The Great Debate UK

Fears for bank rally overdone

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REUTERS — Margaret Doyle is a Reuters columnist. The opinions expressed are her own –

Three months is a long time in the markets, and particularly for banks. Alongside the rally in bank shares, investors have also bid up bank bonds, especially so-called tier 1 bonds which rank just above the equity in the list of creditors.

In some cases, the prices these bonds have tripled and, overall, yields to perpetuity have halved across the sector, according to Morgan Stanley.

This rally has now overshot and the risks are on the downside. Despite being labelled debt, tier 1 is pretty much like equity: issuers can stop paying coupons, the coupons do not always accumulate if missed and the issuer can choose not to “call” (redeem) them at the call date.

The plight of middle-aged investors

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david-kuo_motley-fool- David Kuo is director at The Motley Fool. The opinions expressed are his own. -

What is the one thing that young investors have but older investors would give their eye teeth?

BT must be more efficient

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david-kuo_motley-foolthumbnail- David Kuo is director at The Motley Fool. The opinions expressed are his own.-

BT’s annual results were expected to be bad. It turns out that they weren’t just bad – they were awful.

Now, many of us were expecting massive losses, a slashing of dividends, the axing of jobs and a gaping hole in the company’s pension fund. And BT duly delivered on all fronts.

AIB’s last chance to avoid nationalisation

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REUTERS– Margaret Doyle is a Reuters columnist. The opinions expressed are her own –

Eugene Sheehy told investors last October that he’d rather die than raise equity. Luckily the Allied Irish Banks boss, who has announced his imminent “retirement”, won’t have to make good on that pledge.

from The Great Debate:

Look to deal numbers for M&A green shoots

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Alex Smith-GreatDebate

-- Alexander Smith is a Reuters columnist. The opinions expressed are his own --

Volumes may be down, but there are green shoots appearing in the M&A market after the frozen winter of financial distress.

from The Great Debate:

Saving the economy from our brains

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James Saft Great Debate -- James Saft is a Reuters columnist. The opinions expressed are his own --

Our brains are wired for bubbles, it would appear, and regulation and tight external controls are the only way to save ourselves from ourselves.

Bankers, traders and investors effectively became addicted to the pleasure that comes from making money, while at the same time increasingly losing touch with just how much risk they were taking.

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