Thursday, Nov 26, 2009
Markets in melt down?
BBC news: London Stock Exchange trading hit by technical glitch
Stock market has ceased trading. Is the collapse coming?
Posted by will @ 12:44 PM (1235 views) Add Comment
14 Comments
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1. mken said...
no glitch on the way up
2. str 2007 said...
I've been wondering this morning why most shares/markets are down.
I guess we don't know how much banks have tied up in Dubai.
Does make you wonder why a cigarette manufacturers shares would drop on the strength that someone in Dubai has got their figures wrong.
Interesting to see a 'technical' hitch coming about on a day the market starts to fall quite quickly.
It's probably genuine, but does make you wonder what is at play behind the scenes, particularly given recent news about the odd £60 billion being moved around.
Could it be that we now have our own 'Crash Protection Scheme' in the UK that steps in if things look like they're going going off a cliff (ie > than 1.5% fall by 10:30am and action is taken ?
3. jack c said...
This might be the real glitsch
UK banking shares drop on Dubai debt worries
UK banking shares dropped sharply in early trading alongside peers overseas after it emerged that two major investment firms in Dubai had run into debt problems. All the major UK banks suffered heavy losses after Dubai World, a government-owned investment company which has total debts of $59 billion (£35 billion) according to the BBC, asked for a six-month delay on repaying its creditors.
In a further shock, Dubai World has also reportedly appointed global accountancy group Deloitte to help with its financial restructuring, having been hit by the credit crunch and recession.
Analysts at Credit Suisse said European banks could take a hit of about $5 billion in total because of their exposure to Dubai World's debt via either bonds or loans, although banks do not have to disclose the numbers and it would vary from bank to bank.
As an indication of just how nervously markets are now treating Dubai, the cost of insuring Dubai issued debt has soared to levels seen at Lehman Brothers just before it collapsed.
A trader has calculated that in the last three days, the insurance premium on government issued debt has climbed from $320,000 to $575,000. In comparison, Lehman Brothers insurance moved from $327,000 to $706,000 over a five day period just before it collapsed.
While investors fretted over UK banks’ exposure to Dubai, there were also problems in Europe, with worries about the Greek economy and its impact on the country's banks. There were concerns they may not be able to get cheap funding from the European Central Bank, and it has subsequently sent the cost of protecting Greek government debt sharply higher.
By 10:10am, Asian-focused bank was off 3.8% at £15.47, while semi-state-owned was off 3.9% at 34.39p, as was peer which shed 3.9% to 90.55p.
Dubai World is understood to be due to repay $3.5 billion of its debt in December, but it has now asked if this can be put back well into next year.
The Dubai government added in a statement that the request to delay debt repayments also applied to property developer Nakheel, a Dubai World subsidia
SOURCE :- www.citywire.co.uk/adviser/-/news/market-and-shares/content.aspx?ID=370043&ViewFull=True
4. rumble said...
Where do the ripples go? Dubai -> Abu Dhabi -> Sheikh Mansour -> Barclays/Man City ...? They have fingers in small business too - small company I was working at earlier in the year had a sheikh backer.
5. rumble said...
European banks' Dubai exposure at $40 bln
6. cat and canary said...
praps Badger and Merve called a halt to trading whilst they secretly inject another 60 billion to offset Dubai losses:)
7. rumble said...
Ah, Sheikh sold his Barclays shares in June.
8. yoyo1 said...
Last time this happened to the London stock exchange, the betting sites like IG index continued to operate their casino as normal. When the exchange opened the following day all prices matched those on IG
9. str 2007 said...
cat & canary
I really wouldn't be surprised if something funny had gone on this morning behind the scenes.
yoyo1
can you expand your thoughts on that ?
10. rumble said...
IG is a side business, not critical to the UK economy, so they're permitted to carry on their business, presumably using the ongoing orders that aren't being executed.
11. yoyo1 said...
The stock exchange and spread bets are linked systems, however if one has something like a connectivity issue the other can operate as normal. Both dance to the tune of the same computer which is programmed to put itself into profit. What business/casino wouldn't? This is no longer our grandfathers market which took a much steadier course and was not corrupt and greed driven as it is today.
12. str 2007 said...
yoyo1
Programmmed to put itself into profit.
Can the FTSE do that ?
I thiught it was a representation of the shares being traded by individuals and computers, admittedly weighted towards Miners and Bankers etc. But a reflection of activity none the less.
You talk as though the FTSE itself is the controlling influence.
Am I missing something ?
13. rumble said...
LSE facilitates trades; cannot manipulate any more than a big funded player. Shirley?
14. jack c said...
LSE is back up and running again with FTSE100 currently down 150