I suspect we are witnessing the first stages in the decoupling of International markets from the USA.

I hope it is achieved quickly without too much impact on other economies.

Alex, Aberdeen,

Peter Clements. Investment in South America, Africa and China. Safe investments/? Just look at history. All banks have been involved excessive lending using securitisation to keep lending. The pay back has arrived.

david barker, maidstone,

If what is reported is true and and Barclays are basically in good shape,it is time for the Barclays Board to scupper the Hedge Fund operators and and force them into a big loss position. As a shareholder I am getting tired of seeing my shares being attacked by and devalued by gambling Hedge Fund operators.

ed corbett, bridgend , UK

The British banks have done a roaring trade in creating triple-A rated securities and products, and certainly sold them to pension fund but there are plenty of greedy bankers in the City and I don't think the blame can be placed on "the Americans. " The ratings agencies may well have their day in a U.S. court., in any case.

Christine, London , UK

It is an opportune time to review the role of Hedge Funds, their contribution to the current crisis in financial markets, their interaction with other institutions in the investment community, and possible outcomes emanating from the chaos in current markets.

No apology is made for any apparent bias or omission in the comments. The comments are opinion only – others will probably provide their thoughts.

Hedge Funds and their shorting activities contribute little to the well being of financial markets, appear to have questionable ethics and standards, operate with minimal transparency (if any), interact with other institutions that are regulated appropriately and expose the entire financial system to considerable (unquantifiable?) risk, to satisfy their greed for profit at any price and to facilitate the obscene remuneration and bonus packages of their managements.

The old chestnut, usually pontificated by Hedge Fund representatives, identifies their role in contributing to market efficiency by increasing volatility – well we now know the full implications of that statement!

They omit to mention that the primary beneficiaries of increased volatility are the Hedge Funds themselves and that leveraged and dubious financial instruments sufficient to cause potential meltdown in the financial community will be used to achieve their ends

I do not accept that we have a “subprime crisis” – we have a meltdown in International Financial Systems due to the proliferation and mismanagement of derivates and other leveraged and dubious financial instruments.

It is proposed that such proliferation emanated from the deregulation of the financial sector, development of sophisticated computer trading models, growth in international web based trading and the failure of Central Banks and Regulators to manage these changes through monitoring sufficient to protect savers, investors and the general wellbeing of their economies.

If the current problem is not properly identified then we run the risk of solving the wrong problem and consequently will face its recurrence at some time in the future.

It appears that Hedge Fund managements operate in an environment where accountability or ethics are considered a barrier to their operation.

Early in the current crisis we had senior representatives of the financial sector in the USA lobbying the Federal Reserve to release “bail-out funds” and to reduce Interest
Rates to provide stability and liquidity to the market.

Concurrently institutions were deciding where dubious toxic debt should be off-loaded, and other institutions were busy “shorting” Banks and Building Society shares to make the best of the opportunities offered by the market turmoil.

On one hand begging for Government support whilst concurrently making enormous profits through aggressive activity in “shorting” activity. For example, it is rumoured that up to £500 million was acquired by shorting just one Bank in the UK.

Another example is the obvious enthusiasm and greed of market traders as expressed in interviews on the main financial TV channels where the terms “let’s go make some money” were heard in the early days of market chaos and volatility.

The absence of accountability and foresight in the development of Hedge Funds and the proliferation of leveraged instruments may have resulted in other impacts as yet un-quantified.

For example the potential impact on UK companies and the general economy of “shorting strategy” attacks by International Institutions (primarily American) thereby having a downward ratchet effect on UK share prices – devaluing companies and their share currency for competing and taking advantage of M & A activity in international markets.

It should be noted that Hedge Funds are not the only participants in “hedging / shorting” strategies. Institutions, in their search for profit, are encouraging the public to participate in all sorts of leveraged trading “spread-betting”, CFD’s, options etc. through their submissive advertising.

The logical conclusion will be for savers and investors, (be they pensioners, children or homebuilders) to commit funds to the market, (acknowledging their risk), and for Hedge Funds and other “shorter” to immediately relieve them of the full potential of their investment – surely this will not be allowed to continue?

Apologies this is a bit long – I will bring it to a close with a few comments and predications as to what may happen in the future noting that Politicians are getting exasperated by the inability of the financial community to work together and solve the problems.

Here are a few suggestions for discussion:


1. Hedge Funds will be regulated and obliged to provide transparency in their holdings and risk exposures as applicable to the markets in which they operate.

2. Regulated institutions will not be allowed to interact with Hedge Funds engaged in “shorting strategies” or operating highly leveraged instruments, to include:

a. Loaning stock
b. Providing all kinds of finance or participating in equity

3. (If (2) is not enacted, Regulated institutions interacting with Hedge Funds engaged in “shorting strategies” or other institutions operating highly leveraged positions will have file their transactions, to include:


a. Details of Stock loaned
b. Provision of all kinds of finance or participation in equity
c. Institutions loaning stock will have to report such activity to their Shareholders
(This may be a powerful tool – do we have many institutions with subsidiaries offering Investment Advice and Services whilst concurrently loaning stock, (at a price), to permit others to short the market and devalue the potential of client investments.)


4. Provide details of any transactions concerning the transfer of ownership of Collateralised Debt Obligations, or other Mortgage related instruments, in the period from 1st July, 2007 until current date to validate that Institutions complied fully with their fiduciary duty of care and contract, that the integrity of “Chinese walls” was effective and that the ownership of liability remained with the accountable institution and was not transferred to another party or the public through a fund managed by the debt holder.

5. “Short positions” must me fully covered.

6. The components of Investment Banks will be divested as a hedge against anticipated activity by “class-action” lawyers – similar to the tobacco companies in the 90’s.

I suspect that the general warning “stock can go down as well as up” or “you
could lose more that you invest” will not be sufficient in the future.

7. Fund Managers will get off the fence and represent their investors better when voting on Director compensation within the financial sector, specifically where remuneration is not linked to company performance against sector peers.

8. Other?

I have copied this message to Mr. John McFall, Chairman of the Financial Stability and Transparency Treasury Committee at mcfallj@parliament.uk

Alex, Aberdeen,

We need trading statements from all of the British Banks - it's time that the Banking Sector identified these issues as an industry and confidence problem.

They may be hesitant to set a precedent - however if all of the Banks participated then it is unlikely, (I hope), that such concerted reporting would ever be required again.

A few minutes ago CNBC reported that "Barclay's" had denied that they had £XXXX exposure.

It appears that the market does not believe them.

What does this say about the public's expectations in respect of the standards, integrity, ethics and credibility of our major institutions?

This is a huge problem.

British Banks are respected around the world - their good name should not be sullied by the continued "drip by drip" innuendo and rumour experienced over the past days.

I suspect that only official Trading Updates will suffice.

Alex, Aberdeen,

Any thoughts on quarterly reporting in the UK.

I suspect that requirements for Final & Interim reports only, are insufficient and inconsistent with the volatility and speed of current / future markets.

Alex, Aberdeen,

I suspect we are witnessing the first stages in the decoupling of International markets from the USA.

I hope it is achieved quickly without too much impact on other economies.

Alex, Aberdeen,

Been watching Mr. Bernanke's presentation to the joint economic select committee this afternoon and listening to commentary on CNBC

Have the politicians delegated responsibility to the "markets" to identify a way forward?

Where is the political leadership - they appear completely lost.

There must be some other means to return confidence to the "still" largest economy in the world.

Alex, Aberdeen,

UK institutions that purchased Debt Instruments that were not what they were purported to be, and found to be non-compliant with their contract description; should return the debt to the originating US Institution for a refund.

To ensure the continued credibility of the USA Financial System such debt obligation and refund should be "backed" by a General Fund instituted for that purpose by the major American Banks and the Federal Reserve.

This appears to be a reasonable proposal which can be implemented quickly, return stability to international markets, demonstrate acceptance of accountability, pre-empt the lawyers and save millions in legal fees.

Any other suggestions that may help our neighbours?

Alex, Aberdeen,

Politicians, financial managers and commentators are always referring to the subprime crisis in their deliberations.

In my opinion the subprime issue is a symptom rather than the "root cause" of current turmoil within International Financial Systems.

I suspect that the primary cause of breakdown in the performance of the market is the proliferation of derivatives and other instruments to leverage revenues by Banks, Hedge Funds and other institutions; without truly understanding the risks that they were imposing on their financial community, to their own organisations and indeed to the general worldwide economy.

The extent of mismanagement should not be underestimated.

I submit that if the “crisis” did not arise as a result of “subprime” then it would have been another investment vehicle, (e.g. shares, commercial property, commodities etc) that eventually, would have highlighted the untenable risks being built into financial systems.

As professional management, ethics and standards appear to be absent or a diminishing quality within International Financial Institutions, (basically American – the primary promoters of leveraged solutions), then it is unlikely that self regulation within the industry will be sufficient.

Accordingly, let’s hope that the Regulators and Politicians are up to the task for all our futures.

Alex, Aberdeen,

I suspect that there are curently too many conflicting interests in America to quickly resolve the sub-prime issue.

In the year prior to an election, I can't see the Democrat led Senate and Congress being overhelpful to President Bush in finding a solution until all political collateral has been "milked"; to the general detriment of all their citizens.

Alex, Aberdeen,

As a small Barclays shareholder I have every confidence in the Barclays management to weather the storm in financial markets. How many millions in the last fortnight/three weeks of their own shares have Barclays bought on the open market, having received in May/June this year from Chinese and Hongkong investment vehicles what I believe to be an averate price of £7.40 a share and what is the ultimate profit they have made with their share price continually being reduced (must be millions). The rise of China and its investment in Africa, South America and other parts of the world in order to safeguard its future will be automatically beneficial to Barclays and thus opportunities for them to enjoy the billions to be made from association with the Chinese. Take my packet of shares Mr. Varley and let me ride on the back of the tiger as a small investor.

Mr Peter Clements, Droitwich, Worcestershire, England

So its not $10 billion. $9 billion? $8 billion?

Why show September and October figures for BarCap - its the figures from the previous years that are causing all the problems.

Will they be explaining their alleged approaches to the ECB and Fed too?

More wattle and daub accounting practices from the City.

Elton Wellby, Manchester,

You write that Barclays is using PWC to ensure that the guidance it is giving the market is correct. But what is correct? If Barclays has a significant exposure to CDO's and their offspring, there is no way of quantifying exactly what level of write-offs, if any, is appropriate. The critical question is how well covered will (inevitable) payment defaults be by the value of the collateral that is held as security against them. And, unless someone has a crystal ball, and can foresee the decline in property values to be expected in the short/medium term, there's really no way of predicting the appropriate level of write-offs.

Of course, if the market's operating principle had been prudence, instead of squeezing the last bit of current profit, real or imaginary, out of every situation, then we wouldn't be in this position today. Maybe this is something that will be learnt? I hope so, but I'm not holding my breath.

Simon Stephenson, Windermere, UK

Where are the FSA?

Deliberate rumours placed by hedge funds designed to cause people to sell stock at false prices to give them a profit is fraud if true. There is no other word for the actions of the rumour starters who hold a short position, so where are the FSA, BOE, and the government?

Peoples pension are being hit hard by this fraud via rumour and could be hit further if the pension funds own some of this fraudulently sold AAA debt. So again I ask where is our government on this? AAA rated debt that clearly was not AAA was sold to our institutions. If we did this to USA funds they would be asking for our executives to be shipped out for criminal trials but as usual the UK allows America to stomp all over us.

I look forward to seeing US bankers and ratings agencies in a UK court......... I wish!!!

Yes I am very angry at what is going on that originated from the knigs of greed - The USA.

Gary, Manchester,