Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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It’s simple don’t sell .
…I am of course referring to the Credit Suisse Bonds.
Dow Jones Futures currently looking circa -300 to the downside. I’d be surprised to see the stock finish above 130p today.
Regards, MrA
Newdealz, no such thing as a bad profit my friend. I’d be shocked to see us get to a £1… that with the caveat that there are no other Banks in ‘liquidity trouble’. Confidence in the whole sector has been rocked, as already mentioned, even more so if you are an institution and your purchased bond with capital and interest has effectively been ripped up, meaning you have lost the lot. No surprise that the sector is taking another kicking then really? I read somewhere over the weekend that confidence is slow to build and quick to shatter. Ain’t that the truth.
Good Luck My Friend, Regards, MrA
suspect barc needs another haircut!
@MrA - yes i took my small holding off the table with very small profit Friday, waiting it out now, will we see the £1 party before the end of the month? Possibly.... good news is that oil is dropping which is a good indicator re inflation so im thinking fed might ease a 0.25, BOE likewise, jobless claims Thursday also one to watch.
People making a real killing shorting the banks. So corrupt.
Can see a bounce back up at 1.28
…and indications it could go lower. I’m still looking to ‘load up’ but not until s9me stability is seen or I think we are close to the bottom. US and UK Base Rate decisions will have a part to play over the next few days.
Good Luck All, Regards MrA
Picked up a small amount at 1.31, looks like it'll go lower?
GLA
Rather large spread . . .
On the face of it, the takeover of Credit Suisse appears to be a good investment for both UBS & it's shareholders and ought to steady the nerves of the global financial market during today's trading session. The flip side of the coin will be a lack of confidence still so while I, for one think & hope for a beginning of a BARC recovery, anything can happen as we all know. Not long now to wait for the opening bell. On a more positive note, I see Motley have said they wouldn't touch us... this invariably means the SP will rise then!
Anyone expecting 10% fall today?
Hard to believe w could be in the 120s by the end of today. By the end of the week?????
I’m sure these MM are creating all this fear .. they make money on volatility .. or is there a problem there behind the scenes that we don’t know about .. another bloodbath coming today
speculation driven by the problems with the other two American banks made investors loose confidence.
This should draw a line under this banking issue which by all accounts has no comparison with 2008 financial crisis.
All IMHO.
Unhappy precedent in many ways as regulators cited 'a risk of the bank becoming illiquid, even if it remained solvent'. So much then for central banks as the lender of last resort. If the short sellers can instil panic, it's game over for any bank they choose to target in concert regardless of its solvency. I would have thought that will only encourage them to find more and more targets. Can't see it encouraging investors in the sector.
It will be a brief relief and then the reality of Fed's interest rate increase later in the week. Mid sized banks in US still wobby and the pending US debt ceiling being reached with no automatic rubber stamp uplift this time it seems. Oh and sadly, a Russian spring offensive in Ukraine. Write offf 2023 for investing.
With the takeover confirmed. Do you guys think the markets will react positively to this in the morning? In particular Barc? Just interested in opinions I know no one here has a crystal ball.
Over 2 bill now this will go through to avoid all the blood shed
https://m.uk.investing.com/news/economy/crunch-time-for-credit-suisse-talks-as-ubs-seeks-swiss-assurances-2955563
UBS is gonna tank in the morning.
Oh, I am sure the government went in to bat for the taxpayer with all their might! :) Just joking of course - we have been told in no uncertain terms that this was without impact on the taxpayer. Would have been interesting if the interviewer had asked whether this meant just for now, or for ever. We all know how good with words politicians can be. Read the small print etc.
On an entirely unrelated topic, I wonder if any current politicians will end up with banking directorships in the years ahead? Probably not, nor any consultancy work for one or more of the banks, either. That could arouse some suspicion in the more untrusting minds of the populace. Not me though. I trust our dear Leaders :)
" I do however think that two days would not have been long enough for HSBC to undertake the normal amount of dd before agreeing to this move. Hence consider it probable that they got given some informal assurances from the government."
=========================================================
LHWL, I would be amazed if HSBC weren't given some sort 'assurance' in order to take on the risk of SVB UK. The big question is how much they managed to screw the UK government for. The current Tory government has a reputation for handing over suitcases of taxpayers cash to get themselves out of a pickle.
I was reading on the BBC this morning: "UBS is said to have asked the Swiss government to cover about $6bn (£4.9bn) in costs if it were to buy Credit Suisse, according to sources quoted by Reuters."
On a totally different scale to SVB UK of course.
Assuming they get the deal over the line, we'll see tomorrow how the markets react. At least they seem to be acting swiftly and decisively over Credit Suisse. My concern is back in the US. I know First Republic is a lot smaller fry and the banks stepped in last week to patch it up, but it lost a third of its value in one day on Friday and I don't see any kind of urgency to take that one over - but I suspect it might be needed.
The FT
UBS offers to buy Credit Suisse for up to $1bn
Https://www.ft.com/content/ec4be743-052a-4381-a923-c2fbd7ea9cfd
Agree. There are plenty of genuinely dodgy decisions/payments that get made/have been paid, but this does not seem to be one of them. Insofar as contractual legalities. Still does not look good and still need time to see if this takeover proves to be a good one for HSBC in the medium to long term. I simply do not know enough about the details of SVB UK operations (let alone the US business) to have an opinion in either direction. I do however think that two days would not have been long enough for HSBC to undertake the normal amount of dd before agreeing to this move. Hence consider it probable that they got given some informal assurances from the government. Whether or not one should trust anything from this government is another matter altogether! Still, it will give me an opportunity to josh some corporate M&A consultants I know about how long they typically take doing deals :)
While paying bonuses doesn't make for good headlines it avoids the detail. The UK branch was ringfenced from the US operations and was quite profitable - making £88m last year. The US branch got into trouble not for buying junk bonds, dodgy mortgage books or making speculative investments but because of a lack of liquidity after putting too much money into low value bonds and then running out of money once people started wanting their money and finding out that the ultra safe bonds weren't worth what they paid for them. When they made those investments they were being ultra-conservative, the opposite of what happened in the run up to the credit crunch.
Barclays gets grief from investors for paying low dividends but they have plenty of cash in the bank, their CET1 ratio is around 14%. This meant that when they got clobbered for the misbuying of securities last year they coped with the fines and litigation without having to sell off the family furniture. While the banking sector is getting hit I genuinely think that the larger British banks are well placed to avoid any fall-out.
But you are right about the bonuses needing to be paid - if they weren't they would get sued for them.
I had to chuckle when I read that the bankers in the UK SVB got paid those bonuses the day after the bail out. I am sure it was all in line with contractual agreements...but it does not look good, eh?