Lloyds to writeoff £13bn!

mbga9pgf

It's an asset writedown (paper valuation), not an operating loss (costing actual cash). They don't need to make it back.

Yes they do if they cant make capital adequacy! How many times do I have to tell you! You cant operate a business, especially a bank, with unlimited liabilities and no assets!

When is your little sock puppet hamish going to answer the 4 homework questions I set him?

julieq

Hamish isn't my "sock puppet", once again you go for ad hominem attacks as part of your argument.

And Lloyds balance sheet shows over 400 billion of assets. So where is the problem exactly? It has strong operating profit (even the article admitted that). Looks like a good business to me.

And give me numbers please, anyone can rant from the top of a soapbox.

HAMISH_MCTAVISH

julieq wrote: »

Hamish isn't my "sock puppet", once again you go for ad hominem attacks as part of your argument.

.

Thats all they have. The facts don't in any way support their assertions of imminent doom.

misskool

HAMISH_MCTAVISH wrote: »

Thats all they have. The facts don't in any way support their assertions of imminent doom.

I keep waiting for imminent doom but it just never happens

mbga9pgf

If their asset balance sheet was so great, why does the public own 70% of lloyds today then?

you need to balance assets and liabilities. 17 bill writedown means they will have to find this money from somewhere to balance their liabilities. Still sure they are going to last without more government assistance?

tomterm8

mbga9pgf wrote: »

If their asset balance sheet was so great, why does the public own 70% of lloyds today then?

you need to balance assets and liabilities. 17 bill writedown means they will have to find this money from somewhere to balance their liabilities. Still sure they are going to last without more government assistance?

Um, the thing to remember is the phrase 'regulatory forbearance' ... the truth is, Lloyds is probably still technically insolvent, but since it has a positive cash flow and unlimited 'regulatory forbearance' it isn't going to bankrupt in the foreseable future. As the company makes operating profit, and is in a position to lose money, the write downs will come.

It will take some time to work through the current mess.

misskool wrote: »

I keep waiting for imminent doom but it just never happens

Keep waiting. There will be a disaster sooner or later.

Graham_Devon

We haven't got to the stage where we need to factor in reposessions at a loss yet either.

MissSkool. You keep waiting, because everything, it seems, you regard as good news, no matter what it is.

The doom is all around us, QE is holding up the economy. How much worse can it really get where you would say "ok, thats bad"?

Generali

julieq wrote: »

It's an asset writedown (paper valuation), not an operating loss (costing actual cash). They don't need to make it back.

That would be true for most businesses but for banks they have to show capital adequecy as well as having the cash flow to be able to meet the bills.

Asset price writedowns directly impact on the amount of money a bank can lend or even (as seen with LloydsTSBHBOSC&G/Brad 'n' Bing/NRK/RBSNatWestAmro) cause the bank to become insolvent.

misskool

Graham_Devon wrote: »

MissSkool. You keep waiting, because everything, it seems, you regard as good news, no matter what it is.

I didn't say this was good news. Please don't put words in my mouth.

Bad news is when I lose my job, otherwise, the sky isn't about to fall on my head and I'm not about to die from swine flu. I know I'm a crazy optimist

julieq

Things certainly are bad, but the news about Lloyds today isn't cataclysmic or indeed unexpected. It's an asset writedown for a company operating highly profitably.

It's difficult here, because the moment you stray away from the idea that everything is going to go worst case, you're characterised as a hyper optimist even when in fact you're steering a middle course.