Board-Ansicht
Mix-Ansicht- Another week, another bank in crisis. This time it was one of our own, Barclays. - Vatapitta, 11.11.2007, 13:28
Another week, another bank in crisis. This time it was one of our own, Barclays.
-->A rumour too far
Another week, another bank in crisis. This time it wasn't a Wall Street giant but one of our own,
Barclays.
On Friday, speculation swept the market that the chief executive, John Varley, had resigned. Barclays
shares slumped 9 per cent at one point and were briefly suspended by the stock exchange because a
glut of orders could not be cleared. In an unprecedented move, Varley was forced to reassure
employees in an email, stressing that if there were any substance to the rumours, the bank would have
had to make an announcement to the stock market. But the concern is such that the board is
understood to be seriously considering whether to bring forward its trading statement, due in two
weeks' time, in the hope of putting a floor underneath the share price.
It's by no means an easy decision to make. The fundamental problem faced by Varley and his fellow
banking chief executives is that it is extremely difficult to get to grips with the scale of their sub-prime
exposure. As my colleague Iain Dey explains on page 7, if no one is trading in any of these fancy debt
instruments and there is no market, then there is no way of determining what they are worth.
Barclays' trading statement is not until November 27 and if Varley holds fire, that will leave another
fortnight in to which traders can project their worst fears. Some, of course, will welcome the volatility.
Hedge funds thrive on nervous, see-sawing markets and Barclays' shares are among the most shorted
in the FTSE 100 right now.
The events of the last few weeks, and in particular Barclays' see-sawing share price, will fuel the debate
about the role of hedge funds, and at what point their desire for volatility above all else is to the
detriment of the market as a whole.
Their defenders will argue that hedge fund money is one of the things that makes modern capital
markets so efficient. Their ability to provide massive, almost instantaneous liquidity makes the markets
function efficiently, and without them, companies like Barclays would find it very difficult to have their
shares properly valued.
The flip side, of course, comes when unscrupulous traders spread rumours in order to cash in on the
bets they have already made in the market. Policing this is nearly impossible - even if you locate the
rumour-monger, he or she has an almost watertight defence ready made - I believed the rumour was
true, your honour, and traded accordingly.
In the end, then, I think this kind of volatility is something we will just have to live with. To borrow a
quote from the American president James Madison on the subject of journalism, hedge fund trading,
"chequered as it is with abuses", is a necessary evil.
Hauptsache sie vergessen beim shorten nicht ihr Geld von den Barclays Konten abzuziehen. ![[image]](img/smilies/euklid.gif)
Gruss
Vatapitta
<ul> ~ http://www.telegraph.co.uk/money/main.jhtml;jsessionid=KVJLS0IXJDG03QFIQMFSFF4AVCBQ0IV0?xml=/money/2007/11/11/ccom111.xml</ul>
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