Sunday, August 21, 2011

Your investment

£40bn lost on the bailed-out banks, costing every family £1,500 after plunge in shares

The one-time banking giants were saved from collapse during the financial crisis with £65.8billion of public money. It was hoped the stakes would be sold for a healthy profit but shares in both banks have been hammered in the stock market turmoil of recent weeks. They are now worth just £26.6billion – meaning UK taxpayers are nursing a loss of £39.2billion, or £1,500 per household.

Posted by quiet guy @ 10:52 AM (2210 views)
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11 thoughts on “Your investment

  • So lets get this straight – no-one wanted taxpayers’ money to be used to bail these casino clowns out but it was done anyway – to the tune of over a trillion pounds.

    Now that that deal has turned sour, our recourse is not to the banks but to the people who brokered that agreement with our money – the government.

    The recent riots are starting to make a lot more sense in the cold light of day …

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  • Nothing’s ‘lost’, just as nothing was ‘gained’ earlier in the year when the share prices were higher – that will only be decided come the day, if ever, the shares are sold. This is just paper talk about paper worth.
    Give the high probability of a second banking crash, as discussed elsewhere, nationalising them completely can’t be far off.
    However, it’s not all doom and gloom, bankers still enjoyed billions of pounds in bonuses this year and, in all probability, will again next. I wonder how many used their bonuses to buy more property to let at inflated rents.

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  • mark wadsworth says:

    They should have sorted out the banks by making them do debt-for-equity swaps, that would have cost the taxpayer nothing.

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  • [email protected]

    even mervin king said he was surprised people weren’t more angry with the banks..

    I noted in syria that protestors were being arrested,their homes searched and social media content monitored and in some cases cut off.

    oh sorry thats the UK

    apparently we support the rebels in syria,libya and iran…but we don’t like that sort of behaviour here

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  • stillthinking says:

    I think people aren’t more angry because nobody thinks they are involved, thats the big problem for the UK, everybody thinks somebody else is paying. What difference is 1500 pounds if your property went up 50K, basically none, or if your tax rate doesn’t change, or if some badly run service stops existing, or your tax rate doesn’t change, who cares. When its clear and more obvious year by year that living standards are slipping then I imagine it might be different.
    Things like second earners dropping out of the workforce because of taxation and transport costs, rents going up because of housing benefit calculations in the SE pushing down on disposable income, or the reality that you can’t borrow more money to fund your lifestyle. All this stuff is gathering pace and its going to accelerate.

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  • 3. mark wadsworth,

    That was never the plan.

    Gosh, all this expert multi layered incompetence for nothing.

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  • mark wadsworth said…

    “They should have sorted out the banks by making them do debt-for-equity swaps”

    How would that work? Specifically, how would the existing equity holders be affected?

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  • Stillthinking: Agreed. While 10.5m are enthralled by X-Factor, do they give a stuff. No they don’t. One of the big problems with democracies is people are allowed to vote who have no idea at all what they are voting for. We’ve become a nation of numpties led by numpties are both are controlled by a corrupt banking system. Mervyn King knows the score on this. That’s why he said he was amazed the population at large wasn’t more angry. However, if he took the time to go out and look at the ‘Joe Blogg’s’ in the pubs, clubs and streets of this country, it wouldn’t be long before he found the answer to his question – they are generally thick and don’t give a stuff about anything unless they have it shoved in their faces that if effects them too. Mind you, even if you did shove it their faces, few would understand, preferring instead to believe the Daily Express and Daily Mail.

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  • blinktoofast says:

    @StuartKing: Sadly, you are right, and none of the ways out are (currently) palatable.
    I fear we have hit a critical level of numpties where they’ll just vote for the government that allows them to sit at home eating chips and breeding more and more baby numpties, and that this level is now so great that it cannot be out-voted by the useful parts of society which are breeding less and less due to “politically correct” policies encouraging women to work which becomes self-perpetuating because with a generation of second earners, house process swell to multiples of combined salaries, meaning second earners need to stay in the workplace, and numpties cannot get off benefits. In just a few generations we will have swapped most of the desirable genetics of intelligent hard working citizens for the undesirable genes of those living on benefits.
    The not (currently) acceptable ways out of this mess are a combination of:
    i/ Deny numpties the vote by making them pass some sort of IQ test. (though for 400 years our ancestors have fought various domestic and international wars to protect this right.) A more palatable way may be to deny the vote from anyone receiving benefits.
    ii/ Undertake a mass eugenics program. Although that Adolf chap gave it a bad name it was pretty popular before. Churchill was a big advocate. The next couple of points would get us there without actually herding up numpties for the snip.
    iii/ Prevent second earners from working. Using a horrific tax code for second earners may be one way, but ultimately we want the earners to breed, so maybe we just need need to stop elite women working. This could be achieved through incentives for wives of earners rather than outright denial or taxation of working women.
    iv/ Cut back benefits so that it does not take into account the size of a family. A numpty couple would therefore be better off than a family of numpties, disincentivising numpty proliferation, rather than the current scenario of incentivising it.

    Of course, this is a 3+ generation plan, and isn’t going to fix the 2015 general election. But the sooner we get started…

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  • mark wadsworth says:

    Doggett, debt-for-equity swap is just a traditional way of sorting out businesses which still have underlying value or assets, and which are worth more on a going concern basis than on a break-up basis, which is definitely the case for most UK banks.

    Lots of non-banks were forced to do this in the past couple of years (GM, Chrysler and possibly Ford) and some banks have been doing it in a very limited way. It’s no great shakes, it’s all quite uncontroversial – if you think about it, if a bank repo’s a house, then that is also a sort of D4E swap – instead of having a loan outstanding from you, they take over the equity in your house.

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  • @ 10. mark wadsworth

    Thanks for that.

    Would I be right in assuming that, since there would be more parties holding equity in the bank, the share of the equity of existing shareholders would therefore be diluted?

    As you say, this would have cost the taxpayer nothing, so why do you think the Government didn’t do this? They were more concerned for the existing shareholders than the taxpayer?

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