Lehman - baton down the hatches

hedger

how long will it take the markets to recover from this bombshell? The biggest bank to fall SO FAR. Im actually afraid to check my investments today.....:mad:

napoleon

I've said it before and I'll say it again

Doom, doom, we're all doomed

pressuredrop_2

I'm glad my dough's in Reykjavik.

sanfly

Could under the bed be the safest place for any savings we might have??

lynzpower

watch my ISas collapse beyond all recognition _pale_

dunstonh

This may actually be good news. That sounds weird I know but the markets have dropped on speculation and negative feeling but there hasnt been the defining event prior to this. This could be the defining the event that starts the clearing of the bad wood and then allows for actual real information to be available rather than guesswork and speculation which the markets never like.

As for the consumer, things shouldnt be too bad. Any half decent portfolio will be diversified and not be 100% equity based. Gold is up today, bonds are up today etc. So, whilst some bits may go down 5% other bits will creep up.

The overall drop is still quite small in the scheme of things (still nowhere near the level seen over the start of the millenium).

Debt_Free_Chick

dunstonh wrote: »

This may actually be good news.

I am in two minds, but this is one of them

Only the fittest survive -the dross/foolish/riskiest sink. Always has been the case and always will be. So part of me thinks that Lehmans were simply not good enough to get through this - or to be rescued from it. Contrast its demise with the rescue of Merrill Lynch - BoA see "financial sense" in buying ML, but not in shoring up Lehmans.
On the other hand, this is serious !!!!!! :eek: Today, technology means that investors can react more quickly - and panic is no friend to the financial markets. Similarly, speculators can take advantage of panic, take short-term positions and arbitrage far more successfully than was previously possible.

We could well create a near collapse in Worldwide financial markets ... before the speculators enter the fray and sweep up all the debris for knock-down prices.

Whilst we might not have exposure to these big investment banks, the ripples will be felt throughout the whole financial sector. It's scary stuff, for sure.

Barclays -who were rumoured to be viewing Lehmans - must have undertaken some serious due diligence/negotiation over the weekend. What a lucky escape! That, alone, must give us some confidence in the ability of the system to "euthanise" those that do not deserve to survive.

AIG anyone?

hedger

who is gonna cut their loses and withdraw to cash?

EdInvestor

dunstonh wrote: »

This may actually be good news. That sounds weird I know but the markets have dropped on speculation and negative feeling but there hasnt been the defining event prior to this. This could be the defining the event that starts the clearing of the bad wood and then allows for actual real information to be available rather than guesswork and speculation which the markets never like.

I agree, it's the uncertainty that causes the problem. Interesting to note that 10 of the biggest banks (incl Barclays) have set up a $70bn self help "liquidity fund" , subscription $7bn.Each can access it to the tune of $30bn if necessary.

When you think that a year ago, the banks were so nervous they wouldn't lend a penny to each other - hence the credit crunch - the fact that 10 of the biggest banks can find nine others they can trust for $7bn is quite an advance.

The bailout of Freddie and Fannie last weekend also should put a floor under the US mortgage market, definitely necessary.Though there will likely be more crunch victims,it's possible to see the building blocks of recovery here.

.

bryanb

At least my Bradford and Bingley shares haven't got far to fall, always look on the bright side.

Stavros_3

bryanb wrote: »

At least my Bradford and Bingley shares haven't got far to fall, always look on the bright side.

I almost bought in when they were 70 odd pence, when do the pundits think it a safe bet to jump in and buy