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seemslikeadream Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 01:53 PM
Original message
growing fears that a big bank could go under as a result of losses in the US subprime mortgage and s
http://www.ft.com/cms/s/0/d18b54f8-995b-11dc-bb45-00007...

Trading in derivatives slows to a trickle
By David Oakley and Sarah OConnor

Published: November 23 2007 01:38 | Last updated: November 23 2007 01:38

Liquidity in some of the worlds biggest derivatives markets has dried up this week amid increasing fears over the health of the international financial system.

Over-the-counter trading in derivatives of equities, credit and interest rates have all seen much lower volumes as problems in financial markets have prompted investors to sit on the sidelines.


Although Thursday is typically slow because of the US Thanksgiving holiday, bankers said the week had been unusually light because of the growing fears that a big bank could go under as a result of losses in the US subprime mortgage and structured finance markets.

David Brickman, head of European credit strategy at Lehman Brothers, said: Generically, trading volumes are a lot lower than they were in the summer.
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BR_Parkway Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 01:58 PM
Response to Original message
1. Hmm, US bank or one in Europe? There are several possibilities
out there on either side of the Atlantic, wish he had been more specific. European banks can probably ride out that storm if one falls, but if US, that could really put the slide on the economy.
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Angela Shelley Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 02:00 PM
Response to Reply #1
2. Think about the "individuals", not just the bank
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aquart Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 02:01 PM
Response to Reply #1
3. Citi?
If there's a dishonest deal going, those boys will take it.
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Angela Shelley Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 02:03 PM
Response to Reply #3
4. I agree with your assumption
(heard it through the grapevine that they were doing some "crazy" things")
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Reno.Muse Donating Member (307 posts) Send PM | Profile | Ignore Fri Nov-23-07 04:41 PM
Response to Reply #4
5. This past week, Wells Fargo froze my son's payroll deposit ....
It's been going to his bank account from the same employer for 2 years and they froze it so he couldn't withdraw cash or write checks on it. He went in to find out why and they told him that his automatic payroll deposits showed a history of not clearing. He demanded a copy of his bank records for the past two years, no history to justify the freeze.

He's closing the account now. They had some hack from corporate office call him to talk him out of it and he told them to pound sand.

So, I wondered ...

all those mortgages on fake money and derivatives must be causing Wells Fargo some grief ...
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Selatius Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 05:07 PM
Response to Reply #5
10. If he closed his account, it means they have just a little less liquidity than before.
If I deposited 10 dollars with Wells Fargo and the reserve ratio is 10 percent, that means that they can loan out 9 of the 10 to people who want to take loans, but on the account ledgers it still says I have 10 in the bank. That's fractional reserve banking; it's how all banks operate.

If I closed the account, they're going to have to find for me where the other 9 dollars went, and that's now 9 dollars they can't use to shore up their own problems.
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 05:25 PM
Response to Reply #5
14. Wells Fargo Slips on Downgrade
http://www.marketintelligencecenter.com/articles/480117

http://www.forbes.com/markets/economy/2007/11/15/wells-...

<snip>
"We have not seen a nationwide decline in housing like this since the Great Depression," said Wells Fargo Chief Executive John Stumpf.

"I don't think we're in the ninth inning of unwinding this," Stumpf said, according to the Associated Press. "If we are, it's going to be an extra-inning game." In what has become a familiar refrain, Stumpf blamed the housing woes on weak demand, a decline in home prices, rising defaults and poor loan-lending practices.
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Mike03 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 04:45 PM
Response to Reply #3
6. Citi's been on my mind too, but maybe it's too obvious
to be the failing bank.

I don't think its Wells or B of A.

It might be a government sponsored enterprise like Fannie Mae.

My best guess is that is without question a domestic bank.
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LSK Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 05:15 PM
Response to Reply #3
12. I hope not, they bought out my mortgage company last spring
What happens to my mortgage than? (Its 30 years fixed at 6%).
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burrowowl Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 04:45 PM
Response to Original message
7. Well, supposedly accounts up $100,000 are insured
by the Feds. If the FDIC doesn't pay up the Nation is in real trouble.
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Mike03 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 04:48 PM
Response to Original message
8. There are also the brokerages to consider, like
Edited on Fri Nov-23-07 04:50 PM by Mike03
Schwab (which has money market funds) and so forth. Some of them own tons upon tons of worthless CDOs and other instruments of questionable quality.
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cliss Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 05:01 PM
Response to Original message
9. Here's what I've got on the situation ~
According to what I've read, the largest banks are teetering on the brink of insolvency. It's just a matter of time.
Most vulnerable:
Morgan Stanley
Citibank.
Several other of the biggest financial companies.

There is a thread on the LBN that the biggest banks are currently throwing out money and dividends + bonuses to all employees of the companies. Even though they are showing big losses.
The only conclusion I can draw is that these corporations are bankrupt. Just like Enron did, right before the fall. They started digging into the coffers before it was too late.
I'm sensing they're doing the same thing now.
There's nothing to be saved.
And when these giants tip over, watch out.
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Mike03 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 05:13 PM
Response to Reply #9
11. Morgan Stanley
That's interesting, and not unexpected.

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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-23-07 05:21 PM
Response to Reply #11
13. and Citibank
They've all been running the ship like Enron - Bushaccounting. It's now listing - watch the rats jump.
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