Well, that was £50bn well spent

[Rogin the Armchair fan]

FTSE-100 opened 5% down this morning, and at 3,870 was over 200 points lower than it was last week, before the Government unveiled its extraordinary "bail-out" package for the economy.

Formula One has become an unlikely casualty of the deepening economic gloom, with next year's French Grand Prix cancelled because its sponsors have decided they simply can't spare the cash anymore. I wonder how many other events and planned projects will falter because of corporations not having any money to lavish around. How reliant are the London Olympics on corporate backing?

[ad hoc]

Well, that was £50bn well spent

Well, hang on a second, I'm no financial expert, but the economy and the stock market are two very different things are they not? And as I understand it, the bail-out package is about trying to fix the banking system which was to all intents and purposes utterly fucked. The trouble is that the cost of fixing the banks, is so high that the economic situation which was already fairly dire, is now almost certain to become a full blown recession/depression - which is why the markets are down. (I have likely simplified this, somewhat, but as I understand it it's fairly close to what's going on). I don't think the FTSE going down reflects much on the effectiveness or otherwise of the bank bail out plan.

[San Bernardhinault]

Well, that was £50bn well spent

I was thinking the same, ad hoc - I honestly couldn't give a fuck if the markets collapse over the course of a few weeks. The critical thing is to get banks lending to the public again, and at reasonable rates. Hopefully, the government having majority stakes in several banks now (NR, B&B, HBOS) and minority stakes in others, they are in a position to force at least UK banks to start lending to businesses again. 10% off the markets is really pretty meaningless in terms of real economy and real jobs.

[Eggchaser]

Well, that was £50bn well spent

You'd give a fuck if the stock market collapsed and you were about to draw a proportion of the funds for your pension from it, like loads of people do.

Won't somebody think of the old people?

[Tactical Genius]

Well, that was £50bn well spent

" 10% off the markets is really pretty meaningless in terms of real economy and real jobs"

Banks would feel reluctant to lend to a company who's share price is tumbling. Especially in this financial climate.
The banks shares are falling again as it has become clear to investors and shareholders in those banks that they will not be getting a dividend for the next 3 years at the least.

[evilC]

Well, that was £50bn well spent

Tactical Genius wrote:

Banks would feel reluctant to lend to a company who's share price is tumbling.

It's ironic, then, that hedge funds make their money by basically betting that the price of certain shares is going to go down.

[San Bernardhinault]

Well, that was £50bn well spent

Eggchaser wrote:

You'd give a fuck if the stock market collapsed and you were about to draw a proportion of the funds for your pension from it, like loads of people do.

Won't somebody think of the old people?

Any sensible pension capitalises into cash and other much less volatile investments incrementally over the last 5 to 10 years of their life. If even half of someone's pension fund were invested in shares at the point when it gets cashed in, then the fund manager is incompetent and irresponsible.

[beak]

Well, that was £50bn well spent

FTSE question: I have some funds maturing in about a month's time, invested in NS&I by a benevolent relative*.

Anyway, this thing promises the original stake back, plus any rise in the value of the FTSE, taken from the six-month average. Now I'm financially literate enough to find the value of the FTSE (obviously), but can anyone point me in the direction of said average?

I need a ballpark figure of how much this sucker will be worth so I can figure out where to put it.

* - Yes. Technically I have a trust fund. Unfortunately it won't be funding an opulent and debauched lifestyle. It won't be funding much of anything.

[hobbes]

Well, that was £50bn well spent

then the fund manager is incompetent and irresponsible.

And that would be unheard of!

[Ginger Yellow]

Well, that was £50bn well spent

Try this, saucy. There pretty obviously hasn't been any rise in the FTSE, though, average or no.

[beak]

Well, that was £50bn well spent

Thanks GY, that looks like just the thing.. It's just a shame my works internet will not load the chart (the rest of the page is fine.) God knows.

Anyway, I'll have a look when I get home.

[Ginger Yellow]

Well, that was £50bn well spent

When did the investment begin?

[beak]

Well, that was £50bn well spent

2003, when the FTSE was around 4,300. I'm confident the average over the last six months will be higher than this (unless something amazing happens), but like I say, I'm comically inept at this kind of thing.

[G-Man]

Well, that was £50bn well spent

You'd give a fuck if the stock market collapsed and you were about to draw a proportion of the funds for your pension from it, like loads of people do.

Logged

Yeah. My wife has been waiting for her pension fund pay-out for three years since the organisation she worked for went bankrupt. We're rather worried that she'll now get only a fraction of what she should have received if the fuckers winding up the fund hadn't fucked around for three years.

Are all those bank bosses who had to be bailed out on the dole now?

[Ginger Yellow]

Well, that was £50bn well spent

Ah, fair enough. Didn't realise it was that far back. The chart doesn't seem to let you get precies numbers for the the average, but the 6mo MA was about 4,100 in October 2003 and is now about 5,300.

[beak]

Well, that was £50bn well spent

Thank you, this was all very useful.

[beak]

Well, that was £50bn well spent

p.s. I may not know economics, but I know what I like! The cover of this week's New Yorker, that is:

[Rogin the Armchair fan]

Well, that was £50bn well spent

Four months after the FTSE index downturned so dramatically the Government had to pump all our money into those banks ... it's now at a seven-year low of 3625.

[Bruno]

Well, that was £50bn well spent

It took me a while to get over losing quite a lot of money (for me) when the market 'crashed' after the 'internet bubble' in 2000-2001. Turns out the burst bubble was just a bubble.

Read this about AIG if you're still not depressed enough.

[caja-dglh]

Well, that was £50bn well spent

Rogin the Armchair Fan wrote:

Four months after the FTSE index downturned so dramatically the Government had to pump all our money into those banks ... it's now at a seven-year low of 3625.

And four months later the responses upthread still haven't sunk in.

[caja-dglh]

Well, that was £50bn well spent

AIG is a huge, complex mess. The one thing that has come out of all of this is that the calls made by the Fed, post Bear, Stearns & Co (where they probably called it wrong), have been very solid.

AIG does have huge systematic risk and could take other companies, banks and others with it if allowed to fail. Lehman, strangely, didn't have as much as one might have thought.

That said, Geithner has become the invisible man over the past month or so. Not an enviable job.

[Ginger Yellow]

Well, that was £50bn well spent

There's quite a few factual errors in that Nocera article, but the overall gist is right. Then again, not much in the story has changed since AIG first ran into trouble, except that more people have defaulted on their mortgages.

[Bruno]

Well, that was £50bn well spent

One of the more satisfying Daily Show skewerings in recent memory.

[Ek weet nie]

Well, that was £50bn well spent

One little formula fucked everything up.

For those with more financial acumen than me, is that article oversimplifying things?

[Er Liquidatore]

Well, that was £50bn well spent

I really wish Americans would stop that bloody wooing in the middle of comedy bits, it fucks up the flow, maaaaaan.

Very good bit mind you. I used to think the Daily Show was a bit lame, but that Stewart chap has grown on me loads.