A Random Rant, Or Was A Riot Around The Corner??

U.K. Faced ‘Bank Runs, Riots’ as RBS and HBOS Neared Collapse

Today Jon Menon and Andrew MacAskill wrote an article for Bloomburg.com which suggested that had the Government not stepped in to swallow the debt thus saving both RBS and Lloyds a year ago today, then Britain could have faced a massive backlash from the public with widespread riots leading to the streets of London looking more like the streets of Basra. Commenting on remarks made by David Livingstone suggesting that "Bank failures would have forced the government to cancel police leave and deploy troops as the breakdown of the financial payments system threatened the ability of utilities to provide essential services" the authors suggest that the actions taken by the British Government were not only necessary but mandatory for keeping peace.

Are we to be convinced?

The answer to this question can only come after many years, with hindsight we will see if the decision made were necessary or even required, for today we are too close to the event itself to look back and make a valued judgments. So I guess we will just have to leave this question with time, and time itself will give us a response when it sees fit.

How maths killed Lehman Brothers - The Beginning of the End

"On a sunny morning in 2001, a piece of investment plan landed on the desk of Dick Fuld, the then Chief Executive of Lehman Brothers. The document, compiled by a team of maths and physics PhDs, included a calculation to show how the bank will always end up with a profit if they invest on the real estate markets. Fuld was impressed. The next five years saw the bank borrowing billions of dollars to invest in the housing market. It worked. The housing market boom had turned Lehman Brothers from a modest firm into the world's fourth largest investment bank. "

Horatio Boedihardjo.

This is just a small snippet click here for the full article.

Is a thank you in order for Mr Pandit??

The S&P 500 closed 3.4% higher today, taking away any loss made in 2009.

Since Vikram Pandit's comments on the 10th of March 2009, the markets have seen something of a small turnaround, confidence is returning, or at least in the eyes of an amateur (me). Many major analysis's also say they see the beginning of the end of the global recessions, even though these may be words which may bring much joy to Average Joe's all around the world, it must be noted that recessions take much longer to expire then they do to show their true colours. Are we past the worst of it... well we will only be able to tell with hindsight in around twenty years time.

For the investor who believes risk is something that comes with the game, their risk has either paid great dividends or has left them worrying how they are going to pay the rest of their mortgage. It's easy for anyone on the outside of a boxing ring to suggest tips on how to use intellect to earn true profits from a raging bull, but when your livelihood depends on it, I'm sure its a different situation.

Watching Barclays go from around the 50p a share mark to 300p per share over a matter of weeks, it is obvious that many investors must have made a killing, but I fear by the time the little man gets into the game the markets will realize that they are overvalued and everything will head south...

My advise... there's obviously money to be made, but playing it safe will surely pay off in the long run.... think dividends!!! have a look at stocks which have fallen due to the recession, not stocks which may have helped the recession along the way.