On 03/04/2014 09:06, Bob Hobden wrote:
Regarding the Banks the facts are that all the money lent to the Banks
has been repaid with interest so we, as taxpayers are already in profit
on that one. The shares we own in Lloyds and RBS can and should also be
sold at a premium over what we paid (depends on the politicians) so
supporting the Banks looks increasingly like a good deal for the
taxpayer as we and the Banks come out of recession.

I'm interested to know what that rather blanket statement is based on.
Does it account, e.g., for the ongoing losses at RBS etc. - or the
amounts of cash pumped into them, the guarantees, etc. - rather than
just the share price?

Perhaps you should look at the reports of the National Audit Office -
http://www.nao.org.uk/highlights/taxpayer-support-for-uk-banks-faqs/
is a fascinating place to start and to me, quite clearly disagrees that
the money has been repaid - let alone the amounts that would have been
repayable had the same money been used for 'normal' loans.

The NAO believes that there would need to be significant changes to both
the income of the state invested banks and their share prices to even
come close to repaying the investment.

And even the share prices are extremely misleading. RBS share prices
are now around 310p - 320p. I think shares were bought at around 50p by
the government. Sounds like a good deal at first.

However, the stock was around 20 - 25 p in 2012 before a stock split of
1:10 was made (coverting the price to 220p), so the 315p price doesn't
represent anything like the good deal it might seem. (I'm unclear ofthe
full nature of the stock split, but on bare figures, it would appear
that the share prioce would beed to be more like 450p to cover just the
intial investment, even forgetting about income/interest.

Does your statement account for the hiving off of 'bad debts' to the
taxpayer while the 'going concern' is sold to existing banks (such as
the cherry picking of Northern Rock and others)?

A reasonable review (although from 2013) of *some* of the real costs can
be seen at:
http://www.mindfulmoney.co.uk/wp/shaun-richards/what-is-the-cost-to-the-uk-taxpayer-of-supporting-our-banks/

And in some senses, the imbalances roll on -
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10735502/Lack-of-too-big-to-fail-plan-could-cost-taxpayers-billions-warns-IMF.html

You might notice that the sites quoted are not exactly known for their
left wing or anti capitalist/banking bias, btw.

Finally, there are a host of other considerations - such as the extra
cost of UK borrowing resulting partly from the bail-outs - and various
other other inangibles to take into account.

Obviously, the wrong NG even allowing for thread drift - but a
fascinating and very complex situation. As with anything involving
numbers, anyone can present different views depending on what they
choose to concentrate on, but blanket statements won't come close.

But that was my two penn'orth

--
regards andy