Is the credit crunch really ending?

ianmr65

mr.broderick wrote: »

It appears the sub prime crisis was over exaggerated.

£100bn writedowns still to come in the UK banking sector...+ THE uk sub prime crisis has only just started.

free4440273

ending? well, the equity market seems to think so LOL: perhaps they have 'priced in' all the bad news:rolleyes:
http://youtube.com/watch?v=__VQX2Xn7tI

mr.broderick

ianmr65 wrote: »

£100bn writedowns still to come in the UK banking sector...+ THE uk sub prime crisis has only just started.

Don't shoot the messenger

andyyorks

brit1234 wrote: »

Bradford & Bingley and Alliance & Leicester likely to go under in the next couple of months.
HBOS also highly unstable.

Can I ask how you know this or why you think this? Are you in the industry or know people who are?

brit1234

andyyorks wrote: »

Can I ask how you know this or why you think this? Are you in the industry or know people who are?

.

I know some people who are. It is widely known secret, the TV and Radio Media seem not to mention bank names incase it causes another Northern rock run but it occasionally slips out . The fact is no one is investing in them and they have the closest operating model to Northern Rock. Their exposure is too big and with house prices dropping its only a matter of weeks.

The simple fact is when you expand your business that fast, your funding drys up overnight and your assets are highly overrated your in trouble.

&

Vincenzo

http://news.bbc.co.uk/1/hi/business/7375881.stm

I have said all along that the 'write-downs' were overly pessimistic. The problem is, unless confidence is restored in the market, or the banks decide not to profiteer, the market price remains as it is. I suspect this recent statement is to aid in that restoration of confidence.

My guess - the banks will report bumper profits next year, when these assets are re-valued. Add into the mix the capital the banks will have raised (by increasing margins on lending and share issues amongst others) and there will be plenty of money to lend. Don't forget this is the business of banking. The banks WANT to lend money.

I cannot see us returning to 100% plus mortgages and lacklustre underwriting though. At least not until the next generation of City Bankers take the reigns and all is forgotten.....

mr.broderick

In reply to the opening post i am beginning to wonder if it ever happened ?

MarkyMarkD

brit1234's scaremongering is without foundation.

Whilst A&L and B&B may be the most closely related to NR, they are not actually "closely related".

NR were growing their lending hugely; A&L and B&B are not.

NR were hugely exposed to unsecured through "Together"; A&L and B&B are not.

And, anyway, NR's problems weren't caused by poor asset quality as is often, and incorrectly, reported. Their problems were caused by lack of funding which was in turn due to the global credit crisis, exacerbated by their poor strategy in seeking funding at the last minute rather than obtaining it for a sensible future period.

Lenders have also significantly tightened up on things like new build lending. I don't believe that there is lots of unprovided-for bad news there.

Plasticman

MarkyMarkD wrote: »

brit1234's scaremongering is without foundation.

Whilst A&L and B&B may be the most closely related to NR, they are not actually "closely related".

NR were growing their lending hugely; A&L and B&B are not.

NR were hugely exposed to unsecured through "Together"; A&L and B&B are not.

And, anyway, NR's problems weren't caused by poor asset quality as is often, and incorrectly, reported. Their problems were caused by lack of funding which was in turn due to the global credit crisis, exacerbated by their poor strategy in seeking funding at the last minute rather than obtaining it for a sensible future period.

Lenders have also significantly tightened up on things like new build lending. I don't believe that there is lots of unprovided-for bad news there.

I suspect the folk at A&L and B&B have had a bit of a stressful time lately though! A (slightly old) story here about A&L: http://www.guardian.co.uk/business/2007/nov/28/creditcrunch

Hopefully they have come through the worst still intact?

Plasticman

Treadmill wrote: »

The Credit Crunch is over and the markets are currently undervalued, buy buy buy.

bye bye :wave: