[QUESTION] bail-out package and general market stuff

[Furr]

With the bailout package in the states having been voted down in the US, just how bad are things about to get? Some people seem to think this week is going to be financial Armageddon others are saying meh! it'll be fineeeee.

[Gumbo]

It's serious, very serious, but sadly, hugely predictable too.

[mank!]

i'm spending all my money on material objects before the world ends

[Embattle]

Everyone will be affected in some way, although it'll be by varying amounts and the reality is that the bail-out being voted down just means it is going to be reworked and sent back in for another vote.

[Cadelin]

The banks will be bailed out, the plan will just be changed slightly.

[SilverHood]

It's a total disaster. The politicians were warned that financial meltdown would ensue if they didn't approve it. Something like £100 bill drop in the value of US shares ensues, and we're going to be seeing runs on the smaller US banks. National City is mentioned, but they say they haven't got liquidity problems. That's what Bear Sterns said and it's what Lehman said... It's what WaMu said and it's what Wachovia said... The latter 2 will be history by the end of next week. The first 2 already gone, the bright blue glow of Barclays Group Plc now visible from Times Square.

They need to unwind the securities so they can assess the worth of them, and then get rid of the bad ones and re-sell the good ones. As long as each bank sits on a small % of the same loan, no government buy out is ever going to work, since they can't price it accurately, and it will be seen like the banks are making money on selling the securities back to the government... which they are, since the capital needs to be pumped back into the system somehow. Damned if they dont, and damned if they do.

Ah well, they're not voting on it again until Thursday, which gives us 2 1/2 days of joyriding the economic rollercoaster. I just hope I still have a job at the end of it

[Raven]

Nice time to buy a few shares in the right companies. They will bounce back, they always do, in the mean time make some money out of it if you can, sadly I can't afford it at the moment

[Scouse]

Originally Posted by Raven

Nice time to buy a few shares in the right companies. They will bounce back, they always do, in the mean time make some money out of it if you can, sadly I can't afford it at the moment

Oh dear, oh dear.

/shakes head at lack of comprehension.

Maybe there'll be a three or six-month rally but it's gonna be a bear market for at least a couple of years...

But yay capitalism, eh?!

[Chilly]

liquidated my ISA a couple months back, fucking glad I did. Although having said that I wish id done it 6 months previous to that when it would still have shown a net profit

[Ciar2001]

it's bad, I work in Finance not as a trader but the other side of the fence, at the moment the FTSE is actually up from it's lows on the day from 4671.02 back up to 4816.19, and dow futures are currently showing +181 so there is going to be a small rally in terms of the loss yesterday, but in general it is bad it's going to get worse it has to until the US ratify's the bailout and banks start moving their bad debt into the vehicle which is going to hold it until it either expires or gains value again.

as for the EU that's a different kettle of fish depending on which country you look at they all have different issues, here in the UK the housing and buy to let market are the big issues, in other countries it's banks affected by the US fallout in Germany,Belgium so on so forth and the general downturn caused by the credit crunch which actually started back in Feb last year but didn't really rear it's ugly head until June of last year.

any ways that's just my opinion on what's going as for what's coming who knows lol.

[Marc]

Originally Posted by Raven

Nice time to buy a few shares in the right companies. They will bounce back, they always do, in the mean time make some money out of it if you can, sadly I can't afford it at the moment

Not really the advice a supposed "accountant" should be giving right now.

Ive had various clients of mine asking wether its a good time to buy shares and what they should do with their savings over and above the guarnteed limit by the government. True, there is money to be made on the stock market, but ONLY if you know what you are doing. Just picking a few companies whos stocks are low at the moment, due to the credit crunch, isnt really a safe gamble at all.

If you really want to invest in the stock market, do some research and visit a professional in that field.

If you are worried about your savings, Gilts are the way forward. Granted your return wont be the best, but at last they are pretty much guranteed in their entirity

[Big G]

Yes this a very grim time for all. Very, very bad.

I hope they push this through one way or another, I think we need to start over and wipe the slate clean; and in the process, hope to fucking mary and christ that everyone learns from this complete disaster.

Hopefully this will allow banks to start lending to each other again so things can start to pickup in the UK before theres another casuality here. As soon as some confidence is restored in the banking market, people will start to invest in banks again and things might level out.

In my opinion, banking as we knew it, is fucking over. Cheap and easy mortgages are a thing of the past, it'll be a return to strict and prudent banking (not that all lenders were irresponsible, large UK banks are pretty decent).

[SilverHood]

Ah well, the runs have started on the small US banks. Was a big queue at my local Chase and Bank of America, people stuffing their money in safe banks.

They just announced 2000 jobs are to goat my workplace. That's like 10-15% of the workforce. Already had a massive cut in March and only essential personel has been replaced. Ah well, can only hope for the best. My team already got cut back then, and I'm literally the last man standing.

Indeed Big G, banking as we know it is over. To get a loan now, you need to have stellar credit rating and proof of future earnings. As for Investment Banking, the big ones left - Goldman and Morgan Stanley, will scale down considerably, with most of their talent forming their own small specialised funds.
Rather than the 10 or so powerhouses we've had over the last 10 years, we'll see 40-50 smaller specialised companies, though the big banks will naturally always have a big presence (if they stay in business).

[Raven]

Originally Posted by Scouse

Oh dear, oh dear.

/shakes head at lack of comprehension.

Maybe there'll be a three or six-month rally but it's gonna be a bear market for at least a couple of years...

But yay capitalism, eh?!

quite, but if you buy shares at rock bottom then there is only really only one way they can go and that is up

[Raven]

Originally Posted by Marc

Not really the advice a supposed "accountant" should be giving right now.

I am not an accountant, i gave up that monotony years ago.