Banking Sector

Spectrum48k

Anyone up watching the Banking sector implode?

Any ideas on how to profit from the situation?

Will alot of investors run to Gold and Silver and cause a big price jump?

damnyanks

short the stocks you feel are imploding. Buy PWC and other Big4's

Hedge funds will buy assets on the cheap.

Perhaps BOFA / JPMorgan.

Dollar is going to get very cheap it would seem.

(And yes Gold is a safe haven)

Spectrum48k

How do you buy Big 4 stocks? I did not think they were publicly traded?

Surely all banks will suffer in the short term?

damnyanks

you know what you're right. I didnt check. I do know they'll be busy doing big liquidations / audits. My mistake.

How about lidl / pennys / aldi ? People need to eat and dress. Walmart perhaps

christeb

I was waiting on Ryanair's share price to get down to €2.50, that didn't happen so I bought a decent amount of Vestas - an excellent Danish Wind System company. One for the future I reckon, as their shares have not suffered as much recently as many others.

DJDC

If things keep getting worse,then there isnt really any way you are going profit from this crisis because unless you work in the public sector, job security is going down the drain.

The merger between BofA and ML could be disastarous for that ML BO operation up in sandyford.There is huge duplications between ML and BofA BO's and there is going be some major cuts. Unless that operation is some kind of a tax haven holding, I wouldnt be surprised to see them firing everyone up there.

ranger4

could make profit by shorting bank stocks on iseq, Over the near term i feel they have further to fall.

Idu

if you are going to short banking stocks over the short-medium term then wait for the FED to cut interest rates tomorrow. That should put some positive sentiment back into the banking sector, at least temporarily. Goldman and Morgan Stanley both release their earnings this week too

I'm getting long the Euro against the Dollar for the forseable future offset against a short crude position. Nice

rugbyman

janets on clubs

yourself and a few others are on here regularly and seem to know your stuff( I am forgetting about your suggestion to give my childrens money to them, it being safer than letting me invest it)

Both you and another poster mentioned shorting banks. How can one short sell Bank shares if one does not own them.i have read of CFD s and how shares can be "loaned" in order to short.
I have read also how one can bet on them falling.

Could you explain how one could short sell.

It seems to me that when Irish bank shares colllapsed some weeks ago the the levels to which they fell were their asset value prices, from memory B of I down to 4.3 approx and AIB down to 6.7 approx. What do you reckon.

Idu

Basically shorting stocks is like asking to borrow stocks from someone else and agreeing to pay them back at a later date. So when the time comes to pay them back you can buy back the contract and "return" it. Metaphorically speaking of course.

Basic example is if I have an apple that I bought for €1. You ask to borrow my apple and pay it back in six months because you think the price of apples will go down. In six months time you buy an apple for €0.50 and give it back to me. You bank the €0.50 profit.

Very basic, hope that helps to explain it. As for the physical act of shorting bank stocks I Wouldnt actually know how to do it. I presume CFD's as you say or ETF's would work. Someone else will be able to explain them better.

"It seems to me that when Irish bank shares colllapsed some weeks ago the the levels to which they fell were their asset value prices, from memory B of I down to 4.3 approx and AIB down to 6.7 approx. What do you reckon. "

Not sure what you mean by this

ranger4

Which of the following irish banks is best positioned to weather this global down turn whilest still paying the best dividend, Bank of ireland, anglo irish, and allied irish, also it is possible to see a merger between the irish banks in the not too distant future, could we see a aillied and anglo merger as the front runner, i wonder.

daveirl

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tej

Hi
I have regular saver accounts in AIB, BOA, Halifax, First Active and Irish Nationwide. I opened these accounts to get better interst rate. Now, I am afraid about these. Is any of these banks at the verge of bankruptcy. If that happens will I loose my money. Should I try to close some of these accounts and put the money in the banks which seem less vulnerable.

Blackjack

DJDC wrote: »

The merger between BofA and ML could be disastarous for that ML BO operation up in sandyford.There is huge duplications between ML and BofA BO's and there is going be some major cuts. Unless that operation is some kind of a tax haven holding, I wouldnt be surprised to see them firing everyone up there.

I think they should be OK - BofA don't have as much exposure to the areas where Merrills are, so this is actually a good fit for BofA. All remains to be seen, but I'm sure there is a Tax benefit to Merrills in having their ops in Ireland.

ranger4

daveirl wrote: »

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Yes there are other banks to short trade withinn the present turmoil, rbs hsbc etc, At present i trade with euro bank stocks, sterling seems to be volitile so at moment i tend to trade with euro stock on the ftse and iseq.

damnyanks

Irish banks are useless dont use them. They are far too conservative. While they wont go bust they certainly wont earn you money (Thinking AIB / BOI here)

Really you need to wait until Friday to get an idea of whats happening. What happened yesterday will never happen again (2 of the top 5 investment banks going bye-bye).

If AIG fail then really write off the next 2 years. IF they dont fail and Goldman annouce decent earnings today then things will pick up. By Friday the dust will have setteled

Spectrum48k

At yesterday/todays prices I feel the Irish Banks are oversold. The banks are valued at 4/5 times earnnigs. Very cheap by my reckoning. Maybe a takeover or merger on the cards at those levels.

I went long on Anglo and BoI yesterday at €4.25 and €4.54. Hopefully they will have stablised by Friday and will return to €5.50 levels soon enough.

DJDC

At yesterday/todays prices I feel the Irish Banks are oversold. The banks are valued at 4/5 times earnnigs. Very cheap by my reckoning. Maybe a takeover or merger on the cards at those levels.

I went long on Anglo and BoI yesterday at €4.25 and €4.54. Hopefully they will have stablised by Friday and will return to €5.50 levels soon enough.

Ever stop to think about what the book value of Anglo and BOI actually is? The Irish banks are keeping a good percentage of their debitors on life support at the moment. If the property market doesnt pick up soon..its game over for them.Gamblers like you have been trying to catch this falling knife for months.Why dont you invest your money into something with a bit of future to it rather than throwing your money down the drain on property related equities which is essentially what irish banks are?

Spectrum48k

DJDC wrote: »

Ever stop to think about what the book value of Anglo and BOI actually is? The Irish banks are keeping a good percentage of their debitors on life support at the moment. If the property market doesnt pick up soon..its game over for them.Gamblers like you have been trying to catch this falling knife for months.Why dont you invest your money into something with a bit of future to it rather than throwing your money down the drain on property related equities which is essentially what irish banks are?

Iam curious, do you know what the BoI Anglo book value actually is? BoI are fairly conservative lenders. Anglo are more of a risk, but I only put a small bet on them.

Do you know the percentage of debtors that are on life support? If you do you are way ahead of the rest of us?

I feel the p [FONT=&quot]endulum [/FONT] has swung to far and I hope to benefit from a small up swing. I am not a fan of property based investments in any way.

What do you recommend that has a bit of future in it?

Killme00

Spectrum48k wrote: »

At yesterday/todays prices I feel the Irish Banks are oversold. The banks are valued at 4/5 times earnnigs. Very cheap by my reckoning. Maybe a takeover or merger on the cards at those levels.

I went long on Anglo and BoI yesterday at €4.25 and €4.54. Hopefully they will have stablised by Friday and will return to €5.50 levels soon enough.

Investing in Anglo is crazy. You would be better off playing roullette with Elan.

The seem to be struggling for cash which is why they are offering high interest deposit accounts with no deposit limit, seems scary enough to me.

stepbar

I do know that for BOI the percentage of "distressed" loans to total debt is less than 1%. What it will be this time next year is anyones guess.

Idu

No rate cut from the FED. Very interesting

DJDC

Iam curious, do you know what the BoI Anglo book value actually is? BoI are fairly conservative lenders. Anglo are more of a risk, but I only put a small bet on them.

Do you know the percentage of debtors that are on life support? If you do you are way ahead of the rest of us?

I feel the p [FONT=&quot]endulum [/FONT] has swung to far and I hope to benefit from a small up swing. I am not a fan of property based investments in any way.

What do you recommend that has a bit of future in it?

Thats the thing I don't know, no one does and uncertainty isnt good. If you are in for a short-term play well then maybe could yield a profit although fed rate staying at 2% certainly hasnt helped. Its a bad long term investment...property market and unemployment going opposite directions,competition from outside banks etc.

As for alternative investments...think outside the box.

Spectrum48k

Killme00 wrote: »

Investing in Anglo is crazy. You would be better off playing roullette with Elan.

The seem to be struggling for cash which is why they are offering high interest deposit accounts with no deposit limit, seems scary enough to me.

Just to clarify I have spread bet on Anglo going up. I have a stop in at 3.98. If everything goes south I can take the loss. But if things recover to €5.25+ I will do very well out of it. I know the risk, I know the potential loss.

This is a short term play. I would like to be out of it next week. Longer term Anglo are probably going down the toilet.

Spectrum48k

stepbar wrote: »

I do know that for BOI the percentage of "distressed" loans to total debt is less than 1%. What it will be this time next year is anyones guess.

The expected impairment charge as a % of loans for 2008 is less than 0.2% this is expected to rise to 0.6% by 2010. The fact that it could triple is a concern. But things would have to get very bad for the impairment charge to break 1%.

BoI have a lot of UK exposure. Any body watching the news will know that there property market is in trouble. This is factored into the 0.6% impairment above.

Check there financial statements.

Spectrum48k

DJDC wrote: »

Thats the thing I don't know, no one does and uncertainty isnt good. If you are in for a short-term play well then maybe could yield a profit although fed rate staying at 2% certainly hasnt helped. Its a bad long term investment...property market and unemployment going opposite directions,competition from outside banks etc.

As for alternative investments...think outside the box.

I try to mantain a diversified portfolio. EFTs in wind and solar. Energy stocks.
Forestry and film investments. And I dont own any property not even my rented house. I would be interested to hear what you consider outside of the box?

stepbar

Spectrum48k wrote: »

The expected impairment charge as a % of loans for 2008 is less than 0.2% this is expected to rise to 0.6% by 2010. The fact that it could triple is a concern. But things would have to get very bad for the impairment charge to break 1%.

BoI have a lot of UK exposure. Any body watching the news will know that there property market is in trouble. This is factored into the 0.6% impairment above.

Check there financial statements.

I don't mean impaired loans. I mean loans that are in arrears but yet not impaired. There's maybe a better word than distressed.

BOI have stopped lending in the UK for the time being AFAIK.

How in ever, I'd have a lot more confidence in BOI then the likes of Anglo, whose agressive asset backed lending model is going to come under increased scrutiny over the coming months. It's not sustainable to continue to offer 8% percent rates in order to attract deposits.

rugbyman

to quote Spectrum 48 I have spread bet on Anglo going up. I have a stop in at 3.98. If everything goes south I can take the loss. But if things recover to €5.25+ I will do very well out of it. I know the risk, I know the potential loss.





Hello Spectrum 48, have read with interest the above piece.. To make the bet you were Betting on the share price of Anglo rising from 4.25. Your stop loss is at 3.98.

Am I reading this right, If they fall further ,you are out at 3.98. a loss to you of 27 pence per share. If you had committed yourslf to 1,000 shares ,you lose 270 euro. If they rise to 5.25, you are up 1,000 euro.
How long a timescale is open to you to sell ?
How does one place such a bet?
Whats in it for the institution/Bookie who accepted your bet?

I find this interesting and would appreciate advice. Your bet seems a good one, will see when the markets open ,considering the AIG bail out.

ranger4

With a posible merger on the cards with the irish banks which of them would be front runners for such a merger boi+anglo? would such a merger have a neg or positive effect with share price and dividends.

Mitzy

My pension is a self directed type whereby I can buy whatever shares I like. Would you recommend buying BOI at €4.40 for a long term hold? I have 30 years until retirement:( so I can afford to leave them there for the very long term.

daveirl

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Spectrum48k

rugbyman wrote: »

Whats in it for the institution/Bookie who accepted your bet?

I find this interesting and would appreciate advice. Your bet seems a good one, will see when the markets open ,considering the AIG bail out.

I placed the bet with a standard spread betting firm. Unfortunately the bet went aganst me. I knew this was risky and had allowed for the loss. Spread betting on short term market fluxcuations is something I rarely do, but these are unusual times. For the record spread betting has a better chance of sucess over the medium/longer term following trends.

If you do decide to spread bet. Your acceptable loss should (stop loss) be no bigger than 1 or 2% of you total investment capital. Also I would recommend not having more than 10-15% of your funds in your spread betting account. Spread betting is risky as my loss shows.

If you want to know more about spread betting I have written a bit about it here. If you do want to start spread betting I suggest you read Malcolm Pryors book.

SoCal90046

Spectrum48k wrote: »

Anyone up watching the Banking sector implode?

Any ideas on how to profit from the situation?

Will alot of investors run to Gold and Silver and cause a big price jump?

Patience. That's my watch word.

I am waiting for more clarity on what's happening. I think that, in the US at least, there is a once in a life time opportunity approaching to buy banks.

irish_bob

SoCal90046 wrote: »

Patience. That's my watch word.

I am waiting for more clarity on what's happening. I think that, in the US at least, there is a once in a life time opportunity approaching to buy banks.

i bet a lot of people are thinking the same way , id buy them only if i bought them , they,d tank and i wouldnt want to spoil it for you and everyone else