Monday, 19 January 2009

RBS share price down 70%: We said this would happen..what now?


Ending the short-selling ban has not worked, as predicted. Bailing-out the banks without suspending the shares has not worked, again.


The government has repeated the same mistakes it made in October.


Ideas to move forward are desperately needed, feel free to discuss in the comments...

28 comments:

Anonymous said...

Yes tell Brown to ***** and then take a ****** ** and ****** it.
That at least would ****** the useless ******

Ed said...

Total nationalisation of the banks for £1. Accountants and actuaries to take a good look at the books to determine how much bad debt there is, total transparency with the public and Treasury.

Bad debt written into a specific government bond issue to be paid off at a sensible interest rate over 30 years.

Bank capitalisation rules to be toughened so this never happens again.

Revitalised banks floated once again.

CityUnslicker said...

BE - RBS balance sheet is £1.6 trillion. If we take this on and there is say a 20% loss - £320 billion. Then add Barc, LBG, not to mention HSBC.

There are assets as well as losses; but if we put these on the government sheet today the UK then I see a sovereign default within a few days in the current febrile atmosphere.


We need some space, why oh why did they not suspend bank shares this morning...

Anonymous said...

Every nulabour voter in 3 last elections sent a bill for 15k per vote

Anonymous said...

They didn't suspend shares because they didn't want to be seen to panicking.

It's like watching Frank Spencer defuse a bomb, there's a method to the madness, but it doesn't stop it from being madness nonetheless.

CityUnslicker said...

passer by - worse if you never voted for them....

Anon - maybe. maybe gordon just thought he had saved the world again and expected the market to push on to 6000

Ed said...

So either banks default or the state defaults, either way we all lose. I don't think the state has to default, it just has to slash spending on non-front-line services. Not popular, but possibly necessary. That or the Argentine solution: default now, pay later.

Reykjavik-on-Thames suddenly sounds apt.

roym said...

if short selling was so inevitable after the 16th (i thought it was bound to happen too), who on earth is lending their stocks out?

CityUnslicker said...

the government roy. All part of the grand socialist plan....

JPT said...

Get your handcart out and your summer clothes (if you know what I mean).

Steven_L said...

"Reykjavik-on-Thames suddenly sounds apt." (blue eyes)

I'm seriously thinking we might do an Iceland now. In fact tomorrow I'm opening an account where I can buy warrants and am going to hedge myself against a devastating collapse in sterling by buying December 09 puts against the USD and EURO.

I get the impression that Brown and Vaderia have gone 'all in', if things continue to deteriorate the only move they have left is to crank up the presses.

Anonymous said...

"What now"

Let them go bust. All the bad debt, gone, Pfffft!

Then instead of the endless bleeding dry of the tax payer, a one off capitalization of a brand spanking new bank, with perhaps 30bn initial capital.

With fractional reserve banking and a ration of 10:1 that would be 300bn avaliable to loan into the economy.

Anonymous said...

Blue Eyes: "That or the Argentine solution:"

Which is to look at the pension schemes and confiscate them.

Right up Browns strada really.

Anonymous said...

Mr Brown said: “I came into politics because of the scourge of unemployment in my own home area and I will not sit idly by and let people go to the wall because of the irresponsible mistakes of a few bankers.”

True.
They'll go to the wall because of irresponsible mistakes of a c*nt in Downing Street

Anonymous said...

What happens if they go bust?

Shareholders get wiped out - well arguably they deserve it, and the State's share is effectively worth nothing anyway.

Retail deposits are guaranteed. Yes it's a lot of dosh but it can't be worse than where we are now.

Then the actual real performing assets can be picked up by someone (PLEASE not the government) and set working again.

Is there something wrong with this picture?

Anonymous said...

Perhaps this is a naive question, but is it really worse to allow RBS go bust?

Why should I, as a taxpayer, take ownership & full liability for a £2 trillion black hole?

Elby the Beserk said...

Suggestions? Arrest Brown & Darling under Terrorism laws, 42 days detention, whoops - they threw themselves out of the window as we went to interrogate them

Problem solved.

CityUnslicker said...

anons - many people have deposits over 50k - i.e. companies, investment funds etc.

A bank going bust screws much of the economy. For example, RBS lost £1 billion when lehmans went bust.

Also, we can't let it go bust now, it is 70% state owned - we are on the hook for it now for better or for worse...

CityUnslicker said...

Elby - Arrests sound like the best way forward to me too.

The Ror said...

This is a move into the Euro, with the UK as the poor man of Europe. When there's parity, and grand depression across Europe,

Clarke is on board with the conservatives, so don't expect a fight.

Indeed, Peston has just posted Jim Rogers comment on selling any Sterling you have. Normally that comment would be ignored by the masses: on Pesto's blog it'll be public knowledge. A7L to offer Euro accounts backed by Santi anyone? :)

Anonymous said...

Couldn't they separate deposits from the loan book. Then leave the banks creditors to fight it out in court over the loan book?
I'm glad I'm in gold, this is a good time to be outside the system.

CityUnslicker said...

Ror - i expect teh Euro to break up under the stress it is facing. devaluation is saving us from the Irish meltdown and even gordon the moron can see this.

Anon - as ring-fencing depositors. We did this to landsbanki and Iceland is suing us internationally - you can just renege on the bits of deals you don't like whilst keeping the yummy bits...

Anonymous said...

Print money. It is now clear that this is the only way out in the short term. The banks can't lend to day because they don't have enough cash on their books to lend against. It will be worse as the year goes on because more businesses, starved of working capital, are going to go under. That will make the bank's balance sheets look even worse, making it even more difficult for them to lend. So looking for ways to get the banks to lend or force them to lend will not work - the banks are constrained by international treaty to keep the ratios of loans to cash reserves within limits. Even if they did try to lend they can assume that anyone looking for capital now is a bad risk. So they won't lend, and the governments continued protestations will only delay us moving to a more plausible solution. Even if the government could get them to lend this would only delay the inevitable as the end stops of the debt bubble would just be reached a little later. In the end the debt bubble needs to be dealt with and overcome, or we won't ever make further progress. This was the problem that was faced by Japan.

So, we now have a situation where clearly the expanding debt bubble can expand no more. The amount of debt in the system starts to contract and therefore the amount of money in the system starts to contract. This causes a deflationary recession. Don't get me wrong - prices of some things will rise but the price of many more will fall in an effort to chase business. Thing is that as prices fall people - even the ones with cash - put off spending until tomorrow because tomorrow they know it will be cheaper - and tomorrow never comes of course. So even the ones with cash don't spend in a deflationary recession. This must be avoided because this will turn a recession into a depression with everyone affected and mass unemployment. The only way to avoid the collapse of money supply when a debt bubble collapses is to print enough money to make up for it. No doubt that QE is a recipe for future serious problems but we have a real danger right here and now and we need to get over that first. If we don't then unemployment will accelerate rapidly as the year goes on forcing the deflationary spiral downwards ever faster.

Electro-Kevin said...

If prices fall too far don't sellers stop bothering to sell ?

As so much of our trade is in imported goods won't most of it be going up ?

Savonarola said...

Too many unknowns, too complex, too many *uckwits in charge to make any sort of plan to extricate ourselves from this carnage.

But a few outcomes seem probable:

- £ will weaken further
- Govt will have to print money
- Govt bond yields will rise

- inflation will follow
- cash will lose its value
- gilts will be a value trap

- bankruptcies will rise
- strong companies will take over good performing smaller ones
- consolidation will lead to cartles
- companies in the cartles will make big profits and pay rising dividends

- gold will break through $1000

Savonarola said...

Cartels not cartles. Its what this 'global downturn' does to one.

Anonymous said...

aaaa片, 免費聊天, 咆哮小老鼠影片分享區, 金瓶梅影片, av女優王國, 78論壇, 女同聊天室, 熟女貼圖, 1069壞朋友論壇gay, 淫蕩少女總部, 日本情色派, 平水相逢, 黑澀會美眉無名, 網路小說免費看, 999東洋成人, 免費視訊聊天, 情色電影分享區, 9k躺伯虎聊天室, 傑克論壇, 日本女星杉本彩寫真, 自拍電影免費下載, a片論壇, 情色短片試看, 素人自拍寫真, 免費成人影音, 彩虹自拍, 小魔女貼影片, 自拍裸體寫真, 禿頭俱樂部, 環球av影音城, 學生色情聊天室, 視訊美女, 辣妹情色圖, 性感卡通美女圖片, 影音, 情色照片 做愛, hilive tv , 忘年之交聊天室, 制服美女, 性感辣妹, ut 女同聊天室, 淫蕩自拍, 處女貼圖貼片區, 聊天ukiss tw, 亞亞成人館, 777成人, 秋瓷炫裸體寫真, 淫蕩天使貼圖, 十八禁成人影音, 禁地論壇, 洪爺淫蕩自拍, 秘書自拍圖片,

做愛的漫畫圖片, 情色電影分享區, 做愛ㄉ影片, 丁字褲美女寫真, 色美眉, 自拍俱樂部首頁, 日本偷自拍圖片, 色情做愛影片, 情色貼圖區, 八國聯軍情色網, 免費線上a片, 淫蕩女孩自拍, 美國a片, 都都成人站, 色情自拍, 本土自拍照片, 熊貓貼圖區, 色情影片, 5278影片網, 脫星寫真圖片, 粉喵聊天室, 金瓶梅18, sex888影片分享區, 1007視訊, 雙贏論壇, 爆爆爽a片免費看, 天堂私服論壇, 情色電影下載, 成人短片, 麗的線上情色小遊戲, 情色動畫免費下載, 日本女優, 小說論壇, 777成人區, showlive影音聊天網, 聊天室尋夢園, 義大利女星寫真集, 韓國a片, 熟女人妻援交, 0204成人, 性感內衣模特兒, 影片, 情色卡通, 85cc免費影城85cc, 本土自拍照片, 成人漫畫區, 18禁, 情人節阿性,

Anonymous said...

情色電影, aio交友愛情館, 言情小說, 愛情小說, 色情A片, 情色論壇, 色情影片, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊美女, 視訊交友, ut聊天室, 視訊聊天, 免費視訊聊天室, a片下載, av片, A漫, av dvd, av成人網, 聊天室, 成人論壇, 本土自拍, 自拍, A片, 愛情公寓, 情色, 舊情人, 情色貼圖, 情色文學, 情色交友, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 色情遊戲, 情色視訊, 情色電影, aio交友愛情館, 色情a片, 一夜情, 辣妹視訊, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊, 視訊美女, 美女視訊, 視訊交友, 視訊聊天, 免費視訊聊天室, 情人視訊網, 影音視訊聊天室, 視訊交友90739, 成人影片, 成人交友,

免費A片, 本土自拍, AV女優, 美女視訊, 情色交友, 免費AV, 色情網站, 辣妹視訊, 美女交友, 色情影片, 成人影片, 成人網站, A片,H漫, 18成人, 成人圖片, 成人漫畫, 情色網, 日本A片, 免費A片下載, 性愛, 成人交友, 嘟嘟成人網, 成人電影, 成人, 成人貼圖, 成人小說, 成人文章, 成人圖片區, 免費成人影片, 成人遊戲, 微風成人, 愛情公寓, 情色, 情色貼圖, 情色文學, 做愛, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 寄情築園小遊戲, 色情遊戲, 情色視訊,