Question for Generali (Greece & Goldman)

reweird

Like all lenders am IOU. Quite simple really. Not sure what's your beef.

Generali

sabretoothtigger wrote: »

Isnt everyone trying to compete with 0.5% interest rates what causes normal companies to become radical

If only it were so. It started in the post dot com time IME, especially after about 2004. I think a big part of it was down to baby boomers looking to get a ton of money together to retire early so there were huge sums of money going into 'risk assets'.

Part of it was simply this gambling mentality. It's funny that the banks that never offered the amazing deals and didn't try to ramp up the Investment Bank side (e.g. HSBC, Nationwide, BNP Paribas) have largely escaped unscathed.

Firms like RBS, Icelandiski Bankarooni(sp?) and UBS who thought they were so blimmin' clever lost their shirts, or rather their taxpayers' shirts.

PS It looks like there might be trouble at t'mill at another 2 investment banks. Tonight I'm gonna party like it's 2008 or as my Dear Old Mam used to say, "It's all fun and games until someone loses an eye/trillion bucks".

michaels

Name names please.

Generali

michaels wrote: »

Name names please.

No.

One has exposure to MF Global, the other has a big net exposure to 'PIIGS' (actually PIIBS) debt.

Both are denying any problems. That's enough to let us know that there are problems to deny.

michaels

I heard mention of MF Global exposure a couple of days ago and wondered whether it was manageable. Hadn't heard about the bonds thang - but then as an armchair observer it has absolutely no direct consequence to me.

Is central bank money available to banks who suddenly find no counter parties are willing to deal with them due to perceived liquidity/solvency risk?

Generali wrote: »

No.

One has exposure to MF Global, the other has a big net exposure to 'PIIGS' (actually PIIBS) debt.

Both are denying any problems. That's enough to let us know that there are problems to deny.

Generali

michaels wrote: »

Is central bank money available to banks who suddenly find no counter parties are willing to deal with them due to perceived liquidity/solvency risk?

The Central Bank retains its role as lender of last resort however under US rules, too big to fail starts with a balance sheet of $50,000,000,000.

MF Global had assets/liabilities of $37,000,000,000 approx so are too small to be bailed out.

AIUI, MF Global would have access to overnight repo funding but not to cheap unsecured funds. The problem was they'd run out of assets to put up as security.

michaels

I was more asking re JPM.

Generali wrote: »

The Central Bank retains its role as lender of last resort however under US rules, too big to fail starts with a balance sheet of $50,000,000,000.

MF Global had assets/liabilities of $37,000,000,000 approx so are too small to be bailed out.

AIUI, MF Global would have access to overnight repo funding but not to cheap unsecured funds. The problem was they'd run out of assets to put up as security.

Generali

michaels wrote: »

I was more asking re JPM.

I think you'll need to ask someone that works for JPM.

Now isn't a good time for a bank worker to discuss the financial position of another bank without specific, non-price-sensitive information. There is a stretch in a US prison awaiting the unwary disseminator.

michaels

In the past once banks managed to last to the weekend a rescue package would be put together before the Monday morning. I wonder if there are going to be some very busy people this weekend?!

Generali

michaels wrote: »

In the past once banks managed to last to the weekend a rescue package would be put together before the Monday morning. I wonder if there are going to be some very busy people this weekend?!

Those days are long gone. Banks are too complex and too lever aged for their peers to bail them out without months of due diligence.