Lloyds shares reach half their bailout price.

As we today pass the milestone of Lloyds Bank shares reaching half of their bailout price, a reminder of the causes of the mess in the UK, may be obtained by reading this Ironies Too post below:

Saturday, October 02, 2010

Can Prime Ministers Constitutionally Deliberately Bankrupt their Countries?
In Ireland it is now clear that a decision by that country's Prime Minister to give an open ended pledge to back its banks will inevitably lead to the bankruptcy of the nation. In the UK the Prime Ministerial decisions over RBS, Northern Rock and the Prime Ministerial machinations regarding the takeover of HBOS by Lloyds will eventually be seen to have the same result. In the case of Gordon Brown, the sell off of national assets in the form of the Inland Revenue offices started way back in the last century. Illegal expenditure beyond Parliament's approval was identified by the National Audit Office as Parliament prorogued in July 2009 as I blogged here and here. What kind of democracies allow the PM and his Finance Minister to commit endless amounts of expenditure to crooks , spivs and cheats without any parliamentary review nor constitutional restraints. Such behaviour has to be illegal!

Iceland again and the ongoing banking crisis.

The second day when the Online Times refuses to publish a comment of mine on the Iceland affair (see post below). Less surprisingly today perhaps, as my ire was raised by this nasty slur at the start of Mr Hattersley's article upon which I commented, linked here: "Icelanders are, by nature, intrinsically unreasonable." Hattersley states in his first sentence. At least The Economist recognises the significant aspects of the Icelandic situation which The Times chooses to ignore - Read here. MEANTIME - ANTICIPATING REJECTION - I today copied my exact comment to the Hattersley tripe in The Times, which was as follows: Mr Hattersley, as has been his habit down the years, is completely wrong on this matter. The Icelandic refusal, if confirmed in their referendum (wot that?), to repay deposits lost outside normal EU interbank guarantees are showing the way for ordinary people everywhere to eventually escape the results of the banking fiasco and the present government's policy of the printing of vast sums of useless money under QE. Brown and Darling will eventually be found to have acted illegally in the banking bailout as confirmed by the NAO on the last day of the parliamentary sitting in June last year. When they are eventually jailed (if such is possible under Scottish Law), or otherwise brought to account, then I feel sure small property owning English taxpayers will be as reluctant as the Icelanders to pick up the tab for the profligate commitments made without benefit of parliamentary approval by these two incompetents. A blow by blow account of the HBOS Lloyds RBS fiasco is available in these blog archives as well as the illegality of the bailout as stated by the NAO last June. The illegal conspiracy has now been compounded by Parliament's inaction on this matter since its return. The depth to which this law-busting conspiracy has spread across large parts of the British establishment was again illustrated last evening on the Jeff Randall programme when, from Edinburgh please also note, a funds manager refused to explain why he had deliberately thrown millions down the sewer at the behest of Brown and Darling and contrary to the obligations of his office and interests of his policy and share holders.

Lloyds HBOS over 10 billion loss stuns the market

As long predicted by this blog the HBOS takeover looks as though it will now take down Lloyds. The following is from The Guardian, linked here:

The new Lloyds Banking Group stunned the City this afternoon by issuing a profits warning after admitting that the losses incurred by HBOS would amount to £10bn, much larger than previous forecasts.

Its shares plunged 40% at one stage to just 54.9p.

The sharp rise in the loss is the result of a £1.6bn increase in the impairment charge to £7bn to cover loans which have turned sour largely in the corporate division which was run by Peter Cummings who has since left HBOS.

The size of loss that will now be reported by HBOS, which was rescued by Lloyds TSB to create the new bank, is even greater than the £7bn-8bn loss that Royal Bank of Scotland warned that it expected to make. The total RBS loss will reach £28bn when £20bn is written off because it paid too much for the Dutch bank, ABN Amro, and other deals.

The Times Online report on the same news is here. Strange is it not that this is reported as a surprise. More should read this blog which reported exactly this outcome on the day the merger was first announced and asked many questions all of which remain unanswered, read it here. Enter "Lloyds Hbos" in the blog search bar above to see how often these questions and concerns were repeated and ignored! The BBC reporter on business Mr Peston who has been ever verbose on this topic has added his two pennyworth here.

Top Lloyds Bankers Beg fo More Pay

Present or past shareholders in Lloyds Bank who have watched their investment destroyed over the recent past will be astounded to read this report in today's Guardian, some tasters:

Lloyds Banking Group has sounded out shareholders about a change in its executive remuneration plans that could generate pay rises for its directors despite being bailed out by the taxpayer.

The bank, in which the government holds a 44% stake, is understood to have approached big City investors between a month and six weeks ago with outline proposals for a modified pay package for the executive team of the bank ......

...Eric Daniels, the Lloyds chief executive, is currently paid a basic salary of £1.03m.

The bank's other five executive directors before the HBOS takeover was announced had a basic salary of between £590,000 and £680,000.

They also have short- and long-term incentive schemes that include annual bonuses of up to 200% of basic salary, with the exception of Daniels, who can boost his salary with a 225% bonus payout.

Lloyds Bank $300 million fine raised at PMQs

Andrew Mackinlay (Thurrock) (Lab): Were the Serious Organised Crime Agency, the Financial Services Authority or our security and intelligence services fast asleep, or were they part of a cover-up in relation to Lloyds TSB’s illegal handling of money from Iran to get round sanctions? Surely we need a statement about why this bank—and no individual has been prosecuted in the UK—laundered in America $300 million of Iranian money and money from London that related to the Sudan. I think we should be told.

The Prime Minister: My hon. Friend is making very detailed allegations. Our sanctions policy against Iran has been one of the toughest in the world. It is tough on banks, tough on oil companies and tough on other institutions. I will of course look at the allegations that he has made, but I can tell him that we and other countries are leading the world in the sanctions against Iran.

See my post of 10th January on this topic, from here.