From the BBC:
The government has incurred a loss of £2.1bn after selling another tranche of shares in Royal Bank of Scotland. The shares were sold at 271p each, almost half* the 502p a share paid in the government's bailout of RBS a decade ago when it rescued the bank at the height of the financial crisis.
Clearly, the government did lose money, but that money was lost/wasted ten years ago when the government bailed out RBS. The government did not lose a penny on the sale itself, it merely converted shares worth £2.71 into cash of £2.71.
* The phrase "almost half" is totally misleading as the government sold the shares for more than half of what it paid for them. It would, however, be correct to say "The shares fell in value by almost half".
This leads me on to something else which annoys me. Let's say Object A weighs/has mass 1 kg and Object B weighs/has mass 2 kg. It is fine to say that B is twice as heavy as A, or that A is half as heavy as B. It is also OK to say that A is lighter than B. But for some reason, a lot of people say that A is "twice as light as B", which is nonsense. You can't use a comparative with an adjective meaning light, small, short, near etc, only with adjectives meaning heavy, large, long, far away etc.
What have we wrought in the UK?
7 hours ago
12 comments:
This is a bit of a philosophical question. Consider a trader. The price might go up and down a lot after he buys something, but the amount of money he makes or loses depends on his timing - when he sells it. So if a trader makes a loss, it isn't correct to say "he made the loss when he bought the thing".
To be really pedantic, the correct thing to do is mark to market. So the trader who bought the fluctuating asset made a profit, then a loss, then a profit, then a loss, then he sold it.
Mark,
I share your annoyance in spades.
If twice as heavy as 1 kg is 2 kg ( add the same amount of heaviness on an upward scale), then twice as light as 1 kg would be 0kg (deduct the same amount of lightness on a downward scale).
But the scope for opposing pedantry is probably boundless.
However, if the shares suddenly shoot up in value on the first day of trading to, say, 305p each, in the way that shares sold by the government have a habit of doing, I can't think why, then the government will have converted shares worth 305p into £2.71 cash and made a loss of 34p a share, or £909M.
JJ, but in the RBS case, the government threw away the money on Day One. They could have just waited until it went bankrupt and then got it for free/nationalised it.
VFTS, thanks, "twice as light" could indeed mean weighs nothing.
B, selling massive blocks of shares is always fraught with difficulty, I'm not going to fault the current government on day to day timing. I'm faulting them - i.e. Mr G Brown - for having bailed RBS out in the first place.
Lets thank Gordon McDoom for the RBS disaster . He was pandering to the Scottish voters as well as saving the World .
Elevate him to the House of Gargoyles prestissimo !
God loves a pedant, Mr W.
My personal nails-on-blackboard moment comes when someone starts wittering about "the temperature tomorrow is only going to be half of today's!" You get some funny looks when you ask if liquid nitrogen will really be running down the streets.
H, is that not clear from.the post?
FT, agreed that "half as hot" is meaningless, but unlikely they were thinking in Kelvin.
'Half as hot' probably works when applied to the relative merits of bikini models....not that I spend much time on such matters these days....sadly....
Any idea what adjustments have been made to the national accounts? I remember seeing figures of public debt and deficits excluding bailouts, should this farce not just be ended and assume what shares remain are worthless until actually sold?
L, not allowed any more #metoo.
M, all manner of glorious accounting adjustments went on at the time.
MW. It may not be 'allowed' but boys and girls will always be boys and girls. The latter capitalising on the formers delight in the latter wearing very little.
L, indeed. We are pre-programmed to look, end of.
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