75% of Lloyds owned by us, £260B of toxic debt is ours too

amcluesent

I predict a riot!

ad9898_3

I do believe we will see riots before the end of the year, £500 billion of assets that the banks say are bad !! , we are in for unimaginable pain, virtually no one in the country is going to come out of this unscathed.

mewbie_2

£260B of toxic debt. Is that how you write billions? I never learnt that at school. A million seemed an unimaginable amount of money. Billions upon billions. Crazy.

MrFonzerelli

No need to worry...the BoE have a master plan!

Thrugelmir

amcluesent wrote: »

I predict a riot!

Why?

By moving the toxic debt away from the banks. The fear is removed that the banks will become insolvent. Confidence will return to the banking system.

There is no reason to believe that these toxic debts will not have any realisable value in the future. So potential reduction in exposure to the taxpayer.

The cleaned up banks will become far better investments again. Eventually paying dividends which the Government will collect on our behalf. As share prices recover the Government will able to offload shares onto the market making a capital gain.

People will riot as they won't have jobs.......

ManAtHome

Thrugelmir wrote: »

There is no reason to believe that these toxic debts will not have any realisable value in the future. So potential reduction in exposure to the taxpayer.

Depends on the valuation (which we may/may not get to know) - apparently the taxpayers cover anything above a 5% ish default or write-down, so must be pretty good stuff. If it was really good stuff, surely the banks would have been up for at least a 50-50 deal with an "insurance charge" of say 1%..?

Graham_Devon

Thrugelmir wrote: »

There is no reason to believe that these toxic debts will not have any realisable value in the future. So potential reduction in exposure to the taxpayer.

The whole reason they are called toxic, is because they are, just that.

We will never, ever get the money back for these debts, and if people think these will magically be paid off they are deluding themselves. The only people to pay these off will be us.

If they were going to get the money back, there would be no need to make them a taxpayer liability instead of a bank liability.

It's all lovely saying what you said above. But lets face facts. This government can't even get the banks to hold up to their side of the bargain of a bailout (lending more). So I don't think for one second the banks are going to at any time be looking to get the toxic debt, now taken off them sorted.

Heyman_2

ad9898 wrote: »

I do believe we will see riots before the end of the year, £500 billion of assets that the banks say are bad !! , we are in for unimaginable pain, virtually no one in the country is going to come out of this unscathed.

And you wonder why everyone thinks that you're this guy -


'We're Doomed!'

Wookster

Graham_Devon wrote: »

The whole reason they are called toxic, is because they are, just that.

We will never, ever get the money back for these debts, and if people think these will magically be paid off they are deluding themselves. The only people to pay these off will be us.

I'm not sure I'd be quite so pessimistic about MBS'

The truth is that no one knows what they will yield in the long term and to a large degree that depends on how bad things get economically. If they yield 85p in the pound that would be disastrous for the banks and painful for the public finances, but certainly survivable.

Generali

Graham_Devon wrote: »

The whole reason they are called toxic, is because they are, just that.

We will never, ever get the money back for these debts, and if people think these will magically be paid off they are deluding themselves. The only people to pay these off will be us.

If they were going to get the money back, there would be no need to make them a taxpayer liability instead of a bank liability.

It's all lovely saying what you said above. But lets face facts. This government can't even get the banks to hold up to their side of the bargain of a bailout (lending more). So I don't think for one second the banks are going to at any time be looking to get the toxic debt, now taken off them sorted.

The losses on these securitised debt products won't be anything like 100% on the senior parts of the debt although they may well be for the really cruddy equity stuff.

dacouch

Could Gordon Brown not ring up Ocean Finance and consilidate the debts all into one easy to manage payment?