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Butterfly

Well, that's a good thing, so I guess they will not fail after all as you claimed !!! I thought they were all going to default on deposits and the credit cards would stop working

not, they are not. Only a UK branch got fucked, that's hardly EVERY bank in Iceland !!! again making up claims. Another of your extrapolation.

Well, Banks stocks are fucked so there is a huge re-adjustment of portfolios for those securities. Perfectly understandable, but that's hardly mean that the "financial" system is in collapse. Bank Stocks is not the Financial system.

Let's hope that the DOW reach 6,000 but I wouldn't hold my breath on that.

bkkandrew

I hate your lies and really cannot be bothered to respond to them, but this is simply disgraceful. Landsbaski is essentially an Internet bank (trading name Icesave). Its fucking shut you prick. Just look at the front page of their website. There have been thousands of people phoning TV and radio stations wailing they have lost £xxx thousand.

If you don't understand things, you really should not comment on them.

Icesave's website:

icesave - high interest savings accounts

Spin

This from Landbanski.co.uk homepage "Creative, Positive, Sustainable"

bkkandrew

^And even the UK Chancellor is on Radio 5 (discussing his mega bank bailout - details to follow) saying he is angry with Iceland leaving savers high and dry by forcing them to "try their luck in the Icelandic Courts".

He DIDN'T say he was helping out though...

bkkandrew

555 - good one!

Creative - sure, nab the cash and hide behind a vulcano!
Positive - For opponents of West Ham FC perhaps.
Sustainable - I think they missed the "un" there.

bkkandrew

U.K. to Inject About $87 Billion in Country's Banks (Update1)


By Ben Livesey




Oct. 8 (Bloomberg) -- Prime Minister Gordon Brown's government will invest about 50 billion pounds ($87 billion) in an unprecedented step to prevent a collapse of the U.K. banking system.

As part of the plan, the government will buy preference shares, and the Bank of England will make at least 200 billion pounds available for banks to borrow under the so-called special liquidity plan, the Treasury said in a Regulatory News Service statement today. The government will also provide a guarantee of about 250 billion pounds to help refinance debt.

The steps to partially nationalize the banking industry provide ``the necessary building blocks to allow banks to return to their basic function of providing cash and investment for families and businesses,'' Chancellor of the Exchequer Alistair Darling said in a statement.

More here:

Bloomberg.com: Worldwide

Spin

Worldwide rout continues unabated. Everywhere is down
Japan -9%
Hong Kong -7%
Indo -10% trading halted
Thailand -6%
Taiwan, korea, OZ all -5%
US futures down 200 at 9320 for Dow and 13.2 to 992 for S&P500.
At least oils "cheap" at 87$

Edit at 3pm Thai time.

Us futures are dropping like a rock dow now down 350 at 9188. s&p500 futures down 38 pts to 967

bkkandrew

Apart from the oasis of utopia that is Butterfly Word.

Spin

The UK Treasury said it will protect the retail depositors in two Icelandic-owned banks: Icesave, a UK-based branch of Landsbanki, and Heritable, a UK-based banking unit of Landsbanki.

Thats good news for a lot of people, Im pleased to hear that the treasury are doing something to help the man on the street.

link

bkkandrew

^If you are so confident of their success, go an open an account with them.

Icesave was over 70% of their deposits. No Icesave, no bank. As has happened. You are just like that Iraqi information minister denying the US military advance even when the tanks could be seen out of the window. I suspect that when your own ATM card fails you will lecture all those around you that, in fact, it isn't a 'real' failure and that it could be called 'a success' that your card is being rejected.

Butterfly

link ?

bkkandrew

^I have their 2007 Annual Report on my desk. It isn't published on the net.

Anyway, summary of the day:

Iceland move closer to Sovereign debt default, althought denied by their PM. The remaining two main banks nationalised, however Krauptung Edge's savings hived off to ING (UK). Ripple effects now felt - although UK Chancellor promises to compensate UK savers who have lost their money (and take 'legal action' against Iceland - good luck with that!), but it then turns out that many local councils had Council Tax money in Icesave accounts - oops!

Interestingly, it seems that Pakistan has come up on the rails and intends to beat Iceland in the race to first to default. And they have nukes!

The £500BN UK bailout (40% of GDP!!!) of all the main UK banks is a bold move. It really exposes the Paulson plan as being too little, too late. By way of comparison, scaled up just to match GDP, the Paulson Plan would need to be IRO $5TRILLION. And this does not account for a significant number of analysts in London today calling the UK's bailout 'not enough'.

Is it enough? Well, that all depends on the UK housing market, which has so far fallen 15% yoy. The value was $8TRILLION in 2007, so this has declined by $1.2TRILLION in the yoy figure (to date). Assuming that distressed sale reductions from average prices negate average unaffected equity, the bailout doesn't even cover year to-date falls, if and when it turns to bad mortgage debt. Going forward, a further 15% yoy fall will mean significant bailout funds would be required during the next 6 months due to the domestic losses alone. If the crash gathers pace (more likely, given rising unemployment and lack of ability for home owners to remortgage) to say 30% (this year's California yoy figure), then an additional bailout to the order of $2TRILLION would be required. All of these figures do not take into account banking losses from corporate, personal unsecured debt, foreign bad debt, such as the US CDO's that started the credit crunch, etc., etc.

As the markets digest the differential between (a) the differing magnitude of the UK bailout and the Paulson Plan and (b) the likelihood of inadequacy of even the UK's bailout, the closer we get to complete capitulation.

bkkandrew

So, are you still sure about this? DOW closed down 189 at 9258 and the current futures market puts it down another 64 at 9163. That would mean a recovery of 12.5% tomorrow and Friday for your prediction to come to pass...

bkkandrew

Final note on Iceland, namely that there are now widespread reports of the krona now being refused as a method of payment in Iceland following abandoned attempts to put a floor under its falling currency by fixing the exchange rate. A full-scale breakdown is upon us there, bank cards useless and the local currency worthless and rebuffed.

An AP article with some earlier news (including all the stuff that doesn't exist in Butterfly World):

The Associated Press: Iceland struggles, abandons fixed exchange rate

Spin

Icelands three biggest banks have now been taken over by the government and total debt is around 61 $billion
In 2007, Iceland's GDP was 11.7 billion dollars.
Not long now.....
source
source

bkkandrew

^You begin to wonder if there has been a shortage of calculators and/or maths teachers in Iceland over the past 10-years...

bkkandrew

^^And don't forget that the majority of the $11BN GDP was banking-related, which is now kaput...

Spin

You might see a shift in environmental policy there. They have cheap electricity due to geothermal activity and aluminium companies love to put factories where there is reliable cheap lecky. Iceland has resisted expansion of that industry but things could change quickly.

Butterfly

lucky you, I found on google your 70% reference and again you got it wrong

Icesave, a small Internet division of a much larger bank

Icesave Online Savings Review - Savings Accounts. Review of 351990
so in other words, 70% of the parent national bank loans are funded by deposits which is a very different claim that "Icesave was over 70% of their deposits." of the parent company, not even close !!!

IceSave is the UK Branch, and that branch doesn't represent 70% of the parent National Bank, it's only 5b BP out of 30b BP for the bank assets, so that represents only 16% of the total assets of the parent company,

so again, you are confusing numbers,

Thanks for playing,

bkkandrew

^While you are googling, check the figures for Norwegen, Swedish, Danish and other European countries' savers' deposits. The £5BN figure is for UK savers only.

You are confusing the deposits to funding requirements ratio, which sands at 70% with the fact that over 70% of the total deposits held in Landsbanki were from its Icesave division.

Just because to figures happen to be 70% does not mean they relate to the same thing.

Oh and by the way, The reason I have their annual report from 2007 is that I had a considerable deposit in Icesave prior to moving it when (funnily enough) I started investigating the banking crisis last year, which in turn gave birth to this thread in February.