Wednesday, January 21, 2009
HSBC on the verge of COLLAPSE! GET YOUR MONEY OUT! Needs 30 BILLION DOLLARS!
By Bei Hu
Jan. 19 (Bloomberg) -- HSBC Holdings Plc fell for a sixth straight day in Hong Kong trading after shareholder Knight Vinke Asset Management LLC said Europe’s largest bank may need to sell shares to plug a “substantial” capital shortfall.
London-based HSBC slumped 3.9 percent to HK$62.30 at 11:18 a.m. local time, the lowest in a decade and extending the longest losing streak since September. The stock has lost 15 percent this year, making HSBC the worst performer on Hong Kong’s benchmark Hang Seng Index.
Knight Vinke joined Morgan Stanley and CLSA Asia-Pacific Markets in predicting HSBC will be forced sell shares for the first time since the financial crisis began in 2007. Fitch Ratings said Jan. 16 it may cut HSBC’s credit rating as the global recession undermines the bank’s finances.
HSBC’s Household International unit, an investor in sub- prime loans, “has turned out to be an unmitigated disaster,” Knight Vinke said in a statement published on its Web site on Jan. 18. HSBC spokesman Patrick McGuinness declined to comment today when reached by telephone that day.
“There can be little doubt that HSBC will need substantial additional capital if Household is not restructured,” Eric Knight, chief executive officer of Knight Vinke, said in the statement.
HSBC may need to raise as much as $30 billion and cut its dividend in half, Morgan Stanley analysts led by Michael Helsby said in a Jan. 13 note to clients. The company’s so-called core capital ratio of 7.3 percent is among the weakest among European and Asian banks, the analysts said.
Fitch cut its outlook on HSBC’s debt to “negative” from “stable” and said the bank’s long-term issuer default rating may be lowered over the “medium term.” HSBC’s profitability in the fourth quarter was probably “weak” and the bank is increasingly likely to need to raise funds to support the U.S. unit, Fitch said.
SAVE YOURSELF! Over 400 Depression and Survival GUIDES only $2!
THE COLLAPSE OF CAPITALISM
AND THE SAFETY NET OF GOLD
For Ponzi schemes to succeed, they must expand faster than the request
for redemptions. If they do not, they will collapse. This is what happened
to Bernard L Madoff Investment Services, the largest Ponzi scheme in
history. The same is about to happen to capitalism.
Although capitalism is not a Ponzi scheme, credit-based economies, sic capitalism, and
Ponzi schemes share the same fatal flaw. Both must constantly expand or they are in
danger of collapse. Today, because capitalist economies are no longer expanding, but
contracting, their continued contraction will lead to collapse.
EXCELLENT ARTICLE A MUST READ!