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Next bank to fail: HSBC

Discussion in 'General Entrepreneurship and Startup' started by andviv, Sep 15, 2009.

  1. andviv
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    andviv 210 kph Staff Member FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    I remember a couple of years back when I had an account with Wachovia. It was a great bank. Suddenly they started to delay longer to cash my checks. I'd deposit a check and then they would take extra days to make the money available in my account.

    The excuses were varied, from "new policy" to "making sure the cash is available from the check's owner account" for a cashier's check (yup, a certified check, can you imagine?).

    Well, it is Deja Vu all over again... this time with a different bank.

    This time the one that is having the same type of situation seems to be HSBC.

    We deposited a check on Thursday night from a different city than where the account resides, using an ATM. The check wasn't that big, a little bit more than $2K.

    They made $500 available the next day.

    And then on Monday the account showed a negative balance for the amount we deposited on Thursday. The $500 they had made available are now gone as well.

    When we called the bank they said that "Security had put a hold on the check" and no more explanations. The hold would last for 5 business days.

    An hour later, after listening to stupid excuse after stupid excuse we were finally transferred to a manager who told us it was a policy from Security to make sure the check was correctly funded, to "protect you". Protect me from having my money in my account? wow.

    So, it started to sound like Wachovia again, and we all know what happened to Wachovia, right?



    Today the excuse has been similar... really obscure... Security put a hold on the check cause they were not sure who had signe the check. When we asked them if the check had funds and the paying bank was OK with it they said yes.

    Oh, but now they told us that the money would be available next Monday. That is more than 5 business days ni my books, but hey, they are the bank, I guess they know better, right?

    Anyway, still dealing with this issue, and we still don't have the money in the account. And we are in overdraft.

    So, again, these are the same symptoms I started noting with Wachovia, well earlier than when they started talking about its demise.

    Have you noticed similar behavior from any bank these days?

    I wonder if it is time to short HSBC in particular at this time....
  2. MJ DeMarco
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    MJ DeMarco Admin Staff Member FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    I doubt HSBC goes insolvent. It is a Chinese owned bank. Sounds like just typical corporate BS strategies to increase fees and surcharges.
  3. Runum
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    Runum Warp 1 Read The Millionaire Fastlane Speedway Pass

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    Isnt' this called check kiting? They get the use of the money for a few more days before paying off.
  4. andviv
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    andviv 210 kph Staff Member FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    Yes, it is. The thing is, they didn't do it before, and now they are...

    like I said in the OP, I noticed the same pattern with other bank 6 months before they were in big trouble and ended up being bailed out by us.

    This change in policy is what makes me believe they are starting to have liquidity issues.
  5. JLaw
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    JLaw 20 kph

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    HSBC was founded in Hong Kong, but headquartered in London, I wouldn't exactly classified it as a Chinese bank. It is the world's largest banking group and top ten company in the world. I don't think you have anything to worry about. MJ, HSBC just has a huge chunk of its operations in China.
  6. andviv
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    andviv 210 kph Staff Member FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    This sounds just like Citibank a year or so ago...

    Just in case I'm moving my account to another bank.
  7. JLaw
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    JLaw 20 kph

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    Little different, Citibank is an American bank, HSBC is a British/Hong Kong bank. You can thank American rules and regulations for all the bank failures and credit crisis.
  8. randallg99
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    randallg99 70 kph Speedway Pass

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    I personally had similar experiences with Santandar/Sovereign as well as TD Bank N.A. The same run around you received is similar to the one I got. Banks are changing the rules as they go along and their policies have cost me significant sums. Funny thing is that everytime I threaten to move my deposits they beg for me to stay and waive the excessive fees.

    Banking institutions have recently put customer service behind "staying alive" and "screwing the masses."

    It's easy to blame American banks for the mess, but European banks had laxer standards than American banks and almost doubled leverage ratios. From an article one year ago:

    >Dr Daniel Gros, director of the Centre for European Policy Studies and co-author of the study, says that the "overall leverage ratio" of Europe's 12 largest banks - that is, the measure of total assets to shareholder equity - is 35 to 1, compared with less than 20 for the largest American banks. Highly-leveraged bets were widely blamed for the demise of Lehman Brothers, which held almost $700 billion in assets despite having shareholder equity of just $23 billion (a ratio of 30 to 1). <

    High leverage ratios could mean Europe's big banks are in deep trouble - The Irish Times - Wed, Sep 24, 2008
  9. hatterasguy
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    hatterasguy 40 kph

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    This is why I use local banks.
  10. Chitown
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    Chitown 40 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    Hatterasguy,

    I'm right there with you, my man.
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