Tag Archives: Royal Bank

RBS shares go to hedge funds – quelle surprise

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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Government determined to lose money on RBS share sale

The total (expected) loss to the UK taxpayer from the sale of RBS will be £13 billion. Lucky for some, eh?

Yes – lucky for those who are rich enough to be able to afford shares in this bank; shares valued at much less than they were when the taxpayer bought this bank as a loss-making firm, and shares that will be worth huge dividends each year, now that this bank is starting to make profits again.

It isn’t the government that will make a loss on the sale, though – it’s the population of the UK. Note that the sale is happening now that RBS is starting to turn a profit again – that’s not for the likes of you and I, though! No, we must suffer the loss, at a time when the United Kingdom needs the money.

Isn’t it strange, how the Conservative Government that demands that we must shoulder any burden, including the premature deaths of our loved ones due to the removal of £12 billion of social security funding…

Isn’t it strange how these Tories are happy to accept a loss greater than that, in order to give the undeserving rich an undeserved reward?

The government has started to sell off its 78% stake in the Royal Bank of Scotland.

UK Financial Investments, the body that holds the government’s RBS stake, said it would offer about 600 million shares, representing 5.2% of the bank, to institutional investors.

It is expected that the government will make a loss of about £1bn on the sale.

Source: Government starts RBS share sell-off – BBC News

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RBS sale demonstrates Osborne’s fiscal foolishness

RBS

George Osborne’s plan to sell off the Royal Bank of Scotland before the Treasury has recouped all the money it spent keeping that firm afloat is a perfect example of the silliness This Blog mentioned in an article earlier today.

The taxpayer bought an 80 per cent stake in RBS seven years ago – to the tune of a deficit-raising £45.2 billion. Now Gideon has announced that he intends to force the taxpayer to accept the loss of £7 billion while he gives the bank away to “major investors” for a song.

This demonstrates perfectly Osborne’s failure to understand that government operates like a large business, and that investments such as RBS create debts that must be recovered before any sale should be considered.

How will Osborne compensate for the £7 billion loss he is forcing on us? He’ll clamp down on payments to the poor. Meanwhile the rich will have gained a lucrative asset at a knockdown price and will go on to reap profits from it – profits that would reside more appropriately in the UK Treasury.

The poor will pay twice while the rich will take the cash.

It’s nothing less than an institutionalised con trick, with the taxpayer as the victim.

Follow me on Twitter: @MidWalesMike

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