Reply to: The Stock Market

[richard-af]

If ... it turns out that banks are chronically nervous about lending to each other -- this is the dark scenario -- imagine how they will feel about lending to you or me, or to companies with anything but impeccable credit ratings ... or to hedge funds.

Pay attention here.

This is either a false alarm or a pivotal moment in history

Better be Cool on Wall St - when you're Index is low
Dow Jones ain't got time for the bums ...

I bet you're a whiz at Monopoly.

[AlfredJPruffock]

You'll wind up
In Skid Row
With Holes in
Your Pockets
You'll plead us -
CUK - can you sapre a dime ?

But we ain't got the time ...

[BlasterBates]

Things are looking up. Lost less than 10 grand today.

[AlfredJPruffock]

If ... it turns out that banks are chronically nervous about lending to each other -- this is the dark scenario -- imagine how they will feel about lending to you or me, or to companies with anything but impeccable credit ratings ... or to hedge funds.

Pay attention here.

This is either a false alarm or a pivotal moment in history

Better be Cool on Wall St - when you're Index is low
Dow Jones ain't got time for the bums ...

[DimPrawn]

Imagine if house prices were like the FTSE 100.

My house is worth £350K, no hang on £270K, I mean £105K. Sorry, the price is now £380K, scratch that, £645K.....Stop Press! It's now worth 43K!

In a matter of days.

Thank heavens, they just go up, week in week out, forever.

Who wants to buy equities on the stock market? Not me!

[TwoWolves]

Q : Is it possible that Basel I and II contributed to the current problems?

A : We only need go as far as the wikipedia entry…

Criticisms…
Experience with these systems in the United States and the United Kingdom, however, shows that the improved risk sensitivity means that banks are more willing to lend to higher risk borrowers, just with higher prices. Borrowers previously ‘locked out’ of the banking system have a chance to establish a good credit history.
A more serious criticism is that the operation of Basel II will lead to a more pronounced business cycle. This criticism arises because the credit models used for pillar 1 compliance typically use a one year time horizon. This would mean that, during a downturn in the business cycle, banks would need to reduce lending as their models forecast increased losses, increasing the magnitude of the downturn. Regulators should be aware of this risk and can be expected to include it in their assessment of the bank models used.

The writing was on the wall all along.

[DimPrawn]

I got sent an email where the lady techie was referring constantly to conical schemas. I think she meant canonical, bless. Or maybe comical schemas..

[Xenophon]

That was a damp squid, shares shot up about 1 or 2% and now drifting down again.

That'll be squib. Squids are ok being damp. In fact, I hear they quite like it.



In a similar vein, I was in a meeting recently where a woman insisted on consistently using the word 'pacific' when she actually meant 'specific'. Rightly or wrongly, I found it most amusing.

[richard-af]

Sell, Sell, SELL!!!! Or buy, not sure.

[ChimpMaster]

That was a damp squid, shares shot up about 1 or 2% and now drifting down again.

I wouldn't think so. Fed have cut the Discount Rate which is the rate that financial institutions can borrow from it. In effect they have reduced the credit spreads which were widening quickly and causing panic the past few days (i.e. harder/more expensive to borrow).

They have also agreed to take on loans from the institutions, which will mean that the credit market can continue to operate without getting investment banks & funds getting stuck with loans that they can't shift.

[BlasterBates]

That was a damp squid, shares shot up about 1 or 2% and now drifting down again.

[mrdonuts]

not a glitch, fed have just cut rates

[mrdonuts]

futures were looking a bit ropey, but in the last few minutes they have just gone from -14 to + 34, hope its not a glitch

[bored]

FTSE above 6k again

[xoggoth]

No it's not. The entire world has a personal vendetta against ME. Where is my Kalashnikov?