Tuesday, 7 October 2008

Can somebody put RBS out of its misery


We have seen this movie before.

It starts with a sliding share prices, some poor results and over-exposure in a deadbeat market. The rumours start, first as a whisper and then grow into a deafening roar. The end approaches when the share price falling off a cliff. Then, we know we are only days away disaster.

The RBS share price is down 40 percent today. All it takes is one lazy teller in one branch and a queue outside a bank branch and RBS will be history.

Somebody needs to do something before it is too late.

10 comments:

Anonymous said...

The end won't be long coming.

Anonymous said...

It'll be Enfield Natwest branch next Saturday morning.

They have queues on to the pavement on normal days.

aSteve said...

RBS is something of a worry - and not only because they bought Natwest (my preferred current account bank) in a hostile takeover in 2000.

RBS is huge and has many customers with significant sums on deposit.

I'm very, very glad I've taken my time to diversify my dependence on banks.

With RBS and HBOS both loosing ~40% today alone, I think there will need to be government intervention overnight. I'm hooked in rolling news awaiting the outcome of the meeting currently under way in Downing Street.

I'd like to see RBS split-up... I have always considered RBS to be dishonest in their conduct - I hope Karma proves effective.

(P.S. Great to get rid of the anti-spam spelling-test... I hope you don't get deluged... but it is much more pleasant to comment without that hurdle...)

Mark Wadsworth said...

Yup.

What needs to be done is for RBS to replace every £1 of exisiting bonds with new bonds with a face value of 97p plus shares with a face value of 3p. Based on figures from Morgan Stanley's analysts in today's FT, this would restore RBS' Tier One capital ratio to the required 7.5%, and Bob's your uncle.

It's called a debt-for-equity-swap.

MAB said...

Alice,

What's the skinny on Barclays? They are thinnly capitalised also.

Anonymous said...

The system that runs on credit has entered meltdown as seen in the money markets
Paulson deciding the jig was up for the economic system and so set out to rebuild the superpower.

He launched his corporate state Bazooka plan ,for the state to soak up dud bonds and to
recapitalize the US banks in a play for re-organization time before a complete collapse.

Rather than seeing the US hit the canvass alongside the other imperialists and staying down with them,Paulson and his banker friends decided they would attempt
to be the last man standing the only banks with capital and having the chance for a big buy up when the blood started to flow on the bourse streets worldwide.
Are some European banks ready to beg for "rescue" yet.

Anonymous said...

How can you pretend to write about economic issues and not know a thing about economics? RBS is intrinsically sound not to mention much larger then Lehman, Fortis, Northern Rock or any other bank in trouble. Besides that, the UK government won't allow RBS to fail. This is a liquidity problem, not a solvability problem. RBS will survive, just keep watching...

Budvar said...

The other thing most people don't realise is that Bank of Scotland as in HBOS and Royal bank of Scotland RBS issue their own banknotes!!

Nick Drew said...

have you seen the RBS Prefs ? 31.4% yield !

Nick von Mises said...

"How can you pretend to write about economic issues and not know a thing about economics?"

"This is a liquidity problem, not a solvability problem."

Hmmmmn