Greenspan: a bit of doom, maybe
In his first UK radio interview since leaving the Fed, Alan Greenspan tells John Humphys (audio, fast forward about 9 mins) economic instability is the price of ever increasing wealth. However, we’re learning to cope. We may not be able to forecast significant turning points in the economy, but society is becoming more flexible so [...]
Will China bring this market down?
If a run on a bank won’t bring this market down, what will? How about a China scare-story. They don’t get much bigger than that.
Though the the bail-out of Northern Rock and the fragility of banks in the face of a credit crunch seem serious, the stock market has actually risen since the news [...]
Saving Merv’s reputation
The fight is on to restore Mervyn King’s reputation:
Former banker Sean Park would put bankers and especially Northern Rock chief executive Adam Applegarth in the dock, not Mervyn King. Bankers turned safe debt into toxic losses using excessive leverage, and Northern Rock ran itself like a hedge fund.
The former chairman of the US Federal Reserve [...]
The market is cheap! No! It’s expensive!
The market’s price earnings ratio is lowish suggesting good returns ahead. But the long-term PE is high, suggesting we’re doomed. Can they both be right?
CXO Blog says shares are good value. Price to earnings ratios remain at or below both their 17-year and three-year averages, with current levels and earnings forecasts suggesting good returns for [...]
Interactive Investor Blog 2.0
Have you ever left a comment on our blog and forgotten all about it, oblivious to all the replies you might have received? No more. Tim’s put a small box under the comment form. Tick it when you comment and the blog will automatically send you a notification every time somebody else comments on the [...]
From bail-out to buy-out
A popular assumption is that somebody’s going to buy Northern Rock, or its assets and that, along with the various guarantees offered by the Bank of England and the government, must be informing the decisions traders are making.
According to Citywire on Monday, broker Keefe, Bruyette & Woods has valued the bank at 475p a share, [...]
Falling in love again
A drawback of using the historic price earnings ratio to value a company is it’s future profits, not last years that matter. That explains why Fonebak’s PE ratio of 6 is so low. This year the price has more than halved because the mobile phone repairer and recycler is making a loss.
It’s a shame. When [...]
Selling Northern Rock
It would be ironic, but it seems destined, that the credit squeeze that stopped the buyout business in its tracks looks set to jolt it back into action. Dealbook speculates that Northern Rock is headed for the block.
Scott Moeller, ceo of executive education at Cass Business School and author of a book on mergers and [...]
Was Northern Rock threatened by insolvency?
One thing that’s bothering me. The FSA says Northern Rock is solvent. But if it’s solvent, why does it need to tap the Bank of England for credit?
I think the answer lies in today’s trading update:
While Northern Rock has continued to raise new funds, these have been mainly in the short term wholesale debt markets [...]
Northern Rocky
Northern Rock has called on the Bank of England as lender of last resort.
It sounds portentous: On the Financial Services Authority’s recommendation, and on the chancellor’s authority, the Bank of England is providing “liquidity support“, aka a “bail out”, to Northern Rock in the form of credit at penal rates guaranteed against its assets.
The FSA [...]
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