Reply to: Lehman Brothers bank to go into insolvency (maybe)

[Cyberman]

I see that the City whizz kids are playing "Destroy HBOS" again.

HBOS allegedly has loans of 200 Billion approx. coming up for renewal which it would normally refinance from the money markets, which is a delayed Northern Rock scenario. Come on Mervyn.... get your wallet out !!!

[Bob Dalek]

I see that the City whizz kids are playing "Destroy HBOS" again.

[Cyberman]

Kent Philip..... please stop quoting rubbish on Northern Rock. Try educating yourself !!

http://www.uksa.org.uk/

[Cyberman]

There are some banks that Mervyn was right to give loans to, but many that he has not been right to.

Yes giving loans to banks with assets is fine, but I don't agree that Northern Rock's assets exceeded liabilities - the reverse was the case. They had loaned billions to subprime borrowers who are unable to pay them back. So Northern Rock was insolvent and belonged in the garbage can.

You're a fool because you have believed New Lie propaganda. Look at their balance sheet before Nationalisation and you will see that Northern Rock had massive assets. Without those assets how do you think the Rock would have already have paid off 10 Billion of loans in 9 months, and is due to clear all outstanding loans from the BofE by the end of 2010.

HMG have made a major mistake and by insisting on repayment of loans they are denying around 60 Billion pounds of extra lending to UK mortgage holders by forcing the Rock to call in its debts from those people, which at this time is plainly stupid. The first court case(Judicial Review) which New Lie will have to answer to is in January 2009.

[aceboy]

If you like playing with fire. There are British banks / building socs in your high street that will go bust and soon.
But American banks might be worth a look now.

All of them? RBS are looking pretty good at the moment, stock price aside....

[Moscow Mule]

They had loaned billions to subprime borrowers who are unable to pay them back. So Northern Rock was insolvent and belonged in the garbage can.

No they hadn't, and no they weren't. The reasons for their downfall are well documented.

[ace00]

Possible buying opportunity?

If you like playing with fire. There are British banks / building socs in your high street that will go bust and soon.
But American banks might be worth a look now.

[KentPhilip]

So has Mervyn King been wrong to give loans to all banks since then ? Have the other Central Banks been wrong to do the same ?
Giving short-term loans as long as the banks have assets to cover the loans is the obvious thing to do. Northern Rock was making a profit and assets far exceeded liabilities. Drying up of money markets had nothing to do with that bank at all, but was due to other banks overwhelming subprime losses.

There are some banks that Mervyn was right to give loans to, but many that he has not been right to.

Yes giving loans to banks with assets is fine, but I don't agree that Northern Rock's assets exceeded liabilities - the reverse was the case. They had loaned billions to subprime borrowers who are unable to pay them back. So Northern Rock was insolvent and belonged in the garbage can.

[BrilloPad]

For the brave (or foolhardy?).

The difference between the two can be quite small sometimes.

These DOOM things always cause overselling - whether stocks or house prices. Thing is I feel it will get worse before it gets better.

If you believe that stock markets look 18 months ahead(and are not just a casino) then there is trouble for a long while to come.

[Fred Bloggs]

I told ya guys, time to escape from financial companies to Oil companies, pure black gold

Yup. For now............

[Fred Bloggs]

Possible buying opportunity?

For the brave (or foolhardy?).

[DaveB]

It is a possibility - but why not just head hunt the people you want? I bet they would be so pleased of a job they would work for peanuts.

Apologies if this sounds a bit heartless - I do feel sorry for them. I have a couple of friends there - very upsetting.

It's easier as a corporate entity to buy a business, or a chunk of it, wholesale rather than try and cherry pick individuals. The bits of Lehmans that are carrying the losses will be let go and the rest broken up and sold as going concerns to the highest bidder. From what I can tell a lot of the Lehmans operation was still profitable, just not profitable enough to support the losses incurred by the bits involved in mortgage equities.

[BrilloPad]

Lehman had 750 bln USD of derivatives in its book. guess we have a problem

Is that the notional value? How much of those were in credit derivatives?

They **could** have been shorting the major indexes and sitting on a packet now. Though I doubt it.

[dude69]

Do we have any agents here?

How are things?

Being deluged with CVs from ex-Lehman staff?

Or will they come tomorrow.

[BrilloPad]

FTSE has gone through -5%
Banking? HBOS Hbos Plc 189.0 -32.98%

Possible buying opportunity?