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H S B C In Trouble Too?

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http://www.bloomberg.com/apps/news?pid=206...Cs&refer=uk

HSBC Investor Knight Warns of ‘Substantial Capital Shortfall’

By Mathew "Matt" Carr

Jan. 18 (Bloomberg) -- HSBC Holdings Plc, Europe’s largest bank, may need to make the U.K.’s biggest rights issue to shore up its capital position, said investment group and shareholder Knight Vinke Asset Management LLC.

London-based HSBC’s Household International unit, an investor in sub-prime loans, “has turned out to be an unmitigated disaster,” Knight Vinke said today in a statement published on its Web site.

“We agree with Morgan Stanley and Goldman Sachs & Co. that HSBC has a substantial and worsening capital shortfall,” the statement said.

“There can be little doubt that HSBC will need substantial additional capital if Household is not restructured,” Eric Knight, chief executive officer of Knight Vinke, said in the statement.

Some of the statement was reported earlier by the Sunday Telegraph newspaper.

AIAP. Looks like another one might be about to bite the dust. They are all insolvent, every last one of the greedy sods. Looks like taxpayers are going to be paying their bonuses and keeping their lifestyles going for decades to come. Gordon's "miracle economy" and his HPI house of cards has ruined us. It was some boom and its going to be some bust.

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Are there any banks not screwed?

There is one global problem. Banks lent too much money against inflated residential and commercial property values.

For some banks like Northern Rock, the problems were exposed early because of the high proportion of their business done in wholesale markets.

For some banks like HSBC, the problems are being exposed later because of the high proportion of their business done in retail markets.

The retail versus wholesale mix have impacted the timing at which the problems have been exposed but do not change the simple fact that most banks have the same problem which will have the same results in the end.

This is a financial disaster of epic proportions. All the support given to banks so far is not even enough to replenish the losses that they have taken to date or will report in the coming years. Until balance sheets are repaired there cannot be new lending.

Edited by LuckyOne

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Guest sillybear2

The whole system is insolvent, has been for many months now, they just can't pretend anymore. The second round affects of a faltering economy is just the final kick for the two legged stool.

Come this time next year everything will be nationalised, everything.

Edited by sillybear2

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The whole system is insolvent, has been for many months now, they just can't pretend anymore. The second round affects of a faltering economy is just the final kick for the two legged stool.

Come this time next year everything will be nationalised, everything.

Yes.

The wholesale businesses are accounted for on a mark to market basis and the markets says that we are on a hiding to nowhere.

The retail businesses are accounted for on an accrual basis. To date, impairments have not been large enough to track what the market is telling us about fair value.

At maturity, mark to market and accrual accounting have to value transactions over their life at the same value.

I cannot see any way for house prices to be propped up in this environment. I am willing to change my mind when the evidence changes but there is none that I can see so far.

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I'm just sick to death of hearing that the "banks must get back to lending again".

Lend with what money?? They are pretty much insolvent. If the gov know they haven't got money to lend, they must know that to lend, the money will have to be created out of thin air.

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Treat anything Knight Vincke say with a very big pinch of salt. Remember, this is the very same hedge fund that tried to get HSBC to radically reduce its tier 1 capital and lend out lots more money during the boom. I wouldn't be surprised to find that they now have a very large short position in HSBC.

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I'm just sick to death of hearing that the "banks must get back to lending again".

Lend with what money?? They are pretty much insolvent. If the gov know they haven't got money to lend, they must know that to lend, the money will have to be created out of thin air.

It can't be long before many people actually twig that the banks will actually be lending our OWN MONEY back to us.

Think they'll be clamouring for a mortgage then McTavish? :lol:

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I'm just sick to death of hearing that the "banks must get back to lending again".

Lend with what money?? They are pretty much insolvent. If the gov know they haven't got money to lend, they must know that to lend, the money will have to be created out of thin air.

This might be what is confounding the government. Banks have been creating money out of thin air since fractional banking started. The government has great difficulty understanding why they cannot resume doing so.

However, I don't think that the government is as concerned with the lack of bank lending as it is about the prospect of this centuries old con-trick being revealed to the electorate.

Having to admit to a lot of people who believed that they were relatively wealthy that they are slaves/paupers can be a health hazard.

p-o-p

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Treat anything Knight Vincke say with a very big pinch of salt. Remember, this is the very same hedge fund that tried to get HSBC to radically reduce its tier 1 capital and lend out lots more money during the boom. I wouldn't be surprised to find that they now have a very large short position in HSBC.

+1

Beware of hedge funds talking their book...

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Oh so that is why Gordo was told to say 'come clean'

Though the lad had no idea fings were this bad

couldn't have

well he's ministers son ennit

.... reverts to Latin.....words ending in unt

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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