Latest: Finance Blog

The Mother of Bear Rallies: Obama effect to rally Stock Markets?

The Mother of Bear Rallies: Obama effect to rally Stock Markets?

Wall Street rallied today in a dazzling return of investor confidence only a day after US financials were slaughtered. The Dow Jones gained 279.01 point (3.51%), the S&P 500 35.02 points (4.35%), and the Nasdaq was up 66.21 points. (4.60%). Marketwatch makes and interesting point with Jeffrey Kleintop, chief market strategist, LPL Financial, as saying: […]

Why RBS can’t be nationalised

Why RBS can’t be nationalised

The announcement by RBS yesterday that it expected to write down £28 billion was extraordinary. Fears that the bank may be fully nationalised drove the share price down 67%. However, the announcement was extraordinary not simply because it would represent the biggest single loss in UK corporate history – but also because of the timing. […]

Pre-Budget report fails to support business

Pre-Budget report fails to support business

Alistair Darling’s Pre-Budget report was received among a flurry of interest and excitement, but anyone expecting tax cuts to help the UK’s small businesses and entrepreneurs will be left sorely disappointed. A cut in VAT from 17.5% to 15% was announced, ostensibly to help consumers – and yet consumers would be hit with rises on […]

UK Banks: the worst is yet to come

UK Banks: the worst is yet to come

UK banks such as RBS, HBOS, Barclays and Lloyds have had it bad – share prices have plunged wiping billions from their company values, and commercial markets have frozen up leaving them in need of government help to remain afloat. During the drama of the financial crisis, everyone seems to have forgotten about the ongoing […]

DJI under 9000 points

DJI under 9000 points

Hell – the DJI has already fallen through 9,000 tonight, only 4 days after crashing through 10,000 points – and the fall is continuing through the last half hour of normal trading. Currently the DJI is just above 8,900 points, a loss of over 3.8% on the day. That’s a consecutive loss of 18% over […]

Do pray for us Mr Darling

Do pray for us Mr Darling

As yesterday morning’s speaker on BBC Radio 4′s “Thought for the Day” urged a bleary-eyed nation to consider in its prayers the plight of bankers, whose lives may be torn apart by the credit crisis, and bear in mind their efforts in support of charity, a new day of financial turmoil was about to break. […]

Banking Crisis: Which are the Safest UK Banks?

Banking Crisis: Which are the Safest UK Banks?

We’ve seen Northern Rock and Bradford & Bingley collapse, the Cheshire and Derbyshire Building Societies rescued, and even Halifax Bank of Scotland required a bail-out from Lloyds TSB. Turmoil in the world’s markets mean that credit around the globe has literally frozen up, and banks face the very real possibility of a systemic meltdown of […]

Santander: White Knight or What?

Santander: White Knight or What?

A crisis might be a time for action rather than questions but with the scale of the problems facing the UK banking sector escalating, one particular question regularly bubbles to the surface. Is Grupo Santander any more likely to emerge from the credit crisis in sound shape than some of its failing European rivals? Santander […]

Stock Markets face October crash

Stock Markets face October crash

Stock markets face a further crash over October, as a combination of bad economic data, credit derivative write downs, and the threat of further bank failures, plague financial markets already freezing up. The finance sector is bracing itself for further nasty shocks over the new few weeks, as a slew of worsening economic factors come […]

Bradford & Bingley shareholders ‘robbed’

Bradford & Bingley shareholders ‘robbed’

The nationalisation of Bradford & Bingley is the most blatant case of legalised bank robbery this country has ever seen, with almost a million shareholders likely to lose a fortune. The whole point of having shareholders in a democracy is that they own the company and can decide its fate between them, including sacking the […]

Are Wachovia Bank and Ambac next to fail?

Are Wachovia Bank and Ambac next to fail?

Wachovia Corporation (WB) When Harvard economist, Professor Kenneth Rogoff – formerly head of the IMF – predicted at the end of August that at least one major US bank would collapse along with hundreds of smaller banks, trader speculation fell on three names: – Lehman Brothers – Washington Mutual – Wachovia Corporation Since his warning […]

Shares in US Financials rally after crisis

Shares in US Financials rally after crisis

Shares in US financials have begun a powerful rally, which has seen shares in many US banks leap by double percentile figures. The rally began just before 6pm GMT and 1pm New York time. Companies previously hit hard by investor fears on their mortgage assets are seeing the strongest rebound, with mortgage insurers and US […]

Meltdown Monday for banks

Meltdown Monday for banks

Within the past 24 hours, two of the world’s biggest investment banks have been destroyed – Lehman Brothers filed bankruptcy, while Merrill Lynch was rescued by Bank of America. The Fed extended emergency lines of credit; Wall St banks set up a $70 billion liqiudity fund. And global insurance super giant AIG suddenly threatened to […]

Morgan Stanley Advantage: what a bunch of muppets

Morgan Stanley Advantage: what a bunch of muppets

I took out a self-certified mortgage with GMAC two years ago, because as a company director traditional lenders tend to get very confused when your income is not a straight salaried income-taxed income. Like many company directors, I instead take an income in the form of dividends. On the low interest rates everyone enjoyed at […]

The BBC fudges savings vs investments report

The BBC fudges savings vs investments report

The BBC publishes a report: Savings returns ‘beating’ shares which makes the outlandish claim: Savers putting their money in funds investing in UK stocks and shares would have made more money since 2000 by putting it in savings accounts instead. To make such a claim requires extreme generalisation and a complete ignorance of investments. It’s […]

Pension funds want more money for mismanagement

Pension funds want more money for mismanagement

Final salary pension funds return to the red, with pension trustees looking for more money to shore up the losses. What no one seems willing to talk about, though, is the mismanagement of final salary pension funds – and how the managers of these funds have been actively seeking to generate losses against their own […]

MBIA and Ambac: the underdogs you can’t keep down

MBIA and Ambac: the underdogs you can’t keep down

If there’s one thing US analysts seem to enjoy at the moment, it’s downgrading US financials. It’s no surprise that the very companies most actively shorting financials should then release doom and gloom analyses, undermining these further. And in an almost tit-for-tat battle, analysts at different banks have been downgrading each other continually over the […]

The Credit Crunch is Over

The Credit Crunch is Over

“The Credit Crunch is Over” is a bold statement to make, and more experienced people foolishly made the same prediction much earlier in the year. However, as we near the first anniversary of the Credit Crunch slamming into the financial markets, here are the observations and predictions from Finance Markets: 1. The Credit Crisis is […]

Can the FDIC cope with US banking failures?

Can the FDIC cope with US banking failures?

With the collapse of Indymac, the FDIC was forced to allocate anywhere between $4-8 billion in assets to take over the company. Who are the FDIC? The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress that maintains the stability and public confidence in the nation’s financial system by insuring deposits, […]

Sell and Rent Back: What you need to know

Sell and Rent Back: What you need to know

The market in “sell and rent back” has boomed incredibly over the past couple of years. Originally there were just a handful of established companies in this market – but the tail-end of the property boom has brought in a massive influx of property speculators who have entered this market as an alternative to buy-to-let. […]