Black Wednesday
Discussion
In British politics and economics, Black Wednesday refers to the events of 16 September 1992 when the Conservative government was forced to withdraw the pound from the European Exchange Rate Mechanism (ERM) after they were unable to keep Sterling above its agreed lower limit. The most high profile of the currency market investors, George Soros, made over US$1 billion profit by shorting the sterling. In 1997 the UK Treasury estimated the cost of Black Wednesday at £3.4 billion.
The trading losses in August and September were estimated at £800m, but the main loss to taxpayers arose because the devaluation could have made them a profit. The papers show that if the government had maintained $24bn foreign currency reserves and the pound had fallen by the same amount, the UK would have made a £2.4bn profit on sterling's devaluation.[1] Newspapers also revealed that the Treasury spent £27bn of reserves in propping up the pound; the Treasury calculates the ultimate loss was only £3.4bn
Now if we step forward in time to last week:
"At close of business last Friday, the UK government held £5 billion in preference shares and a 50% of the ordinary shares of RBS. I calculate the market cap of all of the company’s ordinary shares at £8.33 billion, so the total government holding of prefs and ordinaries would have been worth about £9.16 billion.
At the weekend the government cut what it thought was a good deal to exchange the prefs for ordinaries at a price 8.25% below the Friday closing price, giving the government a 70% interest in the ordinaries. Unfortunately the share price fell 67% on the day leaving the market cap of RBS at £4.58 billion, and the UK government’s 70% share at £3.2 billion. So instead of getting a benefit of a £400m discount on the conversion price, the government took a £5.96 billion loss on the day."
http://alexmasterley.blogspot.com/2009/01/probably...
So if there are still any doubts, GB and the Labour party have cost the country more than the Conservatives ever did (and I've not posted anything about the gold sales). Please stop voting Labour I can't afford it.
The trading losses in August and September were estimated at £800m, but the main loss to taxpayers arose because the devaluation could have made them a profit. The papers show that if the government had maintained $24bn foreign currency reserves and the pound had fallen by the same amount, the UK would have made a £2.4bn profit on sterling's devaluation.[1] Newspapers also revealed that the Treasury spent £27bn of reserves in propping up the pound; the Treasury calculates the ultimate loss was only £3.4bn
Now if we step forward in time to last week:
"At close of business last Friday, the UK government held £5 billion in preference shares and a 50% of the ordinary shares of RBS. I calculate the market cap of all of the company’s ordinary shares at £8.33 billion, so the total government holding of prefs and ordinaries would have been worth about £9.16 billion.
At the weekend the government cut what it thought was a good deal to exchange the prefs for ordinaries at a price 8.25% below the Friday closing price, giving the government a 70% interest in the ordinaries. Unfortunately the share price fell 67% on the day leaving the market cap of RBS at £4.58 billion, and the UK government’s 70% share at £3.2 billion. So instead of getting a benefit of a £400m discount on the conversion price, the government took a £5.96 billion loss on the day."
http://alexmasterley.blogspot.com/2009/01/probably...
So if there are still any doubts, GB and the Labour party have cost the country more than the Conservatives ever did (and I've not posted anything about the gold sales). Please stop voting Labour I can't afford it.
Wurls said:
Fittster said:
_James said:
1997 figures are not adjusted for inflation.
Quick calculation puts the 1997 figure as $4.5 billion today, still less than the Gordon's latest failing.Edited by Wurls on Tuesday 20th January 13:54
Edited by Wurls on Tuesday 20th January 13:56
Gassing Station | The Pie & Piston Archive | Top of Page | What's New | My Stuff