I hope no TFK members bought into the banks before yesterdays drop!
I hope they did
On sky news there they have a ticker with how the FTSE 100 is doing today. It’s falling steadily and is currently down by 105.6
Banking shares are dropping sharply today again on the Irish market after yesterdays brief stabilization.
Very strong today. AIB and Anglo up nearly 10%, BOI up 8.5% and ILP up a more modest 4.75%.
Corner turned or dead cat bounce?
Continental markets not as strong and don’t see why irish financials would benefit more from Fed’s rate cutting. Is it the supposed greater chances of accompanying ECB cuts, which will help to re-ignite the Irish housing market or at least remove some of the risk of default Irish banks face? I thought Trichet came out pretty strong yesterday to scotch that kind of thinking.
On that point, why does the Fed have to support equity markets? If investors get over-exuberant and invest imprudently, I don’t see why the Fed should bail them out. That’s what it looks like when they hold an emergency session to cut rates following massive market sell-offs. They had a regular meeting scheduled in something like eight days time. If it’s the wider economy that’s prompting the rate-cutting, why not wait till then? Eight days is hardly going to make a huge difference to the overall American economy. By acting so early they look both panicked and as if they’re being dictated to by Wall Street.
Similarly, when they offer massive stimulus to counter-act the bursting of a bubble, credit in this case, they’re effectively just trying to re-inflate the bubble. Structural problems like the lack of savings in the US and the over-indebtedness of the US consumer are never alleviated, while they bail the banks out of their lax lending practices.
Moral hazard how are ya?
When everything’s going well it’s a free market. Once things turn ugly then you get panic interventions and stock markets closing down and trading suspended. This whole free market idea doesn’t work when the guys at the top are losing money.
The Irish Stock Market took another absolute battering today, especially the financial stocks, as a result of the fall-out from Bear Stearns more or less hitting the wall and being taken over by JP Morgan. My job could be at risk but it’s mitigated by the fact that Joe Lewis, a financial backer of the huns, and the largest individual shareholder in Bear Stearns has taken a significant loss. His Wikipedia page has already been updated:
‘On September 10, 2007, he was in the news for paying $860.4 million in an all-cash purchase of a 7 percent stake in Bear Stearns that made him the brokerage firm’s largest shareholder.[1]. About $800 million of that was lost on March 16, 2008 when Bear Stearns was purchased in a straight stock swap with JP Morgan Chase in which JP Morgan paid the equivalent of $2.00 a share for Bear Stearns.’
That said it’s probably a mere drop in the ocean for a fook like him.
Thought I’d bring this thread up again.
AIB shares down from around €15 at the start of this thread to €12.40 today.
BOI shares down from around €10 at the start of this thread to €7.63 today.
Would the 3 to 5 year turnaround on investments really mean shit if you could have saved Two Euro on every share by holding on six months.
there has to be value in BOI at that level. My only fear is that there is some information that is known within the Bank that isnt available to the market. All indications are that BOI are healthy, good profitability, good noises about there loan book etc etc…
But at the back of my brain I cant get away form the fact that these banking shares are dropping and the biggest shareholder in every bank is who? Yep the people with best access to information and the people who see exactly what is happening as it happens on a daily basis…THE STAFF! there may be mass offloding of staff holdings going on.
I would also say that if credit market wasnt in such bad shape, if all the big euro banks hadnt taken such a pounding that BOI would be ripe for takeover.
Mkt Cap today 7.5 bln, makt cap this day 12 months ago 15.3 bln.
Same bank, different market conditions. Doesnt make sense does it.
Don’t buy the staff stuff - the vast majority of them will have no idea about the future earnings prospects of the bank. The market capitalization and all other trends downwards are just a reflection of
a) the international credit market and
http://www.thefreekick.com/board/public/style_emoticons/<#EMO_DIR#>/cool.gif Ireland’s ending/ended boom
Still think they’re a great price and long-term anyway you’ll do well out of any of the banks.
You’re right about takeover though. In any other environment some bigger crowd would have helped themselves to the company by now. But they’re just proving that they reflect international trends so all the larger banks are in the same boat.
Fair point on the staff not knowing future cashflows BUT, they are best placed to see what kind of state the loan book is in. Thats where the panic is currently, nobody knows what loss levels are realisticc or otherwise.
Would potential for a take-over not make them even better value? Take-over bidders usually pay a premium for the shares, otherwise it’s not attractive to shareholders. Share values (in the target firm) usually rise don’t they?
Though doubt there’s much gra for take-overs at the moment, firstly due to the lack of credit and secondly due to worries about what’s on other people’s books.
While I still think Irish bank shares are good value, not convinced they’ve hit bottom yet. Some of the smaller developers appear to be getting squeezed now while there’s rumours about the bigger ones like McNamara. Even if the banks aren’t overexposed to these guys, the fact that we can’t be certain will surely keep prices down for the moment.
Bank chiefs in market for shares
Bank of Ireland chief financial officer John O’Donovan spent 67,500 buying 10,000 shares at 6.75 each on Monday.
AIB non-executive director Stephen Kingon, chairman of Invest Northern Ireland, spent 50,940 buying 4,500 shares at 11.32 each on Tuesday
While I see the Irish banking shares have taken a tumble once again yesterday surely now is a decent time to get stuck into some of the Irish banking stocks? Good indication that some of the banks directors believe there is value there at the moment.
AIB now at 10.75
BOI at 6.56
Ango at 7.00
Now all I need is a bit of cash to actually make an investment!
and aib projected 9% div at current values BOI 10% +
stay away from Anglo
I presume these are going to take another hammering today after Lehman filing for bankruptcy. What does that mean in the end anyway? Are they allowed to just cut their losses and sell as a going concern or do they just end up out of business completely?
Not sure about the mechanics of Lehman’s bankruptcy but it’s pretty nice karma after the way he ran across the 17th green at Brookline when Justin Leonard holed that monster putt against Olazabal in The Ryder Cup in 1999. As Sam Torrance said, ‘To think Tom Lehman calls himself a man of God.’
Hopefully, AIG will go down too for no reason other than they sponsor Manchester United.
Nope think they are shutting up shop completely, 25000 jobs lost
I am most definitely not an expert on this sort of thing. But I watched a “Dispatches” documentary on the banking crisis about six months ago and after that I wouldn’t trust a word said by anybody in the industry. It was all about “collateralised loan obligations” (repackaging debt and selling it on I think) and how people in these banks basically don’t give a shit about what happens as long as they get their bonuses. Barclays were supposed to be 48million (can’t remember if it was dollars or sterling) in debt due to collateralised loan obligations.
What are the chances of one or more of the Irish banks going under? I’m thinking particularly of Permanent TSB and Anglo-Irish here.
Some rank bad advice early on in this thread!
It turns out Ben Shermin was right all along and I think I got away relatively unscathed. Maybe Ben might return as our banking and economics expert?