks to "tidy up" their Balance Sheets. Does that mean that the banks [...]
I’m a real FRIC.
A Valuer FRICS Gordon Brown continues to speak with the conviction of a condemned man reading from a hurriedly-conceived briefing paper This time it is mortgages (again). No more 100% mortgages? I think that it is about time that the Prime Minister carried out a simple calculation as follows: Suppose that the Government (sorry, Northern Rock) lends 80% on a £100,000 property - that is an £80,000 mortgage. Then let's suppose that the property falls in value by 20%. That means that [...]
Sorry?……..Er….Yes, all right then.
I would have asked only the one question: Sir Tom and Lord Stevenson…….."I sincerely and unreservedly apologise for this question but can you please describe the differences between a Credit Default Swap, a Total Return Swap and a Credit Listed Note?" "Phone a friend?……….Oops, sorry, I forgot!! You don't have any." Thankfully, this morning's Treasury Select Committee Cringefest is over and there have been apologies. They were on a par-with and as pointless-as the [...]
City Slickers
The primary reason for the outrageously high payments to the designer-labelled barrow-boy City slickers is the over-simple reward system. The City rewards the "ups" but does not penalise the "downs". That encourages risk-taking. A trader can make a large bonus from the profit on a deal but when that deal or the share price falls, there are no sanctions. In the good old days when life was simple, every day was sunny and back doors were left unlocked, a life-assurance salesman would be [...]
All Change!!
It was Gordon Gekko who said that "Greed is good" and currently it is that greed which is popularly believed to be the root cause of the current economic downturn. But who was it that said that "Change is Good"? What if the real root cause of the crisis is poor governance , jump-started and caused by the new Change mantra? Nowadays, the word "Change" appears on a very high percentage of job descriptions. There are "Change Gurus", "Change Agents", "Change Trainers", "Change Management" and [...]
Where’s that paddle?
No Government can ever act on the basis of certainty. It is always forced to act on the basis of probability. In other words, there is no REAL idea as to when the current financial mess will end so decisions and actions are based on a "best-guess" basis. Stock market prices lie in expectations for the future. It is a constant battle between optimism and pessimism. When there is optimism one expects: Confidence in the Banks and the Marketplace Consumers confident enough to [...]
Undue Diligence.
“Toxic debt” has become a phrase which somehow appears to absolve the banks from having made very bad investment decisions. Another phrase (which was used for the first time in pre-war America) is the concept of “Due Diligence”. It was used again with a passion in reference to the Bank of America not having taken a good look at Merrill Lynch’s accounts before it bought it . Gordon Brown said a couple of days ago that “the banks must come clean”. Does that mean that the [...]
KFC is not a Knighthood, Gordon!
As a management trainer I thought that I would give Gordon Brown and his motley band of funsters a basic (and free) lesson in management - purely to help then to concentrate their minds. During this week's PMQs, David Cameron referred to the "headless chicken". His brutally eloquent summing up of the Brown style , although unoriginal is perfectly accurate. There are only a few types of generally accepted styles of management. So which one is the Labour Party using?: 1. [...]
The name’s Bond – Bernie Bond.
Gordon Brown has invoked the British wartime spirit to cope with the current economic downturn. He probably thinks that that we are all quite looking forward to shivering in our Andersen shelter as we pump the old Primus stove and await our turn with the teabag. Is that what he means? Or are we being gently steered towards seeing him as the new Churchill? "We must not just plan for tomorrow. Our task over the next twelve months is to build tomorrow today". Is that what he was [...]
If it seems too good to be true……………………….
A Hedge Fund Manager The current banking chaos has been caused by nothing less than institutional fraud on a world-wide basis. The banks have defrauded each other and their clients. The alleged Bernard Madoff affair is only the latest but certainly not the last financial "naughtiness with intent" scam to be discovered. The so-called Ponzi scheme is being referred-to as a pyramid selling scheme. It is not pyramid selling – it is simply a scheme whereby old investors are paid with [...]
A Modern Fable
The Gates to economic recovery and the New Prosperity were being guarded by the Bankers. A tired and bedraggled band of travellers stood before them. They were led by "Not Flash" Gordon the legendary illusionist and Prime Minister. The Chancellor, Government and other Hobbits were busy trying to make themselves invisible - an ancient trick copied from the mythical Bank Elders. Gordon raised his chin so as to appear less terrified than he really was. He tried one of his famous [...]
VAT are you saying?
Alistair the house elf This Government and the banks have a lot in common. They have both enjoyed many years of negligible economic turbulence and zero competition. The good times may have continued if either had noticed that Wall Street had invented the real weapons of mass destruction - the financial ones. The banks had sliced, chopped, diced and mixed bad mortgages and fashioned them into contaminative instruments of death with a built-in time fuse. The bankers' handiwork has [...]
Soundbite Brown
"Osborne? Io sono huomo di cortelle e si tu no mascolta io te do na cortelatta." George Osborne has said Mr Brown's attempts to secure a global agreement for a fiscal stimulus package have failed. It pains me to agree with the Shadow Chancellor but he is right. Many (about 3500) fine words have emerged from last weekend's G20 meeting. But what has really been achieved except perhaps an agreement to have another meeting in 2009? Oh yes, there was a statement that the G20 are going to [...]
The New Financial Order
The shock treatment applied to the world’s economies was no more than a fiscal version of "Pin the tail on the Donkey”. It is a failed experiment and politicians are now doing the only thing that they really understand. They are having a meeting. The heads of the world’s 20 most prosperous (!) economies are meeting in the USA this weekend for what is probably the first of many such meetings, the ultimate purpose of which is unclear - both to us and to the [...]
Em I Rate?
" A large erection in Dubai - the Burj Dubai" Dubai, in common with all other Middle Eastern States is not immune to the global financial crisis. A few weeks ago the UAE Central Bank injected nearly $15 billion into the economy in order to maintain liquidity. It did so without the accompanying noise and self-justification that Western governments go about their business. Dubai has had local issues which have complicated its exposure to the credit crunch - namely allegations of corruption [...]
Arrival of the “Suits”
Some commentators are saying that here in the United Kingdom, Margaret Thatcher's policies and the 20 year-old deregulation of the markets have finally unravelled. It is not policies or rules that cause catastrophes - it is people. In this case it is the ineptitude of those running the banks and building societies. Guess what? Apart from the four sacrificial lambs that were offered up a couple of weeks ago, the same senior executives are still running the banks - or should I say should [...]
LIBORATION!
Under Mervyn King, the Bank of England has become an irrelevance. There is no longer any correlation between Base Rate and what happens to real borrowing rates. The banks are out of control and more-or-less doing what they damn-well please - in spite of taxpayers' handouts. " Come and get it." Today, Mervyn King and his band of funsters at the Bank of England are attending their irrelevant monthly monetary policy committee. Why "irrelevant"? Because it is the British Bankers [...]
Real or False Dawn?
There is little doubt that we are currently in a bear market but this week, the markets have been affected by the optimism sweeping the world as a result of the anticipated and now-confirmed new White House administration. Shares are rallying and the markets appear to be rising. Do not be fooled – this is just a temporary “blip” – a bear market rally. The causes of the rally are artificial, psychological and temporary – borne out of hope more than fact. These [...]
Did you call me a Banker?
Over the last week-or-so, there has been a slight upswing in the markets as investors focus on economies rather than on the global banking crisis. The sad fact however is that the banking sector is still having a vastly negative effect on the economy: 1. The banks are not lending. 2. They are "upping" interest rates to businesses as well as personal borrowers - in spite of prevailing downward pressures on rates. One could argue that banks have behaved fraudulently over the last [...]
Adair the God.
"Listen Big G - there can't be two of us." Lord Turner of Ecchinswell is in an expansionist frame of mind. The FSA will expand with even more highly-paid Civil Servants being hired for a proper Blitzkreig through the financial services industry. The FSA was originally designed to protect the "little people" It has now grown into a monster which munches its way through a mind-numbing £300 million per year - and it wants more! Incidentally, the £300 million is raised from the financial [...]
Is there “naughtiness with intent”?
" Mr Banker, would you please move your head just a little bit to the side. It appears to be blocking your backside." One of the conditions of the Government's bailout of the banks was that no dividends were to be paid until any loans (the debts to the taxpayer) had been repaid. It was that condition which caused the participating banks' shares to be dumped this week. That caused quite striking drops in share prices. In fact, they all nose-dived. HBOS shares fell so much that it is pretty [...]
Dejà Loads.
"Come and get it, bankers. I've got loads!" In the three months ending August 31st 2008, the unemployment queue rose by 164,000 and is continuing to accelerate. Current predictions are that by Christmas the total number of jobless claiming benefits will have reached 2,000,000. This is a post from May 2008: http://www.spygun.com/?p=99
The bank that likes to say “Help!!”
A typical bank senior management team. There is euphoria, Gordon Brown is the saviour of the Western economy, there have been a couple of "dead cat bounces" and all decent metaphors have been used up. Life is great! Happy sunny days! But in reality..... it is still raining. The FTSE 100 index is limping soggily either side of 4500 . Last week's red screens seem to have been forgotten - as has the fact that twelve months ago, the FTSE 100 was standing at a healthy 6500. Today, the Dow [...]
I blame Bjork.
Chancellor: " I suppose that it's going to be a bit of a lottery as to who manages to get their money out of Iceland." Landsbanki banker: " Yes. But you have to be Inuit to win it. That's an Icelandish yoke, you know." Chancellor: " Very funny. I'm off to do some more air miles." Landsbanki banker: "The Prime Minister of Iceland would like to see you before you go." Chancellor:" I'm fed up with giving Kerry Katona free publicity." Landsbanki banker: " It's Geir [...]
From a Jack to a King.
The government’s rescue package has been met with a tsunami of indifference, as has the Bank of England’s announcement that the base rate has been lowered to 4.5%. There is still a fear that there are other financial services outfits who are yet to declare that they are not viable - notably insurance companies and judging by the FTSE 100 index (which today is happily bouncing between 4400 and 4500), traders are unimpressed. How many more SIVs and SIV-lites are sitting and [...]
No, No, No!
Yvette "tell it how it is" Cooper. 21st Century heroine. The Treasury statement on financial support for our banking system has been made! Perhaps this hails the beginning of a new era when the Chancellor can stop flip-flopping from meeting to meeting and knocking-up air miles. By now he should have collected enough points to buy a couple of banks. The Treasury statement (all 899 words of it) is very light on numbers and has no mention of any changes in governance of any of the [...]
Who’s kidding who?
Always look on the bright side In the USA, the Federal Deposit Insurance Corporation (FDIC) which currently guarantees U.S.A deposits up to $250,000 has a list of problem banks. The list includes 117 U.S. institutions with assets of $78 billion. But the list has a fatal deficiency: It does not include any of the large banks that have failed or been forced to merge this year. There are 1,479 U.S. banks and 258 thrifts at risk of failure with total assets of $3.2 trillion - 41 [...]
Nightmare on Wall Street
The Nightmare on Wall Street has now spilled over to the British High Street and the FTSE 100 index is twitching and flatlining at about 4700. Some thought that signing-off the $700 billion "rescue package" would have an immediate positive impact on stock markets. It is apparent that the machinations and horse-trading which eventually produced the rescue package were just a distraction and now that the Paulson plan has been approved, traders are once again focusing on the [...]
The Thunderer squeaks.
Even after months of credit crunch and weeks of banking meltdown, there are still those who do not understand the scale of the current global financial crisis. This is the first sentence from today's Times leader: " The banking crisis began with a few mortgages irresponsibly mis-sold to borrowers in the United States who could not afford the repayments." The article has all the in-depth research of something hastily scribbled on the back of a Carlton or Reform Club menu just before [...]
Capitalism Jim – but not as we know it.
Liquidity - the City way Gearing - the City way The flush-cheeked silk-suits who used to talk loudly in London bars are quiet today. They are awaiting the result of the Congress vote which may ratify the U.S. $700 billion rescue package. When (and if) the package is agreed, the politicians should take an immediate step back and the US Treasury Secretary, Henry Paulson should announce the [...]
B&B – In Memoriam
The Bradford & Bingley Bank has been nationalised. B&B's £41 billion loan book is now on the public balance sheet and the government has guaranteed around £9 billion in other commitments related to the bank. Spanish bank Santander has bought the bank's branches and savings business for £612 million. That's about 2.7 million customers and approximately £20 billion in deposits. Santander already owns Abbey and recently agreed to buy Alliance & Leicester - so the B&B [...]
The Ringmaster
Henry Paulson When the $700 million Wall Street rescue package is unveiled, remember the saying: A camel is a horse designed by a committee. The last few days have shown how unpopular the US $700 million rescue package is among the American electorate. Both the Republicans and the Democrats are very mindful of the fact that a Presidential election is looming, so the fact that Joe Average is having to bail-out the Wall Street fatcats is a potential vote loser. Neither Party [...]
The new Oktoberfest?
The financial establishment was driving an express train to hell but now it wants to hand the steering to the government - any government - and it wants to do it as soon as possible. We are the prisoner- passengers and there is no possibility of getting off the train. We're trapped. The Crash of 1929 and the Crash of 1987 both have something in common. They took place in October. October 2008 starts next Wednesday and it looks as if our train is about to hit the [...]
Bradford and Bungley?
Bradford and Bingley's shares are continuing to travel in the wrong direction and we are still not hearing any positive noises from the board. They have an excellent management team, they are product innovators, they are responsible lenders and the only major mistake that they have made is the purchase of the GMAC mortgage book. They signed up to purchase £12 billions-worth of mortgages. The purchase looks increasingly like the sort of idea that materialises in the pub just before [...]
The Speech 2008
Gordon preparing for his speech. A lot of amateur analysis will clog tomorrow's newspapers, so I'll keep it short. Gordon Brown's 2008 conference speech was not good. It did have the effect of a temporary reprieve but Brown is still hoping that someone will manage to get at the jury before they deliver their final verdict. The decision will arrive sometime after the next by-election. That's about one month away. David Miliband looked far too smug, Starling smiled and what the hell was [...]
We need a GFSA
" Yo political dudes. We need $700 billion dolleros for the money dudes. $1000 dollar bills? Can you do Wallmart vouchers or Euros?" We are chewing into last week's shares rally and the FTSE 100 is heading down to 5000 again. That always happens when there is a knee-jerk government announcement. The initial upswing caused by happy noises is then followed by a couple of days of reflection and analysis. When the US government announced its $700 billion rescue package, the markets relaxed [...]
Caught short? You’re a banker.
Banking : American-style Collective noun for bankers - a Wunch? The banking system has managed to avoid wholesale carnage - just some comparatively minor but well-earned blood-letting. Commentators are currently busy constructing ever more grandiose metaphors to describe the last week's events (was it only a week?) but it is now time to take a dispassionate look at the "post-blast" financial landscape. There has been a lot of name-calling and media hysterics but here appears to [...]
Nightmare on Hudson Street?
"A very strange day on Hudson Street although they're not really wanting to believe it!" The figures below represent what is known as the "Capital Multiple" of brokerages/merchant banks in the United States. That is to say the total capital, divided by the minimum capital requirement. The source of these figures is the Securities and Exchange Commission and is based on the most recent financial statements. When choosing a broker or Merchant Bank with which you wish to deal, [...]
The fires of capitalism
A twisted fusion of capitalism and socialism is being forged in the white-hot heat of political panic. No-one should complain because we are all being forced to run blindfold towards a world where profits are privatised and losses are nationalised. We cannot lose. Competition will be a quaint throwback to the last century because both the US and UK governments have now demonstrated that if a company is big enough, it will have Federal and Treasury support. It is the [...]
A Grimm tale
HBOS and Lloyds The Republic of Mancunia's football team (the American one , not the Arab one) appears to have a new shirt sponsor by proxy. The AIG logo currently on the front of Manchester United's shirts may soon be replaced. AIG is now 80% owned by the US Treasury which neatly completes the Americanisation of the team. So what about the new logo? The Statue of Liberty? The Stars and Stripes? Uncle Sam? Or perhaps, more appropriately, a $-sign? Will they now be known as [...]
A dangerous game
Dick Fuld Millions of words have been written on the subject of the latest corporate financial meltdown but no-one has yet explained in simple terms HOW it all happened. Many years ago I was working in the Head Office of a small bank. One morning a little old man walked in and produced his savings book. He pushed it across to one of our cashiers and said "There's three thousand in there. These are my savings." The cashier looked a bit nonplussed "Yes? Would you like to make [...]
The game with no name.
"This time, try to hit the middle." OnJuly 24thSpygun wrote: "The US Securities regulators are looking at suspected manipulation of Lehman brothers Shares. In addition, Lehman brothers have booked a loss of $2.8 billion for the quarter ending June 2008." (That was the second quarter loss) Lehman Brothers' third quarter loss (announced last week) was $3.9 billion on $5.6 billion of writedowns. “This is an extraordinary time for our industry and one of the toughest [...]
Give us a clue
"1-across is SWAT TEAM" "I've got 'T' as the first letter" "That doesn't surprise me." The latest desperate initiatives of an increasingly desperate Prime Minister and a Chancellor who is already packing his parachute have just traversed the laughable and blundered into the surreal. The plot so far: The banks rip each other off by granting a mortgage to anyone with a pulse - irrespective of whether or not they can repay the loan. The banks then tart-up these dodgy [...]
Mervyn’s Tea Party
Monetary Policy Committee David Blanchflower sits on the pointless Bank of England Monetary Policy Committee. The MPC is supposed to be acting and thinking independently but it always seems that whatever they say has been sanitised so as not to upset the neighbours. David Blanchflower says that in his opinion, two million people will be out of work by the end of the year. That's more like it! We need some realism. We need truth and not the platitudinous crap that Merv [...]
Le Crunch and Hedge-cutting
Hedge Fund Manager The primary driver behind the financial Chernobyl that we are currently experiencing is promiscuous lending by irresponsible mortgage "securitisers". The term Credit Crunch has been on our lips for several months now but it has joined phrases such as " learning curve" , " hedge fund" and "police intelligence" : phrases which we like the sound of but have no real idea what they mean. Most of us survived the crash of 1987 and since then, Governments all over the [...]
The Bottom Feeders
Bottom Feeder The bottom feeders in Financial Services are struggling a bit at the moment. But who are they? Here is a list of some of the strange creatures lurking in the mud of the financial services industry. Debt management companies Software salesman Wine merchants Sandwich suppliers Accounting Software companies Hedge fund managers Debt management companies will solve all of your debt problems by - wait for it - putting you in even more in debt. The deal is that [...]
Blame the NINJAS
Would you lend money to this man? They did in the States! Many years ago, life was very simple in the financial services environment. Banks provided somewhere for you to keep your money. You could take it out of your account by means of a cheque-book or by presenting a savings book at the bank counter and withdrawing cash. Banks also provided small unsecured loans so that you could, for instance, buy a set of curtains, fridge or anything else that you needed. Building Societies were [...]
Lower “Swap Rates”
"Don't Panic!" "Moneyfacts.co.uk is claiming there is a “faint glimmer of hope” that the fixed rate mortgage market is returning to some sort of normality. It says that new mortgage borrowers are now finally benefiting, as lenders pass on a string of welcome interest rate cuts on their popular fixed rate deals. Darren Cook from Moneyfacts.co.uk, said: "Moneyfacts.co.uk has used a key barometer of the average two-year fixed rate over the past few months to analyse the [...]
