JH in tennessee opines: “Prediction is Household / Beneficial will not be around in 2 years. It’s easy to see that they are using their current staff to solicit paying off open Real Estate loans by attempting to qualify them for conforming loans so they can sell off to investors. Couple that with the job openings posted on Monster.com for Solstice where they offer an open book to the Real Estate loans to be paid off by the FHA lender. Word on street is targeting over 5 billion to be liquidated. Present employees need only to review these two facts to see they are selling themselves out of a job. As the loans get paid off in the future, so go the offices that become less and less needed.”

HSBC was reported to have set a July 31, 2008, deadline for sealing the KEB deal. Yet, there is little possibility that criminal proceedings with the two pending cases will be completed by the end of the year, let alone within a month or two. The financial regulator’s rigid position is adding to speculation that it is deliberately stalling its decision on the KEB sale in consideration of the unfavorable public opinion against the foreign sale. What favors, if any, can South Korea benefit from? The Seoul Appellate Court’s acquittal of U.S. private equity firm Lone Star Funds from stock price manipulation charges happened this week, but HSBC set a deadline and many Koreans are tired of US and US-related manipulation in Korea.

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Trading in HSBC options jumped Friday to eight times the normal daily volume. Investors picked up 70,000 puts, which let them sell the bank’s stock, and 11,000 calls that allow them to buy it, according to Trade Alert. Traders took up bearish up positions and flocked to September $75 puts, in particular, which were priced at $4.40 and make money if HSBC’s American depositary shares fall below $70.60 before Sept. 19. Such a move would represent an 8% drop from Friday’s close. The shares fell $1.39 to $76.55 as of 4 p.m. in New York Stock Exchange composite trading.

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HSBC never looked into the future when they purchased Household International, and they certainly never made developing the company once they acquired it a top priority. I always had the impression that they were in it for the short term, as they were notorious for leaving branches in various stages of decay. Many times I saw examples of the corporate headquarters outright refusing to give branches new office equipment that simply did not work anymore. It is my opinion that they just wanted to make a quick buck off of the remaining shards of the Household blowup by propping up Household with HSBC funds. They could then sell off the business at a profit to the next sucker once they made it look viable again. Because the sub-prime crisis has rendered Household essentially worthless (again), they are forced to keep it. But someone needs to be blamed for the lack of profits, so why not put the entire sales staff on corrective action?

What always puzzled me was the company’s lack of introspection. Rather than attacking the root of the lack of the production (high rates, high fees, poor customer service), upper management always shifted the blame on the sales representatives. Employees were told that they were not aggressive enough, or that they did not sufficiently “break down” the customer to the point where the customer felt that a HSBC loan was their last and only option.

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