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Selling Off The Royal Turd At A Loss For The Taxpayer

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http://www.bbc.co.uk/news/business-33088599

The government plans to sell its stake in the Royal Bank of Scotland, Chancellor George Osborne has announced in his annual Mansion House speech.

Mr Osborne said the "decision point" had been reached.

Governor of the Bank of England Mark Carney said the phased sell-off "would promote financial stability" and benefit the wider economy.

Mr Osborne also set out more details of the sell-off of the Government's remaining stake in Royal Mail.

Royal Mail employees will share a further 1% tranche in the firm, while 15% will be placed with institutional investors.

The government provided RBS with a £45.5bn bailout in 2008, paying around 500p a share. The share price currently stands at 354.8p.

'Best price'

The chancellor argued that the sale must be seen as a whole and the share price will increase in subsequent offerings as confidence grows.

Mr Osborne said: "It's the right thing to do for British businesses and British taxpayers. Yes, we may get a lower price than that was paid for it - but we will get the best price possible. For the longer we wait, the higher the price the whole economy will pay."

Approx a 30% loss if they all sell for around 354? Won't this give around a £13bn loss which wipes out the Tories £12bn election savings?

George clearly did well at school in maths. We are lucky to have him as Chancellor.

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Its Brown fault (again).

Maybe we can get the money from him + Labour?

Using his favourite saying - 'That would be the *right* thing to do!'

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Why are they selling at a loss.....to cut their losses?

Because they strongly suspect that this is the peak price the shares will reach?

Time will tell.

Also its 5 years to the next GE, if its a mistake it gets buried, if its a triumph (it turns out to be the best price) it will be wheeled out time and time again.

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They need more liquidity in the portion of shares available on the open market to get it moving again.

This is only the first of many sales phased over the next 5 years and once they get the last fines out of the way, return to profit and begin paying a dividend the share price will rise significantly.

Brave move by Osbourne IMO and could see significant returns in 3-4 years.

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Now is the time for the government to do all the bad stuff no-one will remember comes the next general election in 2020.The Tories are in a magic period at the moment: Labour is literally leaderless, the SNP is powerless, UKIP is powerless and the next election is below the horizon. The next "banana skin" is the EU referendum in late 2017. It's not surprising Cameron is gloating - he's got a year or two of power without accountability.

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Its Brown fault (again).

Maybe we can get the money from him + Labour?

Using his favourite saying - 'That would be the *right* thing to do!'

I noticed Mr Osborne using that phrase beloved of Mr Brown. It was like that scene in 'Animal Farm' where the pigs and the humans become indistinguishable from each other!

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I noticed Mr Osborne using that phrase beloved of Mr Brown. It was like that scene in 'Animal Farm' where the pigs and the humans become indistinguishable from each other!

I think Gidiot is very political and has a long, vindictive memory.

He's throwing stuff all back at Brown and Labour. Sort of rubbing their noses in it.

I still think we should get back the money from the useless tnuc Brown though.

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Why are they selling at a loss.....to cut their losses?

Osborne needs to keep his Keynesian spending orgy going while pretending all the while to be Mr Austerity, thus a firesale of remaining UK assets.

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Nationalist, you 'hit the nail on the head there'!

OK, I don't know much about share dealing (yet Osborne doesn't appear to know much about economics either!) but why are they going to sell the whole as a lump sum?....Surely it would be better to 'hedge your bets' and sell say half off (and lose half of the losses), in the hope that the price will get better and sell off the other half then?!...unless of course you are a distressed seller and need the money ASAP?

Finally I saw the Finance minister on the National propaganda machine (BBC News 24) this morning blaming the others (when will the Cons ever take any responsibility?) and justifying their position by saying they have take independent financial advice and advice form the BOE...Christ, we are in trouble then, would have been better having a chat with the Downing street cat (and no, I don't mean Theresa May!).

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Why are they selling at a loss.....to cut their losses?

To cut his career risk

Edited by R K

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I noticed Mr Osborne using that phrase beloved of Mr Brown. It was like that scene in 'Animal Farm' where the pigs and the humans become indistinguishable from each other!

Its basically because the human brain believes simple aphorisms it hears because it has neither the time, nor the energy (literally in terms of calorific effort) to examine whether it is true or false.

So, most people hear phrases such as "Its the right thing to do" uttered by the Chancellor of the Exchequer & repeated in the media and simply believe what they are told. Thats why politicians do it.

Edited by R K

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Will these shares be available to the general public (who already own them!)...if not then surely this must equate to 'stealing of the public purse' and giving it to the wealthy....I really cannot see why the populas are so apathetic about this...most will be more concerned about what is happening in East Enders than what is happening to their future welfare....would be so apathetic if somebody came and stole their wallet/purse out of their pocket AND told them they were doing it?....It make me despair, it really does!

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Osborne needs to keep his Keynesian spending orgy going while pretending all the while to be Mr Austerity, thus a firesale of remaining UK assets.

That's exactly what I've been thinking. Similar predicament to Yellen at the Fed. She has to pretend she can raise rates, Osbooune has to pretend he can cut. He'll add another trillion of debt easily by 2020.

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Fred's okay though. No jail time and a massive pension.

Yeah but if he ever does it again......woooooo

Now that they've increased the max jail time to just 10 years from 7, the very worst that can happen if you steal a few hundred million is 60 months in a nice cushy open prison all expenses paid by taxpayer. Even then, you could pull the Ernest Saunders dementia get out of jail free card.

I bet the RBS & Barcalys boards would still have gone for it. "Ethical drift" haha.

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People are saying Deustche bank's trillion dollar derivative bomb could now be ticking. I wouldn't be surprised if your spot on there.

Maybe all the huff and puff with Osbourne's fiscal borrowing law is so he can spend during the next crisis while pretending he can be 'prudent' during normal times.

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chuck in a third of Royal Mail and that is only a £5.5bn net loss to the taxpayer

you can not make this sh1t up can you?

I think the entire Royal Mail deal stands at more than a 5.5bn net loss all by itself (as pensions liabilities were transfered to YOU KNOW WHO!).

RBS sell off?

Hang on a minute! I thought the taxpayer paid 46Bn in Nov2008 (added the the national debt), the media estimates that sale will raise ~32Bn in todays money...

Then we get this from the BBC article:

A review from Rothschild investment bank said that, despite this price gap, taxpayers can expect to make £14bn more than it paid out in bank bailouts if the sale of bank assets and fees already received are taken into account. RBS has already paid back about £5bn in fees and repayments for insurance systems set up by the government as part of the bailout.

Not sure what part (if any) of this PR spin is actually factual or anything to do with a share sale? But as a simplistic investment, surely 46Bn in Nov2008 would be worth ~54Bn in todays pounds (RPI and CPI calculated). So to sell RBS for 32Bn today the taxpayer would be loosing ~22Bn plus the interest we've been paying to hold the original 46Bn (to buy the shares in 2008) on the national debt for 7 years.

Did I make a mistake or miss something as this is never mentioned in the news/media?

Edited by DarkHorseWaits-NoMore

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Jesus did anyone actually read past the headlines.

The first small tranche of shares will be at the current price which will be at a loss.

To get rid of the full government shareholding will take years and it is hoped, as per Lloyds, that as more shares reach the open market and the business slowly reaches profitability, leaving behind legacy issues, the prices achieved will rise.

There is no sudden loss to the government/taxpayer.

It's the first step in a long game.

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Yeah well lets hope so.

I suspect the taxpayer losses will be even greater when all done.

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Not as straightforward as Osborne may think

RBS is still mired in legal wrangles from 2008.

Big underwriters of rights issues and share sales such as Legal and General and some Pension funds are still p*ssed off at what happened to them

http://www.heraldscotland.com/business/company-news/lawsuit-threatens-to-spoil-osbornes-rbs-share-sale-celebrations.128168613

RBS has also made thumping losses most years since the banking crisis so is hardly a screaming buy

I think even the modest share sales that the Treasury are proposing for a start are going to have to carry a hefty discount to get any bidders

Truth is that the bank should have been broken up.

Edited by stormymonday_2011

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