Lloyds Bank.. a Denini View

[Ed209]

that seems extremely optimistic

[eFestivals]

neil doesn't seem to believe in an unequal distribution of wealth.

Not correct. I believe in reward for work done, not rewards of whatever can be extracted from the payers.

[Ed209]

According to Barclays Investor Relations - assuming these are the right type of shares, we as a country get 2.5p per share on the 18th March.

A quick glance of the spring 2010 results show 12,182,000,000 Barclays shares in total. If 43.4% of those belong to us - 52,869,880,000. 2.5p per share gives a dividend coming to us of £1,321,747,000.

£1.3 billion. That'd pay for a few libraries.

I'm sure I've overlooked something totally, but if we have the shares forever, we'll be getting 43.4% of their PAT (over time, through dividends), as well as the 27-28% of PBT we 'should' be getting through corporation tax.

edit; Its Friday night. What the f**k am i doing?

[Purple Monkey]

Money is an illusion, nothing more. The people who bind us are simply cunning magicians, using misdirection to keep us from discovering and understanding their cheap tricks. And they're laughing their tits off at us.

http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405?page=1

Edited February 26, 2011 by Purple Monkey

[diddly-dee]

A very perceptive take on the financial crisis... (not composed by me unfortunately). It's particular to Ireland but it's the same circus as elsewhere.

Mary is the proprietor of a bar in Dublin . She realises that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronise her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around about Mary’s "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Mary’s bar. Soon she has the largest sales volume for any bar in Dublin .

By providing her customers' freedom from immediate payment demands, Mary gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages.

Consequently, Mary's gross sales volume increases massively. A young and dynamic vice-president at the local bank recognises that these customer debts constitute valuable future assets and increases Mary's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then bundled

and traded on international security markets. Naive investors don't really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics.

Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Mary’s bar. He so informs Mary.

Mary then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts.Since, Mary cannot fulfil her loan obligations she is forced into bankruptcy. The bar closes and the eleven employees lose their jobs.

Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%. The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Mary’s bar had granted her generous payment extensions and had invested their firms' pension funds in the various BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion euro no-strings attached cash infusion from their cronies in Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Mary’s bar.

This is economics in 2011.

[rabid]

A very perceptive take on the financial crisis... (not composed by me unfortunately). It's particular to Ireland but it's the same circus as elsewhere.

[feral chile]

Not correct. I believe in reward for work done, not rewards of whatever can be extracted from the payers.

[Purple Monkey]

optimistic that the banks won't somehow manage to keep their grubby mitts on most of it anyway, and we'll be no better off

Edited February 26, 2011 by Purple Monkey

[markeee]

Who couldn`t accept this concept. Of course they have to make money. But if thats the case.. why so much now? And specifically--Lloyds as they wouldn`t even be here now if it wasn`t for us.

What I dont understand about this uproar about the banks not lending to small businesses is this... why do they need all of a sudden to borrow?

They still have to pay it back. Its not the answer to simply lend money imo.

However-- I personally know how shite the banks are in this respect.They have offered no assistance whatsoever to our lass. She doesn`t make a fortune, her prices are lower than others in the area--but she needs some help atm.. they just f**ked her off.

Whilst I agree with your openeing statement of the lost generation and lazy families --to a certain degree-- I dont think the financial crisis can be put down to that!

den

[eFestivals]

unless you have a central method of deciding pay scales, how can you avoid the economics of supply and demand?

Who would be avoiding it?

The ones who are avoiding the economics of supply and demand are the people scooping up huge wages undeservingly.

We're told that 'the city' has the brightest brains in the country. But do they really?

Even the dullest brain is able to realise that not a jot of anything is changed over whether any deal makes a loss or not from shuffling bits of unrelated paper around - yet that's exactly what happened.

These numbskulls really did think that the risks of someone not paying back what they owed was reduced by the trading of unrelated bits of paper between these 'smart' people. That's how f**king stupid they are.

Meanwhile, just about every failed executive moves onwards and upwards into better paid and higher-regarded jobs - the quangos are full of them, and Dave Moron and his cronies have appointed more than a handful of these to new govt jobs. There's no real regard to supply and demand or to talent, there is only regard to the combined self-interest of the existing establishment.

[gratedenini]

As to the comment about how small businesses suddenly need to borrow - yea I did wonder this, but surprisingly a large number of businesses rely on borrowed money and operate on a day to day basis in debt, without actually having their own money from what I've read

That's the problem, everyone wants the house, the 2 cars, the 3 holidays a year, regardless of what money they earn and what they can afford - see it all the time, friends of mine in low paid jobs/single mums (with no income besides benefits) who go on holiday a couple of times a year financing it through borrowing i.e credit cards, similar to how people get cars on credit, a buy now pay later culture, as long as they can get what they want, worry later - same happens at christmas families get in debt to make sure there kids have 'everything they want' all these homeshop places bright homes or something, where you can get almost ANYTHING on finance

Sadly, people don't want to cut their cloth accordingly, which is what is ultimately needed

I don't go on 2/3 holidays a year, in fact I haven't been on holiday for years (unless we count festivals as a holiday), I don't drive a flash car..I don't even own a car!

[worm]

Who would be avoiding it?

[Gre]

err ... I'm afraid you have. We're talking about Lloyds. The UK Government doesn't have a stake in Barclays

although the concept is the same

[markeee]

Yes--and that is in basic terms very wrong. Its ok borrowing for expansion or something--but to operate (as lots do) a business based soley on borrowing is ridiculous.

The analogy I use is The Sweet Shop one--you have a little corner shop and every week you go to the cash and carry every week and buy £300 of stock.

By the end of the following week--you have to have sold all the sweets and made £500 to cover all your outgoings. If you dont do this consistently..yer f**ked. You can get away with it for a while--a good while. Overdraft,borrowing,waffling to your creditors--but ultimately.. yer f**ked.

Its no good the bank lending you money if your business model stays the same.

I know that is a simplistic view--but its right isnt it.

As for your 2nd bits... how many times have I been on here saying exactly that.. that people now expect too much.. and I mostly get shot down in flames.

The borrowing culture which came in in the 80s are the blame. It was all too easy--and we have reaped what we sowed.

I remember.. approx30yrs ago.. I wanted a Cortina 2000E... was like a f**king aeroplane inside..black vinyl roof..metallic green.

It was £1595. I was offered £595 part exchange leaving a balance of a Grand. Off I went to The Yorkshire Bank.

!!! back then you had to say what you wanted the money for. They had to contact the garage to check out the deal. I had to find a 1/3 of the money AND me Dad had to be Gaurantor!! I`d have been about 20yrs old then.

(I still de-faulted!!! )

Point is--it was genuinely not easy to get drip back then.. and then, gradually.. chucky was all over. Which in one way did stimulate the economy.. folks would be buying settees and fridges and all manner of things. Holidays, cars etc etc-- things you would normally have to save for.

Who saves now?... maybe a few old folks etc.

And that has been the root cause imo (or part of it).

Its hard to see how people can change their mindset without feeling "hard done by" and blaming someone else.

The philosophy of If you borrow--you have to pay it back means nowt now.

den

Edited March 2, 2011 by markeee

[gratedenini]

things have changed. Most people don't have any choice anymore. If you want to go to university you have to borrow not knowing whether you'll ever be able to pay it back.

same with mortgages, you take the loan on without any idea whether you'll be able to pay it back

and so the culture is set