Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
....and you can't have contagion unless there is disease in the first place.
@Badjob. Thanks for the considered reply Badjob. I recall, I think it was Alistair Darling at the time, saying that on the eve of the UK banks being bailed out back in 2008, that all the top UK bankers arriving in their private jets, sat around a table with him in complete denial, saying the only issue was one of liquidity. But for the bail out, every one of those banks would have gone the same way as SVB went last week, because bankers were not doing their job. As I understand it, Becker had lobbied the US administration to effectively de-regulate his bank by having the cap raised from $50bn to $250bn. I fail to see how Becker's behaviour is any different to the way bankers were behaving back in 2008. And I agree with Flashy500 - with the devastation that some businesses and individuals experienced as a consequence of the financial crash - through no fault of their own, suicides included, I think it obscene to suggest Fred the Shred was held accountable. Losing a Knighthood you shouldn't have got in the first place, is not being held accountable.
The banking world is mad! As I understood banking originally, the business model was simple. You paid interest out to deposit holders and savers at 'x' amount and you lent out to borrowers at a higher 'y' amount and you pocketed the difference. And when interest rates started increasing last year, all the analysts were saying this is great for banks and the SP's in the financial sector reflected this. Then when inflation wasn't coming down as fast as the authorities wanted, they continued to increase the interest rates. Still great for banks you would have thought. Not so. There was a dramatic shift in the analysts thinking that profits from increased rates would be be consumed by customer defaults as a consequence of economy's being driven towards recession and the financials SP' s plummeted at the thought of further rate rises. Now we are in the incredibly bizarre situation where it is being suggested the FED will halt further intended rate rises, because it is the banks themselves that are in danger of collapse, not the wider economy! Absolutely mad! I understand that matters are more complex than my simple brain can comprehend and understand the issues over liquidity. But all it says to me is that because the bankers were not held accountable back in 2008 as they should have been, they haven't learnt their lesson. They remain pathologically greedy and self-centred and their financial creativity, becomes ever more reckless. Joe Biden has said he will hold those responsible to account. I wonder just exactly what will be the consequences for Greg Becker. Yes, his SVB shares are now worthless, but otherwise, I bet his $40m net wealth remains intact.
Hopefully the big American banks agreeing to shore up First Republic today, will bring some confidence back to the FTSE and the UK financial sector tomorrow morning. Fingers crossed.
Keep it calm and steady for the foreseeable. Just for once Lagarde, Powell, Bailey et al can help the markets with steady action and soft words. First up, Lagarde today. Expect carnage if a 0.5% rise and hawkish tones are seen and heard. But she might get away with a 0.25% rise if she brings in soft language on inflation and strong reassurance on the banking sector. What we don't want to see and hear is any more creaking from any particular bank. If the US and central banks do their bit and there are no more unwelcome noises from any bank, then I would settle for a penny a day rise in my Barcs shares for the next two months and take it from there! Anything less and I suspect my poor wife will be inheriting this junk in the very near future.
@Zebbo. I genuinely feel for you. That is about where I am at in terms of loss, but am not brave enough to check out - even though I desperately want to. Hope all comes good in the end.
@Pantherax: I respectfully disagree. Recently, I posted how far the Barclays SP lagged behind its peers. I said this was no indicator of potential upswing, but reflected the trust and perception investors had in the bank, in comparison to its peers. I said the gulf would increase. I haven’t calculated to what extent it has widened since I posted, but am satisfied Barclays will have come out of recent turmoils significantly worse than its peers. If there was a shred of honesty in the Barclays Board, they will pick out from the current devastation, that the difference in the Barclays SP and that of its peers, largely reflects the trust and perception investors have of the bank. Until the bank recognises and addresses this, then multi-billion pound buy-backs is simply pouring money down the drain. If every UK banks misdemeanour, fine, scandal, ****-up and so on, in the last 10 years were scored, Barclays would be far and away, top of the leader board. Not as bad as Credit Suisse, but Credit Suisse is a good example of the point I make. IMHO Barclays needs to:
1/ Stop cutting corners on rules and regulations and abide by their obligations. ‘Human error’ - no doubt what Greg Becker at SVB will rely on, doesn’t cut it.
2/ Accept, so far as is reasonable, staff and the Barclays Board, pick up the litigation costs for their own failings - not shareholders.
3/ Curb the obscene amount they pay themselves and have share awards deferred until the SP hits stretching but achievable targets.
4/ Have a dedicated board member whose sole responsibility is to work in the best interest of shareholders.
5/ Start treating shareholders as the respected owners of the business, rather than an unwelcome and costly nuisance and start acting fairly, in their interests.
On the latter point, it is almost laughable what Barclays says about dividends and buy-backs on their site. They say:
“Barclays understands the importance of delivering attractive total cash returns to shareholders…. As owners of Barclays, shareholders benefit from buybacks as they reduce overall share count, thereby increasing each share’s percentage ownership of Barclays equity and proportion of future capital returns”. Barclays wants to encourage long-term investors. So the Board have to recognise the majority of LTH's will have bought into the business at anywhere between £1.50 and £7 a share. Many on this site believe the SP should be at least £3. (you may remember McFarlane some years ago saying it should be well above £5!) Okay, so imagine the hypothetical investor buying in at £3. How do they view Barclays statement they understand the importance of attractive returns? The reality is they have received a 2.5% annual return on a capital investment that has eroded by 56%. And this is after £3bn of buybacks! No matter how many more £bns they throw at it, buy-back money is going down the drain, if the Board continues to behave as they do and treat shareholders unfairly on dividends. How do they
Many (obviously not all) traders in this stock become LTH's unless they are prepared to cut their losses. I see myself as one of those. Barclays share dealing is a depressing variant of Snakes & Ladders where the snakes outnumber the ladders 2:1. They are python length, whereas the ladders are merely, footstools. The consequence is this SP hits the floor more times than Jack Grealish and the bounce is never as great as the fall. It is is why the realistic 'target' for this share has fallen from £8 to £2.50 in the last 15 years. If at some point in the next 18 months it hits £2 (a big ask) there will be a mass sell-off, with traders and investors alike thinking - that's enough for me. As I write, such days seem a long way off. But at what point will the institutional investors say to the Barclays board enough is enough - we demand change? As things stand, the core concern with such Barclays investors, appears to be Barclays carbon footprint.
Due to Credit Suisse? Down over 20% in pre-market trading.
Crikey FlyingHigher - will all this be before the asteroid hits us on Mothers day?
@badjob: (a) Because it's Barclay's (b) Because it's Barclays and (c) Because it's Barclays - and the icing on the cake - (d) it's a transatlantic bank, so when the proverbial hits the fan in the US, Barclays comes off worse over here.
If the dominoes come out stateside this afternoon, there is no telling where the bottom is for Barclays. Hope no-one followed those who were suggesting a re-entry point was in the low £1.60's.
With regard to SVB and its CEO Greg Becker - how hard is it to run a bank properly on $10m a year, given the 2008 financial crisis? How on earth has he got the bank into this situation, that it has run out of cash! It is an absolute scandal this could happen again and no doubt he will get off absolutely scot free despite the carnage he leaves behind. Bankers and their regulators will never learn unless they receive appropriate punishment. Strung up by his goolies and suspended above Wall St, probably isn't sufficient!
@warsaw. It is largely coming off SVB, though continued weakening in the American markets, coupled with Powell's comments saw all the American banks take a major hit yesterday. Barclays off course which prides itself on the transatlantic nature of its operations, which simply means it takes everything that hits the American banks SP in a downturn, but reaps none of the benefits of American banks SP upswings, is taking a further clobbering.
@badjob. I made the point at the time badjob, but given your comments, I reiterate in support of you. Two days before the last Barcs results I opened a 2-year savings account paying 4.2% a year. My capital in that account remains the same. On Barcs results day, based on the overnight SP of £1.87 (itself a disgrace of a price), the 7.5p total annual dividend equated to a return of 3.8%. Since then my capital has reduced by 13%! And then Venkat, has the gall (on £5m a year or whatever ) to say that he and the board members cannot understand why the SP is so poor and that they spend many hours scratching their heads over it!
@ onelongrunner -"History is never the driver of the future share price". So you don't think yesterday's comments by Powell and what happened to the DOW yesterday, has affected the FTSE today?
@onelongrunner - Immediately before the previous buy-backs started, the SP was at £1.83. Now £2.7bn of buybacks later, it stands at £1.65. Another £500m will have no impact on the SP whatsoever.
I am writing on the 10th anniversary of my involvement with Barclays, where regretfully, I made the fatal mistake of investing a huge sum at the price of £2.69. I have 'wheeled & dealed' since to bring the price down to £2.26, but I have for a decade, carried a huge 'paper loss' exacerbated by intolerable treatment of shareholders by the Barclays board in terms of dividend returns. In that decade I have seen thousands and thousands of posts and charts by those telling me the SP is so cheap, now is the time to buy, the SP will be back above £2 by Friday and above £3 by Christmas (I exaggerate, but the general picture is true). Very few of these posters warn of further falls. Well since the decade has past, I look and can tell you that the Barclays SP is 41% down on my original investment compared with HSBC (13% down), Nat West (17% down) and Lloyds (3% down). So not only did I back the wrong sector, but by a country mile, I backed the wrong horse within that sector. My mistake and I have no-one to blame but myself. But there are still those who now argue that Barclays is so cheap the 41% figure represents a massive potential upswing. To those I say sorry, but I believe you are wrong and a decade or more of evidence is against you. What that 41% actually represents is scandal upon scandal and misdemeanour upon misdemeanour perpetrated by the Barclays board, where the only one to suffer are the shareholders. That 41% is actually a colossal anchor of negative sentiment and perception of Barclays, a millstone around its neck that is here to stay, telling potential long-term investors that Barclays is the last of the financials you should be considering investing in - it is deeply untrustworthy. The share price gap between Barclays and its financial competitors will not shrink, but will continue to grow. And if there is any doubt in what I say, look at what has happened since the day before results day in February. Since then, Barclays has fallen 11%, Nat West has fallen 5%, Lloyds has fallen 4% and HSBC has risen by 3%. What is required is a meaningful shareholders revolt, but the unfair rules prevent the likelihood of this happening. The alternative hope is that the SP has been so low, for so long, that a foreign competitor might eye Barclays as a 'steal' and they would not be wrong - offer shareholders £2.50 a share and they would snap your hand off, I bet.
@Warsaw. Buy-backs completed to date total £2.7bn. SP immediately before they commenced was £1.83. SP at this point in time is £1.69. Another 0.5bn will not make a blind bit of difference to upward movement of the SP I am afraid.
Interested to know what you decide Mr A. The day before ex-dividend date last year (2nd March) Barclays SP closed at 176.96. It didn't close above that figure for the rest of the year and only closed above it this January, before retreating back below again. Sobering thought!