The large dilutionInvestors have horror of uncertainty

Lead a bank requires today as feint candor to incorrigible optimism. Kenneth Lewis, the CEO of Bank of America, has the chance to combine the two. He bragged in July "the difference between big diversified banks and others," admits today that the US credit market is a "p... disaster." And that "the most difficult time" that he had known in thirty-nine year career save not the largest bank in the country. Its net profit for the third quarter has been divided by three from last year while the deterioration of the financial situation of SMEs and credit cards holders tripled its supplies and its losses on loans and the crisis charged a new tithe of $ 2.5 billion. The pattern of BoA was beautiful game to explain that he "cannot distribute what the Bank did not win" to justify division by two of the dividend to the time where appears the real invoice of the acquisition of Countrywide and that current, of Merrill Lynch. Having removed the title of 30 in four days, the market does credits not Ken Lewis of naïve such that he can pretend to believe that the own funds saved in dividends $ 5.6 billion and 10 billion of future capital increase will be sufficient to ensure a peaceful digestion.

The large dilution

Investors have horror of uncertainty. Even if the financial crisis provides a widely unreported face, this good old saying remains valid as the note is that a banking crisis heals by the return of confidence. This little game, several British banks are logically in the eye of the cyclone, starting with Royal Bank of Scotland affected both by the purchase of a part of ABN AMRO and its positions across the Atlantic. Because operators face the next move on the chessboard of the Government of her most gracious Majesty, who has already said and repeated for months that it would not sink its banking system. The idea would be to be able to recapitalise major institutions, to rebuild confidence. Very well, but the mere knowledge that meetings be held to talk about is enough to cast the spectrum of the inevitable dilution on the course. How much exactly, it is any unease, even if analysts have a baseline for their calculations, just them a private investor, the American Warren Buffett. In the meantime, natural selection played in full, even among the Scottish banks. Where the action of a group such as HSBC, classified in the winners of the crisis, has gained 7 percent since January, RBS has lost 76 and only HBOS is increasingly worse with a decline of 86.

Misunderstood services

The strongest link cracking, when that string is really fragile. Such is the conclusion reached by the investors of the announcement by the German SAP of a reduction in "very brutal and unexpected" its command in the last fortnight of September. For this reason, software Editor, very little exposure to financial services, was regarded as relatively safe shelter in the current storm. The fact that he also be struck under these conditions mean that the worst for the whole sector. The respite enjoyed by the rest of the rating is thus even not was granted and its values were massacred. SAP first, after the sanction of Eve, received a new stolen green wood, losing almost a quarter of its value in two days. He especially trained Capgemini, who has him, fell by 21 in 48 hours. Market no doubt somewhat quickly equated the two values. It is easier for a company to cancel the order of new software, that to interrupt a service contract in progress such as those that passes French with its customers. Therefore, it is not sure that its situation is comparable to that of the German group. On the other hand, what is certain on the brutality of the judgment referred to by SAP is that evil has spread well beyond the computer industry. And that the respite of yesterday is of short duration.