Thread: A note of caution for those with deposits in US Banks

Originally Posted by bkkandrew

^As you are a disbeliever, I guess it is:

Normal service will be resumed on this thread from Monday next week.

No it's not n s w b r o n t t f m it's m o a b.

But as I watch CNBC I wonder if there will be a b.

^Mother-of-all-Bankruptcies?

Originally Posted by bkkandrew

^Mother-of-all-Bankruptcies?

Probably not, but maybe.

Originally Posted by who

I hope that one of them turns out to be true.

well 1 out of 6 wouldn't be too bad, hell a monkey can do 1 out of 2

Bank run in Hong Kong:

Hong Kong Savers Fret as Bank East Asia Fights Rumors (Update2)

By Kelvin Wong and Theresa Tang




Sept. 25 (Bloomberg) -- For the first time since the Asian financial crisis more than a decade ago, Hong Kong has faced a bank run.

Hundreds of depositors lined up at the city's third-largest lender Bank of East Asia Ltd. yesterday as the bank hit out at ``malicious rumors,'' and Chairman David Li rushed back to Hong Kong from the U.S. to reassure clients and investors. The city's central bank jumped to BEA's defense and police said they're investigating phone text messages questioning its health.

Continued here:

Bloomberg.com: Asia

Deal close on $700 billion financial bailout plan
Thursday September 25, 6:00 am ET
By Julie Hirschfeld Davis, Associated Press Writer
Compromise close on $700 billion bailout as Bush plans White House summit seeking quick deal


WASHINGTON (AP) -- President Bush is bringing presidential candidates Barack Obama and John McCain into negotiations on a $700 billion rescue of Wall Street as Democrats and Republicans near agreement on a bailout plan with more protections for taxpayers and new help for distressed homeowners.

Senior lawmakers and Bush administration officials have cleared away key obstacles to a deal on the unprecedented rescue, agreeing to include widely supported limits on pay packages for executives whose companies benefit.

Deal close on $700 billion financial bailout plan: Financial News - Yahoo! Finance

The plan is mad, doomed to failure, too little and too late. It won't put a dent in the losses, yet will saddle the FED with an unpayable debt.

^ actually FDIC will not even be involved, the bank got transfered already

Originally Posted by WSJ

Under the deal, New York-based J.P. Morgan, which has long coveted WaMu as a way to secure a footprint on the West Coast, will assume most of the thrift's deposits and branches, as well as some other operations.

Unlike many of the 12 bank failures that the FDIC has overseen this year, the J.P. Morgan-WaMu transaction isn't expected to impact the agency's national deposit-insurance fund. It wasn't immediately clear how the transaction would be structured to avoid the insurance fund taking a hit.

Originally Posted by WSJ

While the exact structure of the transaction wasn't immediately known, J.P. Morgan is expected to acquire Washington Mutual's deposits and branches, as well as other operations. The deal isn't expected to result in any hit to the Federal Deposit Insurance Corp.'s bank-insurance fund, according to a person familiar with the arrangement. Some analysts have worried that a WaMu failure could cost more than $20 billion.

Originally Posted by Butterfly

Originally Posted by WSJ While the exact structure of the transaction wasn't immediately known

Shotgun wedding?

^ shotgun wedding are actually the best, it's when they marry for love that everything goes wrong

see AOL and Time Warner for a good example, they married for love, and they got fucked, now in divorce proceeding

^JPM (Well JP Morgan, Chase & Co, Bear Sterns, WaMu) will soon be wedded to every financial firm in the US, which will make a nice and tidy bankruptcy, sort of a one-stop-shop bankruptcy of US Inc.

Wachovia Slips Amid Speculation Citigroup, Wells Fargo May Bid


By David Mildenberg and Linda Shen

Sept. 26 (Bloomberg) -- Wachovia Corp. fell in late trading amid speculation that record losses tied to mortgage loans may force the bank into a merger with Citigroup Inc., Wells Fargo & Co. or Banco Santander SA.

Wachovia dropped to $8.90 at 6:12 p.m. today from its $10 close during regular New York Stock Exchange trading after the New York Times reported that New York-based Citigroup was in early talks to buy the Charlotte, North Carolina-based bank. The Wall Street Journal said bids may come from San Francisco-based Wells Fargo and Spain's Santander.

Takeovers can wipe out bank shareholders if they occur after regulators seize the company. That's what happened yesterday to Seattle-based Washington Mutual Inc., the nation's biggest thrift and now the largest bank failure in history. JPMorgan Chase & Co. paid $1.9 billion for deposits and branches of WaMu, leaving the company with about $28 billion in debt according to Bloomberg data and little means to pay it off.

Continued here:

Bloomberg.com: Worldwide

My bold. Only a few days left to protect yourself from dollar capitulation, FED default and Martial Law stateside...

STOCKMARKETS RUNNING OUT OF UNDERPANTS

FINANCIAL institutions across the globe last night urged the US to agree a bail-out package, warning they are down to their last four pairs of useable underpants.


With traders soiling themselves every time the headlines change on the BBC website, offices in New York and London are now dangerously awash with urine.

Bill McKay, facilities manager at City brokerage Madeley-Finnegan, said: "It's soaked right through the carpet."

He warned the entire financial system was on the brink of collapse, not because of liquidity problems, but because the wiring is 'absolutely drenched'.

"I was called out at 3am after a small electrical fire broke out on the fourth floor. I took one look and thought, 'stockbroker piss'.

"We tried putting down newspapers but they just read the headlines and piss themselves all over again."

McKay added: "I was talking to one broker when a car alarm went off in the street. Within seconds there was a large damp patch spreading slowly across his groin.

"We've turned the first floor coffee lounge into an emergency laundrette, but for every clean pair we send out there's two dirty ones coming in."

Last night the Bank of England urged brokers to hold it in or at least keep a bucket under their desk.

Daily Mash

B&B and Fortis both in crisis

Bradford & Bingley’s fate to be decided by tonight as Spanish bank Santander leads rescue talksIain Dey

BELGIUM’s Fortis is this weekend poised to become the first large continental bank to fall victim to the credit crunch, as the global chaos continues with Bradford & Bingley and American savings giant Wachovia both teetering on the brink.

The Belgian central bank and the country’s regulator are paving the way for a bailout of the huge banking and insurance group, which has a £540 billion balance sheet and a market value of £12 billion.

In Britain, the fate of Bradford & Bingley will be decided today. Fren-etic talks between the Bank of England, the Financial Services Authority and the government have been taking place this weekend to save the troubled mortgage bank.

Santander, the Spanish bank, is in negotiations to buy B&B, but it is insisting on a stringent set of conditions. The talks are being led by Anto-nio Horta-Osorio, chief executive of Santander’s UK bank, Abbey.

Another option being pursued by the government and the FSA is to carve up B&B. This would result in the sale of its £20 billion deposit business, its 197-strong branch network and its troubled mortgage book. These assets would be auctioned to the highest bidder.

But the government could still be left with the bulk of the £42 billion mortgage book, half of which is exposed to the buy-to-let market. One government adviser said: “What we have to do is find the best deal for the taxpayer.”

If no buyers come forward, B&B will be nationalised and broken up. However, while the fate of B&B offers a fascinating insight into the hardship faced by financial institutions, in terms of international significance the problems faced by Fortis are far more serious.

Dutch banking giant ING and France’s BNP Paribas are both involved in talks with Fortis about buying all or part of its business.

Neither bank is thought to be willing to take on Fortis unless they can receive guarantees over the bank’s exposures to sub-prime mortgages and other problem assets.

The Belgian regulator is thought to be considering the creation of a “toxic dump” for assets similar to the controversial scheme proposed in America as a means of ensuring a deal.

Any uncertainty around the future of Fortis is likely to weigh heavily on Royal Bank of Scotland. Fortis was one of RBS’s partners in the consortium that bought ABN Amro last year.

The Dutch banking assets that Fortis bought as part of the deal have yet to be transferred out of the holding company used to execute the deal, which is legally a subsidiary of RBS.

Talks on the future of Fortis, which has 2,500 branches across Europe, accelerated on Friday night after the bank replaced its chief executive, appointing instead Filip Dierckx, who has been on the board since January.

The Belgian government, regulators, and the Dutch central bank are all involved in the talks. A deal is expected to be announced by tomorrow morning to prevent a crisis of confidence that could spark public panic and a run on deposits.

Fortis is Britain’s third-largest private car insurer, based on volume, and the fourth-largest travel insurer.

The British government is also keen to have resolved the future of B&B by tonight and is fearful that uncertainty over the bank’s future will create a run on deposits.

Yesterday there were queues at only three B&B branches. Staff volunteered to go in and help, but there was no repeat of the huge queues outside Northern Rock last year and all anxious customers were seen.

Santander’s prime interest is in the branch network and the savings franchise. It is seeking dispensations from the Competition Commission to prevent investigations into the market shares that the enlarged group would have.
Two weeks ago the government waived the competition rules to allow Lloyds TSB to take over HBOS.

If the deal went ahead, it would create a duopoly in British banking, with the new Santander conglomerate going head to head with the combination of Lloyds TSB and HBOS. The only other bank that had entertained talks to acquire B&B was HSBC, but the bank attached a series of conditions to the deal that was unacceptable to the Treasury.

Santander has also been linked to a possible move for Wachovia, America’s sixth-largest bank, alongside Wells Fargo and Citigroup.

Wachovia put itself up for sale on Friday night after a crisis of confidence sparked by the collapse of Washington Mutual and its subsequent sale to JP Morgan.
Robert Steel, Wachovia’s chief executive, contacted the three banks as his share price plunged 27% in response to the Washington Mutual sale. Toronto Dominion Bank of Canada is also rumoured to be on the fringes of a possible deal.

Prospective bidders were said to be waiting to see whether there was a prospect of waiting for Wachovia to collapse before stepping in, buying only the good parts of the business.

Wachovia had spoken to Morgan Stanley, but these discussions fell apart on concerns about the bank’s exposure to toxic mortgages.

A deal may be made easier to achieve if the US Congress agrees on a $700 billion (£380 billion) bailout facility over the weekend.

Analysts say that most of the obvious bank targets that had been identified as weak, have now fallen.

However, they are not ruling out further surprises, particularly while conditions in the interbank lending market remain at their most severe since Britain quit the European exchange-rate mechanism in 1992.

Treasury to nationalise B&B bank


Parts of B&B are set to be sold on to another bank by the Treasury


Troubled bank Bradford & Bingley is to be nationalised, the BBC has learned.

Officials from the Treasury and the Financial Services Authority (FSA) have been in talks with executives from the bank in a bid to secure its future.

BBC News business editor Robert Peston says the Treasury will almost instantaneously sell to a bank, or a number of banks.

B&B's share price has plummeted and it has announced plans to cut 370 jobs due to the downturn in the mortgage market.

Home loans
The bank will be nationalised using special legislation the Treasury put through when it took Northern Rock into public ownership earlier this year. The measure is expected be announced on Sunday night or Monday morning.


Continued here:

BBC NEWS | Business | Treasury to nationalise B&B bank

I said that B&B would go bust as early as April this year. Now will people listen to me about the financial collapse in the US and UK (and beyond), Martial Law and such?

The Belgian central bank and the country’s regulator are paving the way for a bailout of the huge banking and insurance group, which has a £540 billion balance sheet and a market value of £12 billion.
*********************************
jockben

If the deal went ahead, it would create a duopoly in British banking, with the new Santander conglomerate going head to head with the combination of Lloyds TSB and HBOS. The only other bank that had entertained talks to acquire B&B was HSBC, but the bank attached a series of conditions to the deal that was unacceptable to the Treasury.
***********************************
jockben

Another option being pursued by the government and the FSA is to carve up B&B. This would result in the sale of its £20 billion deposit business, its 197-strong branch network and its troubled mortgage book. These assets would be auctioned to the highest bidder.

***********************************
jockben

Yesterday there were queues at only three B&B branches. Staff volunteered to go in and help, but there was no repeat of the huge queues outside Northern Rock last year and all anxious customers were seen.

********************************************
jockben

The Belgian government, regulators, and the Dutch central bank are all involved in the talks. A deal is expected to be announced by tomorrow morning to prevent a crisis of confidence that could spark public panic and a run on deposits.

******************************************
jockben
Car Auctions

Originally Posted by bkkandrew

Only a few days left to protect yourself from dollar capitulation, FED default and Martial Law stateside...

take your meds bkka

glad to see governments starting to nationalize all those banks,

^Yep, you said "nothing to see here" when I posted (on this thread) the likelihood of B&B, HBOS, WaMu, Lehman, Bear Sterns etc., etc. going bust. Those predictions were as early as February this year.

You saying the same about FED default is like a confirmation that it will happen.

Word on the street is that the credit risk of the Golden Arches are better than Uncle Sam.
VS.
5 Year Credit Default Swaps on McDonald’s Corp are trading at 24 to 29bp while US Credit Default Swaps are trading 30bp. This means that it is more expensive to buy protection against a default of the US government than a bankruptcy of Mickey D.

Golden Arches Safer Than Uncle Sam? - Seeking Alpha

Can I get fries with that?

Originally Posted by bkkandrew

Word on the street is that the credit risk of the Golden Arches are better than Uncle Sam.
VS.
5 Year Credit Default Swaps on McDonald’s Corp are trading at 24 to 29bp while US Credit Default Swaps are trading 30bp. This means that it is more expensive to buy protection against a default of the US government than a bankruptcy of Mickey D.

Golden Arches Safer Than Uncle Sam? - Seeking Alpha

Can I get fries with that?

The US government will just print more of the paper stuff with George Washingtons picture on it and try to sell it to the rest of the world as they have for decades. It will still work in the future, just might not be wort as much.

I've received phone calls in the last hour from two economists I respect, one of them Larry Lindsey, the other in a position where he'd prefer not to be named. Both have government experience, neither is alarmist by nature, and they say this:

The huge European bank Fortis is apparently about to fail. The ripple effect on the American banking system could be disastrous, with bank runs, liquidity crises, and stock sell offs possible Monday. Wachovia may well fail next week. As Larry put it, this really will be 1933 soon if we don't move rapidly to stabilize the banking system.

And here's the bad news: the current bailout bill, whatever its merits and likelihood of passage, does nothing to address this.

Congress should pass by Monday simple legislation doing two things:

1. Giving the FDIC authority to provide unlimited deposit insurance through the FDIC for transaction accounts in banks.

2. Authorizing the Secretary of the Treasury to provide unlimited protection of principal in money market funds through the Treasury's exchange stabilization fund.

Maybe my acquaintances (and I) are too worried; maybe this legislation wouldn't quite be the right solution. But I wanted to sound what may be, unfortunately, a needed alarm.

A Genuine and Immediate Crisis

And they talk endlessly on Capitol Hill as if the $700BN will actually matter.