George Osborne MP

[sgtkate 10]

One of the VERY few occasions I'm going to agree with Gideon here. The sales of shares should be looked at holistically and for what I've seen of Mark Carney, the guy is far from an idiot and seems both pragmatic and ethical. If he is giving that advice then it's likely to be sound. What would be the point of having effectively an expert economist advisor if you are going to ignore his advice (much like the drugs advisory panel). However, what will happen if the shares do not go up? Real chance of the taxpayers losing out here and whilst I know the argument that we didn't buy an investment, we avoided a crisis so the money does not need to be recouped...after the royal mail fiasco, it would be far from a good political move to allow it to be fully sold off at a loss.

Edited June 11, 2015 by sgtkate

[biotechpete 10]

When the government started to sell off shares in Lloyds, they started to go up in price, so much so that the return to the public purse was greater than the average price paid for the shares.

 

I suppose if the interest on the money borrowed to bail out RBS is greater than the likely rise in price, it's simply the pragmatic thing to do to cut our losses.

[RonJeremy 10]

I blame George too.

 

Are you illiterate?

[El Cid 220]

what will happen if the shares do not go up? Real chance of the taxpayers losing out .

 

If things are a dead cert, like all the media are saying; why doesnt the government start an investment portfolio. They could set things up in their own favour, like they do for the edge funds.

[loraward 10]

If things are a dead cert, like all the media are saying; why doesnt the government start an investment portfolio. They could set things up in their own favour, like they do for the edge funds.

 

I'm not sure that that would be legal.

[Bigthumb 10]

The bank had to be saved. George Brown did what was necessary. He didn't have a choice.

 

George Osborne, however, is to sell at an estimated £7 Billion loss. He does have a choice. Surely he isn't forced to sell at this time.

The sale was recommended by a treasury commissioned report from merchant bank Rothschilds.

I suspect someone is going to get extremely rich from this, and it won't be us....

 

As we are constantly reminded share values can go down as well as up. There is also a cost for retaining the "investment" in the price of financing government debt. If the value of the shares is not increasing at a higher rate than the interest rate of the borrowing then in makes no sense to hold on. The stock market has recovered by 30% since it hit the buffers. If these shares haven't matched the market it is a sick bank.

 

Just think. For every billion they get from the sale they can reduce the cuts in spending by the same amount.

[WiseOwl182 10]

RBS shares were down to something like 12p a share back end of 2008/early 2009. A few grand at that price, 30x returns if sold now.... A real missed opportunity.

[Anna B 1,414]

Why didn't he have a choice? Because it was too big to fail.

 

Why was RBS too big to fail, because Gordon Brown preferred light touch regulation that gave the banks a free reign.

 

Brown blamed for RBS collapse

http://www.thesundaytimes.co.uk/sto/business/Finance/article839665.ece

 

Then Brown and Darling told the UK public the deal would benefit the UK Tax payer!

 

Fractional reserve banking caused the crash, which was global. Gordon Brown's light touch would have made no difference, and a Conservative Chancellor would have done exactly the same, if not more so, before the crash.

 

Fractional reserve banking = Lending money you haven't got because it doesn't exist, and charging interest on it. If the debts are repaid (with real money,) the bankers get rich. If the debts are not repaid, the economy crashes and the taxpayer has to make up the losses and plug the hole.

[Supertramp 10]

Fractional reserve banking caused the crash, which was global. Gordon Brown's light touch would have made no difference, and a Conservative Chancellor would have done exactly the same, if not more so, before the crash.

 

Fractional reserve banking = Lending money you haven't got because it doesn't exist, and charging interest on it. If the debts are repaid (with real money,) the bankers get rich. If the debts are not repaid, the economy crashes and the taxpayer has to make up the losses and plug the hole.

 

But if you save money whilst your rich you can use it to help you get out of a hole. If you spend it all like its going out of fashion then you are screwed.

[Anna B 1,414]

But if you save money whilst your rich you can use it to help you get out of a hole. If you spend it all like its going out of fashion then you are screwed.

 

Very few governments have run a surplus, and it is considered a bad way of using money by many financial commentators. Personally, I think having something in reserve has to be a good idea, but not at the expense of essential services. The catch 22 is what exactly is considered essential...

[Bigthumb 10]

Very few governments have run a surplus, and it is considered a bad way of using money by many financial commentators. Personally, I think having something in reserve has to be a good idea, but not at the expense of essential services. The catch 22 is what exactly is considered essential...

 

The government in countries like Australia heeded the warnings and never saw a recession at all. But then they didn't have an idiot like Brown around. I think the electorate made it pretty clear who they think contributed to our financial mess and who is clearing it up, and voted accordingly.

 

PS.. Australia has banks you know. So does China.

[PeteM01 10]

The government in countries like Australia heeded the warnings and never saw a recession at all. But then they didn't have an idiot like Brown around. I think the electorate made it pretty clear who they think contributed to our financial mess and who is clearing it up, and voted accordingly.

 

PS.. Australia has banks you know. So does China.

 

Australia was saved from recession by high demand from China for raw materials. That demand has now weakened and the Australian economy is not looking quite so rosy.

 

I wouldn't argue against calling Gordon Brown an idiot but there were two bigger idiots around before the crash:

 

“In an age of greater choice, he offers more overbearing control; in an age of greater freedom, he gives us more interference…

“In short, in an age that demands a light touch, he [Gordon Brown] offers that clunking fist.”

– George Osborne, 2006

“I want to give you [The City] lower taxes and less regulation.”

– David Cameron, 2006