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British Government Accused Of De Facto Insider Trading


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http://www.londonstockexchange.com/en-gb/p...icleID=19010452

Simon Jenkins, who now writes for the Guardian, told the Treasury select committee that ministers decided to crash share prices once it became apparent that they would have to acquire "large chunks" of institutions like the Royal Bank of Scotland and Northern Rock.

He described their actions as "de facto insider trading".

Edited by gruffydd
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The only reason to nationalise a bank is that it's facing insolvency. The shares of an insolvent bank have zero intrinsic value; the only thing that might make them worth a punt is the prospect that the bank (i.e. the shareholders) will be bailed out.

So this sounds like bullocks to me.

Edited by huw
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Guest sillybear2

He forgets that politicians make the rules anyway, they could have just declared the banks insolvent and unsustainable without government help and nationalised them anyway, no need to worry about the share price.

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The only reason to nationalise a bank is that it's facing insolvency. The shares of an insolvent bank have zero intrinsic value; the only thing that might make them worth a punt is the prospect that the bank (i.e. the shareholders) will be bailed out.

So this sounds like bullocks to me.

+1

if you end up nationalising a bank because it's gone bust, then it's clearly not worth anything.

the fact that the gov't bought any of these banks at a price greater than zero means that they intentionally overpaid.

a gift to their banker chums.

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... ministers decided to crash share prices ...

Did he go on to explain the mechanics of such action? I can think of no method that government ministers, or anyone else, can 'crash share prices'. I haven't heard such absolute total b0||ocks for about a week!

p

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Guest sillybear2
+1

if you end up nationalising a bank because it's gone bust, then it's clearly not worth anything.

the fact that the gov't bought any of these banks at a price greater than zero means that they intentionally overpaid.

a gift to their banker chums.

Exactly, clearly illustrated by the fact that almost all of the bail out #1 money has since been vapourised, if anyone has been stung it's the tax payers falling for banksters dirty tricks.

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Guest sillybear2
"by leaking negative stories to the media" apparently.

Rise, Sir Peston....

Why bother, they could have done it directly with a one line press release :-

"HM Government has determined the following banks are insolvent and are no longer able to continue as a going concern, emergency legislation has been placed before Parliament to nationalise these institutions whilst a longterm recovery plan is developed"

Job done, no need to worry about the level of the share price or the markets.

Remember that the value of the fallen banks is negative, meaning even if the government acquired all the shares for 0p the tax payer still has a raw deal because we're left with all the liabilities.

Edited by sillybear2
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Did he go on to explain the mechanics of such action? I can think of no method that government ministers, or anyone else, can 'crash share prices'. I haven't heard such absolute total b0||ocks for about a week!

p

Perhaps there is a secret government hedge fund being run from the cabinet War Rooms?

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The only reason to nationalise a bank is that it's facing insolvency. The shares of an insolvent bank have zero intrinsic value; the only thing that might make them worth a punt is the prospect that the bank (i.e. the shareholders) will be bailed out.

So this sounds like bullocks to me.

Well they could have waited for some nice arabs to come to the rescue ala Barclays strictly speaking.

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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