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Anglo Irish Bank - Hung, Drawn And Quartered

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Anglo Irish Bank - Hung, Drawn and Quartered

Market Highlights:

• Uk hangs on the precipice

• Ireland exposed further as Anglo Irish crumbles recovery

• US decoupling hits the headlines again

Uk hangs on the precipice

So we are now in the month of torment for the markets. Was September a true indicator as it historically can be? Surely history has no baring anymore as we are in unprecedented times and the rule book has been torn to shreds. This is a worrying time for the UK. We are now in the midst of a very tricky situation. So where do I start? There is so much going on right now it is difficult to digest it all. A divided government is one thing and labours farcical leadership battle took the spotlight from the conservatives. However, a divided Bank of England is a completely different animal. Austerity measures are difficult for all and the PR around the recession paints a dismal picture, but if opinions are divided, which are expected when economists come to the table, we need to take notice.

Last week we were told to go and spend and galvanize the recovery by deputy governor Charlie Bean. Was this a wise move? What else have we got to lose? What we should take note of is the fundamental data being produced by the UK. Fridays data showed the first move lower by exports which have always been deemed as our best indicator of the recovery. I have always disagreed with this but I won’t gloat as I am much more interested in the Bank of England right now and the split in the committee. Mervyn King has always claimed that the disagreements are minor but right now we are in the midst of a battle of wits. Andrew Sentance wants us to hike and that’s nothing new but what is evident is the call for further quantitative easing and a call for £50bln more of tax payer’s monies are needed by the year end. This was also championed by the Institute of Directors and the British Chamber of Commerce at meetings last week. The risk of this is always higher inflation but we know this. What have we got to lose?

Results from the major retailers in the UK will give some indication of how the consumer is coping as Marks and Spencer and Tesco announce results. The UK remains in the spotlight with some weighty data coming out. Services, industrial and manufacturing data could add more weight to the need for quantitative easing. The need is not for Growth but stability. If not then we are staring in the face of a double dip recession and David Cameron will have a bigger deficit to manage

.

Ireland exposed further as Anglo Irish crumbles recovery

Last week saw the final figure revealed to wrap up the bank seen as the cause for the Irish demise. A tidy sum of 36 bln Euros’ is now needed to cover up the mess left behind by Ireland’s largest lender. This far exceeds the once thought of figure of 25bln. Its rival Allied Irish bank requires a further 8bln. So, further damage is done to Brian Lenihan’s political career as his once championed budget cuts are now a very distant memory. In fact, a recent conference with Citigoup investors led to him being jeered as he tried to reassure them of the Irish sound and stable recovery.

Lets put this in perspective. Anglo lent a property developer 171mln euros to buy a 2 acre plot of land back in 2005. On the same plot of land yesterday, a car boot sale took place. Perhaps the deeds to the land were for sale. Ireland is desperately trying to escape the clutches of the EU and will bar the auction of bonds until the New Year. This is to prevent the level of debt rising well above the EU level of 12.5% GDP. Its latest bailout pushes the deficit to 32% of GDP. The EU will scrutinize the next round of Irish budgets in December and then decide its fate. So what impact does this have on the wider European community? Ireland now shares the reputation of Iceland and Greece and it faces a much longer and hard felt recovery then any other European nation. It will certainly drag on the EU and somewhat dampen the recovery seen in Germany which is booming due to a huge rise in exports.

In complete contrast to the UK, German exports rose to their highest level this year as demand from Asia increases. Factories called off summer holidays to meet the demand and the powerhouse is looking at a hefty figure of 3.2% growth this year. This is way over the IMF estimate of 1.2%. So can it last? Well the indicators show that it can but I don’t see it. Siemens have basically offered all of its 128,000 domestic staff a job for life. If anything, that is enough to boost sentiment throughout the country and help boost the already resilient domestic economy. However, Asia is still an unknown quantity in my eyes and much depends on China. If they falter during the recovery then Germany will feel the brunt

.

US decoupling hits the headlines again

The US remains in focus as the recovery shudders to almost a standstill. This week sees a whole host of data which could in turn lead to the dollars demise. The US hit the headlines last week as they warned US travelers of the dangers of terrorism. This week could add further woes to the troubled nation as the all important employment figure hits the headlines on Friday afternoon. Between all of that we will see further indication of recovery from the services industry and also manufacturing.

The Fed is facing the same battle are the MPC in the UK. Should they enter in to further money printing and try and provide stability to the economy. And if they don’t, what is the worst case scenario? Investors will shy away from the dollar and the decoupling between the US and the global economy as a whole will increase. This is dangerous for the Fed but they seem to have little choice. As indicated in the last Fed minutes we will be looking to the month of November for further QE. From there it is anyone’s guess.

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"Quinn, a long-standing customer of Anglo prior to its downfall, ramped up his borrowings from the bank over a period during which he was assembling a major ownership interest in it, through the undisclosed use of contracts for difference (CFDs).

Quinn’s stake is believed to have reached 28 per cent, but losses he incurred in the process eventually triggered a need to unwind his interest.

While Quinn subsequently bought 15 per cent of Anglo’s outstanding shares as part of the unwinding of his interest, Anglo lent to a group of clients to acquire the remainder of the Quinn position.

The circumstances surrounding this set of transactions are currently under investigation."

laugh.gif No shit !!

We think of ourselves in our Western 'developed' countries as somehow better than those on the take in the likes of Nigeria. I don't think we are. We are just not quite as obvious about. Although recently we seem to be catching up on that aspect too.

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"Quinn, a long-standing customer of Anglo prior to its downfall, ramped up his borrowings from the bank over a period during which he was assembling a major ownership interest in it, through the undisclosed use of contracts for difference (CFDs).

Quinn’s stake is believed to have reached 28 per cent, but losses he incurred in the process eventually triggered a need to unwind his interest.

While Quinn subsequently bought 15 per cent of Anglo’s outstanding shares as part of the unwinding of his interest, Anglo lent to a group of clients to acquire the remainder of the Quinn position.

The circumstances surrounding this set of transactions are currently under investigation."

laugh.gif No shit !!

We think of ourselves in our Western 'developed' countries as somehow better than those on the take in the likes of Nigeria. I don't think we are. We are just not quite as obvious about. Although recently we seem to be catching up on that aspect too.

Very harsh comparing a well run country like Nigeria to the corrupt shambles that has been Ireland for the last 10 years

:lol::lol:

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"Quinn, a long-standing customer of Anglo prior to its downfall, ramped up his borrowings from the bank over a period during which he was assembling a major ownership interest in it, through the undisclosed use of contracts for difference (CFDs).

Quinn’s stake is believed to have reached 28 per cent, but losses he incurred in the process eventually triggered a need to unwind his interest.

While Quinn subsequently bought 15 per cent of Anglo’s outstanding shares as part of the unwinding of his interest, Anglo lent to a group of clients to acquire the remainder of the Quinn position.

The circumstances surrounding this set of transactions are currently under investigation."

laugh.gif No shit !!

We think of ourselves in our Western 'developed' countries as somehow better than those on the take in the likes of Nigeria. I don't think we are. We are just not quite as obvious about. Although recently we seem to be catching up on that aspect too.

How many other banks have been lending £billions upon £billions upon £billions to people on condition that they buy shares in the bank lending the money. Who elso have they been lending such astounding amounts to for this purpose.

Certainly not the man on the street as they won't lend money to the ordinary folk to do that.

Shouldn't we (and shareholders) be told these things.

Edited by billybong

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  • 140 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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