FTSE drops under 3900 and things not looking good for RBS!
- Thread starter Admiral Huddy
- Start date
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LOL, if a bank has got so bad that it requires government intervention to save it, arguably there's a positive duty on the government to get the best possible deal for it.
Besides, I thought you were a strict non-interventionist....what would your policy of non-intervention have left the shareholders with when the bank collapsed entirely?
I dont know. Its a risk, if it gets nationalised you might end up losing whatever you put in. I wouldn't invest anything i couldn't afford to lose.
The government could have taken the decision to nationalise much earlier, as it is fairly clear that it was necessary as soon as they used their status as lender of last resort. Under the rules surrounding nationalisation, they do have a responsibility to pay out to share holders, so they deliberately devalued the shares. They did exactly the same with Railtrack, only took it even further, by withdrawing funding and then taking it over from administration.
It will be interesting to see what the judicial review comes out with...
Nothing, and rightly so. However, when a government chooses to intervene, it should do so in a fair and just manner. The Bradford and Bingley intervention seems to have been handled much better than the Northern Rock one from that point of view.
The problems started because the government injected taxpayer's money into northern rock, from that point on they just dragged it out, and nationalisation was pretty much inevitable.
Surely the government has more of a duty to get the best possible value for the taxpayers, rather than the shareholders in the failed bank?
Much like with Railtrack - if a government is going to take over a private company, why should the shareholders benefit from a failed business to the detriment of the taxpayers in general? After all, how much did the taxpayers benefit when it was privatised, compared to the shareholders?
Arguably they should do anything (legally) they possibly can to spend as little public money as possible.
Much like with Railtrack - if a government is going to take over a private company, why should the shareholders benefit from a failed business to the detriment of the taxpayers in general? After all, how much did the taxpayers benefit when it was privatised, compared to the shareholders?
Arguably they should do anything (legally) they possibly can to spend as little public money as possible.
Absolutely, do you know if the Railtrack matter is concluded or still rumbling on in the Courts? Imagine that will set at least some form of precedent in terms of government action/inaction prior to nationalisation.
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Many shareholders are taxpayers, and what's best for the taxpayer in the long run isn't always the cheapest option once governments make a decision to intervene.
The best value for the taxpayers would have been not to have gotten involved in the first place, but once the government gets invovled, it should not be allowed to abuse it's position, which is what happened with Northern Rock.
Because the government must not be allowed to abuse it's position in such a way. The crafters of laws must not be allowed to abuse that privilege.
Arguably they shouldn't be getting invovled at all. However, when they do so, they must be bound by the same conditions that would bind any company, forcing a company into bankruptcy so you can scavenge them is generally frowned upon in the business world, so I see absolutely no reason to allow the goverment to do it.
This is why I much prefer small, constitutionally limited governments. It makes it much easier to control state abuse.
Edit: With regards to the railtrack nationalisation, they lost the court case due to the emergency legislation enacted by Stephen Byers in a classic example of the kind of abuse that should not be allowed to continue. Just because a government can force legislation through permitting them to do something should not make it acceptable, especially with Byers admission that they had been planning it for at least six months, long before the problems (which they created) started.
http://news.bbc.co.uk/1/hi/business/4340794.stm
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Soldato
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From a legal standpoint, won't it boil down to what would have most likely happened had the governement not stepped in, which is the company would have folded and the shareholders would have gotten nothing anyhow (and so they'll likely get little or no compensation)?
Well the markets closed, so if you place an order now it'll be executed by whoever you placed it with "at best" which means whatever the price is when it opens.
Wait until the market is open before placing an order imho.
As for RBS being nationalised, I've no idea about these things really but reading up a lot of people are saying they are too big to be nationalised and on paper if you were to strip it's assets today the value obtained would be more than the current share price. I'll stick my neck out and say they aren't going under (famous last words). They could be prime for a takeover though, but again I'v eno idea how these things work really.
I think there's money to be made if you're willing to take the risk of losing say 50% of your investment, but people day trading these stocks atm are doing ok.
One chap on another board bought some then sold them 10 minutes later for a 10% profit.
Alternatively buy Woolworths shares, Alan Sugar stumped up for around 4% of the company today.
Wait until the market is open before placing an order imho.
As for RBS being nationalised, I've no idea about these things really but reading up a lot of people are saying they are too big to be nationalised and on paper if you were to strip it's assets today the value obtained would be more than the current share price. I'll stick my neck out and say they aren't going under (famous last words). They could be prime for a takeover though, but again I'v eno idea how these things work really.
I think there's money to be made if you're willing to take the risk of losing say 50% of your investment, but people day trading these stocks atm are doing ok.
One chap on another board bought some then sold them 10 minutes later for a 10% profit.
Alternatively buy Woolworths shares, Alan Sugar stumped up for around 4% of the company today.
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No, because the government, under the legislation they use to nationalise companies, have certain responsibilities in the process (mainly to ensure they don't just randomly nationalise things).
The issue relates to how the government involved itself, rather than whether it should have involved itself and what would have happened if it had not.
Soldato
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RBS's overdraft and loan books will be transferred elsewhere if they filed for bankruptcy or went into administration. This means your debt would still stand, but just with someone else.
Man of Honour
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Just a bit of advice but if you don't know what you're doing, I'd highly advise against buying shares
Yes but you cannot buy outside of market hours.
Dilly dallying behaviour?
The government have only just appointed an "independent" valuer. We're still waiting on the few pence per share valuation they'll give. Hopefully we'll get much more by going through the courts.
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Just a bit of advice but if you don't know what you're doing, I'd highly advise against buying shares
I agree. mr tommo, you obviously lack even a rudimentary knowledge of share dealing, I would recommend that you stay away. It's been easy enough to get burnt when you know what you're doing, never mind for a novice.
Soldato
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Apparently the government amd fsa have been tapping hsbc to buy rbs or at least keep them afloat. As the only bank with any real liquidity it makes sense but would hsbc be prepared to take on a bank with £100bn shortfall?