The problem is when there is risk that banking groups with substantial retail operations like Citi or Barclays will find themselves belly-up.
Isn't that most of them?
NR may have had the most aggressive (read - 'totally freaking insane') business model in the UK high street, but don't all of the banks and building societies do at least some of their business in the same way?
I'm finding it hard to imagine how finance will work if the main investment banks are replaced with big smoking craters.
In fact the NR Foundation has quite an interesting position in any solution, because although they "only" got 5% of the profits, they are entitled upon a takeover to 15% of the votes (I think that's how it works).
Uncanny echoes here of the Barings fiasco and the resulting demise of much of the Baring Foundation's "wealth". "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Banks, except investment banks, should have pretty much zero exposure to all this subprime crap.
Still, the bank stock just keep falling. Trading at p/e around 8-9 last time I checked.
This would all have been academic to me if I hadn't inherited a small amount of SE-bank shares, bought by my grandmother somewhere back in the mists of time.
Selling is out of the question due to the accumulated capital gains tax and the bureacracy of selling shares bought before 1990, so I shouldn't really care about the stock losing about 30 % of its value since the peak. It can never be more than a little dividend printing press.
Still, it's a bit irritating. Peak oil is not an energy crisis. It is a liquid fuel crisis.
A good thing for us up here is that that transformation hasn't really happened in Scandinavia. Banks, except investment banks, should have pretty much zero exposure to all this subprime crap. Still, the bank stock just keep falling. Trading at p/e around 8-9 last time I checked.
LY:In retrospect it was a mistake to let Citibank and Goldman Sachs define what a good market or a good regulation might be. Well - who'd have thought, etc? If you hand the hen house over to the foxes, it's not as if they're golng to eat everything and leave a bloody mess.
In retrospect it was a mistake to let Citibank and Goldman Sachs define what a good market or a good regulation might be.
Well - who'd have thought, etc? If you hand the hen house over to the foxes, it's not as if they're golng to eat everything and leave a bloody mess.
