Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Lots betting on this rider.
The more I see, reflect about, the capitalist system the more sympathy I have for some alternative system being developed - because when the market starts valuing companies at below cash (even when they have cash and some other assets that would be useful to someone) then one knows the system is not functioning as it should according to the theory of investors/trading behaving rationally.
I mean so many random things have happened, such as in 2008 the Bank-of-England putting interest rates from 5.5% to 0.5% within the space of a few months and then announcing massive quantitative easing (money printing).
If people were rational then these sudden moves to extreme levels (0.5% interest rates are pretty much the lowest in the history of the financial system going back hundreds of years) by policymakers shouldn't be necessary.
I'm not sure that policymakers can congratulate themselves about what they have achieved since 2007 - what was the point of suddenly dropping interest rates lower than ever before and then keeping them virtually at zero for ten years. Whomever knew of this policy in advance (in the months before it was announced to markets) could have made a fortune - so what were the intentions behind it - was it to aid the corrupt? Was it just because they couldn't care less anymore? Was it an ego thing - to prove to the market that the Bank-of-England could be extreme in its behaviour and yet remain unchallenged for ten years?
I just don't get what was the thinking behind these extreme moves by policymakers - was it just to make the citizens think that the Bank-of-England was as corrupt and fraudulent as some of the worst Roman Caesars?
Clearly such an extreme move in interest rates was going to create massive winners-and-losers - because no rational econometric model could have forecast/predicted such an unprecedented event. So was that the point - to randomly cause some investors to get richer faster than they ever dreamed possible, whilst to bankrupt others relatively quickly who had taken relatively moderate levels of risk?
Just what was the thinking behind policymakers being so extreme?
Ethically its not acceptable, Politically it is a necessity, Commercially its greed
I am famiair with both these buildings & I can tell you that the revised planning permissions for both doubled the numbers of units and as much as people believe its not acceptable there is a need for high density low cost housing. Whether you think living in one room is unethical its probably all they can afford & its a fact of life that with proverty comes crime.
Fair point I has missed the post about the three thousand pounds - and stand corrected that certainly would tempt most very small businesses
https://www.bbc.co.uk/news/uk-england-essex-47720887
Does anyone find this acceptable - what has happened to the morals of people?
So they are giving out shareholders' capital to encourage businesses to switch away from them.
And this is happening in a free-market economy - what a con - if I was a shareholder I would be livid that my funds were being used in RBS in this way.
I'm not sure what most small businesses would do. However, it's not just a few hundred pounds we're talking about. CryWolf mentioned that he is being paid £3,000 to switch. Ideally the uptake is good because the Annual Report goes on to state that:
"should the uptake within the incentivised switching
scheme not be sufficient, the Independent
Body has the ability to extend the duration of
the scheme by up to twelve months, impose
penalties of up to £50 million, and can compel
the Group to extend the customer base to
which the scheme applies which may result in
prolonged periods of disruption to a wider
portion of the Group’s business."
Personally I would not think most small businesses would undergo all the hassle of changing banks even for a few hundred pounds. Unless the service they were receiving from RBS was not satisfactory or there were to be ongoing saving in bank charges.
So as long as RBS charges are competitive and service up to scratch I do not think they should have a lot to fear from this. I suspect the incentives will simply go to those businesses who would probably transfer anyway.
Good spot. Thanks Jab
This is called out as a risk factor on p262 of the Annual Report:
"As a direct consequence of the incentivised
switching scheme (which comprises part of
the Alternative Remedies Package), the
Group will lose existing customers and
deposits, which in turn will have adverse
impacts on the Group’s business and
associated revenues and margins.
Furthermore, the capability and innovation
fund (which also comprises part of the
Alternative Remedies Package) is intended to
benefit eligible competitors and negatively
impact the Group’s competitive position."
I'm not sure whether the impact is expected to be significant though I suppose the point of it is that it should be.
This process has now commenced where SME's are incentivised to move their banking from RBS to any one of several other banks including Santander, Yorkshire Bank, Coop and several others. As part of the EU requirement following the UK government bailout in 2008 (Brexit anyone?) RBS have put £750m into a fund where these banks offer cash incentives for them to move.
Obviously the £750m (on top of the £3Bn cost of the aborted attempt to divest W&G (bloody EU requirement again) has already been factored into the share price but the loss of income, deposits and loans to these switching businesses may not have been fully factored in.
May be I am over reacting but I worry that future earnings / profit will be significantly and adversely affected by this which in turn may drive the SP down. Any thoughts anyone?
It's assumed that in any market economy the people will behave as below. However have you seen some of the citizens in the current economy ….. the ones who do nothing but watch TV mostly. Hence there are not 65 million citizens participating in the UK economy even though that is the number of citizens in the UK. Hence I do now believe the system is in a worse mess than I previously thought ….because clearly the assumptions for a free-market economy (see below) don't hold true over much of the globe, nor in the UK itself:
For any free-market economy it's assumed that most citizens will behave in accordance with the 5 assumptions below:
(1) Have a good level of financial knowledge
(2) Trade frequently within the economic system with other economic actors
(3) Consistently seek out information so as to stay up to date regarding a wide range of prices
(4) Behave rationally themselves - i.e. refuse to deal when prices become too low and be willing to sell more as prices rise.
(5) Trust that everyone else they deal with within the system is following 1-4 also.
McDonnell is saying that Labour wants to create a Public Banking Ecosystem so presumably blocking the sale of the Government's stake means that they want RBS to be an important part of that system. In this scenario you can imagine that the Government would begin taking an active role in the strategic and operational affairs of the Bank.
The notion that small to medium enterprises are very poorly served by the banking sector, and that the sector essentially dictates which SMEs succeed or fail by way of extending or restricting credit seems to be a key driver for the Public Banking proposal. However, I'm not sure how much substance there is to these claims - the Banks compete aggressively for SME market share and Banks only profit when their clients succeed and flourish. I think cherry picking which businesses you want to lend to is called due diligence and managing credit risk? Is McDonnell suffering from Dunning Kruger Effect perhaps?
On one hand, this announcement is actually better than Labour's previous proposal for RBS (i.e. to launch a consultation on splitting it up into many small, regional banks). On the other, as the risk of another General Election increases, today's announcement could have major investors second guessing whether they want to hold stock in a company whose return to private ownership is under threat. :-(
Would it means pumping more capital and funds to support its future expanding rule of lending to small and medium sized businesses?
Just read that. Could be painful in the morning. And then again if they get in.
https://www.mirror.co.uk/news/politics/labour-plans-stop-rbs-being-14210947.amp
Tom Watson on Andrew Marr - Labour policy - RBS should remain under Gov control, run to help small business's
A1
There are winners and losers I guess ... and I know I am not winning from this "half-decent" economy you say that exists ...for millions of people like me the economy is not half decent at all....rather there is no protection anymore....I've been the victim of business fraud four times in the past ten years and not once have the banks applied logic to the situation....can't see the economy being "half decent" much longer in the UK now that the UK political class has in effect condoned a system of legalised financial theft so that their mates can get even richer at the expense of people who were taking perfectly middle of the road business projects.
I think it was a social disaster not to have increased funding for:
(1) Libraries
(2) Rural development
(3) New gas-fired power stations (as it's not always sunny and the wind doesn't always blow)
(4) Railway lines out to the coasts
(5) More coastal development so you don't have to go abroad for a decent short-break if you have a few sunny days off work.
In 2018 RBS made an operating profit before tax of £3,359 million.
Q1 2019 Results are due out on Friday 26th April.
The share price is down here because RBS are not making money. It's like any business - if the business is selling things at a loss (rather than a profit) then the share price will fall. Trouble with business these days is that they are so corrupt that they often sell things at a loss on purpose because they have their mates buying stuff on the cheap (and doing their mates a favour is far more important to them than worrying about the damage being done to shareholders).
Also the average CEO earns about £2.1 million per year and the average MP earns £0.071 million per year. Thus business people are paid an order of magnitude more than MPs and as earnings indicate relative status, then I doubt MPs will ever be listened to by financiers - money is not interested in politics it would seem and money (bribes) can be a lot more effective than whatever some stupid MP may be able to achieve (generally they achieve nothing except talking a lot to other MPs without having the data to hand to know if what they're saying would make the population's lives better or worse).
Poor Ross McEwan - everyone's just woken up to fact that he is earning more than Fred the Shred and with a bigger pension !
From the Guardian ...
Ross McEwan's £350,000 pension payments are out of line with the rest of the RBS workforce, being worth 35% of his £1m salary, compared with the rest of his staff, who are offered 10% on their peanuts.
The Investment Association (IA) and ShareSoc are recommending that shareholders should vote down the forthcoming renumeration report.
You could not make it up ...
That is incredible. Perhaps rather optimistically, I have always liked the idea that these shares could go to 500p in time.
https://www.sharecast.com/news/broker-recommendations-/broker-tips-wood-group-dechra-pharmaceuticals-rbs-united-utilities--3806825.html
Must have been taken out by RBS for an extremely liquid lunch. Buy 489 !!!
The details here at Reuters link : https://www.reuters.com/article/us-britain-royal-bnk-sc-grp-loans/rbs-aims-to-wind-down-1-billion-pounds-in-local-council-loans-the-guardian-idUSKCN1R408B.
Bought for div @ £2.69 and to hold to may can see rise 12 % to £301 by then