London Stock Exchange failure floors share price rally

[Nostalgia]

The recovery of share prices in the wake of the bail out of the US mortgage market stalled when the London Stock Exchange ground to a halt for more than seven hours on Monday.

The glitch, caused by a computer problem, was a huge embarrassment for the LSE and led to the stock market closing for the longest time in eight years. The trading system crashed just 45 minutes into what was expected to be one of the busiest trading days in the year. Before the stock market seized up, shares in banks had climbed by up to 14 per cent.

The market eventually opened at 4pm, leaving traders just half an hour of business to complete their deals. The FTSE 100 closed at 5,446.30, up 3.9 per cent and reversing much of last week's falls.
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By close, all of the major banks had seen their shares increase by more than 11 per cent. It came as investors bet that the US bail out of mortgage lenders Freddie Mac and Fannie Mae may mark the beginning of the end for the credit crisis.

It is understood that the computer systems failed to cope with investors scrambling to change their bets, following huge falls last week and then the sudden rescue of the two American mortgage institutions, which was announced over the weekend.

Investors in London initially cheered the developments in America, with the FTSE 100 index of leading shares jumping by 3 per cent.

There is hope from experts in Britain that the US Government's intervention will prompt an improvement in global credit crisis, which has seen banks unwilling to lend money to each other and to consumers.

This has caused, particularly in Britain, the complete drying up of the mortgage market, with 70 per cent fewer home loans sold compared with a year ago.

Now that the US government has, in effect, underwritten the value of two of the world's biggest financial institutions, it is hoped that lenders will feel more confident about lending to each other and to consumers.

However, investors were angry that they could not fully take advantage of the good news to buy up shares, especially in financial companies.

"Many traders will feel morally cheated that they have been unable to conduct their business in response to today's financial news," said David Buik, a market analyst at BGC Partners.

"The fact that it happened beggars belief." Justin Urquhart Stewart, a director at Seven Investment Management, added: "There's been some fury among traders who have wanted to go in.

The market has been moving very quickly, and in volatile markets like these you rely on trading systems being there so you can carry out your work." The optimism on the LSE was echoed in Wall Street where share prices rallied strong.

In late morning trading, the Dow Jones industrial average rose 184.26, or 1.64 percent, to 11,405.22. Dave Rovelli, managing director of Canaccord Adams in New York, summed up the mood, saying the rescue, "saves Armageddon from happening."

The US Government announced over the weekend that it would guarantee all the debts of the two mortgage giants and inject cash into the companies.

Because Fannie and Freddie act as underwriters to half of the £5.8 billion US mortgage market, they have been forced to pay out every time a home owner defaults on their loans, which has been happening to tens of thousands of home owners every month.

The firms lost more than £1.4 billion alone between April and June, resulting in a sharp fall in their share values. Shares in the two companies have fallen by 80 per cent since the start of this year.
http://www.telegraph.co.uk/money/mai.../bcnlse608.xml

HBOS is going banckrupt but they are not telling the truth about it.

They are saying to media, press TV that they are in a good state.

Inisde information from within the organsiation tells different story.

HBOS is heavily exposed to mortgage market and have no ability to secure funding to fund its business

Peple who have shares with them need to sell them fast.

People with any savings with HBOS need to take them out now

HBOS is not going to last for long

Act before is too late