RBS shares... Up or down?

Higher, or Lower?

  • Higher. Soon!

    Votes: 2 4.9%
  • Higher. Long term.

    Votes: 14 34.1%
  • Don't hold your breath!

    Votes: 8 19.5%
  • Freefall.

    Votes: 9 22.0%
  • Ever considered the dogs?

    Votes: 7 17.1%
  • This is much cleaner than his last poll ;)

    Votes: 8 19.5%

  • Total voters
    41
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If they go out of business - your mortgage is an asset on their books and will be sold off to another institution who will collect your payments.....You wont notice a thing............until you default....:D


I was waiting for someone to notice that small aspect of debt.

However, the OP need to default, the new owner of his debt just has to decide to call it in.

In the last "bad one" my mate had a building business, employees, books chocka full or work, excellent cash flow.

Bank called him in, called all his debt in, not because he couldn't pay, BECAUSE HE COULD, and of course that was that, end of business, end of employees, end of all pending work on books, and predictably enough end of marriage and everything else too.

I owe precisely nothing, I will make some purchases on credit card for the protection, but I always clear it in full every month (a revolver) and have no other debt of any kind.

Not because I am a smartass, I just never forgot the lessons from the last one, and never learned to trust anyone else with money, eg banks etc.
 
true.


Imagine if this guy won! you could take the motor manufacturers to court. Be worth a go wouldn't it?
.


he's not suing because the shares lost value, he is suing because (he alleges) they lied about their liquidity.
 
However, the OP need to default, the new owner of his debt just has to decide to call it in.

Depends on the type of debt.

Overdrafts can typically be called in at any time. This is why small companies suffer in the current climate when the banks squeeze them in this way.

Term loans are a different animal and can't just be called in.
 
Depends on the type of debt.

Overdrafts can typically be called in at any time. This is why small companies suffer in the current climate when the banks squeeze them in this way.

Term loans are a different animal and can't just be called in.

Thats right ,anyone who takes over the mortgage business will have to offer the same terms and conditions , there is no chance of companies calling in the debt , thats scaremongering

There is however a chance they will call it in if you break the terms and conditions of the loan and there is a clause that if the property has dropped significantly in value they can ask for the difference back

ie

Take out a mortgage for £100,000 on a £110,000 house

Property value drops to £90,000

Bank now has a bad debt in other words they have lent more money than they could possibly get back if you defaulted hence they could ask for an extra £10,000 to be removed off the mortgage

Its tails they win heads you lose

Businesses are a different story as said an overdraft can be called in at any time , a business loan is different , whilst lots of companies rely on their overdraft for cash flow its not a great idea , but any decent business wth a good plan should get finance elsewhere , you cant blame the banks for being a bit risk adverse nowadays

Lending without proper regard is what has caused the whole problem in the first place
 
If they go out of business - your mortgage is an asset on their books and will be sold off to another institution who will collect your payments.....You wont notice a thing............until you default....:D

Or you may notice that the "new" lender has a different policy regarding interest rates and you may see an increase in the % paid. the banks are going to have to make more profits fast and one way is higher rates of interest - thats my prediction of what is coming around the corner.
 
he's not suing because the shares lost value, he is suing because (he alleges) they lied about their liquidity.

true. he bandies about the word allegedly all the time.

He even used it on me. However he was given incorrect information when prior to speaking to me about that particular issue, and was very good and nice about taking it all back when he found out, the side of the story that he had not heard at that point. The person who told him however, seems to be very quiet now!!!

He is actually a decent enough person, but barking crackers. His case will be bullet proof but he is playing the game. he has lost around £1000. It would probably cost RBS that just to send the lawyer to the court to sit there and discuss which bits can be heard, and which can't. The court is 300yards from me, and I should imagine the RBS laywers won't be.

He will want £1000+ for his troubles and to go quietly, which is why I want them to fight long and hard, stuff the cost. If everyone did what this guy does, as regular as he does it, the world would run out of money.

PS. he was in court today suing us for £7500k plus expenses. And you really dont want to know over what that is all about.
 
back to the original question - the RBS shares were about £20 at the peak, then they fell to about £2 ish and there were lots of comments about fallen a long way, how much further can they go....well the answer is they can go to zero. After falling 90% to £2 they have now fallen another 95% to about 10p; and in my opinion they are a one way bet to go to zero once they are nationalised. Probably money to be made on the daily 10 - 20% swings along the way but you will need a stake of more than £100 to offset the spread and dealing costs - you should have put £10,000 in at 10p to make it more interesting ;) - you could have made about £2000 today if you had timed it right.
 
Right, I cannot get a sensible answer to this question on Pistonheads :)rolleyes: )

What actually happens in practice if RBS is nationalised? Does this mean that all shareholders are dismissed without compensation? Or, will the shares diminish in value (With future growth possible)?

If it's the latter I will hold firm. If the former, they are approaching my buy price so may offload.
 
Right, I cannot get a sensible answer to this question on Pistonheads :)rolleyes: )

What actually happens in practice if RBS is nationalised? Does this mean that all shareholders are dismissed without compensation? Or, will the shares diminish in value (With future growth possible)?

If it's the latter I will hold firm. If the former, they are approaching my buy price so may offload.

The Former. If (when) RBS are nationalised, the shareholders will lose their stake in the company. Of course there (ala Northern Rock) is likely to be investor legal action to try and get back some cash from HMG but given that is going to be pretty easy to prove RBS is bankrupt once they are nationalised, I doubt any legal action will be ultimately successfull.

Sorry. BTW my brother called me yesterday and asked if he should buy some RBS shares. I told him to spend the monye on servicing his smart roadster instead.

I
 
The Former. If (when) RBS are nationalised, the shareholders will lose their stake in the company. Of course there (ala Northern Rock) is likely to be investor legal action to try and get back some cash from HMG but given that is going to be pretty easy to prove RBS is bankrupt once they are nationalised, I doubt any legal action will be ultimately successfull.

Sorry. BTW my brother called me yesterday and asked if he should buy some RBS shares. I told him to spend the monye on servicing his smart roadster instead.

I

No probs. The price has eased up so I will keep a very close eye on the news tomorrow and sell at the appropriate point.
 
Depends on the type of debt.

Overdrafts can typically be called in at any time. This is why small companies suffer in the current climate when the banks squeeze them in this way.

Term loans are a different animal and can't just be called in.

Commercial banking overdraft rates/fees seem like extortion to me, can't believe anybody would use them unless absolutely desperate...
 
Commercial banking overdraft rates/fees seem like extortion to me, can't believe anybody would use them unless absolutely desperate...

There are quite a few businesses that use overdraft facilities as a buffer.

Surprising number of SMEs run near empty some months of the year. It's something that employees in particular are hardly aware of. And in some cases its actually *growing* companies that use the facility most.
 
Or you may notice that the "new" lender has a different policy regarding interest rates and you may see an increase in the % paid. the banks are going to have to make more profits fast and one way is higher rates of interest - thats my prediction of what is coming around the corner.

Most mortgage deeds have the calculation of the rate of interest written into them - so I doubt very much the rate could be raised unless the deeds allow it - in which case the original lender can do the same..The grey area is standard variable rates....just how are they reached. If they are raised massively then it would be deemed an unfair contract and the courts could throw it out.

Tracker mortages are water tight as the means of calculation are laid out in the deeds..
 
Most mortgage deeds have the calculation of the rate of interest written into them - so I doubt very much the rate could be raised unless the deeds allow it - in which case the original lender can do the same..The grey area is standard variable rates....just how are they reached. If they are raised massively then it would be deemed an unfair contract and the courts could throw it out.

Tracker mortages are water tight as the means of calculation are laid out in the deeds..

Most mortgages are only tied to a rate for a period of time - you are right the existing lender could vary the rate at that time - but a new lender coming to the market is going to be looking for ways to get more profitable.
 
Right, I cannot get a sensible answer to this question on Pistonheads :)rolleyes: )

What actually happens in practice if RBS is nationalised? Does this mean that all shareholders are dismissed without compensation? Or, will the shares diminish in value (With future growth possible)?

If it's the latter I will hold firm. If the former, they are approaching my buy price so may offload.

You might get compensation in late 2009 for 10%...
 
Right, I cannot get a sensible answer to this question on Pistonheads :)rolleyes: )

What actually happens in practice if RBS is nationalised? Does this mean that all shareholders are dismissed without compensation? Or, will the shares diminish in value (With future growth possible)?

If it's the latter I will hold firm. If the former, they are approaching my buy price so may offload.

When (not if) RBS is nationalised then the shareholders will be compensated for the value of the business on that day - thing is what is the value? - once a few more dodgy loans are found at the bottom of the filing cabinet then the value is going to be negative so the company is actually worth zippo. So the shareholders will likely receive a round number = 0.
Could be completely wrong of course - for £100 stake it is more like a bet on the nags than an investment.
 
When (not if) RBS is nationalised then the shareholders will be compensated for the value of the business on that day - thing is what is the value? - once a few more dodgy loans are found at the bottom of the filing cabinet then the value is going to be negative so the company is actually worth zippo. So the shareholders will likely receive a round number = 0.
Could be completely wrong of course - for £100 stake it is more like a bet on the nags than an investment.

That is indeed the crux of the matter, I spend a good portion of my working week trying to value this sort of stuff and there is in most cases no discernible market for it. Its like asking the value of a house when all you know is what it last sold for but no-one turns up for the auction when it goes up for sale, in the end it comes down to opinion, :rolleyes: but iof no-one wants to buy then is it worthless?
 

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