I don't suppose it is the done thing to laugh ...

posh*spice

!!!!!!? wrote: »

We've all benefited from the bubble. I look at my earnings over the last decade and in no way are they justifiable when you see how little a highly productive worker or farmer in China or India gets. We really have been all living well above our means (collectively, as a society) and this sudden contraction of credit/cash is the market's way of bringing things more into balance.

I agree with you - but many many ex and current bankers & traders have made millions and collectively as a group they (and the accountants that audit them:mad:) will walk away minted and regular Joes will be left as debt peons and governments will owe trillions. To me it's the biggest scam ever....

sabretoothtigger

The government is going to be able to borrow the 50bn at less then 12% interest, so long as the banks dont go broke the government makes a profit afaik which is good because they seem to be set on spending even more

If the deal was so great for the banks why is barclays scrambling to raise the money privately

WTF?_2

sabretoothtigger wrote: »

The government is going to be able to borrow the 50bn at less then 12% interest, so long as the banks dont go broke the government makes a profit afaik which is good because they seem to be set on spending even more

If the deal was so great for the banks why is barclays scrambling to raise the money privately

The banks are about to be hit by UK mortgage defaults and UK business defaults too.

All the hassle so far has been concerned with dealing with the fallout from their US sub-prime exposure and in some cases, reliance of their business model on the ability of cheap and plentiful credit on the international markets.

It'll be quite a while before the government see a profit from their involvement in the banks. In the meantime, they'll be called upon to inject a lot of actual cash which they will have to borrow.

scousethife

We are victims of [STRIKE]irresponsible lending which was unsustainable -[/STRIKE]

of being the two most stupid people on planet earth

sabretoothtigger

[FONT=Verdana,Geneva,Arial,Helvetica,sans-serif]Govt Could Sell Shares In Bank Reconstruction Fund[FONT=verdana,arial,helvetica,sans-serif]

--Bank of England Governor Mervyn King said Tuesday the government could reduce its stake in the U.K. banking system reasonably quickly, by selling units in a Bank Reconstruction Fund containing the banks' shares.

[FONT=verdana,arial,helvetica,sans-serif]While the cost of supporting the banking system will inevitably raise the level of national debt, the impact of that doesn't have to be inflationary, King stressed.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]King has been a key proponent of the government's bank recapitalization program. The BOE has been involved in a number of discussions about recapitalization, including the idea of it being financed through such a fund.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]"Within a reasonable period it should be possible for the Government to reduce its stake in the banking system, for example by selling units in a Bank Reconstruction Fund, and repay the additional debt that had been issued," King said in the text of a speech to be delivered in the northeast of England.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]"That is one difference between past increases in national debt in times of war and the increase now to pay for recapitalization of the banking system which involves the acquisition of an asset," he said.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]While the government could simply keep banks' shares in a trust fund until the situation has improved and then sell them off, selling stakes in a fund containing the shares would have the advantage of government-backing, and would be more likely therefore to inspire the trust of investors.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]Earlier this month, the U.K. government unveiled plans to invest in a number of U.K. banks in an effort to recapitalize the industry, end concerns about the viability of individual institutions and encourage the banks to resume lending to consumers and businesses.[/FONT]
[FONT=verdana,arial,helvetica,sans-serif]The U.K. has agreed to inject up to GBP37 billion in the U.K.'s three largest banks, which could see it take a near-60% stake in the Royal Bank of Scotland Group PLC (RBC), and a 40% stake in the entity resulting from merger of Lloyds TSB Group PLC (LYG) and HBOS PLC (HBOS.LN).

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]The government has already nationalized lenders Northern Rock PLC, which suffered the first U.K. bank run in more than a century last autumn after news emerged that the BOE was providing it with a special credit line, and Bradford & Bingley, whose shares plunged on fears about its health.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]"The cost of supporting the banking system will inevitably raise the level of national debt," King said.[/FONT]
[FONT=verdana,arial,helvetica,sans-serif]"Managed properly, however, such a rise in national debt need not prove inflationary," he added.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]Net U.K. debt as a percentage of gross domestic product increased to 43.4% in September from 36.2% in the corresponding month last year due to large transfers to Northern Rock and Bradford & Bingley. That's well above the government's 40% ceiling and economists say that figure could rise sharply to over 50% within the next year or so.[/FONT]
[FONT=verdana,arial,helvetica,sans-serif]As a percentage of GDP excluding Northern Rock, net debt increased to 37.9% from 36.2% in September last year.[/FONT]
[/FONT][/FONT]

Natasha Brereton, Dow Jones Newswires