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Barratts have debts around 1.7bn and after todays carry-on only have a value around the 250m mark.

They failed to raise the 500m from the banks, so when they fail would appear to be down to when the rug is pulled from under them.

Edited by linuxgeek
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Guest sillybear2
The bankers are calling the shots. By their share prices the big builders are almost worthless.

Actually the banks are hostage to fortune, running around like headless chickens, if the majors builders go under it won't make the slightest bit of difference to the sector, newer, leaner and more competitive smaller companies will simply come into their own. It's the banks who are on the hook for the huge amount of borrowed money used to aquire now worthless landbanks, the two loaded barrels are pointing squarely at the banks, they killed off reckless mortgage lending and in the process they're going to kill their commercial loans to the builders.

In Ireland things are a little more incestuous but the position is exactly the same - 'Time for the banks to cut ties with their builder mates'

Edited by sillybear2
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Actually the banks are hostage to fortune, running around like headless chickens, if the majors builders go under it won't make the slightest bit of difference to the sector, newer, leaner and more competitive smaller companies will simply come into their own. It's the banks who are on the hook for the huge amount of borrowed money used to aquire now worthless landbanks, the two loaded barrels are pointing squarely at the banks, they killed off reckless mortgage lending and in the process they're going to kill their commercial loans to the builders.

I agree, I said the same thing in earlier posts. The point I was making is that the banks may keep the big builders on life support. The obvious reason being they don't want to realise big losses at the moment. I would prefer the big builders to be liquidated and cheaper building land made available. Unfortunately I think the banks might stop this happening for as long as they can.

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you would think a big builders like this, probably the most well known house builder in the country, would last more than 6 months into a downturn, especially after the biggest boom in history.

what utter incompetence, and no they cant blame the market, they were in the very best position to understand the market, this is utter folly by the board.

please dont tell me barrett didint understand this was a bubble.

You're under the assumption that the people who actually make the decisions didn't benefit. The directors already have. They've had their huge bonuses from the success, taken the money and even if the company folds and directors laid off, I'm sure the directors are sitting on a huge pile of cash amassed during the boom years.

The only sufferers will be the people who work in the lower ranks of the company (ie not one of the directors)..

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How is this for a Labour plan:

(1)Government decides to nationalise Barrats. I mean - they only need £1.5 billion to cover their debts. A drop in the ocean compared to NR !!

(2)They then use this new 'national builder' to construct the 3 million or so homes that this country 'needs' over the next 10 years.

(3)People who buy homes in these developments get stable long term mortgages from the NR, but only if they have a reasonable deposit.

Not saying this would be a good or bad thing - just an idea of what could happen in these crazy days.

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Barratts have debts around 1.7bn and after todays carry-on only have a value around the 250m mark.

They failed to raise the 500m from the banks, so when they fail would appear to be down to when the rug is pulled from under them.

Out of interest, how do you work that out? I'm assuming it's the product of the number of shares(1) and price of the shares(2). How do you find out what (1) is?

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How is this for a Labour plan:

(1)Government decides to nationalise Barrats. I mean - they only need £1.5 billion to cover their debts. A drop in the ocean compared to NR !!

(2)They then use this new 'national builder' to construct the 3 million or so homes that this country 'needs' over the next 10 years.

(3)People who buy homes in these developments get stable long term mortgages from the NR, but only if they have a reasonable deposit.

Not saying this would be a good or bad thing - just an idea of what could happen in these crazy days.

nice, 1.5bn to clear up, then they need more capital to start building, and the assetts the build become cheaper than they can build, and they lose even more money.

They are dead.

Let them rest. Its what happens in a bust. we are in a bust.

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If you think Barratts is in a bad way.......

Over on Bloomberg news board there's a snippet about a real risk of General Motors going bankrupt. I know they've been to the edge before but I thought they'd saved their skins (presumably by building more and more of the wrong sort of cars!). If they do go under, is it bye-bye Vauxhall, bye-bye Saab?

Edited by blankster
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Taylor Wimpey and Barratt at around 25 and 35 pence respectively, surely they are going bust soon. Their market value must be worth just a few Mayfair flats by now...

Barrat market cap today is approx £138m.

Down from £220m yesterday.

Down from over £4bn just over 12 months ago :o

If house prices fall as much the average house will cost £7000 in 12 months time.

Edited by munimula
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Barrat market cap today is approx £138m.

Down from £220m yesterday.

Down from over £4bn just over 12 months ago :o

Let's not forget the markets in the US are closed on Friday, a lot of protective trades happening tomorrow over there.

Edited by Gel
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Out of interest, how do you work that out? I'm assuming it's the product of the number of shares(1) and price of the shares(2). How do you find out what (1) is?

There was an interview on radio 4 today late on this morning discussing barratt and TW. They were discussing this issue and how soon the banks might react to protect what little was left.

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Some of you may remember I wanted to short Barrats a few weeks ago when they were around £1. Rather than tripling my money I wasn't able to get an internet stock broker in time as all the UK ones didn't allow me and the US one is taking ages.

I'm so frustrated now, oh well now I know that I could have tripled my money so I'm more confident in my ability to make calls as I said the share price was worthless :lol:

This is great news anyway, down with the greedy banks and builders B)

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Guest sillybear2
I agree, I said the same thing in earlier posts. The point I was making is that the banks may keep the big builders on life support. The obvious reason being they don't want to realise big losses at the moment. I would prefer the big builders to be liquidated and cheaper building land made available. Unfortunately I think the banks might stop this happening for as long as they can.

Yup, as McWilliams points out, nobody wants to touch the banks whilst they continue to carry such crap on their books, they're going Japanese with all this zombie debt on their balance sheets. We need short, sharp correction, they need to take the pain now so we can rebuild from a firm base, even if that means vapourising half their tier 1 capital in a matter of months, much better than walking on egg shells and pretending everything is okie f****g dokie when it's clearly not, the alternative is years of stagflation and leaving toxic loans still lingering for our children to deal with, along with compromising our central banks and currency.

A message to the banks: yesterday is gone, the environment of early 2007 was make believe and is never going to return for at least a generation, the current conditions is back to normal, this is the new reality, not something that will 'blow over'. Just f****g wake up and deal with it ;)

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Guest sillybear2
If the government buys Barratts, even if it seems like a good idea at first glance, what happens when Taylor-Wimpey or any other big builder folds. A better bet is just to buy the unsold houses.

If the government bails out the building sector, the public sector unions might as well go strike for a 40% pay rise, and to be honest who could blame them, following on from NR the government would prove itself to be even more morally bankrupt and fiscally irresponsible, they would be advertising the fact they're a push over.

I honestly couldn't sit in Whitehall and stuff £50 notes down the mouths of greedy bankers and corporate builders that are crying because their party is over whilst simultaneously telling a bunch of nurses, who are barely scraping by, to go f**k off with 2%, and I'm not even a Labour man.

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Land Reform: brought to you by excessive greed and then insolvency.

Is this Brown's new socialist paradise? Obviously there had to be a revolution first.

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  • 1 month later...

fair point but its both builders and banks that are doing well now. Hopefully the worst of the news is out of the way and we'll get the housing market moving again for the autumn. Some stability might generate volume and ease the market which is rather constipated at the moment.

There's a nice house near me that was on for £825k .. now down via £775k to £695k.

If it gets close to £500k I might just be interested.

Comes with 1.3 acres of land as well.

TF

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