It puzzles me why anyone would want to invest in shares at this particular juncture. The prospect of earnings must be low and the likelihood of insolvency considerably enhanced. So it is a gamble between an anticipated increase in share price and losing all.

I have to ask will the share price be fundamentally different in 6 months time? What would possess anyone to make the gamble now when the risk side of the equation should decline with each passing month as the less sound fail?

Welcome back to the West Squire Allworthy, I know you brought us back some Gold.

There are all sorts of gamblers and there are those out there now who will see this as an opportunity:

AIB : 57c
BOI : 41c
Kingspan : 2.57c

- Who will see these shares doubling in six months and quadrupling in twelve and they'll have 10-50k to play with on this today ? Are these kinds of gamblers out there ?

What will the Nationalisation of Anglo today do to that share price tomorrow ?

ISEQ 2275 ...

I suppose we can expect a rally by the end of the day when Wall Street decided to bounce around for a while after Obama becomes president.

Freefall.
Is it the banks?

aib 39
boi 35

ISEQ ~2240

I'm dying for a bag of chips

AIB down 45%

A collapsed share price does not necessarily mean nationalisation though. The bank may still be good. The notion that the BOI/AIB will be nationalised has crept in now and this is probably causing the price collapse imo.

Any proposal that covered Anglo, but that didn't make clear what was to happen overall, was bound to have that effect, I suppose.

It may have been wise to suspend trading on all banks until the Anglo thing was sorted one way or the other - don't know ..

At what point do they have to step up to the plate and decide the price has gone too far south??

I'm sure AIB and BoI are relatively OK (admittedly by todays very low standards); the taxpayer may be getting a bargain here. Can we cope with either trading below 30 cents??

This slump in price has more to do with everyone seeing looming nationalisation rather than with a core valuation of these banks' business. Shareholders are afraid of losing money, so they are selling up now

I realise this might sound too optimistic, but is there a teensy weensy chance markets are panicking here?? Stability might be a really good thing, but I think only the Government can give that, now. Why recapitalise when for the same money, you can own the whole bank??

Speaking as a taxpayer with a appetite for risk!!

Auditor #9 wrote:

Welcome back to the West Squire Allworthy, I know you brought us back some Gold.

Forced back by food poisoning and a diet that had too many figs! Interesting to consider that if the worlds economy implodes that those who live the most basic lives will be least concerned, but that is another tale.

As for gold it is a haven of safety against inflation. Right now we have deflation so I am not so sure that it is a safe haven unless you expect complete incineration followed by hyper inflation. Worth keeping an eye on though, but why commit just yet? Silver is now just above 11 dollars an ounce. It peaked in March at over 20 dollars. Gold shows more resilience but has again peaked in March at over 1000 dollars and is now about 842 -843. A bit of an up at the minute but I could easily envisage a fall in the first half of this year, but so much depends on how you view the switch from deflation to inflation and overall political stability. If you think the gates of hell await us buy gold but if it really turns nasty you can't eat gold and land is more important.


Allied Irish, which I think is the strongest Irish Bank, is down over 30% to 40 cents; was 35 cents earlier. These are meaningless figures at this stage. You could buy 1 million shares for 350000 euro. But the problem is will the bank be Nationalized, and will the investment be worth the risk? Government interference causes all sorts of problems and additional uncertainties. Note Barclay's stance. It is an interesting strategic positioning.

Some strange goings on with Lloyds and USB Apparently some Swiss lot upgraded Lloyds to a buy status but downgraded the recommended price by 50%? I think there may be more to this than is apparent. Lloyds has considerable interests in Switzerland.

Anyway lots of work to do.

expat girl wrote:

This slump in price has more to do with everyone seeing looming nationalisation rather than with a core valuation of these banks' business. Shareholders are afraid of losing money, so they are selling up now

Exactly, the downside of government interference.

As an investement buying the big two for half a bil. has got to make sense? How could the State not make money on this? We are where we are. Dump Anglo and take the other two.

coc wrote:

As an investement buying the big two for half a bil. has got to make sense? How could the State not make money on this? We are where we are. Dump Anglo and take the other two.

You forget that very very stupid guarantee!

tonys wrote:

Squire wrote:

coc wrote:

As an investement buying the big two for half a bil. has got to make sense? How could the State not make money on this? We are where we are. Dump Anglo and take the other two.

You forget that very very stupid guarantee!

You are right in one sense, if we had not made the guarantee, we wouldn’t now have to be wondering what was the best course of action to save our banks, we wouldn’t have any to save.

Incorrect. Anglo Irish would have gone. The "Guarantee" is an international laughing stock.

Nobody is going to be laughing tonys.

The only alternative to nationalisation is to do a Roosevelt: publish the books, now. They won't want to do that in at least some cases; I'd like to bet that for at least 2-3 of the banks, it wouldn't make pretty reading and may make the panic worse. The alternative is that the Government steps in before there is a run on all things Irish.

ALLIED IRISH BKS 0.40 -0.20 (-33.50%)
BANK OF IRELAND 0.30 -0.04 (-11.76%)

Tonys

You just do not write a guarantee when you you do not know the extent of the likely exposure and do not know if you can cover the guarantee if called. To write a guarantee that you cannot cover is pretty close to fraud in my books, and for that to be done by a government, well it says all any investor needs to know about Ireland.

With regards the Banks the government should first have asked what purpose in supporting, what is achieved, then is this the best course to achieve that purpose. Currently they could well bankrupt the country. So do tell me what is more important, one or two Banks or the solvency of the country?

They made a series of very bad calls.

expat girl wrote:

The only alternative to nationalisation is to do a Roosevelt: publish the books, now. They won't want to do that in at least some cases; I'd like to bet that for at least 2-3 of the banks, it wouldn't make pretty reading and may make the panic worse. The alternative is that the Government steps in before there is a run on all things Irish.

That could be a useful way forward, coupled with some statement that the government IS NOT going to nationalise and support in the form of loans. You may then get investors taking a longer view on possible returns.

Squire wrote:

Tonys

You just do not write a guarantee when you you do not know the extent of the likely exposure and do not know if you can cover the guarantee if called. To write a guarantee that you cannot cover is pretty close to fraud in my books, and for that to be done by a government, well it says all any investor needs to know about Ireland.

With regards the Banks the government should first have asked what purpose in supporting, what is achieved, then is this the best course to achieve that purpose. Currently they could well bankrupt the country. So do tell me what is more important, one or two Banks or the solvency of the country?

They made a series of very bad calls.

I don't agree, I think it's too early to say and so far, I don't see any evidence to support your judgement.

tonys wrote:

Squire wrote:

Tonys

You just do not write a guarantee when you you do not know the extent of the likely exposure and do not know if you can cover the guarantee if called. To write a guarantee that you cannot cover is pretty close to fraud in my books, and for that to be done by a government, well it says all any investor needs to know about Ireland.

With regards the Banks the government should first have asked what purpose in supporting, what is achieved, then is this the best course to achieve that purpose. Currently they could well bankrupt the country. So do tell me what is more important, one or two Banks or the solvency of the country?

They made a series of very bad calls.

I don't agree, I think it's too early to say and so far, I don't see any evidence to support your judgement.

At what point will you be convinced tonys? When Government has to tell civil servants it doesn't have the money for next week's wages? Because that is where they are heading.

cactus flower wrote:

tonys wrote:

Squire wrote:

Tonys

You just do not write a guarantee when you you do not know the extent of the likely exposure and do not know if you can cover the guarantee if called. To write a guarantee that you cannot cover is pretty close to fraud in my books, and for that to be done by a government, well it says all any investor needs to know about Ireland.

With regards the Banks the government should first have asked what purpose in supporting, what is achieved, then is this the best course to achieve that purpose. Currently they could well bankrupt the country. So do tell me what is more important, one or two Banks or the solvency of the country?

They made a series of very bad calls.

I don't agree, I think it's too early to say and so far, I don't see any evidence to support your judgement.

At what point will you be convinced tonys? When Government has to tell civil servants it doesn't have the money for next week's wages? Because that is where they are heading.

If you are as right about that as you were in accepting Kelly's article at face value, we should be safe for a long time yet.
The ball is still very much in play here with no indication of which way the result will ultimately go.

ISEQ Financial closed the day at 446.
ISEQ overall at 2230
ISEQ general at 2847.

Ireland is seeing a drop of share value of over 75% which is well above average global decline to date. Question is why?