UK just 48 hours from banking collapse

SingleSue

baileysbattlebus wrote: »

you need to read about Argentina in 2002 - people couldn't get their money from cashpoints - some of them never got their money.

The reasons for the collapse may have been different but the consequences were terrible for normal people.

http://www.washingtonpost.com/wp-dyn/articles/A47822-2002Aug5.html

That article was scary and very very sad.....could that sort of thing happen here? If so, why? If not, why?

WTF?_2

mizzbiz wrote: »

If it could get to that stage without the public being aware, this is very serious and should be viewed as a a warning, not a non-story. This was just over a month or two ago and things are not much better, in fact are worse.

I for one feel that it is better to be prepared now for this kind of thing as we slide even deeper into recession. Even Christmas couldn't keep things bouyant, January and February are likely to be awful, the following months likely the same.

Well, some of us were pretty sure of how bad the situation was at the time and were busy warning other MSEers. But of course, that was all dismissed as 'doom mongering' by some.

As you say, the fundamentals are getting worse and not better. As I 'doom mongered' recently, the banks are facing a large hit from home-grown defaults in 2009 and this has now been confirmed and quantified - see the UK banks face £70bn property bombshell thread.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4000183/UK-banks-face-70bn-property-bombshell.html

rhiwfield

I started work in banking in the 60's and left a few years back and I've not seen anything like the past few months. I do think we were very close to total meltdown and we're not out of the woods yet.

Part of the problem is that people and businesses (including banks) have become reliant on short term credit/deposits. Fine when things are going well but not so good when the rainy days come. Especially so for banks that have become detached from their customer base by embracing high capital markets exposure and purchasing debt packaged elsewhere (such as the sub prime mortgages)

The sub-prime crisis in the states seems to have been the trigger for an almighty financial correction thats seen banks nationalised in the UK and Gordon throw away prudence in favour of ramping up government debt to try to kickstart the economy.

So what will happen now. FWIW I dont think The Govt will allow any key banks to collapse because that would precipitate a total meltdown. But I do think that we will see a lot more businesses collapse as they do not have the financial reserves to see a downturn through. Bear in mind that many businesses have geared up (high debt) balance sheets to maximise return on shareholders capital, especially if it has been a private equity funded acquisition. Many such companies will now be highly vulnerable to the downturn and credit squeeze. With consumer and business confidence low expect unemployment to rocket.

2009 will be a very tough year.

mizzbiz

!!!!!!? wrote: »

Well, some of us were pretty sure of how bad the situation was at the time and were busy warning other MSEers. But of course, that was all dismissed as 'doom mongering' by some.

As you say, the fundamentals are getting worse and not better. As I 'doom mongered' recently, the banks are facing a large hit from home-grown defaults in 2009 and this has now been confirmed and quantified - see the UK banks face £70bn property bombshell thread.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4000183/UK-banks-face-70bn-property-bombshell.html

Absolutley right. And I don't think for a minute we have the full facts at hand to make any real decisions about the future. After the impact of the news that has been made public, it's almost inevitable that any real news now will be buried, if publicised at all.

Despite being 'old news', the article is more relevant than ever because it shows how little real information is made public. It's no good to us in retrospect except to ensure we ASSUME that don't know even half the story. Saves from any nasty suprises. We all know that economy is in dire straits, but how many of us are prepared if we can't take out £20 tomorrow for the shopping?

chucky

mizzbiz wrote: »

Absolutley right. And I don't think for a minute we have the full facts at hand to make any real decisions about the future. After the impact of the news that has been made public, it's almost inevitable that any real news now will be buried, if publicised at all.

Despite being 'old news', the article is more relevant than ever because it shows how little real information is made public. It's no good to us in retrospect except to ensure we ASSUME that don't know even half the story. Saves from any nasty suprises. We all know that economy is in dire straits, but how many of us are prepared if we can't take out £20 tomorrow for the shopping?

why are people worrying about a a very, very extreme scenario.
the article does not have any direct quotes either.

unemployment should be more worrying as could impact anyone at anytime.

WTF?_2

mizzbiz wrote: »

Absolutley right. And I don't think for a minute we have the full facts at hand to make any real decisions about the future. After the impact of the news that has been made public, it's almost inevitable that any real news now will be buried, if publicised at all.

Despite being 'old news', the article is more relevant than ever because it shows how little real information is made public. It's no good to us in retrospect except to ensure we ASSUME that don't know even half the story. Saves from any nasty suprises. We all know that economy is in dire straits, but how many of us are prepared if we can't take out £20 tomorrow for the shopping?

That's why I built up a cash stash around that time. At the moment, I've got a month's worth of expenses in cash stored at home.

In the event of a banking crash, longer term as people realise that the currency has no real value any more cash wouldn't be any good and barter will be the name of the game. However, in the immediate aftermath there would be a few weeks where people still thought the little pieces of paper were worth something and their scarcity should allow you to get any essentials you hadn't already stocked up on.

Personally I've recently been dumping a few thousand of my Sterling into luxury stuff that I know is set to get more expensive and harder to get because of the dramatic loss of value of the pound over the last few months. Hey, I worked and saved the cash and I want to get some nice stuff whilst my savings still have purchasing power - and there are bargains to be had as sellers liquidate stock to get cash in now.