HBOS: Malicious traders in the City try to topple the Halifax bank

[muriel_volestrangler]

Source: The Times

Stock market manipulators yesterday tried to bring down one of Britain’s biggest banks by spreading false rumours through the City.
...
The Financial Services Authority (FSA) said that it would pursue traders guilty of “market abuse” by spreading untrue claims that banks were on the brink of collapse.

The authorities believe that the fear and uncertainty in financial markets are allowing unscrupulous traders to make multimillion-pound profits by whipping up hysteria about the stability of big banks.

Yesterday’s drama began at about 8.30am when rumours started spreading through London’s stock market that HBOS, which owns Halifax, the UK’s biggest mortgage lender, and Bank of Scotland, had begged the Bank of England for a multi-billion-pound emergency loan. Within 20 minutes HBOS’s shares had plunged by more than 17 per cent as investors dumped their stakes. An hour later, the Bank of England announced that no bank needed emergency funding, while the FSA issued a statement warning investors to stop spreading false accusations.

Read more: http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3587090.ece

[DavidDvorkin]

1. I assume it's cold-blooded speculation, rather than malice

In the sense that the aim is to drive down shares, buy them, and make a quick profit when they recover. It's malicious, and it can harm huge numbers of people, but the aim is profit.

Heartless, in any case.

[dantyrant]

2. Just like what happened with Bear.

Sharks in Suits. Russ Winter calls these bankers 'Pig Men', and he's not wrong. It's a feeding frenzy.

[Supersedeas]

3. if the wider public only knew

[Robbien]

6. This is big news over in the UK

Headlines are calling it a hundred million Bank Heist. And are calling the hedgers Bank Robbers.

The government has gone to the public making announcements about the bank heist and formed a "posse" to go after the robbers.

Of course here in the US, we are barely even getting whispers that there is even a problem.

[4dsc]

4. Someone at CNBC said watch the British pound

Two days ago, someone on CNBC said he was carefuly watching the British pound for reason he could not give.. It didn't sound good for the pound though..

[muriel_volestrangler]

5. Against the average of world currencies, it's at its lowest since 1997

The only sector of the British economy that is a significant net exporter is the financial one. If international financial activity slows, it screws Britain's economy.