Irish Banks down 15% more on average so far today

copacetic

Apologies if this should be somewhere else, but couldn't see a thread on this.

Irish banks have been hit really hard today, now down on average 15% just on todays trading. Even though they started the day low.

Shares in Irish Life and Permanent plunged 19% to €4.65 while AIB shares plummeted over 16% to €5. Anglo Irish Bank shares dropped 11.5% to €3.78 while Bank of Ireland slumped 14% to €3.52.

With no short selling is this desperation to get out of bank stocks in general on todays news or are we in for a week of similar falls?

http://www.rte.ie/business/2008/0929/marketupdate.html


Could the plan reported it todays independent to save any Irish bank to collapse be required this week?

http://www.independent.ie/business/irish/government-may-have-to-rescue-vulnerable-banks-1484956.html

BuffyBot

Moved to Investments & Markets

copacetic

Didn't actually think it could get any worse, but I was very wrong:

Irish Life & Permanent, the country's largest mortgage lender tumbled more than 34 per cent, the steepest drop since at least 1994 to €3.80 by 3.34pm in Dublin while Anglo Irish Bank was 46%!!

Allied Irish Banks was down more than almost almost 20 per cent at €4.75 while Bank of Ireland was almost 16 per cent lower at €3.45.

Diarmuid

copacetic wrote: »

Didn't actually think it could get any worse, but I was very wrong:

And it's about to get even worse again!

copacetic

Diarmuid wrote: »

And it's about to get even worse again!

yep, very surprised to see it voted down, all reports where that republicans would push it through. Most of media was reporting it was going through even as the vote was going against it.

Idu

A room full of oppossing politicians argueing about how to fix the financials markets. How could it ever fail??

kleefarr

copacetic wrote: »

yep, very surprised to see it voted down, all reports where that republicans would push it through. Most of media was reporting it was going through even as the vote was going against it.

Am I the only one that thinks these rescue deals are a bloody cheek? I mean, the banks take money off us for this that and the other and then the Government takes money off us to bail out the banks. WTF?

Apart from that, I get the feeling that it's only prolonging the problem. Paper money not worth the paper it's written on.

Anyone seen Paul Grignons "Money as debt"? Looks scary to me.

"Paul Grignon's 47-minute animated presentation of "Money as Debt" tells in very simple and effective graphic terms what money is and how it is being created. It is an entertaining way to get the message out. The Cowichan Citizens Coalition and its "Duncan Initiative" received high praise from those who previewed it. I recommend it as a painless but hard-hitting educational tool and encourage the widest distribution and use by all groups concerned with the present unsustainable monetary system in Canada and the United States."

Max001

Anyone contemplating a punt on Irish bank stocks tomorrow morning ? :eek:

irish_bob

Max001 wrote: »

Anyone contemplating a punt on Irish bank stocks tomorrow morning ? :eek:

me thinks you would get short odds on at least one bank going bust tomorrow

Idu

kleefarr wrote: »

Am I the only one that thinks these rescue deals are a bloody cheek? I mean, the banks take money off us for this that and the other and then the Government takes money off us to bail out the banks. WTF?

Apart from that, I get the feeling that it's only prolonging the problem. Paper money not worth the paper it's written on.

Anyone seen Paul Grignons "Money as debt"? Looks scary to me.

The banks are an essential part of the world's economy. Letting them all go to the sword would be suicidal for any 1st world country.

It sucks that the big bosses on Wall St wont suffer at all over this but bail out or no bail the people who would have suffered most regardless is the average Joe in the street. Recession beats depression every time

Diarmuid

kleefarr wrote: »

Am I the only one that thinks these rescue deals are a bloody cheek? I mean, the banks take money off us for this that and the other and then the Government takes money off us to bail out the banks. WTF?

Sure it sucks, but to be honest leaving the banks fail to teach the "fat cats" a lesson would be cutting off your nose to spite your face. Depending on who you believe the Great Depression went from a recession to a depression because the Fed didn't act fast enough in '29

Diarmuid

copacetic wrote: »

yep, very surprised to see it voted down, all reports where that republicans would push it through. Most of media was reporting it was going through even as the vote was going against it.

Sounds like it was the republicans who torpedoed it, in fact.
"About two-thirds of Republican lawmakers refused to back the rescue package, as well as 95 Democrats."

ranger4

could we see anglo being taken over by government.

kleefarr

janets_on_clubs wrote: »

The banks are an essential part of the world's economy. Letting them all go to the sword would be suicidal for any 1st world country.

Bail them out now only to suffer a bigger problem later? I don't know.

janets_on_clubs wrote:

It sucks that the big bosses on Wall St wont suffer at all over this but bail out or no bail the people who would have suffered most regardless is the average Joe in the street.

Agree with that naturally. But someone is going to get bitten somewhere along the line it seems.

Everything's Hunky Dory until it starts going wrong.

Seems like the greed of some are ruining the lives of many.

copacetic

Anglo Irish down 46% today, tomorrow if anything will be worse with rescue plan not going ahead in US.

They have pulled out of their plan to take over Irish Nationwide.

Idu

kleefarr wrote: »

Bail them out now only to suffer a bigger problem later? I don't know.



Agree with that naturally. But someone is going to get bitten somewhere along the line it seems.

Everything's Hunky Dory until it starts going wrong.

Seems like the greed of some are ruining the lives of many.

As was pointed out already many agree that it was the in-action in '29 that caused the Depression. It should also be noted that Bernanke is a great student of the economics of that depression and arguably the measures he has taken have staved off that outcome for now. The financial sector is in dire straits right now but it is essential that these banks survive so that that turmoil doesnt make its way from Wall st to the high street

Time Magazine

Sorry about this, but I've deleted a load of posts that contained dangerous speculation. It's unlikely any Irish bank will crumble and I'd appreciate if posters respected this in their postings. Let's not get sued or say anything that might precipitate a bank run at this difficult time.

Any outlandish claims will see posters banned. Off to Feedback with ye if you're unhappy. Thanks.

leiwand

in sunday business post it was suggested that the irish government should guarantee deposits in irish banks.I put this to a banking friend of mine who said irish government wouldn't have the financial resources to support this initiative.he also says if an irish bank is bailed out /nationalised then shares are worth nothing! is this true?

b.

Hanley

bruno72 wrote: »

in sunday business post it was suggested that the irish government should guarantee deposits in irish banks.I put this to a banking friend of mine who said irish government wouldn't have the financial resources to support this initiative.he also says if an irish bank is bailed out /nationalised then shares are worth nothing! is this true?

b.

The already do guarantee deposits. 90% of your total in any one bank, up to €100,000. If you've more than 111k you can split it between several banks to protect as much as possible. Or you could throw it in Northern Rock, which is fully guaranteed by the Bank of England.

The Irish government only need the resources to support the deposit backing if the banks ACTUALLY fail. Like they've guaranteed deposits to an extent now, but unless some bank actually does fail, they won't have to pay out anything. It's all about trying to preserve confidence.

AFAIK, when a bank is nationalised it's de-listed and in essence becomes similar to a private ltd company. There's shareholders, but the shares aren't traded. I THINK, tho I may be wrong, the value of the share becomes the price at which it was de-listed. So the shareholders aren't left with "nothing" but they're not left with very much either. I'm sure one of the more knowledgable posters will confirm or fix that for me tho.

Scruff

So did the ISE officially have a Crash today? double digit declines, largest fall in 20 years? would seem so to me.

daveirl

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copacetic

It is very unlikely that an Irish bank would be allowed to fall, they would be taken over or bailed out. Even with the numerous failures in Europe no bank customer has lost a penny that I am aware off and it would be the same here.

daveirl

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copacetic

daveirl wrote: »

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the implication in some of the deleted posts was that.

daveirl

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Time Magazine

Right just to clarify: there's a difference between saying "I think it's quite possible a bank will fall" and "Bye bye AIB/BOI/Anglo". One is reasonable and permissible, the other is scaremongering and puts Boards in a tricky spot, especially given the recent events.

And yes, I think it's prudent to play it on the safe side, so that'll probably mean over-modding. Which is a nuisance and really not something I like doing, so please watch what ye say.

Ta.

El_MUERkO

i bank with BOI in ireland, so far i'm not going to panic but there comes a point when i start to look at my mattress and think how much i could hide under it and that may come tomorrow if another large chunk get taken off their price

Diarmuid

Your money is safe. Leave it in the bank!

I think this should put to rest the panic over losing you savings.

Rocket!

Hanley wrote: »

Or you could throw it in Northern Rock, which is fully guaranteed by the Bank of England.

Not saying that you were recommending it or anything, im sure you were actually hypothesizing like but it just made me recall once or twice in the past few weeks advice from some irish media sources where I, and Im sure many of the general public, perceived the so called "advice" as a recommendation that if you were really worried just to throw all your deposits into Northern Rock.
This is ridiculous, in a country with a puplic as cynical and speculative as ours, with people whom are, in the majority, very ignorant as to how the financial system works recommendations like that from any media source is only gonna stir trouble. People should definitely be recommended to split their deposits up like you mentioned and only then put any remainder into foreign banks. It would be disastrous if a huge number of deposits were taken out of Irish banks at the moment and that liquidity given to a State owned english bank.

Diarmuid wrote: »

to be honest leaving the banks to fail to teach the "fat cats" a lesson would be cutting off your nose to spite your face.

Great comparison. As unfair to the taxpayer as it is, its inevitable that the big banks will be saved if anything was to collapse. You just cant let them go to the wolves, theyre an integral part of any economy and we need them. A collapse with no intervention would be catastrophic.
Maybe like DaveIrl said, it may not be possible for them all to be saved if a complete crash was to occur, I dont know, I fully admit to having no idea as to how the government goes about borrowing money. I was of the belief it was through some sort of system that ran through the ECB. Anyone able to shed any light on this?

DublinWriter

Brian Lennihan guarantees a €4bn rescue package should Irish banks hit the skids.

So, if the worst comes to the worst, he'll have to borrow €4bn from a bank...is it just me or does anyone see the inherent flaw in this plan?

Idu

DublinWriter wrote: »

Brian Lennihan guarantees a €4bn rescue package should Irish banks hit the skids.

So, if the worst comes to the worst, he'll have to borrow €4bn from a bank...is it just me or does anyone see the inherent flaw in this plan?

Not at all. Think the ECB or the World Bank are fairly safe

parsi

Either way we'll pay for it :

- higher bank charges to pay for the taxppayers guarantee,
- highers taxes when the guarantee is called on.

Maybe the commercial terms should also include organisational change - sack the bods who were reckless etc.

Dinarius

A few points....

One of the six banks has behaved prudently over the last few years. Another is a testosterone driven basket case and it is about time that it called time on the shed load of bad loans on its books. No need to name names, it is screamingly obvious which banks I am referring to - particularly in the second case.

There is talk today that the UK banking system is up in arms since now there is a temptation for their citizens to move their banking here, because even the dogs of Dublin 2 are suddenly triple A rated. It could only happen in Ireland.

Also, surely there is a huge temptation for those dogs to repackage their bad debt and sell it off 'sub-prime' style since it has the backing of the Irish government. i.e. Us! Will the Central Bank ensure this doesn't happen? Does the legislation guard against this? I don't think it does.

No one in the Central Bank has come forward to be interviewed. Incredible! Look at Bernanke and Mervyn King. Do you know what they look like? I'll bet you do. Would you recognize our governor in a photograph? I doubt it.

The Central Bank has fallen asleep at the wheel. Will heads roll? Are you serious?! This is Ireland. There is NO accountability. Joe and Jane Citizen ALWAYS pick up the tab.

It is a fact that there was a run on the banks on Monday because they are seen as riddled with bad debt. This debt is not being addressed. It has not been removed from their books. Therefore, they cannot borrow against it, and without the ability to borrow they can't do business. It's as simple as that. Presumably, the government and the Central Bank are hoping that the dogs will trade their way out of this in the next few years. We shall see.

Finally, interest rates tend to rise in tranches of 25 and 50 basis points (0.25% and 0.5%). My parents bought their first house when rates were around 15%. If the rate rose by 0.5%, they didn't bat an eyelid. Similarly, if the rate fell by 0.5%, they didn't go out and celebrate.

In these testosterone driven times, it was conveniently forgotten that if people bought their (highly priced because rates were low) house when Eurozone base rates were @ 2% and they rose by 0.5%, they were suddenly faced with a 25%(!!) leap in their repayments. (I know that no one bought at 2%, but I am exaggerating to make the point.) Did the market take this into consideration? Of course not!

My tuppence worth.............

D.

TheBazman

Dinarius wrote: »

Joe and Jane Citizen ALWAYS pick up the tab.


D.

Joe Public and the banking sector are not mutually exclusive. What about the 50 - 100k people employed directly by the 6 institutions. What about the thousands of share holders that have benefitted from the rally in the shares. What about anyone that has a pension which is heavily invested in domestic bank shares. I'm sure all of these people are happy (or at least should be) with this plan.

Also of course the banks have bad loans/debts. Any bank will have in any country that is in a recession. This doesnt mean the bank will fail - what it means is that it has to take writedowns and profits suffer. The bigger issue here is the credit crisis that is going on internationally and that has wholesale funding markets frozen. This is the main reason why the package was needed. Its not the fact that banks in Ireland gave out a small proportion of 100% mortgages or lent into the property bubble. If they had not done this they would have been seen as lagging the rest of the market and would have suffered at the time

Glacier

Could shares in banks rise at all if that did happen?

Fiachra2

[ Its not the fact that banks in Ireland gave out a small proportion of 100% mortgages or lent into the property bubble. If they had not done this they would have been seen as lagging the rest of the market and would have suffered at the time[/QUOTE]

In todays irish times a professor of economics in UCD claims that of every €100 depositted in Irish banks by irish residents €60 was lent to property developers.

Is that not a rather frightening statistic?

TheBazman

Fiachra2 wrote: »

[ Its not the fact that banks in Ireland gave out a small proportion of 100% mortgages or lent into the property bubble. If they had not done this they would have been seen as lagging the rest of the market and would have suffered at the time

In todays irish times a professor of economics in UCD claims that of every €100 depositted in Irish banks by irish residents €60 was lent to property developers.

Is that not a rather frightening statistic?[/QUOTE]

I wonder was that Morgan Kelly? Anyway even if that was correct - that does not mean that 60% of funding was lent to property developers. It completely ignores the non-Irish deposits taken, the huge amounts of wholesale funding that was taken, and for what period does that refer. There are an awful lot of sticky customer deposits sitting in banks for years, long before the fairly recent property boom.

Fiachra2

Fair enough but there seems to be a number of -apparently-well informed commentators discussing what they claim to be a significant exposure on the part of the banks to loans for property/development land which was significantly overvalued.

Presumably a well informed person could calculate the extent of the property related loans outstanding. From that it would be possible to estimate the extent by which the value of the assets relating to these loans had fallen. From that the extent of teh banks exposure can be crudely estimated Clearly there is an unknown which is the liquidity of the borowers and the extent to which they can finance these loans without realising the value of the asset. However it seems to me that with adequate information- most of which should be available to the public- it would be possible to estimate whether the banks are in real trouble. So I dont think the article by the economist-and I think you got the name right-could be reasonably acccurate.

TheBazman

Fiachra2 wrote: »

Fair enough but there seems to be a number of -apparently-well informed commentators discussing what they claim to be a significant exposure on the part of the banks to loans for property/development land which was significantly overvalued.

Presumably a well informed person could calculate the extent of the property related loans outstanding. From that it would be possible to estimate the extent by which the value of the assets relating to these loans had fallen. From that the extent of teh banks exposure can be crudely estimated Clearly there is an unknown which is the liquidity of the borowers and the extent to which they can finance these loans without realising the value of the asset. However it seems to me that with adequate information- most of which should be available to the public- it would be possible to estimate whether the banks are in real trouble. So I dont think the article by the economist-and I think you got the name right-could be reasonably acccurate.

I suppose my point is that Joe Public reading a statistic like that could assume that banks are 60% exposed to developers, therefore if the developers are experiencing trouble their there is a 60% chance of a bank failing (I know I made a few leaps here but my general point holds)

Fiachra2

True the statistic is a bit sensationalist but watching Mansergh and the Regulator on prime time last night would leave me very concerned. They were incredibly evasive.

Dubh Geannain

So the bank shares are almost back to the level they were the day the government intervened. One more bad day and they'll probably beat those lows set just over a week ago.

Last time they were at those levels there were strong rumours of one if not two banks being in danger of failing.

So, any guesses now as to what might happen next?

PS: I know it's just speculation

ranger4

Dubh Geannain wrote: »

So the bank shares are almost back to the level they were the day the government intervened. One more bad day and they'll probably beat those lows set just over a week ago.

Last time they were at those levels there were strong rumours of one if not two banks being in danger of failing.

So, any guesses now as to what might happen next?

PS: I know it's just speculation

Possible slight rally tomorow, British are going to inject funds into bank stocks.

daveirl

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Idu

daveirl wrote: »

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wins the watch

Baird

daveirl wrote: »

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Market had already priced the gov taking huge equity stakes in the banks over the past week.
Most of the damage has already been priced in before the bail out was announced.
Case in point RBS down 40% tuesday.
Thing is if there is another large sell off in the US tonight and tomorrow night any gains the UK banks make will be slowly eroded by the continuing fall in the global markets.
If anyone wants to know is this a good time to buy bank shares the answer is yes if you consider Liverpool a good bet for the premiership.
Its honestly as cloudy as that.
Only HSBC seems safe in the UK and almost any bank in Europe could be nationalised overnight things are that uncertain.
Deposits are safe but i wouldnt like to be a shareholder as its a complete gamble given the current volatility.
Stay away from the stock markets unless you understand the risks!!!!!!

ranger4

daveirl wrote: »

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As i said a short rally.:D

daveirl

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Baird

daveirl wrote: »

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The majority of it was priced in, in fairness.
Scary times, was expecting some manner of a bounce after the UK intervention and the coordinated rate cut.
Would not like to be a shareholder in anything at the moment

DJDC

The majority of it was priced in, in fairness.
Scary times, was expecting some manner of a bounce after the UK intervention and the coordinated rate cut.
Would not like to be a shareholder in anything at the moment

Mate, daveirl is one of the few people on this site who actually know their stuff, Im guessing hes working in the industry. The forward treasury yields before the cut yesterday hadn't priced in a 0.5% cut and that was mirrored in the immediate bounce in equities after the annoucement.

Idu

There's no way a 50 basis point cut from the ECB was priced in anyway

Baird

DJDC wrote: »

Mate, daveirl is one of the few people on this site who actually know their stuff, Im guessing hes working in the industry. The forward treasury yields before the cut yesterday hadn't priced in a 0.5% cut and that was mirrored in the immediate bounce in equities after the annoucement.

Working in the industry myself DJDC, not just speculating on what i hear on
Matt Cooper or George Hook every evening.
The immediate bounce in equities which gave up nearly all their gains within 2 hours?
The market was actually disappointed by a coordinated 0.5% rate cut.
They were hoping for a 1%
The vix (volatility index) broke yet another all time high yesterday.
Instead of stabilising the global market as some commentators hoped, the UK
intervention actually made global investors more worried.
But lets look on the bright side, at least we are not living in Iceland