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RBS

This Blog was saying hedge funds would be the main beneficiaries of George Osborne’s cheap and tacky share sale – how sad (in this instance) to have been proven right.

Perhaps someone can remind us all of how well that worked in the case of the Royal Mail?

The Guardian reports: “George Osborne has tried to justify a £1bn loss on the first sale of shares in Royal Bank of Scotland in the face of criticism from politicians and City analysts by saying it was the right thing to do for the British taxpayer.

“The chancellor sanctioned the first sale of the stake in RBS, announced on Monday night, to cut the taxpayer shareholding from 79% to just below 73%. Slightly more shares than expected were sold after the stock market closed on Monday, crystallising a loss for the taxpayer after £45bn was ploughed into the bank to rescue it amid the financial crisis of 2008-2009.

“Around 60% of the shares were bought by hedge funds.”

The shares were sold at 300p – 37p less than they were worth at the close of business yesterday (Monday). The total loss, if all shares were sold at this price, would be £15 billion – £2 billion more than predicted previously – meaning that Osborne really is determined to pile the burden on the taxpayer while rewarding – apparently – the bosses of hedge funds.

Didn’t hedge funds play a part in the financial crisis that forced the UK government to buy most of RBS in the first place?

The sale also comes at a time when share prices are at a low point. Comparisons with Gordon Brown’s sale of the UK’s gold reserves – much-lambasted by the Conservative Party because the price of gold was low at the time – should be inevitable.

Anybody who doesn’t smell a rat probably has their proboscis rammed up their posterior.

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