Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
29 September 2008
17:206762#1
Two things should have brought about a rise in the stock market today,.
The deal in the USA being agreed, with the bad debt liability being lifted away from the financial sector which should help address the key issue of liquidity that is holding up recovery. OK there is still a vote in Congress to be achieved but this should happen despite some negative comments from some quarters.
In the UK the action to rescue B&B should also have helped the situation but it has been screwed up.
Brown announced that other Banks and Building Societies, like Nationwide and Lloyds, who have not been responsible for the bad lending are going to have to pick up the tab for lending defaults of B&B and NR. In other words Brown has done the opposite to what the USA has done....
Now, I agree, that ideally taxpayers should not have to pick up the bill either but surely we, like the USA, need as a priority to restore liquidity to the financial sector. This is the main problem that is faced by our economy. Brown's action is likely to deepen and lengthen the recession, not resolve the problem. The stockmarket reaction refects that concern.
I know that this is a complex issue but this really is a fowl up and may well result in a much bigger bill for taxpayers than the alternative of drawing a line under the problem in the manner of the USA.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
29 September 2008
18:246764#2
Just been looking more at what has been happening in the world markets today and it is clear that there is more in play than just this B&B foul up. Nevertheless I do believe that my initial reaction remains valid and accounts for some of impact on the UK market.
Today's developments are disturbing and, to be frank, I dont know where things will go from here. Confidence in the banking sector (and parts of the insurance sector) is so low now it wont take a great deal to tip another bank/building society over the edge.
I would suggest that any of you with more than £35,000 with a single institution should spread your money around. Do be careful about 'financial groups' as well because you will find multiple companies within one banking group and you will not be covered by the compensation arrangements for each company, only what is held by the Group.
If you have specific concerns see a financial adviser and ideally get fee based advice to make sure it is impartial.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
29 September 2008
20:046768#3
Now its the American House of Representatives who have messed up - they turned down the package. Things are moving so fast, by the time you read this it may have changed yet again... I certainly hope so as a rabbit must be pulled out of the hat, sooner not later.
What on earth is going on over there?
I suggest that the best thing people can do is to make sure your deposits are spread, as I said before.
As for equities, particularly collective funds, tough it out and dont lock in any losses by pulling out of the markets. A loss is only a loss if you crystalise it. Remember markets can move up as quickly as they can move down and what disturbs them most is uncertainty, one way or the other this uncertainty will be resolved.
If you are worried do get advise in respect of your specific circumstances and dont make any rash decisions. Advisers may not have a handle on exactly what is going to happen but there are some well established core principals surrounding investments that can help steer people in the best direction.
Brian Dixon
- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
29 September 2008
20:116769#4
thanks for your informative posts barry w keep them coming.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
29 September 2008
20:446771#5
i understand the bradford and bingley nationalisation will be a good bet for us taxpayers.
the assets just about outnumber the debts.
people will be paying their mortgages as before.
the credit crunch will end, after that the profit goes to us, not an elite bunch of shareholders.
Ross Miller
- Location: London Road, Dover
- Registered: 17 Sep 2008
- Posts: 3,709
29 September 2008
21:126772#6
Unfortunately the major shareholders in Bingley and Bongley were investment/fund management houses such as Standard Life (9.9% shareholding) and the money they use is your investment/pension so what might be gained collectively through a return to the Exchequer is lost individually.
"Dream as if you'll live forever. Live as if you'll die today." - James Dean
"Being deeply loved by someone gives you strength,
While loving someone deeply gives you courage" - Laozi
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
29 September 2008
21:216773#7
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
29 September 2008
22:546775#8
Ross is of course quite right. The priority here must be to achieve economic financial stability and get confidence back into the markets. The US House of Reps seems to have forgotten that, or at least a large number of its members anyway.
I have been bombarded with information today from all over the place (some conflicting) and I dont expect it to get any better. It seems there remains some greydetails about the B&B takeover and that is not good for the markets. A fair bit of confusion over this and what is happening in the US may see the markets suffer more this week.
I repeat what I said - take care over your accounts and keep your nerve with equities. Get advice if you have specific problems. Rocky road ahead before thing get better. Reports are that we will not see a fresh go at legislation in the US over a settlement until the end of the week.
Guest 675- Registered: 30 Jun 2008
- Posts: 1,610
29 September 2008
23:156776#9
You have to wonder how this will effect the Christmas spending on which so many smaller businesses rely. A trivial, but indicative, sign of this concern could be that the Christmas annuals (a seasonal staple of any home with children) have already been discounted with three months still to go. Out early and marked down already, what lies in store for the rest of the seasonal shopping?
Politics, it seems to me, for years, or all too long, has been concerned with right or left instead of right or wrong.
Richard Armour
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
29 September 2008
23:246777#10
i notice that boots are knocking out their special pressies "3 for the price of 2" already.
i suppose that the hard pressed families have something to cheer them up.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
30 September 2008
06:536778#11
It will be a difficult Christmas for small businesses to survive.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
30 September 2008
07:386783#12
I will use this thread to make a running commentary of what is happening this week.
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
30 September 2008
08:006785#13
thanks barry.
Guest 650- Registered: 12 Mar 2008
- Posts: 542
30 September 2008
08:036786#14
That will be most interesting to read, BarryW.
For those wishing to spread savings to stay beneath the £35,000 threshold, the website moneysavingexpert.com has a table of which institutions are linked with which (under the heading "Are your savings safe"). I note that with the B+B changes, they are now considered as one with Abbey in terms of protection; there will now be some savers, then, who will have over £35,000 in total under this one financial institution.
Guest 640- Registered: 21 Apr 2007
- Posts: 7,819
30 September 2008
09:066794#15
Yes will be interesting but its a pity BarryW chose the title 'Brown Messes Up again' for the thread title as clearly everyone knows by now or should do that the economic crisies has nothing at all to do with Gordon Brown.
Even the Tory cohorts at the Conference are easing up on the politicking over this.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
30 September 2008
09:226795#16
Actually PaulB what Brown is guilty of is leaving the UK in the worse position of any western country to deal with the crisis. The failures of his regulatory 'reforms', his excessive tax, spend and borrowing, the way he disincentised saving', I have written so many times about how he has screwed things up I wont repeat it all again. You cannot whitewash Brown's record so he can hide it behind the global crisis. This crisis is far worse than it need be for the UK and the recession will be deeper and longer as a result of his actions and inactions. I have warned before, long before, of what he was stacking up for this economy.
If he had a clue he would be at the very least freezing public spending and setting about a series of spending cuts.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
30 September 2008
14:396812#17
2.30 pm Tuesday. After some initial volatility the markets stabilised to see what happens on Wall Street.
I find it strange that the USA legislators can just close down for a couple of days in the middle of an unresolved crisis because of a Jewish holiday. It may work out for the better though, providing time for some cooling off and to take stock. Legislation on a revised rescue plan probably wont be seen until Friday, I just hope a lot of work is being done behind the scenes to sort a deal. I am concerned that anything that emerges wont be seen to be good enough but at least any deal would bring a end to the uncertainty and that is the first pre-requisit.
In the UK Osborne is visiting Darling, DC and Brown have spoken and DC made a speech (much praised) calling for a bi-partisan approach and offering co-operation. There are a number of actions that can be taken which will help provide some stability and DC has offered help to HMG in getting any legislation through. I hope GB takes up these suggestions and perhaps recalls Parliament for Friday (or even Thursday) in response to the crisis.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
30 September 2008
15:096814#18
Andrew Lilco has just posted on Centreright an alternative view of what happened in the US Congress. I am not sure he is right, I hope he is and as a result something better will emerge, but I am not at all sure....
quote.......the deeply misguided Bush-Paulson bailout scheme - which I have previously characterised as the end of US private capitalism - has been rejected by the House of Representatives. Even though the resistance to the scheme amongst the Democrat leadership, responding to its deep and widespread opposition amongst American voters, had led - through the proper political process of debate and compromise - to great improvement of the scheme from Paulson's original blank cheque, even the final version was seriously flawed. Its rejection is a victory for democracy - I am very impressed with the House Democrats and Republicans that have had the bravery to stand up to the bullying and melodramatic "this must be done" posturing of Paulson and Bush...........
I wonder. We will see, as I have said anything can happen but what the markets need most is leadership, even flawed leadership is better than none.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
30 September 2008
19:006824#19
what is the alternative for lilco?
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
30 September 2008
19:396829#20
I am really not clear on that howard. It is very easy for him to say what he did but to be frank we need more than just theorising.
The markets today settled down after a bumpy start and ended the day on an up, the FTSE100 rose by over 80 points.
The problems are not over but perhaps traders sat back and realised that they had overeacted. We will see what happens tomorrow when the Monetary Policy Committee, who have been meeting today, will announce what is to happen to interest rates. A reduction is likely before Christmas but I am not sure it will be tomorrow, the market needs it but that alone is not enough.
