Is the Time to Invest in Banks approaching?

Decadent_Fool

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.

I don't think you did; focus on the fundamentals of being the largest banking group in the UK, which has been refinanced, and a strong business model. Stay on the log, and weather the storm; you have a very good chance of making a lot of money mid to long term.

Decadent_Fool

big_peachy wrote: »

Good luck for all the Lioyds tsb holders

:beer: to all of us!

pete917

i dont know what to do on monday - should I buy or sell my llods banking group shares. On the one hand Lloyds is OK but its aquisitions are causing a political sh*t storm.

Can some explain to me what happens if the governement buy lloyds on our behalf and nationalises lloyds.....

Andrew64

If the government takes over the whole of Lloyds the shareholders lose everything as shown by Northern Rock. If the government just goes to a majority holding (eg 51% from the current 43%) the value of the current shares is diluted.

Only you can decide whether or not to sell, but it is gambling on what the government decides to do! If the Lloyds share price collapses over the coming week, the government may decide that it has no choice.

DocProc

Of course, Lloyds Banking Group is already 'part nationalised'.

Full nationalisation is all about a 'complete loss of confidence' in the Lloyds Banking Group and I think you will agree with me that I don't think anyone can really say that things are that bad yet.

As a bank the group are continuing to function reasonably well and, because the UK Government are their partners, the financial credibility of the group goes hand in hand now with the credibility of the financial state of 'UK plc'.

Both are being hammered but are still standing and functioning and financing wars and all kind of things. Even the hospitals have not run out of medicines and bandages yet and there are still all sorts of various foods in the supermarkets. Thus most people still believe the situation will be much better in a year or so.

Lloyds Banking Group is NOT a 'Northern Rock' type of situation. The Government have no intention of nationalising any bank but have merely said 'they will do what is necessary' and so 'full nationalisation' can be said to slot somewhere into that kind of arena - but is surely only 'present' rather than 'absent' albeit only as a possibility.

In the event of full nationalisation, then all trading in the group's shares would be suspended and thus no one would be able to buy them or sell them.

Unless there is some special deal put on the table to reimburse existing shareholders, which again is always a possibility, then this would render them 'worthless'.

Eventually, the Government would divest itself of its holding in Lloyds Banking Group and the bank would once again be privatised using a 'privatisation issue' of shares. This would be done pretty much like the sale of BT, British Gas, the CEGB, etc, etc, was done, back in the 70's and 80's in the Thatcher era.

I hope that helps. As painful as it is, I would advise you to continue to hold , rather than take an actual loss. The main thing is, the LBG is not any kind of Northern Rock and can continue to be bailed out without the government actually taking a FULL stake.

Of course, I could be wrong about this. For a UK banking group such as Lloyds TSB plc, when it was urged on by the Government to acquire HBOS, to then go 'tits up' solely because of it, would surely be absolutely amazingly unthinkable.

Surely no UK government would ever be viewed as being financially credible ever again?

SouthCoast

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

Where would the Pension Funds and Life Insurance companies invest our money?

Alan_Cross

I've been giving the situation discussed in the OP a lot of thought lately. It does indeed seem that the banks have become undervalued to a silly extent.

This is always the way with the stock markets. Irrational, rumour-ridden and driven by perceptions. Never the middle way. Always the extremes. I do wonder why we've ever expected anything like common sense out of them or reasonably intelligent people in them.

Yes, I would probably now be tempted to put a hesitant toe back into the water as regards buying bank shares - e.g. Barclays looks like a good bet - but not with my life savings!

sh856531

For a UK banking group such as Lloyds TSB plc, when it was urged on by the Government to acquire HBOS, to then go 'tits up' solely because of it, would surely be absolutely amazingly unthinkable.

Surely no UK government would ever be viewed as being financially credible ever again?

The government didn't force Lloyds to buy HBOS - the dudes at the top did it of their own free will because they thought all their christmases had come at once. Sucks to be them right now.

As long as HBOS does't have more !!!!!! burried under the bed and lloyds are as strong as everyone thought they were originally then hopefully they'll become much stronger in the midterm.

S

pete917

What you say makes alot of sense IMHO.

Just to be clear for me though, if they are nationalised then all existing shareholders make a total loss. Any divestiture in the future would not revitalise the pre-nationalisation shareholders??

DocProc

I do agree the Government didn't 'force' Lloyds TSB to buy HBOS and also I agree pretty much with the rest of what you say.

Surely to God all the nasties are out of the woodwork now?

Is all the bad news in the price yet?

Is the market seriously expecting full nationalisation of HBOS?

Is there a 'right wing' conspiracy, that's using a collapse in the HBOS share price to bring down first Gordon Brown and then the whole Labour Government?

What is the market's take on things?

I think it will be very interesting to watch the market for LLOY shares on Monday and see whether they go down just a bit further and then strongly rally - or whether they completely collapse.

When there's 'blood on the streets' that's when Mr Warren Buffet says you should actually 'BUY!'

So who's right?