Charismatic

...but how long can RBS go on without making a call to Mr. Darling? It's got to be on the cards soon.

IRRC at over 10% it's classed as a crash and they can suspend trading?

The Dean

What is your problem with RBS? They are no more at risk than any other bank in this situation.

The market is populated with kids who have never experienced this before, and are not intelligent enough or experienced enough to know how to cope. They will destroy their own industry if they are not careful............ if they haven't done so already.

I have a question for people who are moving their savings from bank deposit accounts to other 'safer' alternatives - when you eventually dispose of those other investments, you will receive a cheque in settlement of the proceeds............

........ then what will you do? Put it in your.......... er.......... bank account........... er.........

MacScot

The 8% drop may be higher than expected because there would have been many automatic share sells when the FTSE passed below 4,000 level...it's now down about 5% and dropping but above the 4,000 level again.

You could also lay part of the blame at the IMF who released a press statement saying the global financial crisis was the 'Worse Since 1930!'


Why RBS?

RBS has plunged 82 percent in London trading since last year, and RBS has the lowest capital reserves among British rival banks, and may struggle to fund itself.

RBS have played the acquisition game hard but little or no consideration was given to how deals were to be funded.

Standard & Poor's downgraded RBS's credit rating to A+ from AA- on October 6th.

Charismatic

Banks will survive, I'm just not sure which ones and who they will merge with. Low shareprices reflect the state of the business, shareholders trading shares has little effect on the state of the business.

I don't have a problem with RBS but as mentioned they did take a suprising dive this morning . The fact that they did not take big risks is reflected in the fact they are still trading and still a better option than stuffing your mattress with cash.

I'm confident that your children will live better than you and their children better than them etc. The markets adjusting their expectations is just a short-term trend and many well run companies will actually do well from this in the long term.

Edit to add: Besides the FTSE has picked up a bit since, don't ask me if it'll last though .

Shadya

My hubby has shown me a chart of the FTSE from 1996 to now, which is frankly amazing, like two inverted V's. In 1996 it was down at 3,500 before rising to 6,900 in 2000 before falling back to 3,300 in 2003 and then rising again to 6,900 last year and falling back to below 4,000 today. His view is that it will probably continue falling back to 3,500 in the short term, before rising again to over 6,000 within 12-18 months, so there is no need to panic sell. Let us hope he is right.

The Dean

If he is working in the markets, please ask him for his opinion about something:

If he had fresh money to invest now, would he prefer (a) buying bank shares or (b) putting the money in a savings/deposit account at the same bank?

In other words, which is better - shareholder or saver?

Charismatic

I tend to agree, but think it'll take longer to pick up and the FTSE even get below 3500! There is supposed to be some sort of a meeting going on this weekend to try and guarantee inter-bank lending and if that works out it could help a lot!

I was having a look at GM earlier, if they don't start selling some cars by mid-2009 they are going to be in real trouble with liquidity (The other day someone pointed out to me Mattel who make toy cars have twice the market capitalisation of GM , GM should get a bit of that action! ). Amazing to think that a company of that size could be so close, they have some nice assets they could sell but I'm wondering who would buy if current credit conditions continue .



Also Dean which bank(s)? He may have a different opinion if it's a case of comparing HBOS or Barklays with Citi group or Wells & Fargo.

Meow

No way will UK markets be above 6,000 in 12-18 months. It'll take a good couple of year, at least, to see recovery.



As The Dean says, people have such short memories. Panic selling is driving markets down, but I expect them to stabilise by the end of the year.

-

IndieG

A bit of both really.

I moved out of stocks (Europe and US; am still in India) completely in Apr 07 (thanks to hubby - I can't claim credit for this). On Monday I shall be buying US T-bills and invest in Australian Govt. issued bonds.

I shall keep a very tiny bit in the bank here. Will also buy ETFs soon.

Charismatic

Lehman CDS auction (10.30am Eastern Timezone) so today could be one of the most interesting days which will be looked back by many future governments.

It'll be a good test for giving a gauge on how eager investers are to get hold of these heavily reduced assets.

If I had positions in financial institutions I'd have panicked a long time ago. I'd love to blame investors for panic selling but the fact is I've got no money tied to bank shares at the moment so I'd be a total hypocrit saying that.

IndieG

Complete meltdown - Dow is down 1000 - 11%

All other indices around 10% down.

Charismatic

What's your data source? Mine indicates down 3% after initial trades have completed?

IndieG

Merrill Lynch and Schwab...

Recovered now - it touched 7888 a couple of minutes ago.

Charismatic

Don't panic me like that petal! I was about to load my shotgun and board up a room filled with tinned goods .

Nothing like a bit of silly trading to start the day is there? Now it's at 1% up. Someone is going to get their fingers burned .

IndieG

sorry - thought you had the stomach for it after announcing ftse's 8% fall!

.....definitely not for the faint hearted; think you're the petal...lmao