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Captain Coma

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Everything posted by Captain Coma

  1. I keep hearing on the glorious BBC how NR is a solid business with £135Bn of assets. No it isn't. The value of those "assets" (the mud and straw that NR have lent their ridiculous mortgages on) are clearly worth nothing like that, and the income stream from these "assets" (the ability of the people who borrowed 125% on self-cert for overpriced rubbish) is nothing like as certain and steady as the wonderful BBC seems to assume. Now that house prices are more or less officially falling and the spectre of actual, real values is rising from its grave, NR's "assets" could be worth as little as £70Bn, or less if buyers for distressed sales evaporate. The market now knows, or at least fears, this, and NR is supposed to borrow how many billions this week (possibly total value of its actual "assets") just to roll its business on for a little while longer? Forget it. I agree with Willem Buiter - the BofE shouldn't have bailed out NR. If I can see what's up then they should have been able to. That's several billion of your tax quids down the drain - watch out for the signs next year in your reduced paycheck and a casualty dept closing near you! Prediction: NR will be lucky to make it to Monday evening; it certainly won't be around in its present form to witness the close of business next week. 99% correct, guaranteed.
  2. I suggest that henceforth we refer to Alistair Darling only as Mr Bean. There are more then merely facial similarities.
  3. Aha! Site clock reset at 9:09 AM (i.e.10:09 AM) to correct GMT. I'm not going mad just yet, then.
  4. True. Watch Barclays. I asked for odds a couple of weeks back. Have they shortened?
  5. Really? Never noticed. But why ("measurement began our might" and all that stuff, etc)? Crikey, do you think I really might be sober? There's a horrifying thought.
  6. OT, but anybody notice that the site clock is an hour slow? I make it 11:22PM not 10:22PM. Or am I drunk?
  7. This is one for Goldfinger - a lovely piece from Paul Johnson in last week's Spectator. Please forgive the long posting, but it is the right thread for it and I think worthwhile. Enjoy: When the skies darken, the glow of gold is always welcome Paul Johnson ‘When markets are unsteady and investors are nervous, you can’t beat gold.’ That was my grandfather’s saying, common enough, I daresay, in late Victorian Manchester. Jimmy Goldsmith was another believer. ‘You know what the Aztecs called it,’ he would say with relish, ‘they had a special word for it — the excrement of the gods.’ Jimmy was a great buyer of gold, especially towards the end of his life. He bought bullion — gold bars — and would inspect them in the bank vault where they were kept. ‘Like visiting Fort Knox,’ he’d say. He also bought shares in gold mines, the simplest way to invest in gold. But he liked gold coins too, such as the famous American ‘Two-headed Eagle’, worth ten dollars when first minted. Or the Maria Theresa thaler, still circulating as currency in East Africa when I first went there in the 1950s. Above all he liked the Krugerrand, a splendid coin worth £100 in those days. He liked to have a few about him to rattle in his pocket, which reminded me of Tennyson’s lines from ‘Locksley Hall’: But the jingling of the guinea helps the hurt that Honour feels, ... It is a well-attested fact that really rich men, for no sound economic reason other than intuition or gut instinct, like to keep a stock of gold coins. I hear that these come-lately Russian billionaires are particularly fond of them, especially the 100-kopek gold coins minted by the last tsars. I daresay Warren Buffet has his little stock of gold coins, and even Bill Gates too. A typical case was the so-called Bad Earl of Lonsdale, head of the powerful Lowther family who dominated Lake District politics at the end of the 18th century. Although an immensely rich borough-monger, who controlled up to a dozen seats in the House of Commons, he was also mean and dishonest. He behaved very badly to poor gullible Boswell, and even worse to Wordsworth’s father, who acted as his steward and was not paid for many years. Wordsworth and his siblings had to wait until the Bad Earl died and was succeeded by the Good Earl before they got their inheritance. The Bad Earl collected gold guineas which he kept in leather bags according to the quality of the gold and the finish of the coins, some of which were over a century old. What fun the old Scrooge must have had sorting them, and inspecting them on a dark night with all the doors locked and bolted, his treasure glittering in the light of a single wax candle. Another case was the 15th Earl of Derby, son of the prime minister, and himself foreign secretary in Disraeli’s famous administration. He had 70,000 acres in Lancashire alone, owned much of Liverpool, and ran his estates with parsimonious efficiency. But he loved gold. His diaries (well worth reading and well edited by John Vincent), record that he bought himself an iron strongbox, portable, but so heavy he calculated that a thief, even if he knew where it was kept, could not make off with it without disturbing the whole household. This box had a slit in it, and Derby would pop in a gold sovereign from time to time. At his death in 1893 when the box was opened, it was found to contain over 6,000 sovereigns. The two earls, being of different generations, collected different coins. The point is worth examining, since I find that even well-educated people confuse guineas and sovereigns. England traditionally had a silver standard coinage, though some beautiful gold coins were minted in the Middle Ages and under the Tudors. Then, in 1663, with Charles II on the throne, a new gold coin was minted. It was called a guinea because the gold came from the West African coast where it was mined and brought to England by a chartered company. On one side of the coin was an elephant, the company’s stamp. Then in 1675 a castle was added — hence the many pub signs of elephant and castle, for the guinea proved popular. Originally worth one pound, it had risen in value to 30 shillings by 1694. William III’s currency reform tried to peg it at 21s 6d, and it was finally fixed at 21 shillings in 1717. There it remained for a century, but even by English illogical standards it was an anomaly, especially when paper pound notes became common. So the last guinea was minted in 1813. It was replaced four years later by the sovereign, worth from the start exactly 20 shillings or a pound. The tail-side, in the form of St George and the Dragon, was designed by a great numismatic artist, Benedetto Pistrucci, master of this difficult skill. His design was so successful and practical that it has lasted two centuries. But the guinea did not disappear — far from it. In Rowlandson’s beautiful drawing of the Duchess of Devonshire and her sister gambling, Lady Bessborough is shown getting coins out of her filigree-net purse, while the duchess shakes the dice vigorously. Those coins were guineas, the standard unit when stakes were high. And guineas continued to be used in Brooks’s and gambling halls, even after the sovereign came in. It was considered vulgar (we would say non-U) to play in pounds.€ So genteel England developed a double standard coinage of account. Guineas gradually ceased to circulate. But bills were still presented in guineas by professional men: architects, lawyers, doctors and other people who liked to think themselves gentlemen. Indeed tradesmen who were far from being genteel continued to charge in guineas for a century more. I remember the first suit I ordered and paid for myself cost £7.7s — seven guineas — and some tailors and shoemakers continued to charge in guineas until quite recently. Horse-coping, that dark and devilish trade, was another conducted in guineas until the end of the 19th century, as we learn from the stories of Surtees and Somerville and Ross. When buying a horse there was always a chance of getting the seller to knock off the shillings and charge in pounds — a discount of 5 per cent. This applied to the art trade too. I regret the physical disappearance of coins like the sovereign, which I glimpsed occasionally in my childhood. When I was born we were still on the Gold Standard, the best guarantee, to my mind, that there is against the horrendous scourge of economic life, inflation. Now our currency is strong we should go back on it, and mint a splendid new gold coin, to be called a Thatcher, with her as Britannia on one side and the Queen’s head on the other. It would sell at a premium. Gold is always reassuring and usually pretty too. It is a marvellous metal to work. Its malleability is such that it can be beaten into a leaf four millionths of an inch thick. Its ductability is even more remarkable. The smallest measurable quantity, one grain, may be drawn into a wire 500 feet long. Every bride wants a gold wedding ring: no other metal will do. In India the womenfolk want a good deal more — Indian households own nearly twice the amount of gold held by the US central bank, much of it around the necks and arms, wrists and ankles of 500 million ladies of the subcontinent who love and cherish their baubles. A great believer in gold was old General de Gaulle, who used it to put France on her feet again after he returned to power in 1958. He had a special rhapsody about gold which he would trot out on solemn occasions, in a sonorous tone, as if reciting a psalm. Gold was above ideology and politics, beyond personality and prejudice, the only totally independent and objective standard of value, inflexible, incorrupt and incorruptible, cruelly honest and as valid as life itself. True, when you think about it.
  8. Saw this from you-know-who over at Market Ticker (damn good thread though long, and worth a read ...): "If one big brokerage goes there is a very significant risk that they all will." http://www.tickerforum.org/cgi-ticker/akcs...669&page=15 It ain't just the mortgage lenders, y'know.
  9. Interesting. The 1987 chart is almost identical to the current one - looks about to go off a cliff, but as they say in the article, DON'T PANIC!!! One thing I would add, though, is that when the DJIA closed on Friday, it held the largest backlog of unfilled sell orders since ... 1987. I guess those will hit on Monday, no?
  10. "Saxony's local bank decides that it would be more fun to play with the big boys, and is removed on a stretcher." - Christopher Fildes, London Evening Standard, 7 Sept
  11. We're havin' a bit of an interesting day, all in all, aren't we? I've been glued here to this site most of the day, which ain't buttering any parsnips as far as me work goes (ah, sod it, it's the weekend).
  12. Go to Tuffers' thread here: http://www.housepricecrash.co.uk/forum/ind...showtopic=55126
  13. Funny, if you Google "City hedge funds head for domino collapse" The Times comes up, but it's an article from May 15. Perhaps today's was an update. Anyway, looks like they pulled it ...
  14. Music to me ears. I hope you're getting on with the book ... In fact, literary agent hat on (was one for a time), try thinking about editing and combining your posts over this summer and autumn into a "crash diary" - could well be in demand as a crash [sic] tutorial when the proverbial hits the fan in a month or two. Ahoy-hoy
  15. Succinct. But I would add that Western planners missed the strategic vacuum into which Iran swiftly stepped. Iran now *very* happy with the situation.
  16. Daily Mail link: http://www.dailymail.co.uk/pages/dmstandar...in_page_id=1804 Mmh, try again ... http://www.dailymail.co.uk/pages/dmstandar...in_page_id=1804
  17. Yesterday 4PM Barclays ATM corner of Gloucester Road and Cromwell Road, South Ken, London - OK.
  18. Either that, or they are paralysed with fear ...
  19. See? See?! Impeccable, irrefutable logic. There is no credit crunch here and Barclays is flush with liquidity, we don't screw up like Johnny Foreigner, so you folks just borrow what you like for your dream property right now. Guaranteed returns.
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