Scotland after the vote

[AstonZagato]

pcvdriver said:

AstonZagato said:

pcdriver

If the Belgians and US governments bailed out RBS and Lloyds, what percentage of the equity of those companies do they own?

What percentage of those companies does the UK Govt own?

I've not had time to get exact equity figures - but here something to keep you going....


British banks account for $640 bn of Federal Reserve bailout money

Fed forced to disclose its lending to financial institutions from December 2007 onwards.

by New Statesman Published 2 December, 2010 - 09:21

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The Federal Reserve has released details of more than 21,000 transactions after being forced by the Dodd-Frank Wall Street Reform Act to disclose which institutions it had bailed out in the financial turmoil since December 2007.

The data reveals that British-based banks accounted for $1 trillion (£640bn) of the money the Fed issued to prop up the financial sector.

Barclays took the biggest chunk of bailout money, borrowing $863bn from the Fed. Almost half of the money came in overnight loans thought the Primary Dealer Credit Facility, a programme intended to help banks dealing in US Treasuries.

Barclays has since paid all of its loans, which came about because of Barclay's $1.75 purchase of Lehman Brothers.

Royal Bank of Scotland borrowed $446bn, Bank of Scotland $181bn, Abbey National $19bn and HSBC less than $10bn. The figures show each institution's total borrowing, not the amount they had outstanding at any one point.

Source: http://www.newstatesman.com/2010/12/financial-brit...

OK, so you've proved you don't understand fractional banking systems, the difference between equity and debt, or how the bailout of the banks worked.

I will try to make it simple for you.

The Fed lent money (as did the Bank of England) to provide a short-term liquidity solution. Think of it as taking a pay-day loan to meet your next mortgage payment (and that pay-day loan has now long since been repaid).

The UK government injected permanent capital into the banks. Think of it as your parents paying off your mortgage after you've lost your job (and there is no return on this money for your parents so far and there may never be any return).

Of those two (the pay-day loan company and your parents), which would you say had bailed you out?

[Moonhawk]

AstonZagato said:

The UK government injected permanent capital into the banks. Think of it as your parents paying off your mortgage after you've lost your job (and there is no return on this money for your parents so far and there may never be any return).

Of those two (the pay-day loan company and your parents), which would you say had bailed you out?

Didn't the government get shares in return for their cash injections into Lloyds and RBS - so it's not quite the same as your parents paying off your mortgage.

More like your parents going into joint ownership with you - and when they sell their stake (or you buy them out again) they get part/all of their money back. If they are really lucky - they could even turn a profit.

edit: I see you have addressed that below - sorry

[AstonZagato]

And to answer my own question, the US and Belgian governments own precisely zero of RBS. The UK government, as a direct result of the bailout, owns 63% of RBS as a result of the bailout. This is because the UK Government saved the bank and the Fed/Belgians did not.

The UK injected new capital of £37bn into RBS, Lloyds and HBOS. A Scottish government could not have done that.

[Mr. Potato Head]

pcvdriver said:

You know the we're all in this together austerity spiel that the coalition came out with - slashing funding left, right and centre. Axing this that and the next. I was expecting to see our debt mountain come down. It has however, more or less doubled under the coalition.

Not long ago you were moaning about the national debt, now you are moaning about spending cuts.
Edit: actually you are doing both in the same post.

Edited by Mr. Potato Head on Friday 1st August 12:58

Edited by Mr. Potato Head on Friday 1st August 12:59

[Moonhawk]

pcvdriver said:

You know the we're all in this together austerity spiel that the coalition came out with - slashing funding left, right and centre. Axing this that and the next. I was expecting to see our debt mountain come down. It has however, more or less doubled under the coalition.

The cost saving of any cuts that have occurred will take time to filter through the system. Sometimes cuts cost more in the short term due to things like restructuring costs, redundancy payments etc. Any reductions in the national debt are likely to lag cuts by a good few years.

Watch Labour get back into power just as these cuts really start to make an impact - you'll then get hardline socialists who don't understand about this lag, trumpeting how wonderful Labour are and how they are succeeding where the coalition failed.

[AstonZagato]

Moonhawk said:

AstonZagato said:

The UK government injected permanent capital into the banks. Think of it as your parents paying off your mortgage after you've lost your job (and there is no return on this money for your parents so far and there may never be any return).

Of those two (the pay-day loan company and your parents), which would you say had bailed you out?

Didn't the government get shares in return for their cash injections into Lloyds and RBS - so it's not quite the same as your parents paying off your mortgage.

More like your parents going into joint ownership with you - and when they sell their stake (or you buy them out again) they get part/all of their money back. If they are really lucky - they could even turn a profit.

True but they did it at an unreasonable valuation (imagine your house had burnt down and they took on joint ownership with you as if it had not). The UK government paid approx. £5 a share for RBS shares. All other shareholders were offered the right to buy at the same price - more than 99.75% of other shareholders refused that offer (as the concensus was that the share price was worth far less than that). The shares shortly after went to £1.00 and currently are at £3.47.

So still a gift from "bank of Mum and Dad".

Edited by AstonZagato on Friday 1st August 13:09

[Borghetto]

[quote=pcvdriver]

Sink myself? Don't think so..... What rate are we borrowing at? 1%?...something like that? Please feel free to correct me if you know differently. 2009 debt at £0.62tn x 1% interest per annum x 5 years = £3.1bn interest payments. Not had time to search for what our debt servicing payments are like each year. Anyway, if we'd been using the money we borrowed to pay off debts - that'd be like robbing Peter to pay Paul.

I'm no economist, quote]

You would have so much more credibility if you could get a simple mathematical calculation correct. 1% of £0,62 tn is not £600 million its 6.2 billion x 5 years = £31 billion. The UK has one of the longest gilt maturity debt in the World, so a lot of its debt will not be 1%, but may be fixed at rates when the borrowing was originated. Please do not quote financial guesses, as you clearly have a maths level of a 6 year old.

[Walford]

pcvdriver said:

BY THE WAY IF THE PERSON WHO ASKED FOR ME TO BE BANNED WOULD LIKE ME TO REJOIN THE MAIN DEBATE - THEN JUST ASK THE MODS TO SORT IT...... I MIGHT EVEN PROMISE NOT TO TAKE THE PISS OUT OF UKIP)

This is not "the main debate, its a simple question what will happen to scotland after the vote ?

i think it will be a NO vote but we will still see big changes, and some resoration of democracy in rUK

[Moonhawk]

AstonZagato said:

So still a gift from "bank of Mum and Dad".

Only if they sell now though. The government could wait for the break even point - or even sell part of the investment now at a loss to stimulate confidence - then sell the rest at a profit. There is no reason the government have to lose out massively from this.

Even selling their entire stake at the current price they would still recoup around 2/3rds of the investment.

[AstonZagato]

pcvdriver said:

I'm no economist

Understatement of the year.

So pcvdriver, next question.

Do you want less austerity? Or less borrowing?

[McWigglebum4th]

AstonZagato said:

Understatement of the year.

So pcvdriver, next question.

Do you want less austerity? Or less borrowing?

Anyone who does not believe that Scotland will stop borrowing, increase spending and massively cut taxes is a tory scumbag

[AstonZagato]

Moonhawk said:

AstonZagato said:

So still a gift from "bank of Mum and Dad".

Only if they sell now though. The government could wait for the break even point - or even sell part of the investment now at a loss to stimulate confidence - then sell the rest at a profit. There is no reason the government have to lose out massively from this.

I'm talking about the time at which the BOMAD donation was made. There was no guarantee (indeed there was little hope) that the share price would rise above the price the UK Govt paid for many many years. Remember over 99% of investors refused to buy at the price that the UK government paid.

To stretch my analogy further, imagine the house was worth £600k. It burns down. No-one will value it but most people think it is worth no more than £100k-200k and is maybe worthless. Your parents pay off your £500k mortgage and say they want 60% of the house. You will spend the next 8 years building it back brick by brick. Even now, after all that work, it is valued at £350k. Eventually it might, just might, get above £500k and your parents have some value but it was still a huge gift in my book.

[anonymous-user]

AstonZagato said:

OK, so you've proved you don't understand fractional banking systems, the difference between equity and debt, or how the bailout of the banks worked.

I will try to make it simple for you.

Why bother?

[anonymous-user]

pcvdriver said:

The data reveals that British-based banks accounted for $1 trillion (£640bn) of the money the Fed issued to prop up the financial sector.

Barclays took the biggest chunk of bailout money, borrowing $863bn from the Fed. Almost half of the money came in overnight loans thought the Primary Dealer Credit Facility, a programme intended to help banks dealing in US Treasuries.

Do you have any clue what this means? (Thats a rhetorical question)
Every single cent borrowed through the PDCF was collateralised. To spell it out; if Barclays borrows $10bn cash for one day (overnight) they have to lend the Fed $10bn of US Treasuries or similar. If they do that for 10 days thats $100bn. You should probably stick to Scottish history and politics, basic banking and gcse level economics isn't working for you.

[pcvdriver]

Walford said:

pcvdriver said:

BY THE WAY IF THE PERSON WHO ASKED FOR ME TO BE BANNED WOULD LIKE ME TO REJOIN THE MAIN DEBATE - THEN JUST ASK THE MODS TO SORT IT...... I MIGHT EVEN PROMISE NOT TO TAKE THE PISS OUT OF UKIP)

This is not "the main debate, its a simple question what will happen to scotland after the vote ?

i think it will be a NO vote but we will still see big changes, and some resoration of democracy in rUK

I know this is not the main debate - I was answering Henry's question as to why I don't post in the main debate - I'd have thought it was self explanatory if you'd read the whole reply and not just cut n shut part of it.....

[pcvdriver]

Walford said:

pcvdriver said:

BY THE WAY IF THE PERSON WHO ASKED FOR ME TO BE BANNED WOULD LIKE ME TO REJOIN THE MAIN DEBATE - THEN JUST ASK THE MODS TO SORT IT...... I MIGHT EVEN PROMISE NOT TO TAKE THE PISS OUT OF UKIP)

This is not "the main debate, its a simple question what will happen to Scotland after the vote ?

i think it will be a NO vote but we will still see big changes, and some restoration of democracy in rUK

I know this is not the main debate - I was answering Henry's question as to why I don't post in the main debate - I'd have thought it was self explanatory if you'd read the whole reply and not just cut n shut part of it.....

P.S. I corrected a couple of your typos....

P.P.S. What do you mean by "some restoration of democracy"?

Edited by pcvdriver on Friday 1st August 15:59

[McWigglebum4th]

pcvdriver said:

I know this is not the main debate - I was answering Henry's question as to why I don't post in the main debate - I'd have thought it was self explanatory if you'd read the whole reply and not just cut n shut part of it.....

Care to tell us why no MEP from the SNP has ever asked in the European parliament what happens to Scotland after we leave the UK?

[Walford]

pcvdriver said:

P.P.S. What do you mean by "some restoration of democracy"?

are you taking the pith?

[Moonhawk]

Walford said:

....and some resoration of democracy in rUK

This keeps being stated - but has anyone defined exactly what they mean by this.

How would you make the UK more democratic?

We could normalise constituencies based on population - so every MP represents roughly the same number of people - and therefore every person's vote is worth roughly the same (Some parts of Wales and Scotland would lose out massively if this were the case - the smallest English constituency comes in at number 21 when ordered from smallest to largest). This would also make it so that the number of MPs in parliament for each constituent country was also representative of their population.

We could give MPs from larger constituencies more power. That is - when voting on parliamentary matters - their vote or the influence they have on parliament is weighted by their constituencies population.

We could implement a different voting system that better reflects the underlying will of the voters. The first past the post system doesn't always achieve this - you have to go back to the 1930s to find a government that was elected by a majority vote. Even the current Scottish government wasn't elected by a majority.

We could introduce true proportional representation.

What we have to remember is that 'Democracy' doesn't mean 'you get what you voted for'. It simply means that your vote is counted equally in a free and open election.

Edited by Moonhawk on Friday 1st August 17:26

[Walford]

Moonhawk said:

Walford said:

....and some resoration of democracy in rUK

This keeps being stated - but has anyone defined exactly what they mean by this.



What we have to remember is that 'Democracy' doesn't mean 'you get what you voted for'. It simply means that your vote is counted equally in a free and open election.

Edited by Moonhawk on Friday 1st August 17:26

It means if something is devolved to scotland say education, why should they then, by the fact there are 50 scottish MP,s carry the vote one way or another in Westminster,

they could vote for a policy in scotland, and block it in England

So in england now on education we have a tory majority out voted by scottish socialist, who dont represent any actual constituency affected