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Lepista

Free Bank Shares For All

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Forced to have them now, pay later.

I can't see any flaw in this plan at all. Like, where will the money come from?

http://www.bbc.co.uk/news/business-12661005

Senior Liberal Democrats want the government to give away billions of pounds of its shares in Royal Bank of Scotland and Lloyds Banking Group to the general public.

The radical idea would see most of its stake in the banks shared between 46 million adults on the electoral roll.

A floor would be set so the shares could not be sold until they had passed the price paid by the government.

Individuals would only keep any gains made above that floor price.

The government spent £65.8bn buying shares in the banking giants.

It owns 83% of RBS and 41% of Lloyds.

The idea is set out by Stephen Williams, Liberal Democrat MP for Bristol West, in a pamphlet for the think tank Centre Forum.

He said: "There is a danger that when the banks return to the private sector, it is business as usual. There is a general feeling in this country that we need to get something positive in return for the bail-out.

"This plan would recoup the public's investment and allow the taxpayer to get the benefit from any increased value in the banks."

Under the proposal, shares would be deposited in individual trading accounts.

Mr Williams told the BBC how he saw the plan working: "Every citizen would have the same rights as shareholders at the moment, so they'd have the rights to get the company annual report. They could turn up at the AGM.

"What might happen, for instance, is there could be shareholder associations set up of citizens who own these shares, who will put pressure on the banks to change their behaviour. Banks and all other companies are meant to be owned by their shareholders and to respond to their shareholders' wishes."

Popular appeal

At current prices, every adult would receive shares worth just under £1,000.

Each account would be set up with a default option to sell the shares over two or three years, although individuals could opt to hold the shares for longer.

The idea may have popular appeal - but it was not conceived by politicians.

The city firm Portman Capital devised the model for the Liberal Democrats as a way round some of the problems the government could face in a traditional share sale.

Privatisations in the 1980s saw shares offered at a big discount.

That tempted institutional investors to buy in, but led to criticism the government was "selling the family silver" off too cheaply.

In 2008 and 2009 the government injected approximately £45.5bn into RBS by buying shares, and £20.3bn into Halifax Bank of Scotland, which was taken over by Lloyds.

Stagger

UK Financial Investments, which manages the public's stakes in the banks, is currently expected to sell them through conventional means.

That is likely to include placing the shares with pension funds and sovereign wealth funds, as well as offering them to retail investors.

UKFI is likely to have to stagger the sale of the shares over a number of years in order to get the best price so that the market has time to absorb the huge amount of shares on offer.

The shares are currently trading a few pence below the government's "break even price" of 51p for RBS shares, and 74p for Lloyds.

Toby Fenwick from Portman Capital says the shares suffer from an "overhang" - a situation where the market knows a lot of shares are likely to be sold and consequently depresses the share price.

"Under the current scenario there is one seller with a very big stake to unload and the market knows its break-even price," he said.

"A share distribution would create a new scenario with tens of millions of sellers each with a small stake and no incentive to sell below the 'floor'."

The idea is backed by Mr Williams and Lord Dick Newby, the Liberal Democrats' Treasury spokesman in the House of Lords.

It is not official Liberal Democrat policy, although the party's ministers are understood to be sympathetic to exploring whether the idea would work.

A source close to Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, said: "No decision has been taken about how or when this issue is going to be dealt with. But this is a welcome contribution to the debate."

Edited by Lepista

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Forced to have them now, pay later.

I can't see any flaw in this plan at all. Like, where will the money come from?

http://www.bbc.co.uk...siness-12661005

Why should the people who are not on the property ladder, bail out Lloyds, who own over 33% of the UK's mortgages, acquired from HBOS, of which, according to whistleblowers, up to 80% were fraudulent?

It still does not spread the pain of deficit reduction fairly, between those who are priced out, and those who own property.

An ill thought out policy, designed to buy votes and sucker people?

What are they really saying?

We fully intend to keep HPI going.....BUT.....We will give everyone a few thousand quid in shares......?!

So the homeowners who have seen their house increase threefold in value, get to keep their 'profits'

But the government would like everyone to be implicated, in the worlds biggest fraud, by forcing us into bed with the fraudsters, for a fraction of the cost?

In the eyes of the crooked amoral b@5tards at the top, you can see how this makes perfect sense.... :rolleyes:

Edited by Dan1

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A floor would be set so the shares could not be sold until they had passed the price paid by the government.

Individuals would only keep any gains made above that floor price.

At current prices, every adult would receive shares worth just under £1,000.

surely they mean theyd receive shares worth fck all

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What money? The government already owns the shares, they're proposing to give them away to the populace. It's quite a good idea, albeit not without problems.

"The government already owns the shares"... Along with quite a sizeable debt that was used to buy them with, that still needs to be paid back.

If the government gives the shares away, who will pay for all that existing debt?

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"The government already owns the shares"... Along with quite a sizeable debt that was used to buy them with, that still needs to be paid back.

If the government gives the shares away, who will pay for all that existing debt?

Didn't you read the bbc article? For want of a better description the government has a "charge" on the shares so they can't be sold till they're worth more than what the governement paid and they get their money back before you keep any profit.

As TDL says, they're not worth £1000 to you, they're worth three fifths of fck all.

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Effectively this is giving everyone £1000, perhaps they are hoping they get cashed in and the money spent.

How is it giving everyone £1000?

A floor would be set so the shares could not be sold until they had passed the price paid by the government.

Individuals would only keep any gains made above that floor price.

Edited by daiking

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"The government already owns the shares"... Along with quite a sizeable debt that was used to buy them with, that still needs to be paid back.

If the government gives the shares away, who will pay for all that existing debt?

Aah. The answer is that as Tamara De Lempicka points out the Govt. keeps the break-even value and the individual gets any premium above that when they sell, so the sale of the shares pays off the debt.

It does mean what's actually being given away is "fvck all" at the moment but you get a stake in an asset that may appreciate and you get a market that might behave more freely. The main danger as I see it is a massively expensive administration burder for doing this - and where the money for that comes from.

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How is it giving everyone £1000?

Should I repharse?

So what's being proposed then is the govt giving £1000 of shares, which people can only sell above the initial buying price and then the govt gets back it's initial outlay and job bloggs then gets to keep any profit made on the share. Essentially the public isn't getting £1000 of free shares but that's how the idea is being spun.

Would the public then get taxed on said profit?

Edited by interestrateripoff

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So the government borrowed £1000 to buy some shares in banks, and now it's proposing to give me the shares except I'm not allowed to sell them until they are worth more than £1000, and when I do sell them the government gets to keep the first £1000 so it can pay back its debts.

Would they index the floor price so it keeps pace with inflation? Otherwise I might as well hang on to them until Merv's magic has made £1000 just about enough for a bus fare into town, and then sell them.

So I get to choose when I sell them, but the government keeps the debt used to buy them on its own books? Seems like that might have implications for the national debt, interest rates on Gilts etc.

Of course, it's all just a smokescreen for the fact that the government got a terrible deal when it bought them in the first place. If they'd waited a bit longer for the share prices to collapse to zero, they could have nationalised these banks for free.

Edited by Dorkins

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Should I repharse?

So what's being proposed then if the govt giving £1000 of shares, which people can only sell above the initial buying price and then the govt gets back it's initial outlay and job bloggs then gets to keep any profit made on the share. Essentially the public isn't getting £1000 of free shares but that's how the idea is being spun.

Would the public then get taxed on said profit?

:D I see - sorry, I obviously didn't read the article thouroughly enough.

In which case, it is even more of a ridiculous idea than I first imagined!!!

Can I refuse to have them?

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Aah. The answer is that as Tamara De Lempicka points out the Govt. keeps the break-even value and the individual gets any premium above that when they sell, so the sale of the shares pays off the debt.

It does mean what's actually being given away is "fvck all" at the moment but you get a stake in an asset that may appreciate and you get a market that might behave more freely. The main danger as I see it is a massively expensive administration burder for doing this - and where the money for that comes from.

I would be less concerned about where it comes from than where it goes to.The admin would be charged at "market rates" by private companies,thereby creating yet another tranch of bonus millionaires.

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All this article does, is provide further evidence that the Coalition are not serious about spreading the pain of deficit reduction fairly.....

Giving Lloyds State Owned Bank shares to BTL debtors is something Gordon Brown could have come up with.....

Just force the MPC to raise IR and Raise CGT to the same level as Income tax, as per Thatchers Government. And do it YESTERDAY.

Savers are paying off borrowers mortgages, whilst inflation makes us all suffer. How many tens of billions in 'mortgage relief' have been stolen from those who do not own property already?

How many years of my working life have been stolen to keep speculators and fraudsters rich? And me in debt slavery?

Disgusting Government.

Bring Back Guy Fawkes.

Edited by Dan1

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Absolutely brilliant idea!

The gov can't do anything with these shares, they can't be sold as it would crash the share price due to the volume of shares to be offloaded.

Instead give it to the sheeple, force 45 million people to open a share dealing account, pay fees of all kind, then one day, maybe they sell the shares and give the money back to the government, minus an hypothetical profit, on which you pay tax and fees that essentially go back to the government... and wait for this! now that the government has only the debt of purchasing those shares in the first place (but no share to show for it), the tax payer has to pay more tax to make up this increased deficit! Oh and should I mention that in the process one powerful shareholder is now replaced with 45 million x-factor watching, careless and voiceless shareholders.

Brilliant I tell you, what's not to like if you are a banker, or a dealer, or a financial adviser?

By the way, rather than give it to 45 million people, should it be given to those who pay tax and whom therefore contributed to the bail-out? I am not sure people on SMI, benefits... should be given shares they didn't pay for in the first place!

Edited by frenchy

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Isn't this creative accounting, HMG borrow money from the future to buy shares and divi up money for Lloyds bonus pot to bail out Lloyds, give away the shares to the tax payer who has to hold until they at least regain the purchase price, meanwhile they are paying taxes to pay back the money that was borrowed to buy the shares that were given to them that they can't sell but the idiots they feel like "I own shares in Lloyds" lets spend some money now and pay it off when I can sell the shares (on the never never then)

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Worked perfectly well when the building societies got carpet bagged. :lol:

Didn't lead to distorted incentives, insane 'free market competition', sucking in overseas 'investment', the biggest house price bubble in history, lending 120% of asset value or forcing people to lie about their earnings.

We're all VIs now. Go on, buy a house, you know you want to. :lol:

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Won't the Government also tax the premium?

So effectively they would make more than £1000? Or have I got this share malarkey all wrong?

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Isn't this creative accounting, HMG borrow money from the future to buy shares and divi up money for Lloyds bonus pot to bail out Lloyds, give away the shares to the tax payer who has to hold until they at least regain the purchase price, meanwhile they are paying taxes to pay back the money that was borrowed to buy the shares that were given to them that they can't sell but the idiots they feel like "I own shares in Lloyds" lets spend some money now and pay it off when I can sell the shares (on the never never then)

in fact what is portrayed as a gift of a £1000 by the government to the people is in fact quite the opposite, the people would be all the sudden in debt to the government with essentially the obligation to pay the government back the £1000. this is creative accounting indeed, along the line so of PFIs and the likes, I imagine that the 65billion paid by the government for those shares could now come of the balance sheet as the debt is now on the sheeple.

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Guest sillybear2

Absolutely brilliant idea!

But a cumbersome way of going about it, why not just turn the existing holding company (UK Financial Investments Limited) into a public trust, any dividends go to HM Treasury to spend on Useful Shit.

Why should I care about directly owning some tiny allocation?

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Living in this country is like living in a cage, which is gradually being squeezed, smaller and smaller, until you can no longer breath nor move.

Edited by Dan1

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Guest sillybear2

Isn't this creative accounting, HMG borrow money from the future to buy shares and divi up money for Lloyds bonus pot to bail out Lloyds, give away the shares to the tax payer who has to hold until they at least regain the purchase price, meanwhile they are paying taxes to pay back the money that was borrowed to buy the shares that were given to them that they can't sell but the idiots they feel like "I own shares in Lloyds" lets spend some money now and pay it off when I can sell the shares (on the never never then)

Yup, it means the government has purchased the shares with a 0% interest loan from the 'buyers'.

Edited by sillybear2

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Mr Williams told the BBC how he saw the plan working: "Every citizen would have the same rights as shareholders at the moment, so they'd have the rights to get the company annual report. They could turn up at the AGM.

"What might happen, for instance, is there could be shareholder associations set up of citizens who own these shares, who will put pressure on the banks to change their behaviour. Banks and all other companies are meant to be owned by their shareholders and to respond to their shareholders' wishes."

Is this a way of trying to appease voters over bank bonuses? Technically if this happened (for RBS), 60% of the public could group together and vote off all the directors, refuse to accept the annual report, scrap bonuses etc. If we don't vote against it, how can we later moan of the bonuses they get.

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But a cumbersome way of going about it, why not just turn the existing holding company (UK Financial Investments Limited) into a public trust, any dividends go to HM Treasury to spend on Useful Shit.

Why should I care about directly owning some tiny allocation?

If you did care, it would be hard to acquire the shares without filling in the census.

Someone is counting their livestock.

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  • 295 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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