HBOS shares

setmefree

nicko33 wrote: »

How did it get into the public funds?
Put in by taxpayers, or created out of thin air?

Tax payers money,that's unless you know different,and if you do please explain

muymalestado

Banderman wrote: »

They've announced that their next dividend won't be cash, but yet more increasingly worthless shares! They must have a printing press pushing out millions of new shares every single day. The dividend will be slashed further you can have little doubt.

The point is: Long Term.

HBOS for 6 or 18 months will be a dog.

What will happen after that? Neither you nor I know, but historically they, and some (not all) other companies have paid well.

This discussion seems to forget that (not disregarding the many valid or even possibly-valid remarks being made).

purch

Do you mean money that taxpayers have paid to the government has been GIVEN to the banks? Or loaned to the banks?

It's really neither......

HM Pawnbrokers of Threadneedle Street have exchanged Rock Solid Ultra High Quality Lower Yielding Treasury Paper for 'allegedly' Higher Yielding but Low Quality and potentially non performing 'Assets' held by the Banks

If this was a permanant exchange then the Banks would instantly be in a far stronger position, and the worst effects of the 'credit crunch' might be over.

But HM Pawnbrokers couldn't possibly hold onto these 'assets' permanently (cos they are absolute cr*p) as then it truely would amount to a 'givaway'..... so at some stage in the near future they will reverse the exchange, and so the Banks will be back in exactly the same position they are now.

Which is why the whole idea was crazy in the first place, and as everyone knows the garbage was only pawned to the BOE for a short time and still in reality are owned by the Banks, it's had no real impact at all.

nicko33

setmefree wrote: »

Tax payers money,that's unless you know different,and if you do please explain

I don't know, that's why I'm asking.

jamesd

It's not taxpayer's money, it's money conjured up from thin air. Banks hand over various loans they have and the BoE lets them have government bonds worth a varying percentage, perhaps 90%, depends on just what is offered to the BoE, that they can then use.

So magical transformation of one type of debt into another type of debt that the banks can handle more easily. At interest rates that are profitable for the BoE and with ample safety margin and guarantees from the banks that the BoE won't bear any loss if the securities being handed over drop in value.

It's taxpayer's good credit rating rather than taxpayer's money that is being used.

setmefree

The government has been trying to secure a buyer for Northern Rock since it had to be rescued by the Bank of England in September. Since then, Northern Rock has borrowed close to £20bn from the Bank at a penal rate of interest believed to be close to 7%.
Mervyn King, the Bank's governor, agreed to rescue the stricken mortgage lender, Britain's fifth largest before it crashed in September, on condition it pay the penal rate as the price of its rescue. But Northern Rock has not yet paid any interest and the bill will continue to rise until the bank is more financially stable.
Mr King believes the bank should pay a higher rate of interest to protect taxpayers from potential losses if it goes bust. He has spoken several times of the dangers he would create if reckless lending by banks was bailed out using taxpayers' money, only for them to repeat the same mistakes with even more disastrous results.

Gordon Brown today defended the Government's decision to nationalise the stricken Northern Rock bank.
At his monthly Downing Street news conference, the Prime Minister said that they had taken action in the best interests of the taxpayer.

esbo

Old_Slaphead wrote: »

Well setmefree you really seem to have this thing about the banking industry.

I might be a bit thick about this but surely no-one's forced to borrow money from banks so what has pensioner/child poverty got to do with it?

Also, what's this £80bn 'ploughed into the banking industry' ???

That's a bit like blaming the drinkers of poisonous water from a water company
for drinking the water rather than the company that supplied it.

setmefree

Shares going up 300.50

Old_Slaphead

esbo wrote: »

That's a bit like blaming the drinkers of poisonous water from a water company
for drinking the water rather than the company that supplied it.

Not really a very good analogy.

People only get in hock to a bank either out of trying to live beyond their means or because of failure to read small print ergo it's the individuals problem rather than the bank's.

No-one would blame an individual for drinking poisoned water from a company that was required to comply with the Drinking Water Quality Regs.

tradetime

esbo wrote: »

That's a bit like blaming the drinkers of poisonous water from a water company
for drinking the water rather than the company that supplied it.

I'd be inclined to say it's a bit more like blaming smokers for causing themselves harm by smoking, rather than the tobacco companies. ie nobodies blameless, but the end decision as aways lies with the enduser, who has to bear the ultimate responsibility.