Is the Time to Invest in Banks approaching?

melbury

mike_the_bike wrote: »

There you are mate less than 2 weeks later you can pick them up for 32p if you are quick!!

Clever old me did buy some Lloyds shares yesterday afternoon at 62p (they were never 32p) and then look at what happens - suddenly there is talk of nationalization, so I got it wrong again.:eek: :eek: :eek: What a complete waste of money.

Stavros_3

I wanted to buy B & B and RBS last year. My good old IFA strongly advised me against doing so, boy am I glad I listened to him. Instead I came out of cash and into investments with a very diverse portfolio, none of which include banking equities. They are a huge gamble at the moment even more when Alistlair Darling this morning said he was 'not ruling out' Nationalising the Lloyds Group :eek:

gozomark

Stavros wrote: »

even more when Alistlair Darling this morning said he was 'not ruling out' Nationalising the Lloyds Group :eek:

well he couldn't answer the question in any other way - not ruling out could mean a 1 in a million chance or 99% chance - he's never going to rule it out as an option

Andrew64

I wonder if Darling is warning that anyone who buys Lloyds shares does so at their own risk? I suppose the same applies to RBS/Natwest.

Darling declines to rule out Lloyds nationalisation

http://www.guardian.co.uk/business/2009/feb/14/darling-lloyds-hbos

Darling was asked on two occasions during an interview with BBC2's Newsnight whether he could rule out nationalisation of Lloyds. He responded:

"I said in January there is a range of options that we will be deploying, a range of levers that can be pulled to help all banks, because I have made it very, very clear that the integrity of the banking system is very, very important. What we are focusing on at the moment is making sure that we can identify these bad assets and then deal with that problem. That's our focus at the moment and that will continue not just here but it will continue across the world as well."

melbury

Surely if Lloyds was nationalized and like Northern Rock the shareholders got nothing, people would just stop buying shares in any financial institution.

If Lloyds do go, then surely it would cause massive problems for other banks with people trying to salvage a bit of money for their shares, thinking any bank could be up for nationalization.

I can't understand why so many people think it is fine for shareholders to lose out completely on their investments, when people with massive debts and mortgages are being pandered to and helped. Perhaps in future nobody should invest in anything and we can all live on the welfare state. It amazes me that nobody seems to begrudge the obscene amount of money spent in that area.:mad:

sh856531

I can't understand why so many people think it is fine for shareholders to lose out completely on their investments

I don't think anyone thinks it's "fine" - but it is the way it should be.

It's pretty simple really - if the government has to step in and take a bank over - you don't have an investment left - because its bust. Governments don't just commit hundreds of billions or even trillions of pounds to taking over a bank just for $hits and giggles. They do so because the bank in question is so utterly £"$%ed that it's threatening the whole economy. In that sort of situation how can you possibly think that the bank is worth anything? If it were solvent, why would the government give them a penny, nevermind actually taking on trillions of liabilities (as would be the case with RBS).

when people with massive debts and mortgages are being pandered to and helped

I know for a fact that there are many people on these forums who are quite clear on the fact that the people that borrowed stupid amounts of money and then couldn't repay it are very much responsible for the current situation.

But people with mortgages aren't being pandered too - its just that cutting interest rates is one of the few methods that the BoE has at its disposal to attempt to boost consumption. If you know of a better way of getting hundreds of pounds a month into everyone's pockets then I'm sure the BoE would love to hear from you.

Best Regards

S

Linton

Andrew64 wrote: »

I wonder if Darling is warning that anyone who buys Lloyds shares does so at their own risk? I suppose the same applies to RBS/Natwest.

Darling declines to rule out Lloyds nationalisation

http://www.guardian.co.uk/business/2009/feb/14/darling-lloyds-hbos

Darling was asked on two occasions during an interview with BBC2's Newsnight whether he could rule out nationalisation of Lloyds. He responded:

"I said in January there is a range of options that we will be deploying, a range of levers that can be pulled to help all banks, because I have made it very, very clear that the integrity of the banking system is very, very important. What we are focusing on at the moment is making sure that we can identify these bad assets and then deal with that problem. That's our focus at the moment and that will continue not just here but it will continue across the world as well."

IMHO a silly but unfortunately typical BBC question to Darling - no-one with any responsibility for economic policy (or for anything else really) can ever rule out anything in the future. If he said that it could happen the papers would be headlining "Darling to nationalise Lloyds".

melbury

But people with mortgages aren't being pandered too - its just that cutting interest rates is one of the few methods that the BoE has at its disposal to attempt to boost consumption. If you know of a better way of getting hundreds of pounds a month into everyone's pockets then I'm sure the BoE would love to hear from you.
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Well cutting rates to an almost non-existent level doesn't seem to be helping the economy very much at all. Yes it is getting hundreds of extra pounds a month into the pockets of people with mortgages, but that is certainly not the case for everyone as you imply above. If people over-borrow and don't allow for the bad times then that is really down to them. As it is the banks are being dictated to about not pursuing mortgage arrears for a certain period of time, why?

sh856531

Well cutting rates to an almost non-existent level doesn't seem to be helping the economy very much at all

Who can say whether it is or it isn't? I can't - because I don't know how bad things would be if interest rates were still 5%. I suspect very, very much worse though.

Yes it is getting hundreds of extra pounds a month into the pockets of people with mortgages, but that is certainly not the case for everyone as you imply above

Sure, I understand that. But my point was really that the BoE only has so many options as far as getting lots of money into the pockets of lots of people is concerned. As someone who doesn't have a mortgage and does have some modest savings, I'm currently getting shat on by the current situation. But that doesn't mean that I don't understand that it is what needs to happen in the short term to get us out of this mess.

As it is the banks are being dictated to about not pursuing mortgage arrears for a certain period of time, why?

I don't know - thats probably quite a complex issue. It could be as simple as we have a very socialist government. Or there could be a very good macroeconomic reason why the government doesn't want people kicked out of their homes - perhaps because that would depress house prices even further, which would in turn collapse even more banks. I've no idea I'm afraid

Best Regards

S

big_peachy

melbury wrote: »

Clever old me did buy some Lloyds shares yesterday afternoon at 62p (they were never 32p) and then look at what happens - suddenly there is talk of nationalization, so I got it wrong again.:eek: :eek: :eek: What a complete waste of money.

Not a waste of money.Its a strong long term hold for me put it away forget it and look again in the new year,In the short term though i see them falling on Mon and the only people that are gona make out of it is the Shorters for a wee while anyway.Am not a good trader but investing i can hold my own.

Good luck for all the Lioyds tsb holders