Member Info for johnmcclean

May has walked the UK into an impossible position. By mustering her own troops to vote against her own deal she has closed off any chance of convincing the EU to negotiate any further. Why would they when she could just shake hands on it today and give it the two fingers tomorrow. May has now only 2 choices. A climb down and capitulation to Europe OR the hardest of brexits. Its not in the UK psychic to capitulate so the odds have to be now on the last thing anyone (including Boris and Mog) wants, a no deal disaster. Expect to see a lot of panic buttons been pressed over the next month and a lot of diving for cover.

If Corbyn intends to play any cards now's the time. The EU might give a time extension because they just love kicking that bloody can BUT they might not. They might think its pointless and that the uncertainty this is generating across Europe is nearly as bad as a hard brexit at this stage. If they thought Labour would step up and alter the politics (God help us) they might think it would be worth a try.

TBH despite the disaster a hard brexit will be I am beginning to come to the view that in the long run it might be the best thing. The UK spent years trying to convince de Gaulle to let them join and no sooner were they in than they were trying to get out. Maybe for everyone's sake they would be better off out. Eventually things would settle down. English people just don't see themselves as European and there lies the problem. It's not just about the economy for them it's about been British.

Sorry I disagree Senator.

The bulk of money in the markets belongs to people not making the actual calls, eg hedgefunds, sovereign wealth funds, pension funds. their recklessness created products at the end of the 90's that even the experts struggled to understand. Their regulators (of sorts) like Moody's became part of the market and AAA rated all kinds of crap and turned a blind eye to what was going on. In the US what would the banking system be like today if the politicians hadn't baled them out. What would the auto industry be like. What would the economy be like if the governments all over the place hadn't sanctioned QE. The markets gambled with citizens savings and the citizens as tax payers saved their ass. I have far more respect for politicians (good and bad) who are willing to go before their peers every few years, than the vast majority of the anonymous "Market" participants. At least the politicians can be held accountable for the money they spend.

I agree with the first part of your post Senator but not the last bit.
"Politicians are to be avoided at all costs by the markets. They prove themselves over and over again to be of low intellect".
Leaving aside that the " intellects" of the "Markets", left to more or less get on with it were the cause of the 2008 crash.
Politicians are democratically elected by their peers which means you get a mix of the mad head the balls to some that are actually smart. It's a lot fairer that going into the top universities in the world and choosing the leaders from the top intellects in there. David Cameron was educated in Eton and Oxford and was considered by his peers as extremely smart and capable.
Here's an academic review of Cameron by Kevin Theakston , Professor of British Government at the School of Politics and International Studies at the University of Leeds and Head of School.

"David Cameron, in contrast, can be seen to perform well and to have strengths under several of these key headings.
He is a strong communicator; he has made some intelligent decisions about the organization of advice and decision-making in government; he is a formidable political operator; he has shown flexibility and pragmatism; he seems to be able to handle the intellectual and personal challenges of the premiership, and he shows emotional intelligence.
He faces, to be sure, huge political and economic challenges. But it cannot be said of him – as it was said of Brown – that he is not up to the job of being prime minister."

Yet Cameron has led the UK into what could arguably be described as the brink of economic suicide.
Rees Mogs has the same highbrow education and was successful outside politics. Would he make a good PM? Intelligence, while very desirable does not guarantee better leadership.

"This share always goes down disproportionately more than other bank shares and never recovers as much."

Would it surprise you to know that the share price of BoI is down 37.5% from peak in the last year and that the Europe 600 banking index is down 32.5%. That's a very small difference considering BoI's exposure to brexit compared to the vast bulk of European banks.

Capital group have assets under managament of almost 2 TRILLION, income of 8 BILLION in 2017 which was up 9% YOY. Their only problem is where to put the cash. Birg is nothing to them.

I wounder has Europe been caught out economically? The numbers out today on manufacturing and activity from all over the place are poor. Brexit can't be blamed for this either. Actually quite the opposite. In the UK and Ireland and I assume all over Europe business have been stock piling. Every warehouse is full in preparation for borders going up if the Brexit is hard. So businesses have actually been over ordering and are bursting with stock and inventory. A bit worrying if manufacturing and activity in China, Europe and the US is slowing. I wounder who is funding all these full warehouses. Hopefully not the "competitive" brexit loans the "banks" are offering.

When activity slowed after the last crisis the worlds central banks came up with QE and lower interest rates. this time round at least the US has a little room to maneuver. They have been retiring billions of the QE bonds and raising rates over the last while. Not so China, Japan or worse Europe. Europe's bullet belt is empty unless it just keeps printing indefinitely. There's actually an economic theory and movement around permanent QE now..

There's a good chance an end to trade wars ( even if China needs to have its wings clipped) and protectionism would ease the pressure. For Europe, a reasonable Brexit deal, or no brexit, would brighten the outlook no end. With a bit of luck 2019 will be a little brighter than 2018.

Funds like Capital are made up of money from loads of different clients. Their investment decisions are constantly changing. When all markets are shaky and worse been predicted it's not a surprise individuals and institutions are nervous. With bonds and US interest rate offering a better rate now why risk the markets now that there is a competitive alternative that didn't exist for the last few years. Expect more of the same for the next while I would think.

After your post on Nov 21st when BIRG hit your target NAV of .75 and a price of 5.75 you were at buy buy buy up to an NAV of 1.1, I posted the following..
"I think May's deal is a near term catalyst. If as expected it crashes and burns then the SP drops below €5. if she defies all and gets it through we then more or less know what Brexit acutally means and we are heading for €8. As we are at an NAV of .75% today then the down side looks a lot less than the upside potential. However after 9 years of chasing this share lower there is one lesson I (should) have learned .. the ability of BIRG to shake off all positivity and to disappoint is unrivaled."

This still holds in my opinion so I am with Senator1's view. I think the situation is the UK is worse now than ever. May did not win the confidence vote yesterday. She got the vote for the least worst option for the UK at the moment and that tells you where they are. Not only that but by avoiding putting her brexit deal to parliament she has put off the inevitable for another month. So for BIRG no news means more uncertainty and a share price most likely heading for the mid €4's. Logically it makes no sense but that's where we are. The ending of EU QE today, although no surprise is not going to help sentiment either. No Santa rally this year.

There are very few trading days left between now and year end. Very soon BoI will have to lock in the exchange rate from STG to the reported currency EURO. Even allowing for averaging or hedging we are going to be on the wrong side of the conversion. pretty good chance the return from the UK will be a zero % increase for the year or not far off it. With 40% of the business in the UK we are not going to see any headline grabbing positive numbers for FY18.

There is no doubt that Brexit is and will be the biggest influence on the SP for the foreseeable future. It's like Captain Kirk's Enterprise caught in the gravity of a black hole. At least he had Scottie in the engine room, full throttle on the warp drive to save the day.

May must know that not having the vote today is pointless. The backstop will stay. The DUP will not vote for anything that is not a hard border. Nothing she brings back will satisfy the hardcore brexiteers. In 1 week or 2 weeks or a month we will be back to this exact same point again with the exact same inevitable conclusion. Of course, politically, events might well come to a head there before a new vote but in the mean time the market will continue to tick down.

Don't forget Irish founded company Stripe. https://www.nytimes.com/2016/11/25/business/dealbook/value-of-payments-provider-stripe-doubles-to-9-2-billion.html

good luck with that Howth. a lot of very smart have been trying to figure the exposure for the last few years without much success. The markets for the most part have decided to take no risk on and have discounted the BIRG share price to the bottom of the range. The profit for 2018 matters little to the market makers. It's 2019,20,21 that's on their mind. Apart from the currency risk which is bad enough, it's the potential damage a hard (or semi hard) brexit will do to the UK and as a knock on effect to ireland. Because Banks by their nature reflect the economy they operate in, they are on the front line of any down side. Is the market overreacting? I suppose that depends on how bad or good you believe brexit will be

.What I have done this year as a reaction to what's going on is to drip feed a set monthly amount into a pension fund made up a good companies in Europe and the US. Between Brexit,Trump and China the markets are dangerous so picking shares myself is way too risky. By drip feeding, timing the market isn't as important. I'll continue to hold BIRG myself but don't plan on buying outside the pension.

Despite all the rhetoric in the media about a united Ireland I think we are many years away from that yet. For a start the political set up in NI needs to change away for a system where religion is the deciding factor where your vote goes. The time will come when voters will vote on issue's that really matter to their lives rather than which church they were baptised in. The Brexit vote was the first hint of that change. However when it comes to a vote to elect their representatives the choice is not there for voters to escape their roots. NI needs party's of the left right and centre. When that happens (and it will) that will be real progress.

40% of the balance sheet is generated in the UK. Hence the turbulent share price. Possibly the most exposed Irish listed company to brexit.

As with all things brexit, from the beginning its as clear as mud what happens next. It's highly unlikely May, try as she might, will get the deal through in two weeks. She would need 100 labor votes to win and that seems impossible. Her idea of going after the soft under belly of her MP's, their voters, is sound but she has too little time to make an impact. I think a lot of voters have disengaged from the debate anyway. It will only be when they are staring the cliff edge in the face next March that they will start to panic.

So if she does fail she's in a tight corner. her instinct seems to be to fight but where has she to turn to? If she doesn't jump she will be pushed anyway. So Boris will probably get the job unopposed. I don't think anyone else will be stupid enough to want it.

Boris will be as unpredictable as his friend Trump. If he's watching the polls he will know that the one thing Trump has that he doesn't is a loyal base. As soon as he takes the job he will have "Fall guy" written all over him. He will have two real options. A new vote or his only real play, go back to Europe and get something extra. Why would Europe give him something May couldn't get? Maybe because playing hardball with Cameron years ago and May now has led them to staring the cliff edge in the face also. Apart from a few Rees Mogg types who are the equivalent to the British generals sending the young soldiers over the trenchs in Flanders, NO one wants a no deal Brexit that leaves all of us in no mans land.

One way or another the UK is about to reach the point on the road where all the cans that have been kicked so far have gathered. Hopefully for us all they are the recyclable type and not a permanent pile of rubbish.

I think May's deal is a near term catalyst. If as expected it crashes and burns then the SP drops below €5. if she defies all and gets it through we then more or less know what Brexit acutally means and we are heading for €8. As we are at an NAV of .75% today then the down side looks a lot less than the upside potential. However after 9 years of chasing this share lower there is one lesson I (should) have learned .. the ability of BIRG to shake off all positivity and to disappoint is unrivaled.

VAT back to 13.5% is on the cards. Hospitality sector are going to be very disappointed.They were fairly sure that 11% was as far as it would go this time.

Hospitality vat going from 9% to 11% seemingly. The €500 million is coming from a once off extra billion from a change in the corporation tax rules on when profits are accounted for. Affects the big Tech companies mostly.

That share holding the government has in the banks has protected them from a lot harsher environment. Like retaining their deferred tax liabilities, no pressure to lower interest rates, not encouraging competition, very little pressure to deal with NPL's ect.

https://www.bloomberg.com/news/articles/2018-10-04/italy-pivots-to-china-in-blow-to-eu-efforts-to-keep-its-distance?srnd=economics-vp

Geraci dismissed any concerns that Italy could get in too deep with China, and face a debt risk. Sri Lanka, for instance, borrowed from China to build a port and then couldn’t repay the loans. Italy could learn about “what pitfalls we may be running into” from Sri Lanka, Malaysia and Laos, he said, but Italy has other issues.

I LOVE THIS NEXT BIT

“Our European friends already have a lot of Italian debt, we don’t need to worry about China, it’s the European Central Bank that has Italian debt,” Geraci said. “The size of the Italian economy saves us from this debt trap.”

As per my posts on China v USA.

10 US Bonds hit 3.2% today. Euro v Dollar 1.15. Almost certain Fed rate increase in December now. Pay increases already(amazon). Once the pot is boiling it's difficult to put the lid back on. The fed really should be increasing in 0.5% rather than 0.25% except that would send the market into meltdown. The only bright side is this is good for banks. I believe Mario will be under serious pressure to start upping rates in early summer rather than late.

https://www.theguardian.com/business/2018/oct/04/world-markets-rattled-by-us-inflation-concerns

Not sure why the markets are suddenly "Rattled" now. This has been coming since Trump hit the first tariff button. That was only 20 or 50 billion. wait until the 200billlion starts to kick in. Conveniently after November.