A full year before the Great Financial Crisis but serious in it's own right. There was a run on the bank that had been writing 20% of all the new mortgages in Britain while leveraged out at 58:1.
And people who knew what's what were getting in line:
When I read that The City's Stockbrokers and Fund Managers were queuing up to withdraw their deposits, well, it gets your attention....And we have our short chronology of the events of the next year, September 2008, and the magnificent market call by Société Générale's Albert Edwards*, after the jump.
And here we are on another September 15th.
From ZeroHedge:
Exactly 11 years to the day since traders organized an emergency impromptu CDS unwind session on Sunday afternoon ahead of Lehman's shocking September 15, 2008 bankruptcy filing, major banks are preparing for similar Sunday chaos, only this time in the crude oil market in the aftermath of Saturday's shocking drone attack on the most important oil processing plant in Saudi Arabia (and the world) which may result in a production shortfall of millions of bpd that stretches for days if not weeks, and lead to an explosion in oil prices (for those who are reading this early on Sunday afternoon, gas up your car now before gasoline prices surge on Monday).
First, we present the email that was just sent out by Saxo's Christopher Dembik, indicating that when Brent reopens, it will surge as much as $5-10 in the Asian session:
Very short comment on what is happening in the oil market.The bottom line: oil may spike much more if the return to normal production takes longer than expected. Sure enough, that is the main point conveyed in an email that was just blasted out by Goldman sales (not research) to the bank's top clients around the globe, with a message is simple: expect chaos when oil reopens... and sharply higher prices.
Following the events in Saudi Arabia, well-informed market participants expect that oil prices may increase by $5-10 per barrel in the Asian session.
Higher pressure on CNY, but also negative for TRY and INR due to elevated current account deficits.
Too early to assess the exact macro impact by it is bright clear we don’t need an oil shock…
A shocking lack of additional information has been released since the initial headlines yesterday afternoon that attacks on Saudi infrastructure would halt nearly half of Saudi output. With even Donald Trump quiet on the issue there remains more questions than answers.
A thorough summary of events and quick market backdrop from my colleague, Elise Backman, is attached. The long and short of it being that the Saudi’s Abqaiq facility processes up to 7mbd of crude and Khurais that was also hit produces about 1.5 mbd. It’s not an overstatement to call Abqaiq and its surrounding areas the heart of Aramco’s empire. In our view, the flaring pictures from NASA satellites make it very likely that some production is down; these flares are likely not from the attacks but more from the facilities going into emergency shutdowns. Aramco is built and setup with a lot of redundancies which is why you rarely hear of major outages – given the importance of Abqaiq we expect these redundancies (extra piping, spare stabilization units, extra tanks, etc.) to be even more prevalent at the facility.
However, this is a meaningful change for the crude market and highlights the vulnerability of Saudi infrastructure, and ongoing instability of the Middle East. While the market needs more information in order to make a determination on the direct impact to balances our expectation is for the market to trade definitively stronger with high levels of activity from the discretionary, systematic and corporate community likely creating a raft of opportunities.....MORE
Expect chaos to begin at 6pm sharp, when futures reopen:
We will be staffed globally from Market Open this evening (6pm EST/11pm BST) with best efforts on pricing subject to market tradability.And just to help traders make an informed decision (to submit a market buy order), here is what Goldman's energy analyst, Damien Courvalin and teams, published on the situation moments ago:...
*The greatest market call was Robert Rhea in the summer of 1932 but Albert is damn close on the leaderboard. as recounted in a 2011 post:
On September 5, 2008 we posted "Meltdown"-Société Générale" which linked to Albert's research note of a couple days earlier:During the Northern Rock debacle I was so tired I degenerated to New York Post style headlines:
***Alert****Economic and equity market meltdown imminent****Alert***
A good call. Very timely.
On September 7, 2008 Fannie Mae and Freddie Mac were placed into conservatorship.
On September 14, 2008 Merrill Lynch agreed to be acquired by Bank of America to avoid a Reg. T shutdown when the market opened Monday morning.
On September 15 Lehman filed their bankruptcy petition.
On September 16 AIG became a 79.9% subsidiary of the U.S. Treasury.
Within 10 more days the Nation's largest thrift, WaMu was seized and five days later Wachovia gobbled up.
Good times, good times....
Rock, Paper, ScissoredMerrill Lynch came out with a buy rec. and a price target of 913 pence. Alphaville commented "We like a ballsy call, here on FT Alphaville, but what's this?
What's a Rock Worth? Lon: NRK; This Could be AwkwardAnd more Post style headlines:
Panic on the streets of Britain: Northern rocked, City shockedAnd started babbling about the story of the first Barings Bank failure in 1890 [just to cheer people up? -ed]
A RUN ON THE BANK.
