Taxpayers nursing £32bn loss on Lloyds

kabayiri

HAMISH_MCTAVISH wrote: »

....
Buffet sits on the shares for decades and realises long term value from them. And Buffet, probably the worlds best investor, bought 5 Billion dollars of Bank of America shares a few months ago. The share price then was almost $7.00. Today it's significantly lower. In the future it will almost certainly be significantly higher.
...

You're not trying to equate one of the world's most successful investors to UK governments of recent times are you ?

This government has failed to forecast growth correctly on a consistent basis for some time. Their estimates of inflation have also been wrong.

Labour were no better, selling off gold reserves at low price.

What evidence is there that they paid true market price for the shares in the first place ? AD and GB had the banks over a barrel that crisis weekend. They overpaid.

Thrugelmir

Mr_Mumble wrote: »

Under "adverse" circumstances RBS would need another 18.6bn Euros (£16.2bn) of capital according to to Morgan Stanley (via FTAlphaville). IIRC the adverse scenario involves a 20% loss on Irish debt. If Ireland pulls through then RBS is unlikely to need any more capital (which is the default scenario).

LloydsHBOS is also exposed to Eire.

The issue for Eire. Is that GDP has to grow at least 2.5% every year into the foreseeable future. If it doesn't the cost of servicing debt will become unmanageable. May not be an issue for 5 years or so. But a very real problem.

chewmylegoff

RenovationMan wrote: »

What are you saying 'Doh'? You were the one who said "You need to clarify, left what all these years.. " after I had clearly mentioned your pension.

However, getting back to the discussion. What have you done with your pension savings over the past 15 to 20 years?

well he can't have invested it in a balanced share portfolio as whatever he paid in 15/20 years ago would have doubled in value since then before even accounting for dividend income...

Generali

You need to add on the financing cost. @5% (back of envelope calculation) it's £3,000,000,000 a year.

Also you need to subtract dividends of £0 from the loss. Perhaps they already have.

There is no chance that the Government will make money on the bailout if you include the cost of financing.

Still it's a drop in the ocean compared to the rest of the debt Brown and his merry men saddled you with. Plus of course all those unfunded liabilities you'll need to pony up for.

Generali

IronWolf wrote: »

Taxpayers haven't lost anything until they sell.

Not true. There is the cost of financing these holdings and anyway, that just means the losses are unrealized. A capital writedown is still a loss in the accounts AIUI. Not that I'm an accountant.

RenovationMan

chewmylegoff wrote: »

well he can't have invested it in a balanced share portfolio as whatever he paid in 15/20 years ago would have doubled in value since then before even accounting for dividend income...

That's what I thought. He seems to have gone quiet so perhaps it was one of those baseless pension rants that we see so often and that are used by so many third-parties use as 'proof' not to save for their retirement?

wotsthat

Thought I'd dust this one off.

Lloyds share price seems to be hovering around the 50p mark which is the average price paid by the government according to the OP.

Does this mean the taxpayer is at breakeven point on the basic purchase or have I missed a rights issue somewhere?

Thrugelmir

Page 8. Net cost of investment 63.2p.

http://www.ukfi.co.uk/releases/115_2%20FW%20Update%20Jan%202010_10_AW_LR.pdf

HAMISH_MCTAVISH

Graham_Devon wrote: »

UK Financial Investments, set up in November 2008 to act as an "arms length" investor in the stakes in the bailed out banks, reckons this gives an average price of 50.2p share

Todays share price.....

50.5p

What does Hamish have to say now?

Fella

Of course the price needs to be way higher than what was paid for it for us to recover just what we paid, the reason being that as soon as the UK Govt starts to unload it's shares it'll trash the price.

We may get our money back eventually but it needs the shareprice to go much higher than £0.50 & for the shares to be dripped back into circulation over a long period of time.