Lloyds TSB-HBOS

[Tony.London Suburbs]

Why all the publicity?

No Big Deal if you ask me....

[Brendan]

What worries me, not to detract at all from Lloyds? magnanimity in the matter of course, is that in the long run it will create a bigger group to monopolise the market which will be worse for the consumer.

[Tony.London Suburbs]

I find it quite refreshing and re-assuring in a cynical,selfish business World (where lets face it!) so many Corporations and Multi-Nationals are purely out for their own personal gain that this marvellous Bank,with barely a thought for their own situation, have altruistically put their metaphorical arm around Halifax and Co, raised the necessary funds and preserved them for the collective benefit of our great Nation and all its people.

BRAVO! I SAY.:)-D

[Marmora Man]

Yes - but on the other hand think of all those traders selling HBOS short who now have to settle their deals at a much higher cost, and almost certainly a loss, than they greedily anticipated. One small glimmer of positivity.

[Brendan]

Warms the cockles of me heart it does.

[Tony.London Suburbs]

Brendan Wrote:

Warms the cockles of me heart it does.

Actually warms my "heartles"..but thats another story..:-$

[Jeremy]

I wonder if we will see some sort of tax introduced on short selling? Kind of a disincentive for taking a bearish position.

[Ladygooner]

The papers are predicting 40,000 job losses following the merger so I am sure it is a big deal to quite a lot of people.

[AcedOut]

I'm sure the hedge funds bought back at a decent level to cash in on their shorted positions. And then probably went long before making a 45% gain on HBOS!

I strongly believe that shorting rules should have been tightened up by now though - they are used purely as speculative bets. This has nothing to do with hedging positions - that's what put options are for. In the future, regulation around stock lending will be tightened up I'm sure. I'm not saying that short selling has caused all the problems, but it sure hasn't helped matters.

It'll be interesting to see if Goldman bankers try to take the bank back into a partnership. This wouldn't surprise me, since I think a merger is the last thing they'd go for...

[EDOldie]

Does anyone think that it's rather ironic that Lloyds-TSB were not able to buy Abbey as it would have given them too much of a monopoly and Abbey has been sold to a Spanish Bank. But now they have bought HBOS at a knock down price and ended up with an even larger share of the market than if they had bought Abbey.

They must be laughing all the way to the bank, so to speak.

[AcedOut]

I can assure you that no one is laughing!

This isn't going to be good for the consumer long term though, but better than to let a retail bank fold or get nationalised (again).

[EDOldie]

No, but it's going to be very good for Lloyds. It highlights what a useless bunch the government and the regulators/Bank of England are.

[lozzyloz]

It also highlights how a system based purely on delivering shareholder profits screws us all in the end.

[Brendan]

What I don't get is why the "regulators" don't seem to be able to regulate. They seem completely powerless or unwilling.

Or is it upholding spirit of, "Let's pull the wool over their eyes and steel as much as we can while we can..." sorry the "Free market."

[lozzyloz]

I think it's a fear of losing volume to other financial markets which might be more competitive or rather, less 'regulated'.

[EDOldie]

Could be greed.

[AcedOut]

Regulators just cannot keep up with the bankers. A loophole will be found and exploited and regulation takes years to put in place. As regulation is established, a new more complex product / structure is invented. Regulation and control around banking is extremely complex. The Basel II regulation is only scratching the surface.

[Brendan]

You see that?s been their excuse for years now and look where it has ended them. I reckon they will lose more due to this cockup than they would have if they had had a strongly regulated but stable system running consistently.

[Brendan]

Sorry my last post was in reply to lozzyloz.

[Jeremy]

AcedOut Wrote:

-------------------------------------------------------

> This has nothing to

> do with hedging positions - that's what put

> options are for. In the future, regulation around

> stock lending will be tightened up I'm sure. I'm

> not saying that short selling has caused all the

> problems, but it sure hasn't helped matters.

Sometimes traders go short for hedging... for instance, to hedge a put option that their bank has issued. Short selling also plays an important role in regulating over-inflated prices. In fact, it's pretty much essential... which is why I think that such a tax would be impossible to implement.

[Redone]

The thing is, sometimes people are long term investors. Sometimes they are day traders following up or down trends. Sometimes they are market makers supporting the trading activity of long term investors. Sometimes they are short sellers with a negative view on a stock. No doubt sometimes they are rumour mongering law breakers that are falsely talking the stocks up or down. This is what makes a market - different drivers and attitudes.

If you actually believe that the short sellers have been the major force in driving down the price of HBOS since its peak in June last year, then you are crediting them with too much power. The facts on the amount of stock on loan for HBOS dont support your argument.

What you should really be doing is asking why HBOS management has been working on a merger for a while without disclosing to anyone publicly that they were in increasing amounts of trouble. The bottom line is that the stock price went down because long term investors gave up and sold and no one else wanted to buy. Stop looking for scapegoats and look at the poor management.

[AcedOut]

If you write a put option, you're net long the underlying (long delta). Yes, you can sell short to hedge (reduce your delta), but you can also write calls. In understand what you're saying, but the number of short positions must be limited somehow.

Regulation of over-inflated prices? Surely an over-inflated stock would cause an investor to sell hence driving down the price? I'm not sure I follow that reasoning.

[AcedOut]

Reread my earlier post, which states, "I'm not saying that short selling has caused all the problems, but it sure hasn't helped matters."

[Tony.London Suburbs]

There was TSB and Bank Of Scotland and Lloyds and Halifax.Now they are one.Its one way to remove your competitors..

[EDOldie]

Does TSB stand for Try Selling Banks?