egafd.com

Apparently, our great leaders are negotiating with sovereign wealth fundholders in Abu Dhabi to sell up to a third of the 82% government owned bank, RBS.

Share price at the time the Labour government spent ?45 bn (yes, ?45 bn) to stop RBS collapsing and the British public having to whistle for its savings - 50p per share.

Current price - 27p.

For those mathematicians on the forum, do you think this is potentially a profitable sale?

For those politically aware on the forum, what does the seeming desire of the British government to get shot of a chunk of the bank at what is sure to be a very large loss, tell you about the government's perception of how the British economy is going to be doing in years to come, if they are that desperate to flog it now?

Now I suppose you could argue that if the share price goes up as a result of the partial sale to Abu Dhabi then that would offset some losses on the sale. But and here is the heartwarming part, the main winners would be those senior bankers in RBS who get paid their bonuses in shares, not cash!!

Great eh?

We have now entered an era of totally unfettered Capitalism. It is now running amok unchecked and the checks and balances, ie "Competition" or rule of law or common decency are not in place to control it. This is why petrol is ?1.42 a litre, not because of supply or demand, or the "Market being worried" it is because of uncontrolled speculators who are more or less running the World. This state of affairs has been allowed to happen by previous governments and now this present bunch of clowns who are in effect pouring petrol on the flames.

This government is now acting under direct orders from the City and NOTHING must be allowed to stand in the way of these cunts making money. They talk about curbing the excesses, but they do nothing. Selling RBS to a bunch of Arabs, should be seen as treason, as should be ANY asset prevously owned by the British tax payer, whether it be the railways, utilities, roads etc.

Thatcher herself should be dragged out of retirement, tried and found guilty of treason as she allowed the assets of this country sold to the highest foreign bidder.

In another time and another place there would be a popular uprising led by the army and this country would be taken back for the people themselves. The main City fat cats and bankers brought to book in front of a military court of justice, have a fair trial, be found guilty and executed. Petrol prices would be controlled by a "Fat Cat Control Mechanism" whereby if the price exceeds a preset amount, a city trader is randomly dragged out of his office and publicly hung in Canary Wharf and all our sold off assets re nationalised with NO compensation.

You watch the prices start to drop then!!wink!

And of course, Osborne has made trips to CHina to try and get their sovereign wealth fund holders interested in buying our roads on a lease.
I wondered why the M6 is now labelled as the Highway to Celestial Goodness.


I seem to recall a recent Cameron speech saying something like given we don't think twice about the fact that our utilities have been privatised, why not privatise the roads?

Well actually Dave, most people can think of a reason every time they open their gas bill, ya plonker.

The share price isnt doing much - the government is trying to sell off some of the shares to stimulate growth and get the share price to increase enough that it would sell of the rest at break even.

"Two points firstly if they sell often it's above the traded share price if buying a significant chunk"

The share price was 50p when Labour supported the bank. Given that it is now about 27p, basically every 1p below the 50p share price that the government agrees with Abu Dhabi represents a ?1bn loss!

I'm sure that the Abu Dhabi sovereign wealth fundholders aren't stupid. Why should anyone pay substantially over the odds for a part of a bank which has performed very badly in the last few years, losing half its value almost, since the time it was on the point of complete collapse?

"secondly if they do make a loss that should be offset against interest charges for the borrowings the labour government took out"

"If they do make a loss"? So you reckon they might pay twice the current share price then? Given that the government can borrow at historically low interest rates, why the rush? This government has already sold off Northern Rock at a loss in which part of Northern Rock's assets apparently were used by Virgin Money to make the sale.

"the government is trying to sell off some of the shares to stimulate growth and get the share price to increase enough that it would sell of the rest at break even."

Given that the bank share price has halved since the point at which the government stepped in, you would have to be one of life's optimists to assume that it would "stimulate growth" in the backdrop of a euro crisis which is far from solved, when the banks have been told by the Bank of England to increase their capital base and even banks like Barclays which emerged relatively unscathed from the banking crisis compared to RBS and Lloyds, lost 30%+ of their share value last year.

It would be a huge gamble. Havent we had enough of that being done in the investment banking sector?

Speaking to someone that knows RBS its on the way up - as much as it can be given the circumstances that it was left with. The management structure has changed and they are rooting out the old school and getting new blood in.

If you looked at the figures you would see that this past year had been good in terms of profit - the mark downs from disposing the toxic parts of the business was what hurt the bottom line. Its on the mend and a few years from now it will be back in health. Good thing is that we never went with the euro that would have been a disaster.

The bank has business in the US the middle east and the far east - its not constrained by the euro by any manner of means.

If I were a betting man id say there will be no euro this time next year as its about to fold. It cant continue in the vein that it has with the number of countries that ate teetering on the verge of collapse. Spain Italy for one, not just Greece.

"If you looked at the figures you would see that this past year had been good in terms of profit "

But certainly not in share price. It has dropped from the low 40's in early 2011 to 28p at the moment.

"The bank has business in the US the middle east and the far east - its not constrained by the euro by any manner of means.

If I were a betting man id say there will be no euro this time next year as its about to fold. It cant continue in the vein that it has with the number of countries that ate teetering on the verge of collapse. Spain Italy for one, not just Greece."

Your view in the first paragraph about business in the US etc. disguises the unfortunate news that in total, its exposure to national and local government debt and derivatives across Ireland, Spain, Italy, Greece and Portugal is ?3.3bn.

Your view in the second paragraph totally undermines your guess about RBS being on the up.

The overall exposure of RBS, including private lending in those five economies above, is ?76bn. As and when euro countries go kaput, what do you think the impact will be on the RBS balance sheet?


Best for the government to keep hold of this lot for the seeming long term rather then go for a Northern Rock-type firesale.