Wednesday, Aug 14 8:02 AM Fitch: RBS "bad bank split" not a great idea The costs of the so-called "bad bank split" for RBS would likely exceed the benefits, according to Fitch, citing the complications in actually doing the split, and the bank's H1 profits and increasingly robust balance sheet.The most likely outcome, says Fitch, is for the bank to continue with planned capital actions - deleverage further, sell some U.S. operations, reduce its markets business. The greatest risk facing RBS is litigation relating to its legacy business and this would be difficult to remove with a bad bank split. http://seekingalpha.com/currents/post/1220702
LONDON (ShareCast) - Royal Bank of Scotland Group topped the risers on the FTSE 100 on Wednesday after ratings agency Fitch said that a break-up of the state-backed UK lender into a ‘good’ and ‘bad’ bank is increasing unlikely as the costs would outweigh the benefits. Part-nationalised counterpart Lloyds was also making gains today.
Goldman insisted RBS could create a "better bad bank" by separating assets rather than splitting them off, claimed that "retaining the bad bank assets on the RBS balance sheet" would be preferable to transferring them into an "off-balance sheet bad bank". Investors will ascribe a "fuller value to the core RBS", which would make it look as good as Lloyds.
Nomura analysts however, said the bulls' point that RBS is the next Lloyds is wrong because the "main difference is the profitability of the core". They warned that it remained "challenged" and will "take time to restore". Investors inclined to Goldman's view and RBS edged up 3.5p to 333p. It has been on the rise since the start of this month, according to the Independent.
I'd say that there was a nod to the psychological impact of the sp after consolidation. But the sp only got to 50p+ once, in about April- May 2010. Prior to consolidation, there was chat on here about 'when this hits £1' and so forth, which for much of the time represented about a 400% increase in the sp. Given that kind of optimism, we would be looking at 1200p a share at the moment. I would argue that in the long term, after this crisis has been a long time gone (like 1970's house prices), we could see £12 a share again. A healthy, functioning bank in any normal, healthy, functioning national equities market has that capacity. I think that our own psychology is affected at the moment by the sheer number of times that this share has risen then collapsed, to the point where no- one can realistically see the sort of level I have mentioned. But I think it is possible in the longer term.
I know I've asked this question before but I never really got an answer. Before the consolidation these were at say 30p and had got up to 50 a couple of times. Since the consolidation they have got nowhere near 5.00 (50p). Does anyone think the consolidation has put a bit of psychological pressure on the share? Before the consolidation surely there was every chance of the share going back up to £3-5 once all the problems were sorted and the country was in full recovery. Now it seems to me we are in a situation where if the bank recovers to say £6.00 (60p) that will pretty much be that and there is no chance of going anywhere near £60 (£6)
I bought in the 70's and was totally stretched at that time. Through the 80's and the very high interest highs, we managed, it wasn't easy, there is inference on here that it was. 15% interest rates meant that we had to work two jobs.
If anyone thinks it was easy then, then I'm afraid you are deluded. I lived with my parents, saved my deposit and bought my first property. My son has done exactly the same. Work hard + Save hard + Buy house, it's not rocket science, thats of course if you have the motivation to do it.
Maybe we wanted to make better and more financially rewarding lives for ourselves than our parents were able to do following the war years.
Sorry, you have it wrong. House prices have not doubled because two incomes may be used. What happened was that as people had more money available to them they bought bigger houses. At the same time, as you suggest, as the banks increased lending to 125% the builders and estate agents increased house prices in order to take a greater share. I would suggest that if you compare like with like you will find that incomes have grown at a similar rate to prices, except for house prices which have been manipulated as noted above. As I have been saying on here for over a year the house market is overpriced and needs to be corrected. Otherwise people are a little better off today than we were back in the sixties and seventies in relation to the cost of living.
keep the sheep thoroughly endebted so they have to keep working forever to fill the governments tax coffers to fund gilt edged fat cat public sector pensions and mp's perks and expense accounts while pumping endless pots of money into greedy banker bonuses and rescue packages
when all we want is housing that relates to what we earn and the ever decreasing disposable income in our pockets
another bubble waiting to burst and the dreams of all those baby boomers sitting on what they think is their pension being shattered as the generation following on is suffering record levels of unemployment and starts life with massive student debt making current housing prices unaffordable and unattractive......no wonder they all stay at home with mummy and daddy till they're 55 or whatever
Neephead .. You say that one was eligible for a mortgage years ago ..correct and it helped stability in house prices... Change that system and you create a different outcome... Thus two people become eligible the house prices double ..
That is what I have been trying to tell you all...
The system is changed or allowed to change to boost house prices... And then create different more expensive means of financing the cost... The future is obvious longer years of mortgage payments to keep the monthly payment to an affordable level...
How better it would have been if the one person eligible system was not change and houses just went up more in line with the average wage.. And the amount of houses over the past 50 years could have been built to requirements needed ... Nice affordable stability for many...wishing to buy a house...
Now we have a mass greed culture of creating fast uncontrolled debt with everyone on a different level of affordability and a system that worked a treat 50 years ago with stability and respect.for not letting people get into too much debt...has now over the past 40 years been shot to pieces... And now encouragement of endless debt is now the norm..... From government assisted mortgage deposit loans to wonga and many other tv adverts to get many into debt.. As basic costs increase..IE rail fares the latest and coming uitlity prices .. All reduce people's spending power with no or little stability .. As per 50 years ago when stability was the more the norm... You just knew what a range of prices were because they changed slowly in the 60s .. Petrol in today's terms.. 35p and gallon.. Cinema 20p... Tube fares 20p to 40p...mini car £600 ..and the now media driven system of taking on more and more by changing the goal posts to suit... Encouraged debt...
I have lived though it all and can confirm what I say is true... They say that money can be the route of evil... Maybe there is some element of truth to that statement.. as house prices have in 40 years increased in the region of 20 times the 1970 value...that's ...2,000% ...and growing...?... ...just how does the average persons income keep up with that increase ... Like for like as said before my income is around 50k a year short if it was to keep up with house inflation.... The past 40 years...
Thanks Neephead for the discussion ... We're have and others aired many truths and opinions on this housing issue .. It will no doubt continue... History tells that one could buy a house years ago ..now takes two to do the same... ..
One valid reason why is
That house building has been engineered to keep house prices increasing by creating a shortage to the demand required .... Or if 100,000 extra houses were built every year over the past 50 years house prices would be far lower than they are today.. And there would be half a million more houses available in the uk today..to buy..
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