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Any one hot in finance?
fcurrito [ PM ]
11 September 2008 00:36
With major investment banks going bust right left and centre, won’t retail banks go the same way? Do you feel your savings are "safe" and in good hands? Which banks/building societies is looking after you dosh and which you think might go bust very soon and which will survive the mother of all recessions?
ATAY_BE_LEQAMA [ PM ]
11 September 2008 15:30
Morning Fcurrito
It’s the hottest topic these days. In the US, if the depositor has savings at one of FDIC insured bank totaling $100,000 or less, the deposits are fully insured. If you have more than the insured amount, it’s recommended to deposit your savings in multiple banking institutions.
I worked for an investing institution that just went bankrupt not long ago; Lehman Brothers is struggling to survive. We forgot about basic finance: High profit means you need to take high risk.
chelhman [ PM ]
11 September 2008 17:01
If the system collapses, no bank will be safe. The best way is to put your money into something that won't depreciate so much : real estate or gold certificates. Real estate will fall but if you're in no hurry, it always comes back up after the storm has subsided, you'll just have to wait it out.
fcurrito [ PM ]
11 September 2008 21:25
Thanks Leqama and chelhman,Smiling Smiley

I did work for few months in an investment bank but nothing related to finance, therefore my knowledge in finance is zilch. Winking smiley

I am told that the FSA in the UK guarantees the first 35K of your savings. What you get if the system goes belly up, is 100% of the first 2K and 90% of the rest. This means you loose some 8K of your savings no matter what.

As Leqama said, spreading your savings is paramount; putting all your eggs in the same basket could prove disastrous. Not that I am sitting on hordes of money, but whatever is there I don’t want it to end up with the thieves who already ripped off the working class and drove the global economy into freefall.

I don’t have enough money to invest, but if I did, I doubt this is the right time to throw your money in bricks and water, even for the long term. If houses have lost some 25% of their value last year and continuing to fall, then better wait, buy low and sell high as they say. The housing market in the UK is so over-valued and prices need to come down enormously before first time buyers like myself can afford them, add this to the fact that banks have no money to lend, they are all kaput and cant do business, we would need half a decade for the market to bottom up and normality to return, before they become affordable. The FED and the treasury have used all the ticks in their hat and it looks as if things are only getting worst. From NR to LB to Freddie & Fannie or is it Fannie and Freddie?

Lately gold has been on the hike, and could probably carry on in doing so for the foreseeable future, but isn’t it like everything else, whatever goes up can only come down, same with the dot.com, housing and the dollar? It always starts with bubbles and then it follows with busts.

Many people are already hinting that most banks will disappear including some major ones, and those who are left will be absorbed by the few colossal ones who will soon own the whole planet.

So the question is; is their any place where we can find information and analysis which can tell roughly which banks in the UK are heavily invested in the US mortgage market? And those who will have to be bailed out by the government or socialised for the rich. I don’t want to end up standing for hours in a mile queue trying to get my money out only to be told we are not open for business.Angry smiley
ATAY_BE_LEQAMA [ PM ]
11 September 2008 21:55
Fcurrito - Hoovers is an excellent site to check, going from basic informations up to financials statments and industry trends.

[www.hoovers.com]
fcurrito [ PM ]
11 September 2008 22:16
Quote
ATAY_BE_LEQAMA
Fcurrito - Hoovers is an excellent site to check, going from basic informations up to financials statments and industry trends.

[www.hoovers.com]

Thanks Leqama, looks interestingSmiling Smiley
Kutchia [ PM ]
11 September 2008 22:26
Salam fcuritto!
I knew this was going to happen long before it happend. Before june 2007 I had my savings in 90% stocks long and 10% cash. I sold most of my stocks before the first news articles about "subprime" and since then I have max invested 10% of my savings in stocks and only in very short term investments when I see an oportunity to make some fast money. I have been an investor for more than 12 years now. During the dot.com buble I never invested 1 $ in any dot.com companies as I knew it was a matter of time before the buble burst. The financial problems we see now has been accumulated in the last 30 years or so and accelerated after the dot era. The former Fed chairman kept lowering the rates to keep US away from a recession and there by pumping more hot air into a "credit buble" wich lead to the housing buble. The problems we are facing now are far more greater than we ever witnesed since the great depresion. I can talk about this issue for hours but I am too bored to write more than I have already Smiling Smiley . now back to your question I will say than I don't know enough about the UK banks, but If I were you I will not trust any of them. Try to protect your cash as best as you can. It is a good Idea to have 10% of your cash in physical Gold like the krugerand ( in UK [www.hattongardenmetals.com] or [online.kitco.com] in case if worst case scenario should happen (but then again I don't think anything will help att all as it will be anarchy in the streets and only a gun can save you Winking smiley) I know investing in gold at the moment is a high risk, but it dosn't hurt to have a little money invested in physical gold at all times.
I have my money in 4 different banks (all solid banks with a very low risk and very high cash reserves.)and I can wire transfer my money between any of the 4 bank in less than an hour if I smell any trouble.

All are talking about inflation now, but in the near furture you would start hearing about deflation wich I think is the 3.rd step in this finincial crisis. When that happens then you will se house prices fall weven further and interest rates at 0-1% I will not explain why beacuse it requires a long explanation.
If you have any further specific question then do ask.



Edited 1 time(s). Last edit at 09/11/2008 10:27 by Kutchia.
fcurrito [ PM ]
15 September 2008 22:41
Sorry Kutchia, just time for a little note.Smiling Smiley

Have you see how the whole system is now on the brink of collapse. Was watching those young men and ladies leaving leman’s offices, looking quite sad and depressed. Sad SmileyI think they ought too. They will be lucky to find a job in the next two years or so. The storm has now landed on the shores of Europe. Major Banks took a hit this morning with HBOS loosing a third of its share value, with Barclays and RBS in deep doodoo as well.Are you crazyEye popping smiley

Yesterday in an interview, I saw Alan Green Span, who should have been impaled on some cross by now outside Wall Street, told this young lady that he has never see anything like it before, that this type of tsunami, referring to the chaos about to be unleashed in the Asian market this morning, only happens once in a century. Meaning that this could be the mother of all depressions. Strangely enough no one challenged him as to why and how all this mayhem started in the first place, and what role did he play in all this.Perplexe

There is more bad news to come. It looks like capitalism is on a life support machine.Moody Smiley
chelhman [ PM ]
15 September 2008 22:54
And this ain't over, not by a long shot, the fun will continue after the election and the winner gets to find out how bad is the deficit left by the Bush administration, and it's an abyss like no other in US financial history.
The question is how will it play on this side of the Atlantic ? European banks and insurances hold 70 % of the US debt, if they fall, we fall. Asians were the smart ones, they started dumping their US debts a few years ago, mainly treasury bonds like India did 2 years ago.
Who's got gold ? I'm buying...Tongue sticking out smiley
fcurrito [ PM ]
15 September 2008 23:56
Indeed Chelhman, it ain’t over until the big fat lady finishes her usual melody.Smiling Smiley After the storm has bashed everything on its path, they won’t be much left; the whole financial system will be kaput. The question now is what is the sheeple going to do about it? I doubt anything will come from the other side of the Atlantic, if anything is about to change the face of the current political system and the status quo, that change will, me thinking, come from this side of the Atlantic. The French, the Spanish won’t sit by and watch their livelihood squandered by a bunch of liberal globalise fanatics. We will be seeing riots all over the place, the like of the French student revolution of the sixties. Are you crazyAs to fellow Americans, gullible or not, they will buy whatever the political elite and the media crooks throw at them. There is plenty of stuff to keep them distracted. Tongue sticking out smileyJust today I saw O.J Simpson being drag, yet again, to court, an all out assault on Iran is closer than ever, so they will be plenty to keep ordinary folks glued to their TV sets. Danse
chelhman [ PM ]
16 September 2008 00:09
Fcurrito, I don't think it'll sink that bad in Europe, there are plenty of safeguards the US doesn't have, add to that a strong social system that'll cushion the blow.
The one thing we should worry about, given Europe's history, is the return of the far right politically, it happened everytime Europe was going through a crisis.
Economically speaking, the euro has changed everything, it's the new "dollar", commodities are already traded in euros instead of the US dollar. We'll take a hit for sure but it won't be a 1929 scenario, the ingredients are not there.
ATAY_BE_LEQAMA [ PM ]
16 September 2008 02:28
The situation is frightening, the banking meltdown is getting on people nerves. I am scared to loose my pants... a friend of mine just hired last week get layoff today Eye popping smiley
Allah Yakhod al haq...wall street spoiled my coming trip to Morocco.

Chelhman- "European strong social system" won't resist if faced to massive layoff and pensions lost. It' overstated, European system as all other social benefits are coming ultimately from taxpayers pockets and if we loose our jobs, who is going to fund these benefits?
Minniemouse [ PM ]
16 September 2008 10:25
Don't worry about the Lehman Brother's redundancies. Those guys will be sitting on their millions for quite a long time. They'll probably miss next year's bonus more than anything else! In fact, they are largely to blame for the credit crunch along with US mortgage lendings, with bosses setting ridiculous targets and short-term objectives and rewarding them with exhorbitant salaries and millions of pounds in bonuses!

There will be more heartbreaking news and an avalanche of bank collapses and we may well be on the verge of a great depression but it won't be the end of the world. Something positive might come out of it. We could be witnessing the end of capitalism and our useless governance institutions which developed at the same time. There is a limit to everything and Capitalism can't go on forever, dividing the world into classes of rich and poor nations.
There is no sincerer love than the love of food. George Bernard Shaw
chelhman [ PM ]
16 September 2008 12:14
Quote

ATAY_BE_LEQAMA
Chelhman- "European strong social system" won't resist if faced to massive layoff and pensions lost. It' overstated, European system as all other social benefits are coming ultimately from taxpayers pockets and if we loose our jobs, who is going to fund these benefits?

You're right, but we're talking about a total collapse to get to that point, we're not there yet and I don't think we will. It's a structural crisis in the US not across the world and the US is no longer the epicenter of the world economy, hasn't been for years now.
Besides, before Europe collapses it would take a lot, the EU structure spreads the costs of rescue programs over the 400 millions plus european citizens, decisions are not made individually anymore, they're debated in Brussels among EU nations and applied across the board.
I'm not downplaying this, I know it'll be bad but Europe has a safer system, remember the US is a victim of a massive deregulation of all sectors, that hasn't happened over here.
fcurrito [ PM ]
18 September 2008 22:59
Any thoughts on the meltdown taking place at the moment?Grrr

Amazing that no one knows what the hell is going on ... even the so called experts are at a loss... Eye popping smileythings are out of control and set to worsen... Whatever money the central banks are pumping into the system is proving worthless… this is frightening… jobs are shed by the tens of thousands… people aren’t sure where to keep or move their savings too… any bank could be the next casualty…Moody Smiley
Kutchia [ PM ]
20 September 2008 03:55
Well the biggest capitalist was saved by the goverment in the bigest bail out in history. The mother of all bailouts. Its a scandall. It is estimated that the bailout will cost min. 1 trillion $ this means that the US debt will increase by at least 10%. The worst thing is that this will just cause another catastrophic effect on the US economy on a longer term. I mean what are they thinking? It's going to get very ugly in the future. -be carefull out there, protect you savings by all means.
chelhman [ PM ]
20 September 2008 17:51
The so-called bailout has yet to pass through Congress, it might, since Congress and the Senate are filled with mostly idiots who have no idea what's really going on and take their cue from their party leaders in exchange for favors (let's call'em bribes) if necessary (pork barrels).
But the big question is where's the money ? The White House just proposed to sign a check for 1.5 trillion US$ they don't have. So they'll borrow...more. The US has already an unmanageable public debt with less and less willing creditors, the Bush administration is leaving so they can say pretty much anything they want, they'll leave the mess to the next guy, which begs the question : why are Obama and Mc Cain in such a hurry to take the next shift ? If I were Obama, I would take a pass and leave the Republicans manage the inevitable upcoming disaster.

An excerpt from an article by Mike Whitney :

"Foreign central banks and investors have turned off the tap. They can see that the US financial system is teetering and that the dollar is weakening. "The perceived risk of U.S. government debt, long held to be absent of any default risk, also climbed to a record yesterday as the government's involvement in bailing out financial markets weighed on its own balance sheet." (Bloomberg News) The "full faith and credit" of the United States government is slipping. US debt will be downgraded. Triple A is no longer guaranteed. America's stock just moved to Level 3 assets. The US is now a subprime economy on life support.

Presently, "there is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion." (Mish's Global Economic Trend Analysis)

$273.7 Billion is a paltry sum, insufficient to meet the needs of even a minor run on the banking system. The storm hasn't even touched ground yet in middle America, and already the system is buckling. 2009 will be bleak, indeed."




Edited 1 time(s). Last edit at 09/20/2008 07:00 by chelhman.
 
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