i can't decide if that was a good week or a bad week. I suppose it was a could have been worse week. At least we finished with a blue arrow.
DB bond buy back gave us a little boost. It is a little worrying that buying there own unsecured debt was considered a good use of their cash. It shows the pressure they are under and I wouldn't be surprised if the markets continue to pick on them. Fridays event is a bit like giving them a crutch to hide the broken leg they now have. It will give their capital levels a small boost short term but now they have 5 billion less to make a profit on with limited interest in the bond market to lend them replacement capital at good rates. Once the annalists redo their projections and the bond buyers get over their relief at getting their money back, Fridays gains might well disappear for them. It also opens up a problem for other banks. will pressure be put on them in the hope that they will pay back their unsecured debt.
A big part of the problem goes back to the fact that EU rules changed to allow banks to burden share if they get in trouble. The markets have decided that rather than wait for the proverbial to hit the fan they pressurize the banks considered weak into early payment of the riskiest bonds by attacking the share price. The plan worked on friday as far as I can see so whats to stop them doing the exact same thing to other banks. Mario might need widen the type of bonds he buys and the amount fairly quickly because a black hole for QE could easily open up. For sure banks are going to continue using up the QE funds they do get to bolster their own books. Not much chance of it ever seeing the light of the real economy it was meant to stimulate.
That's my reading on things. happy to hear other opinions
.... a recent article about greek banks.. and investors... ross & ...co..... news is not good... unstable political system will lay waste to every penny invested... a few requirements... a culture of hard work and ethics.... positive gdp... a stable political system..
Would not be putting any money on Ireland you understand because of my severe aversion to risk, but I am quietly confident that just like our little bank, it will come good again.
I have switched off my crystal ball and am refraining from further forecasts for the moment, because they must have been reading them in the City and I think there is enough turmoil going on.
My one hope now is that they have learnt the lesson that short term betting is best done on horses - where investments are made they should be attempting to look beyond the horizon in terms of time and not just as far as the end of the pier.
Good luck all and I will be watching tomorrow whilst I enjoy a glass of the good stuff. GO IRELAND....
They are like the angelus .....a ringing bell of no significance . Results will be good but unfortunately the tail wags the dog re economic fundamentals these days. I think .30c is the new glass ceiling for the mo. My exit is .40c be it Monday or 5 years time. Best of luck all and go Ireland tomorrow!!!
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.