RBS - Like Filling a House with Money and Setting Fire to it.
26th Feb 2009 10:26:53
£24 billion pounds is, admittedly, a lot of money. Let's begin with calulations. I told you there'd be calculations, see, it's great fun.
A £5 note is 135mm x 70mm x 0.12mm. So, a pile of 20 £5 notes is 135 x 70 x 2.4mm. That's £100. If you want to make £1,000,000, you'll have to increase the pile to 135cm x 70cm x 12cm. That's great. A BILLION pounds though, and you'll want a pile that's 13.5m x 7m x 1.2m. £24billion will require a pile of £5 notes that's 13.5m x 7m x 12m. So to cut a long story short, imagine filling a small house with money, and then setting fire to it.
And that's net losses, if you want gross losses, then you have to either have a big house, or borrow a friend's flat. They blamed the loss, apparantly, on bad economic conditions. Again, bankers just seem to be incapable of taking any responsibility for the situation. You're bankers, for christ's sake, "bad economic conditions" are supposed to be something you prepare for in "good economic conditions".
The figures boggle the mind. I must admit, I have little comprehension of how someone can lose billions upon billions of pounds. It's a cockup on a never before seen scale, and the man at the top, Sir Fred Goodwin, is claiming £650,000 pounds a year for the privilige of losing more money than a million average men make in a year. Apparantly, we now own 80% of RBS, and that might rise to 95%. Quite what this all means escapes most people, and I'll admit, the finer points escape me too.
Really, there's this feeling of helplessness. It's not about 650 thousand pounds, that's just something for people to get angry about when the read the Daily Mail, it's about billions of pounds, that will ultimately have to be paid for by the taxpayer. Or let's put this simply. There are about 60 million people in the country, so a billion pounds is £17 for every man, woman and child in the country. I'm part of a family of 6, so a loss of £24 billion, if it all falls to the state to absorb, is £2,400 pounds for us all.
The reports in the newspapers talk about "bad banks", which seem to be simply "the Government will buy your bad debts off you, and write them off", and even more technical terms. "Shifting non-core assets to a standalone division" is in the Telegraph, and honestly, they could be writing in latin for the sense it makes. Try this one on for size:
- Sir Philip Hampton
Give up? OK, I'll tell you. He said "we lost loads of money, so shares in RBS lost 93% of their value in the last year." One thing we can be sure on is that this is going to result in the taxpayer footing the bill for irresponsible trading from men at the top, who are unfortunately going to walk away with millions upon millions of pounds of money. Our money.
Of course, if you're Sir Fred Goodwin, this probably doesn't sound all that bad.
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