Bank of China sniffs HBOS

"Since Chinese businesses are not famous for their derring-do in the deals market. "

But they are astute analysts of they who derring-do and QuITe Inscrutable Hosts for Honest Friends.

Oh well HSBC posts more huge writedownsb- $4.3bn is just staggering!

If you've got an HSBC bank account they will no doubt be raiding it soon in the form of eroneous bank charges and fines etc. etc.

I changed my account from First Direct to Nationwide a couple of months ago in anticipation of such write downs ;-)

.....would be nationalisation - which is not a bird in the bush that many HBOS shareholders will find attractive.

But will be the feather in the nest of the Treasury

Nationalisation is back!

Good luck to Bank of China if they have the cash to spend on one of our banks. Unlike the British and other western nations who have grown bloated on a sea of unrepayable debt, the Chinese have been steadily working hard and saving so they have cash in hand.

For the moment China is running to catch up with the west but they have shown they are well able to compete and even surpass expectations (eg Olympic games). They still have a long way to go in terms of environmental concerns/human rights etc but are they any worse than we were a century or so ago? I don't think so...you only have to look at a Dickens novel to see we weren't so hot on these issues a few years back.

We should take a leaf out of their book and stop looking to get rich quick and not buy things we don't have the money for. Government meddling with things they don't really understand can only make things worse. I don't think there is anyone in government at the moment who has an entreprenurial bone in their body. They are top of the list for free hand-outs and an easy life. A bit less of "jaw jaw" and doing an honest day's work for an honest day's pay wouldn't go amiss!

HBOS is solvent and fundamentally profitable but has a massive cash flow problem. It is (still) inconceivable that the UK housing market could deteriorate enough to seriously threaten solvency. Robert's article shows the extent of the problem. Anyone taking on HBOS would be taking an enormous gamble that the money markets are going to free themselves up. Of course if they are right they will make a killing.

Slightly tangential-but can you please provide a view on the AIG extra funding at reduced rates? What is the dirty big secret in terms of undisclosed future losses from CDS' bets? Why is no one in the US Treasury/Fed providing any information on tax payer exposure. This seems akin to lunacy....

What a ridiculous mess.

At least we will be spared anymore of those stupid adverts with Howard the Duck or was it Howard the Turkey flying on a Duck.

Quack Quack

Any takeover should be delayed until Bank of China's overseas lending is examined. Far too many Chinese banks have been lending to the US with the loans priced in dollars: the collapsing value of the dollar has left these banks with gaping black holes in their accounts.

#2,

I'm also with the nationwide, but I don't think they will miss the writedown boat either. I'm telling you they offered me a staggering multiplier ;-)

This comment was removed because the moderators found it broke the house rules. Explain.

Dear Robert

We are witnessing the failure of Globalisation, and Capitalism, this is the swan song of The March of the Bildergergers,

China of course has a currency that is essentially linked to the dollar. So a Chinese bail-out is no worse or better than an American bail-out. And China has been building up massive reserves these last years.

But it would mean a foreign bank owning the right to print (Scottish) bank notes. This surely cannot be allowed to happen so I would expect Acts both at Westminster and Holyrood to ensure that the currency is protected.

If the Chinese are genuinely interested, it could be that they believe that the worst is over or they could be buying a pig in the poke. I think they will walk away from it - certainly if they have to roll over HBOS's £156bn in June.

The more this goes on i just wished i had issued my petition against Halifax PLC back in January 2007.

If this was any other business it would be in Administration.

Administration is the only answer,like wise for a few of the others.

Then start again with new set ups run by people with integrity.

I was overjoyed when I heard that Hornby was heading to China and then was gutted when the details showed that it was the model train people and not Andy the ceo of HBOS.

Robert, any comments on Mr Hornby's £60,000 per month consultancy fee, working for Lloyds TSB?

We pay our Chinese staff via Bank Of China.

Hope i dont now have to worry about the payroll . .

I really dont want them to take the hit on th UKs crazy property market. . .

5. At 3:47pm ~ waitingforthepain.

waitingforthepain, I don't think you quite understand what being solvent means, It's nothing to do with what a balance sheet shows.

Being solvent means the ability to repay ones debts when called upon so to do.

HBOS is clearly not in that position, as we all well know.

Doesn't RBS own a small chunk of the BoC... ?

Hi Robert,

It is still a very sad that the long suffering shareholders of LloydsTSB are having to stump up for a Christmas Turkey which is all bones and no flesh. If I was a TSB shareholder, I would be incredibly annoyed! (To put it mildly)

Ho, Ho, Ho! HBOS Christmas everybody!!!

The establishment always bitched on about Maxwell.

But at least when he had nowhere to go he did the decent thing.

The Chinese have a similar Ethos of falling on their swords.

ANY VOLUNTEERS FROM THE ESTABLISHMENT?

There seem to be many dishonourable knights knocking around.

30 years ago the popular joke was that the Shanghai motor co. would one day buy Rover .The added punchline now is that it was ever thought of as a joke.


Clearly the Bank of China taking over HBOS is the latest joke .....they should get serious and bid for the Federal reserve and The Bank of England[why should we wait 30 years for the punchline ] and produce a new currency with the Queen ,Abraham Lincoln and Confucius on the front with the Yen and Euro represented on the back

This comment was removed because the moderators found it broke the house rules. Explain.

This is a piece of Government propaganda intended to frighten the HBOS shareholders into accepting the takeover. The question you haven't addressed is that if HBOS is in such a critical condition, why is Lloyds buying it? And if Lloyds is interested in buying it why not other parties?

The Bank of China is in a substantially better cash position than Lloyds and can offer the HBOS shareholders a better cash deal. It is also better positioned to weather the storms of recession. The housing market will eventually recover and BOC can make a massive profit.

Bankers don't save other banks out of the goodness of their hearts. I would trust Mathieson and Burt over the incompetents in Government and the HBOS board. Furthermore Hector Sants of the FSA,himself confirmed that HBOS could survive independently.


The "nebulous thing in the bush spotted by the duo of banking knights who want HBOS to remain independent" is in fact a serious offer for a much required independent assessment. There is plenty of time. The shareholders meeting is December and all stakeholders in the company deserve to see the current board dismissed and replaced with a board which is open to all options and not merely interested in covering up its misdemeanours.

21 And when you've exhausted your limited understanding of economics - hit 'em with the homophobic jokes. Hilarious!

I'm sorry, but your argument against HBOS independence doesn't make sense to me.

The GBP156bn of refunding that HBOS has to make over the next 8 months or so - is this made any more straightforward by HBOS being merged with Lloyds? What is the advantage to Lloyds shareholders of taking on this burden, if it is so problematic for a stand-alone HBOS to contemplate?

The GBP35bn HBOS loans to the property and construction industries, and the danger of further write-downs as this sector continues its collapse. Is there any less danger of write-downs by being under the Lloyds umbrella? Again, where's the benefit to Lloyds shareholders in taking on what appears to be a poison chalice?

Is the reality that HBOS, as a business, is deemed by the government not to have a future, and that the merger into Lloyds is no more than a back-door way of putting HBOS into liquidation? I wrote at the time this deal was first announced that there was more to this deal than meets the eye. HBOS apparent plight was so deep, and the potential downside so great, that there must be something on offer to Lloyds that the general public has not being told about. Maybe you could ask one of your contacts in high places what this is?

#5 waitingforthepain and #16 von_reitoc both have it PARTLY right - insolvency can occur either because cashflow problems preclude meeting debts when due OR because the balance sheet shows assets exceed liabilities (hence the need to recapitalise banks to forestall this potential event on increasing bad debts).

An interesting prospect, and the Chinese have shown themselves ready to capitalise on credit-crunch opportunities: recall that the China Development Bank bought a big slice of Barclays in July 2007.

Several smart strategic motives could be seen at the time.

Trouble is, they paid over £ 7 per share for the privilege - which turned out to be fairly near the top, and Barclays are now trading at under £ 2 !

With that memory fresh, how keen will Bank of China be to jump in ?

Post23

Limited knowledge of Economics??

I dont think so.

The Welsh call take-aways "packed meals". In this case, it wouldn't be possible the Chinese fancy a carefully-packaged English, would it, where Lloyds, suffering from terminal indigestion having swallowed HBOS, is itself taken over by HongKong and Shanghai Banking Corporation (just to remind those readers of more tender years what those initials on the former Midland Bank branches actually stand for) which then reveals its true colours by taking out RBOS and imploding itself to reveal the Dragon within?
We already know that the False Knights on the Road, having made the mess in the first place, can't distinguish between Lloyds own need for refinancing capital, a couple of hundred million which it could under other circumstances have foregone by hanging onto some of this year's profits, and the amount it will need to haul HBOS out of the morass, via the loan it's made.
The quid-pro-quo was the government not nationalising the lot.

"11. At 4:00pm on 10 Nov 2008, solomanbrown wrote:

Dear Robert

We are witnessing the failure of Globalisation, and Capitalism"

Really, the problem is specific to banking:

https://internationalcashday.webs.com/frb.html

Globalisation is made possible by vast amounts of cheap energy (oil). With that peaking in a couple of years, and the price of transport soars. Yes the economic fashion of globalisation is likely to become the economic fashion of localisation.

I apologise for my sarcasim but i cannot take any member of our current government seriously,mainly due to the dreadful patronising attitude doled out to us the people.

As regards the regulators such as the Bank of England & the FSA,my personal experience of dealing with these organisations was disappointing.
Please bear in mind the contact was regarding the issue of a Winding Up Petition against HALIFAX PLC.

Post 27

"Limited knowledge of Economics??

I dont think so."

Extensive knowledge of smooth treats is the question left begging/hanging ice cold there, alex?

A Google search suggests Alexander Curzon is either
a venture capitalist from Kingston upon Thames,
one of the signatories of the 1719 Bill for repeal of Acts preventing Occasional Conformity and to hinder the growth of schism,
or
"The Seraph's very little," I explained apologetically, "he doesn't understand."
Any one of which may be relevant here.

Rahere, on the other hand, provides the nearest prayer facility to the Stock Exchange. He also did the pathfinding for Neil Record's merry men just down the road.

amanfrommars post 31


Think thats one for prince of darkness.

I couldnt possibly comment.

sarcasm. . .need to type a bit slower

YES THE ONE FROM KINGSTON rahere.


Im in Poland at the moment.

Is the prayer facility St Helens Bishopsgate?

As the imbalance in overseas funded loans to domestic savings has been reported as rising from zero to 625 / 650 Bil GBPs since 2000 there are other black holes to find in the next 12 months unless wholesale (was a word ever more appropriate) refunding is found. I wouldnt be rushing if I was at the Bank of China. Plenty of time for Pimp my Debt. In the meantime Captain Pugwash steers the Black Pig ever onward on the Sea of Debt. Now where was that South Sea Bubble.

For avoidance of doubt it is a loan facility not a loan.

Basically HBOS has a large overdraft facility at LTSB. Although with a 3 billion write off it probably has bitten into it.

#6, here is the release:

https://www.federalreserve.gov/newsevents/press/other/20081110a.htm

or google:

"government's financial support to the American International Group (AIG)"

36 alexandercurzon, 32 rahere

The prayer bit is quite fitting as the loan interest bit all started with the Knights Templar. Dont thing prayer is going to save this mess. I talked to the faeries at the top of the garden and they just shrugged their shoulders and laffed. Buried gold tis best. LOL. How is Poland.

Am I the only one who thinks Santander has been given some very valuable banking assets on the cheap ?

But saying that, Santander has the Spanish property crash to contend with, so its not escaping Scot free............

If the Bank of China buys HBOS, that will mean massive flows of profits overseas in years to come.........

Letting the British Banks be taken over on the cheap is a scandal.

Especially when the Bank of England could have acted properly as lender of last resort, instead of helping to humiliate and destroy the UK banking industry.....

41 supercalmdown

Scot free - I wish

#6, AIG's losses and capital needs are a moving target. No-one can predict how much and whose debt will require CDS payouts, so no-one can predict their losses. On the strength of their record so far, they will keep repledging the same old collateral for greater and greater sums of US taxpayer money until the losses stop. Then at last we will see a final figure, probably in the multiple hundreds of billions of dollars.

Perhaps this is not as tangential as you might think, the urgency behind a carefully crafted LTSB takeover could be in part out of a wish to avoid another large credit event.

This comment was removed because the moderators found it broke the house rules. Explain.

42 supercalmdown

humiliate the UK banks..

You must be kidding, they did it to themselves as instructed by their shareholders, egged on by Browns delirium. Credit where credit is due, debt where debt is due. B and B didnt even want to be a bank, they were voted that way by their shareholders. Any muffin could see it coming.

The great waaall of Chinaaa could then be connected to Haaadrians waaall with London brick taken from repossessed houses, to keep the sAAA'Sinaxe out


Britain and USA both inheriting the military extension of the roman empire, now have leaders Brown and Obama who are unconected to its origin by blood lineage ,to rejig the international "status quo" more favourably to the Orientals, leaving Burlesqueonly to provide the bread and circusses as, the tanned peril crosses the rubi con ,marches up the AAApean way and finishes the Italian[Nero] Job with Chinese fire craaackers

19#
I thought this was the favourite pastime of the Japanese not the Chunese!

post 42 supercalmdown

I am sorry but the top end of the banking industry need to partake in humble pie.

#24 "the merger into Lloyds is no more than a back-door way of putting HBOS into liquidation?"

I think you've got it there, but with less chaos and less cost to the UK taxpayer. Also, as a sop, Lloyds keeps its registered office in Glasgow and keeps BOS as a trading name printing banknotes. Lloyds shareholders accept lean times short term with a prospect of better days eventually, and HBOS shareholders are not totally wiped out.

Either no compulsory redundancies, or generous terms should be part of the package too. As a shareholder, I would happily wait a bit longer for a cash dividend if it meant less social disruption. However, I would not wait any longer just to save some politician's face.

RE 48 and 19

Yes the Japanese act with honour.

45 PetersKitchen

They do deep fried battered pizza. You know, the whole thing dipped in batter and deep fried. Inventive or what. GP did a stint up there and they were pushing the 5 a day veg n fruit thing and this old boy said Oh yes I have tomato ketchup, squeeze of lemon on my chips n peas and a drink of lemonade so I get my 5 a day.

sashaclarkson YOU ARE BACK!!!!!!!!!

42 supercalmdown

re my post 46, apologies re muffin reference, bad form. Just gets under my skin. Had to spend too much time cautioning against 250+k mortgages been thrown at kids. Ditched all bank shares before 2003, dont agree bank explotiation in play recently.

I have the highest respect for you Robert, but in a previous blog entry you said something like, HBOS had been hugely profitable or a formidable profit making machine.

Almost everyone - you included - has been suckered into thinking these business were profitable and can be again. The truth is they were only profitable in the good years, they are now bust and they are unlikely ever to be as profitable again - except when they are riding a bubble.

Why do you give so much respect to the 'awesome talents' that run these businesses? We simply should not! They were fools running foolish businesses with foolish inflated egos.

The sun that shone on these characters robbed true innovators and businessmen working hard and creatively of their share of appreciation - and set a hugely unrealistic standard for profit and return. Additionally it is the prudent and hardworking that are bailing these fools out.

hello 42 it seems you forget the ammount of british banks already owned by overseas companies.
it should never have been allowed and should be stopped at all costs.

but we have a weak minded government that only seems interested on selling the whole country up the river.

#51 "sashaclarkson YOU ARE BACK!!!!!!!!!"

Hi alex - I do try to have a life outside the blogoshpere :-)

If you are still in Poland and get a good deal, please don't say "Super Dooper" "Dupa" means "faeces" in Polish, but not quite so polite!

# 50: "As a shareholder, I would happily wait a bit longer for a cash dividend if it meant less social disruption"

Somewhat naive. The function of a bank is to make a profit, not to act as a tool of social policy. The hypothetical merged bank will almost assuredly not make profits for a long time. If HBOS is in the dire condition which Peston would have us believe (it is not), then the broken black horse may face an accelerated departure from Intensive Care into the mortuary. The cost to the UK tax payer is likely then to very, very substantial.

The cheapest cost to the tax payer is to part nationalise both banks separately until they can be nursed back to health. The alternative is that they get snapped up by foreigners with a huge loss of potential tax revenue to the Treasury.

Furthermore if the Bank of China makes a bid, Gordon and the Government are over a barrel. If Gordon tries to block it, China may not buy up all the Treasury Bonds that Gordon needs to sell to finance his tax cuts and spending plans. Then he would be calling in the IMF faster than he thinks. The UK's financial circumstances are precarious.

Whatever is reccommended by Brown and Darling must be a bad deal for HBOS and the taxpayer. Their running of the economy is hardly liable to instill confidence when it comes to deciding the future of a financial institution. Why can't there be a full independent enquiry into the best course of action for the bank, rather than a decision by two economic incompetents. The Labour party has long been in favour of public enquiries for all sorts of nonsense, why not for something of national importance.

The interest from Bank of China (if there is interest) and the comments from Burt and Mathewson are needed to throw some doubt and questions on the takeover by Lloyds TSB which is getting bulldozed through by the Government. If the same Government had acted quicker in making money available to the banking sector during the ealry part of the credit crunch, HBOS may not be in the position that it is now. For the Government to favour Lloyds TSB above all others is scandalous. Stevenson and Hornby should have been replaced a long time ago and Burt and Mathewson are a better bet, possibly backed by money from China. Anything is better than a Lloyds TSB takeover which is brokered by a morally bankrupt Government.

Correct me if I am wrong but don't RBS hold a stake in Bank of China & Sir Fred sits on that board ?

#17 wee-scamp

Yes, RBS holds a 5% stake in the Bank of China. No doubt if the deal did go through our somnolent regulators might spot this in about 5 to 10 years time.....

Brodick1 "50: "As a shareholder, I would happily wait a bit longer for a cash dividend if it meant less social disruption"

Somewhat naive."

Not entirely, I would happily accept a scrip dividend, and take a chance on future prosperity. Lloyds is proposing paying these sooner than cash ones anyway.

As for the rest, please don't continue to make assertions based upon wishful thinking If Sir Peter Burt claims "HBOS has been run into the ground" then how does that not translate into a "dire condition"? Of course, his various assertions have been mutually contradictory anyway.

Looking at the bigger picture, the truth is that all the demutualised buliding societies have, one way or another, been "expletive deleted"ed. But Sir Peter merged his beloved BOS with one and they have sunk together. Why should anyone believe him about anything? He, like so many others, including HMG, is in denial about his role in creating this crisis. I would forgive all of them if they just had the cojones to admit "we got it wrong".

Let's hope Bank of China are successful, it will serve the "All lads together" management right. For Lloyds TSB to even consider employing someone like Andy Hornby who brought one organisation to it's knees is incredible. It shows the mentality that is prevelent within these organisations.
God help us or can the Chinese break this pathetic mould

Anything this government is in favour of is a no no. HBOS shareholders should be very concerned.

I think this is a trial balloon. A Chinese bank buying a troubled British household name, not this time, but it could be on the cards some other time. I think public sentiment is being gauged here. Nice try, give the man a cigar.

We now see that HBOS has the same and more problems than Northern Rock and B & B.

In addition to a faulty business model, it has also wasted billions by buying US mortgage backed securities i.e. massive US sub prime exposure, whereas NR for example had none.

However NR and BB have been destroyed, with the banks run down and with shareholders completely wiped out, whereas HBOS survives with the majority of its business and scottish jobs saved. Similarly RBS survives.

Most Northerners support labour and have it inbred in them over generations - I know coming from the North, and no matter how much labour keeps them down, they believe there is no alternative but to vote labour.

Most have not yet worked out that it is in Labour's interests, when in government, to keep them wanting and not to channel too much wealth to say the North East, otherwise they might get above themselves and vote Tory!

Perhaps this is why our Scottish Labour government felt comfortable destroying NR and BB, but fear the SNP backlash in Scotland should RBS or HBOS be run down, as clearly the Scots have finally woken up to an alternative, which is proving highly effective, as opposed to Northerners who do not see an alternative.

Should the balance of power in most Northern constituencies be more finely balanced, the North would benefit as both parties would strive to keep their votes, and they would not be taken for granted by labour.

Labour in saving RBS/HBOS have already reaped benefits in Glenrothes - if either were now being run down the election result would have been somewhat different.

Burt and Matthewson took their respective Banks to the brink of Administration/Nationalisation and their self belief beggars belief. Varley at Barclays has an Olympic Gold for Arrogance but these two are very close behind

Anyone good at maths ,hahaha

Nationwide have said they expect house prices to fall into 2010, which would come into line with what i have been saying that house prices will fall by 50%.

So average house price at there peak was 188,000.

188,000 - 94,000= 94,000

S0 lets say there are 12 million mortgages

12 million x 94,000 is how much less are housing stock will be worth.

sorry my calculater is no good the numbers are to big,hahaha

i think thats about 9 trillion 400 billlion but maybe im wrong.


lets hope alot of that dont turn into debt

A mortgage, as a rule, is a 25year+ loan, not a 2 year renewable overdraft, let alone a 3 month loan facility. A lot can happen in 25 years. This is the 4th major house price correction since '73 for instance. Furthermore, as assets go, houses are not that easy to realise. Small matter of evicting occupants, whom you hope won't trash the place and then finding
buyers with access to large amounts of capital. Finally there is that nasty fact of life - correlated risk. Chances are that the economic circumstances that have led one house to be repossessed are causing loads of them to be. So you end up trying to realise your asset in a buyers market. Now none of the above is news and it is nothing that wasn't seen in the past 3 crashes. It's not a show stopper. Factor the risk into your lending criteria - LTV, income multiples,
interest charged - and your bank will survive downturns in the housing market.

In view of this, does a bank that went about funding itself and lending like HBOS did deserve to survive, and what were they doing, if I read other posts correctly, holding U.S. mortgage backed assets ? I thought the whole idea was to get risk off your books to mitigate the consequences of a future downturn, not pile it on,

Yours Aye,

Graucho.

P.S. To my #70

The Chinese have been know to put officials accused of corruption and or incompetence in front of firing squads. Maybe a Sino take over of HBOS has its good points,

Yours Aye,

Graucho

no.55 drew_lg

Thats a very broad brush statement to make about fools.

Surely its the fools that took their business to the banks to allow them to prosper?

#69, if you like, half of home equity could be destroyed, but where it was not borrowed against, it does not matter. If your home doubled, then halved in value while you slept, who cares? On the other hand, buyers who bought overvalued properties and the banks who loaned them the money face difficulties.

Total outstanding mortgage debt in Britain is around the £1.1 trillion mark actually and there is £100s of millions more consumer debt on top. Still much higher than our GDP though. If borrowers repay the loans, the banks are happy. If they do not, the banks lose because the assets against which the loans were written could be worth much less than the outstanding amount, less than in normal times because of the bubble.

Maybe Robert Peston could write a blog entry on how banks are dealing with this situation in construction loans. He just dropped a hint up there. The BBC has published many stories about builders having massive layoffs, look around and you will see half-finished construction sites abandoned everywhere, it is hard to escape the conclusion the value of those loans is demonstrably zero. We have heard about subprime writedowns, what about this? Someone must be losing millions of pounds each time.

Why shouldn't bank of China buy HBOS which has been selling sweet and sour for years[sweet tarckers for the customers and sour grapes withering on the vine for the shareholeders ]

In fact HBOS should be split into a banking and a Chinese restaurant backroom section , where the boys once got paid to help themselves to the biggest smorgaasborg in town .

And now, that the great Gordon and co. has increased its credit rating for having kept to thee golden rule, its own [objective]credit rating entitles it to issue to itself the latest Golden narcissus Buzt lightyear credit card ,with balance transfers and purchases to infinity and beyond at 0%interest

Gordon has the H BOS X factor

Tellaphony lines are now open

For consciencous objectors Phone calls will cost £25 per minute with the aim to answer all obcene calls , in mandyrin whilst taking legal councel within three minutes or eternity whichever is the longer

In the late 80's/early 90's, the Great and Good, ThePeopleWhoKnowBestAboutSuchThings of both parties in the US, dismissed the misgivings of those of us who became dismayed at the wholesale removal of our manufacturing base(and the wealth it creates) to China.

We were told we were being silly, xenophobic, short-sighted, unprogressive, etc. And by the way, all those WalMart shoppers need those cheap shoes and toys for their kids. How could you deny shoes and toys to children?

And now, China is in position to buy up great parts of the West at firesale prices.

Any suggestions on how little people like us can gain the ear of the Great and Good?

OldSouth, are you referring to this kind
of thinking?

Sasha


Still out here in Poland,had things/attitudes towards manufacturing our 7 factories in Poland,Czech Republic & China would have been in the UK.

To set this lot up in the UK now would be more or less impossible as there is virtually no infrastructure to support such a business.

So in a nutshell thats virtually 5780 jobs that are not in the UK.

So all the cheap imported product have a very personal cost in respect of unemployment in th UK.

Despite all the blag unemployment back home is now worse than it was in 1997 it just depends how the figures are looked at.


So vast parts of UK PLC are box handler operators at minimum wage many of whom cannot afford to live.


If Clunking Fister likes a global economy i suggest he and his gang try a few months on minimum wage.

AS HE SAYS 'No time for old thinking . . .'

I would have some respect for our government if every member of the cabinet spent two months living in a council house/flat on a sink estate in their respective constituency.

With no car minumum wage family allowance etc as appropriate & their utilities on prepayment meters,mobiles on payg etc.

So guys you know what to do GO OUT AND EARN SOME RESPECT.

See how some of country gets by from crisis to crisis with very little money.

History shows that Robert Peston is well connected and informed. So, I believe that BoC is that mistrerious institution that is looking at buying HBOS.

It makes sense for them as wall for many other institution who can afford it at present. HBOS is a solid, respectable bank with current acute temorary liquidity problems. Buying HBOS now for a small money would be very good investments for BoC. Just in one year of 2007 the HBOS profit after tax was GBP4.1 billion. Current capitalisation of the bank (total number of shares x share price) is just GBP5.2 bln - due to incredible share value drop. When the current turmoil settles, house prices start to rise again BoC will have VERY good return on their investments.

Actually, I was thinking Santander bank would want to bid as well. Competition concerns currently set aside by British Goverment. Santander, if they can, have a good opportunity to add HBOS to their portfolio of Abbey, AL, B&B. There would be a lot of rationalisation, cost cutting opportunities for them in combining four banks into one. Their cost savings could be even bigger than Lloyds.

If BoC does make a bid for HBOS, British Goverment and public should welcome it.
1. It would not damage competition;
2. It woudl keep many thousands of people employed, feeding their families

One more observation: GBP has lost a lot of value recently. It should help foreign companies bidding for British companies.

There is only one game in town - Lloyds TSB.
BOC bid becoming reality is fantasy land and the Burt / Mathewson "plans" are more bout self interest and protecting value of their pension pot than anything else - bit 'rich' fo them to complain about Lloyds TSB given their history in the market when with BOS and RBS - they both had a hand in the strategy that has brought us to this point!

Weren't the FSA and the Treasury the same "experts" who believed Northern Rock DID have a viable long term business model?

I don't understand...

Why would I expect them to understand what was best for HBOS, they're clearly idiots?!

Templars, Glanafon? Not on your nelly, the Inquisition nicked what they found and hid it in the North - I've spent the last four years on that trail using original archive documentation, it's solid and vouched for by his Holiness to this day, safe and secure under a friend's house. Those of a historical bent should research van Helmont's origins to learn what I'm on about. Rahere's tomb is in St Bart's Smithfield, just marginally closer than St Paul's, but both bow to St Helen's, whose guiding Spirit sent me on this eschatologic 11:19 trail successfully.
Returning to the main thread, BoC is about as stable as a pile of freshly-fried seaweed. Their currency exposure is based on a non-Bretton-Woods model, which is why the subject is up for review now - that Big Lie is causing Planet Zog to inflate in other areas quite spectacularly, which is why HMG has abandonned its Golden Rules, as that particular game's not worth a fig if your only measure is an unmarked length of knicker-elastic and nobody else, ECB included, is playing.
As Spooks so rightly pointed out last night, you can play whatever games you like, but at the end of the day it all comes down to who has the power on the ground. Protectionist policies will pop a good few more bubbles which are desperately in need of deflating, and perhaps clear enough space to unlock the financial log-jam of credit misperceptions, supply-and-demand shunts and naked power plays after the loot. It might also put an end to the naked greed of the retail banks, in the face of overwhelming pressure from the population: once again I repeat, it's time for the State to provide a general minimal retail banking service as a Public Utility, the existing setup has proved beyond anyone's reasonable demands for coherent proof that they are not part of our society, whatever else they are, and that they are neither fit for purpose nor functioning in the public interest. As such, that then knocks a big bit of the interest for BoC out of the window.

# 12 Loggy1948 - "But it would mean a foreign bank owning the right to print (Scottish) bank notes. This surely cannot be allowed to happen so I would expect Acts both at Westminster and Holyrood to ensure that the currency is protected."

have you not have noticed that the Clydesdale Bank (which prints notes) has been owned by an Australian Bank (NAB) for quite some time? or are the Chinese a special case in your eyes?

#80 "HBOS is a solid, respectable bank with current acute temorary liquidity problems"

More wishful thinking I'm afraid. It's been spelled out elsewhere again and again, but I'll try one last time:

1) HBOS lent a huge amount of money it didn't have but borrowed on the wholesale markets.

2) This helped stoke up the now collapsing property bubble. This collapsing bubble and loan defaults now means that HBOS faces vast losses. It also has to repay/refinance (not quite the same thing) its own loans.

3) HBOS business is not really diversified, its apparent profitability was dependent upon the smoke and mirrors of the property boom. Therefore its liquidity crisis is not really temporary. No one, especially HMG, would be prepared to lend money to keep the business going in its present form. Job losses are inevitable. HMG brought LLoyds in to administer the knife - someone had to do it.

If of course, the dip in property prices is only temporary, and we live in a future of ever increasing values, then the above need not apply. But I don't think so.

In all the media coverage and blogs that I have seen on BBC, Times and Independent (I do not claim to have read them all) on the HBOS situation in particular with regard to jobs, there has been no mention of the Republic of Ireland.

A subsidiary of the BoS called St Andrews Group deals mainly with credit card insurance and gap motor insurance to name a few of its activities. Part of the business is concentrated in Esher and Leeds, the remainder in Shannon (ROI). I am surprised (or maybe not considering the somnolent nature of the UK regulatory bodies) that this has not been raised as an European issue drawing in both the European Central bank as well as the Irish authorities.

It is a curious situation: the RBS subsidiary Ulster bank's customaers are entitled to the 100% guarantee on savers deposits by the ROI government (even for UK customers). I know St Andrews group is not a bank but an insurance company, but I wonder if this should not have been highlighted earlier and brought into the mix.[

Does this not mean that the European and Irish authorities should have been brought into the equation before now?

Going back to the original (no Chinese bank) alternative to LTSB, I'm struck by the irony that, in the interests of preserving the independence of Scottish banking (and the dream of wider independence that goes with it), the rest of Britain is being asked to stump up several billion quid.

It's a strange definition of independent.

Alexander: Has the time come to revive, on a temporary basis, the old parliamentary procedure of the Bill of Attainder?

I think it's appropriate because top "businessmen" and politicians have, while apparently breaking no specific law, enriched themselves in the process of ruining the country. And they are still in possession of the spoils. Their negligence is tantamount to treason. Poor old Admiral Byng was shot on more flimsy grounds.

I would not want to see executions, but clearly, "pour encourager les aûtres", confiscation of the assets of these people would be appropriate. As you say, they should be forced to live on benefits in a council estate and redeem themselves by good works. After all, it is no worse a fate than their mistakes have condemned others to.

So no word of compensation to Bradford and Bingley and Northern Rock Shareholders?

Pension Funds owned over half of those firms, insurance companies and small shareholders the rest.

Meanwhile Santander decides to claim to record profits whilst selling billions of euros of shares to its shareholders.......

And pays for expensive adverts saying what safe hands they are, sounds a bit desperate to me, who can believe them after all they other banking giants have collapsed ?

With the brakes on public sector pay, well below the average private sector settlement, and both well below real inflation (12% or more), no consumer recovery can happen.....

People just have less and less to spend.

I used to be an optimist and then I looked at the detail.

86:

Would Santander be one of the wholesale funders with holding their funds in order to create this crisis?

And get its competitors cheap ?

No wait course not !

They've been forced to go cap in hand to their Shareholders too !

Next the ECB.

Who knows where then !

89

pour encourager les autres,


Yes plenty of crooks seem to be very encouraged just at the moment.

Bit hard to see who the crooks are.

Of course mortgage, originally meant death grip, Le Mort gage' or something, finance raised on a Nobles estate in order that he could meet his feudal obligations in time of war, generally hoping to repay such a loan with proceeds of looting on the continent.

Now of course, Mortgages are part of the process of looting the British middleclass !

My Norman French is rusty, no practice you see !

Not sure what the Medieval Spanish would be for an English mortgage, probably Los Inglisi Chump.

alexandercurzon,

Good comments. Also saw your LinkedIn profile - but I think it should be 'principal'!

VKlondon

Been corrected whoops

#20 "30 years ago the popular joke was that the Shanghai motor co. would one day buy Rover .The added punchline now is that it was ever thought of as a joke."

FYI, it is still a joke !! The Shanghainese took a long look at Rover and decided to walk away !! They made a joint venture agreement with Manganese Bronze (makers of those excellent London Black Cabs) instead.

It was the Nanjingese who bought Rover while the Shanghainese sniggered up their sleeves !!

The Chinese are *not* a uniform amorphous mass !! They, too, have their tribal warfare much like the current English vs Scottish tiffs !!

#55 "The sun that shone on these characters robbed true innovators and businessmen working hard and creatively of their share of appreciation - and set a hugely unrealistic standard for profit and return. Additionally it is the prudent and hardworking that are bailing these fools out."

Hear, hear !! It's well overdue time that the *real* economy get some *real* recognition !! For too long the skilled and the talented have been cast into the wilderness while everyone worshipped at the altar of Great God $ !!

Now, when these fools are ranting about re-starting manufacturing in Britain, where will they find the skills and talents needed ??

#92 Most medieval Spaniards of any substance spoke Arabic !! It was not until after the Reconquista that Spanish was widely spoken in all of Spain !!

This comment was removed because the moderators found it broke the house rules. Explain.

#20, the Chinese currency is not the Yen, but the Yuan.

The reason Darling and Brown have been so keen all along to push the Lloyd's TSB takeover of HBOS is, quite simply, because they want to diminish Scotland's financial centre and strengthen cross-border links ahead of the 2010 referendum.

#99

I agree.. There is something very suspicious about Brown's attitude..

What we need now in Scotland is a mutual bank ... or... something like the Kiwi Bank.