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anonguest

Tories To Sell More Lloyds Bank Shares Back To Public

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http://www.bbc.co.uk/news/election-2015-32366391

So let me see if I understand this correctly.......

Banks get into serious trouble. Government bails out the banks and effectively takes ownership of them using our money. Then, later on, proposes to sell the shares it has bought with our money back to us - again getting money off us. Isn't that what is happening here?

What a fantastic scam. It's enough to make your blood boil. And they want us to vote for them?!

As far as I recall the only redeeming feature of the LDs in the coalition was that, early on, they did propose distributing the shares the government had bought - precisely because they too acknowledged that in effect it was the public who owned them.

Edited by anonguest

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When house prices fall again the government of the day will have to renationalise these banks again.

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Don't worry.....the profits made from the sale can be used to prop-up house prices..... :blink: - and so it goes.

Excuse me please. I have to go off and find a pitchfork and a flaming torch......

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It is better than that though as they generally break the banks up and keep the bad bit in the public and refloat the good bit.

Then the people with enough spare cash can buy the good bit of the bank when it refloats.

It is why I bought TSB shares, they effectively created a debt and liability free bank which they undervalued by 30%.

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When house prices fall again the government of the day will have to renationalise these banks again.

I'm not upto date on legislation but thought they had setup bail-ins for those outside protected deposits? In practice though professional investors move faster right so not sure how they get bailed in? There was an article recently about rapid withdraw of deposits presumably as one does not want to get bailed in?

https://www.gov.uk/government/consultations/bail-in-powers-implementation-including-draft-secondary-legislation/bail-in-powers-implementation

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It is better than that though as they generally break the banks up and keep the bad bit in the public and refloat the good bit.

Then the people with enough spare cash can buy the good bit of the bank when it refloats.

It is why I bought TSB shares, they effectively created a debt and liability free bank which they undervalued by 30%.

.....and which you already owned and had paid for! But clearly you felt you hadn't paid enough so queued up to pay some more for what you already owned?!

Did you actually understand any of the essence of what I was trying to convey in my original post??!!

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http://www.bbc.co.uk/news/election-2015-32366391

So let me see if I understand this correctly.......

Banks get into serious trouble. Government bails out the banks and effectively takes ownership of them using our money. Then, later on, proposes to sell the shares it has bought with our money back to us - again getting money off us. Isn't that what is happening here?

What a fantastic scam. It's enough to make your blood boil. And they want us to vote for them?!

As far as I recall the only redeeming feature of the LDs in the coalition was that, early on, they did propose distributing the shares the government had bought - precisely because they too acknowledged that in effect it was the public who owned them.

Not quite. All of us bought the cr4p private sector failed businesses.

Only a chosen few get the giveaway.

Tories are the Below Market Value spiv party.

Michael Green / Grant Shapps probably has a get rich quick scam outlining the broad principles.

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Don't forget the political dimension. The Conservatives are seeking to buy your vote by selling you something you already own.

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http://www.bbc.co.uk/news/election-2015-32366391

So let me see if I understand this correctly.......

Banks get into serious trouble. Government bails out the banks and effectively takes ownership of them using our money. Then, later on, proposes to sell the shares it has bought with our money back to us - again getting money off us. Isn't that what is happening here?

What a fantastic scam. It's enough to make your blood boil. And they want us to vote for them?!

As far as I recall the only redeeming feature of the LDs in the coalition was that, early on, they did propose distributing the shares the government had bought - precisely because they too acknowledged that in effect it was the public who owned them.

In short no, the shares were purchased by creating debt. Letting people who want to buy them so that this debt can be repaid seems the sensible thing to

Certainly it is compared with the LD's idea of distribution, i.e. running up a debt to buy something you don't really want to own and then giving it away to people most of whom also don't want to own it.

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In short no, the shares were purchased by creating debt. Letting people who want to buy them so that this debt can be repaid seems the sensible thing to

Certainly it is compared with the LD's idea of distribution, i.e. running up a debt to buy something you don't really want to own and then giving it away to people most of whom also don't want to own it.

but those who don't want them would be free to sell them on if they want - at least they would have had the shares to do with as they please.

just like the old Thatcher era privatisations. Most did not keep the shares for long(?) whilst others accumulated them for the longer term.

Edited by anonguest

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...Banks get into serious trouble. Government bails out the banks and effectively takes ownership of them using our money. Then, later on, proposes to sell the shares it has bought with our money back to us - again getting money off us. Isn't that what is happening here?

What a fantastic scam. It's enough to make your blood boil. And they want us to vote for them?!...

+1, hard to believe but true, it's amazing, almost magical.

Not to mention the huge loss when adjusted for inflation.

It's so good to be a hard working non share owning UK taxpayer :wacko:.

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I'm not upto date on legislation but thought they had setup bail-ins for those outside protected deposits? In practice though professional investors move faster right so not sure how they get bailed in? There was an article recently about rapid withdraw of deposits presumably as one does not want to get bailed in?

https://www.gov.uk/government/consultations/bail-in-powers-implementation-including-draft-secondary-legislation/bail-in-powers-implementation

It doesn't matter what the UK government claims will happen when the next bank goes bust, this is just for show. When things go south they will guarantee everything and make all bank creditors whole. The bankers have scared politicians into thinking that anything less than this will mean the lights going out, no food on the shelves etc.

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but those who don't want them would be free to sell them on if they want - at least they would have had the shares to do with as they please.

just like the old Thatcher era privatisations. Most did not keep the shares for long(?) whilst others accumulated them for the longer term.

But the debt would still be there and have to be repaid at some point. Effectively the goverment will have found a very complicated and expensive way of loaning people some money in the form of bank shares that will need to be paid back in the form of higher taxes..

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http://www.telegraph.co.uk/news/politics/conservative/11547761/George-Osborne-We-want-to-give-everyone-a-fair-share-in-this-countrys-future.html

This headline needs to be changed to what it actually is;

George Osborne: We want to give everyone a fair share in this country’s failure!

I'm prepared to wager that none of these million people will be queuing up to buy these shares!

http://www.independent.co.uk/news/uk/home-news/one-million-britons-using-food-banks-according-to-trussell-trust-10186142.html

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But the debt would still be there and have to be repaid at some point. Effectively the goverment will have found a very complicated and expensive way of loaning people some money in the form of bank shares that will need to be paid back in the form of higher taxes..

Fair enough. That was a bad comparison. Those old state utilities were already owned by the government outright? The 'cost' of ownership then was not debt taken out to buy them but rather the losses they were incurring.

That said however they were selling off what, technically, belonged collectively to all of us.

But I concede it was better, so it seems from how they were performing prior, that they were sold off into private ownership.

Edited by anonguest

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But the debt would still be there and have to be repaid at some point. Effectively the goverment will have found a very complicated and expensive way of loaning people some money in the form of bank shares that will need to be paid back in the form of higher taxes..

But......given how we are told that equities are, over the very long term, better investments than gilts then WE would have been better off as the value of the shares we owned would outstrip the extra cost in taxes we pay??? Assuming of course the government were to ensure proper enforcement of laws and the regulatory agencies ensured the banks behaved properly and never ever again screwed up!

Edited by anonguest

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1. Someone went and ran the Scottish banks - HBoS above all - for big, unsustainable, jam-today bonuses.

2. When that bubble burst, someone[1] arranged for the now-thoroughly-toxic poison pill to be dumped on steady-as-she-goes Lloyds. Thus the pain was felt not just by HBoS shareholders, but also by Lloyds, who had taken much less gain through the bubble in the reasonable expectation of NOT being wiped out when the bubble burst.

3. Government of the day (with complicity from useless non-opposition-of-the-day) bails out debt, by taking on debt and taking equity.

4. Later government aims to reduce public debt by selling equity, thereby getting back to a position closer to before it all started (except for long-since-shafted Lloyds shareholders).

Now here's the interesting bit. If you're a really big shareholder in anything and try to sell off your stake, you flood the market and crash the price. You can trickle shares into the market only up to a point. So basically, your only real option is to arrange for buyers, and they'll only cooperate if you give them an attractive price - meaning a discount to the price at which shares trade when there isn't a huge seller in the market.

Now, the most usual way to do that is that you arrange a placing. You hire an investment bank, who then go to the market and find buyers. Those buyers might include sophisticated private clients who have an arrangement with their stockbrokers to be in on such things, but mainly it means big institutional shareholders.

Bearing in mind this can only happen at a discount, imagine the headlines if the government were to sell off a big tranche to the City. The press full of stories of big City Fatcats and all sorts of Foreigners getting "our" Lloyds Bank on the cheap.

When that's the alternative, an offer to the British Public might be considered rather more palatable!

[1] I expect we may learn more under the 30-year rule. Or possibly earlier if someone involved breaks cover, maybe as an end-of-life thing.

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Yup rinse and repeat.

Can remember original TSB float/sale. Tories seem good at flogging stuff they don't own

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So as taxpayers we bought the shares and now as individuals we get to buy them again. Where do I sign up?

26AFC84F00000578-2996367-Web_marketer_Mr

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But......given how we are told that equities are, over the very long term, better investments than gilts then WE would have been better off as the value of the shares we owned would outstrip the extra cost in taxes we pay??? Assuming of course the government were to ensure proper enforcement of laws and the regulatory agencies ensured the banks behaved properly and never ever again screwed up!

In principle you are right but it does rely on the government letting the banks operate without damaging political inteference, not sure any of the current parties are capable of this.

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I covered this subject with a colleague. He made the following point.

The MSM intentionally refer to the use of funds to bail out Lloyds as 'tax payers money'. It's sensationalist. Do we know what money was actually used to bail out Lloyds?

If it was from 'the account that holds the stuff tax payers have given us', then consider this: Essentially, in a democratic (snigger) country we are voting for a product to buy into. By crossing our ballot we say 'Yes, I trust you with the money you need from me to run this country'. If we buy an iPhone (other phones are available) do we still consider the money in the Apple bank account to be ours? It is not ours. It is theirs to do with as they see fit. Same with the money the government holds. It's in their name. Once we hand it over, it ain't ours.

Apple will use the money we have given them to develop new products which 3 days after buying their latest phone will mean they will release a new one and sell your investment back to you. Again.

Same difference.

Thoughts?

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