Scummy State Bank Brings Good Business Down - Still support bank bailout?

Maria is chiding herself for just having discovered that most businesses are not successful. :-/ Looks like it's growing carrots and collecting eggs in Bulgaria for me. Not that I mind - it might be a relief to get out of this bloody madhouse.

And neither should he!

It is the task of government to help business as a whole (if that be possible) If we have reached the stage where every individual business falling on hard times can turn to government, then we have inaugurated a sort of commercial welfare state and we shall be in this mess for ever. The weak must fall by the wayside so that the strong may prevail.

As regards your former comment, I must admit to struggling over this. It's difficult to get any useful information. Have you, for instance, tried looking at the website of Wrekin Construction and it's parent group Wrekin Group Plc (which survives) Very difficult to glean any useful information.

I agree with that - my whole objection is based on the premise that we should not have bailed out banks in the first place. It is because we have that I am cross that they are now acting like this. When I discussed it with you lot, the answer was that it was necessary to bail them out to protect jobs and companies from collapse - you wanted to save Jaguar which is *not* a viable company, but which has now been given a £27m grant. Please make up your minds - do you want to save banks - for what purpose? Do you want to save businesses - for what purpose, and which ones?

I'm not sure why they would even publish that kind of information on their website.

What about our market place?!

Can't somebody else finish it?

What makes you think that Wrekin PLC survives?

I suppose that depends if the council has already paid money to Wrekin, how much they will get back, if any, and if they have any money left in the pot. Our council has increased council taxes by 4.5% so they can stick the surplus in the bank. They are all mad.

This widely used term "bailing out" seems to leave some in a state of misunderstanding. I will bet you that the shareholders of these banks don't feel very "bailed out" They have all but been wiped out and it will be years before the recover these losses. What the government has done is effectively and in some cases actually taken a stake in these banks. This stake will become more valuable in the years to come when once more it will be returned to the private sector.

If this does not happen, then that means that the banking system is never going to recover and that the "bailout money" would not be worth the paper it is printed on and that we are all doomed to a very uncertain old age.

That view of course discounts the short term consequences of a collapse of the banking system.

It is alleged that banks got into the position they are now in because they behaved irresponsibility. If this is the case, then bailout could only be considered provided the banks mended their ways and began to operate as banks not so long ago did operate - responsibly.

We must resist the temptation of seeing today's state sponsored banks as social funds. They are businesses and should be operated as such and better than they have been operated of late.

If you have ever placed a piece of plastic in an ATM you should understand why. What would you do if it gave you the card back without any money and the door of the building was very firmly bolted? What would you as the shops ran out of stock because solvent or not they couldn't pay their suppliers who couldn't pay their hauliers who couldn't pay for their fuel and so on.

Where would your employer (if you still had a job) obtain the cash to pay you if it were locked up in a failed bank?

Money is the lifeblood of commerce and it is the banking system that pumps it round.

Those who say the banks should have been allowed to fail just do not understand what they are suggesting. In face some banks have failed an the shareholder owners of those businesses have paid the price as they should. If society allowed these banks also to fail to function then it would be cutting off its nose to spite its face.

It is no part of RBS's function to facilitate the provision of a market place. If these projects are as lucrative as implied and there is enough profit in the jobs to pay off RBS including interest charges as well as all other creditors who it would appear were also hovering then there should be no difficulty in these straitened times of getting an alternative contractor on a more secure financial base to complete the work probably under rather than over budget.

Many companies would be delighted to take this work if only to tide them over to better times.

Because that's what "cashflow problem" means.

But all businesses need cashflow assistance at times - most of the time it is not considered terminal. The business was in profit last year. Doesn't that matter? If businesses are not to use overdrafts to assist cashflow then are they all supposed to operate in the black all the time?

You should try coming to Edinburgh, hen, where we've been living with a half dug up city centre for many months and are due to continue doing so for many more months to come. We patiently await the inevitable announcement that the project to build a tram system has run out of money and will be abandoned.

For the benefit of those who don't know, most of the works in progress have nothing to do directly with building tracks for the trams to run on. Yet. These are preparatory work to move all the underground stuff out of the way (sewage, water, and gas pipes, power and phone cables, etc) so that if they ever need to be repaired, they won't need to dig holes smack in the middle of a tram route, bringing the whole system to a halt for a week.

Whether they get any money back or not they should finish the work on way or another.

I was reading about the pensions that the public sector is committed to paying. There was another report how relatively soon there will be one pensioner for every working age person.

I can see some real problems for pensioners in the future. I don't expect working people will be happy to pay a lot of their taxes to fund pensions. I don't see the money put into "pension funds" being sufficient.

Raise the basic tax allowance to 10000 and raise income tax to 40%. Should at least balance the public sector pensions a bit. All those ex coppers/teachers/civil servants will have to stick one holiday a year then

Hi, Maria - thanks for your posts, which are always of interest.

I take it you've now seen the newly-breaking story of the "Wrekin ruby"? I'll not give you a link - you'll find several if you Google "Wrekin ruby".

Apparently Wrekin Construction issued 11?million worth of shares a year before it collapsed into administration in exchange for an item described as "probably the world's most expensive ruby." Accounts show that the Wrekin ruby, known as the "Gem of Tanzania" was bought in exchange for 11?million worth of shares from Tamar Group, a Derbyshire construction firm which later took overall control of Wrekin. The concern for the Wrekin's workers that you've expressed in your posts is understandable - but whatever is this all about. Seems murky, dunnit?

Having now spent a little time with several of the links that Google's thrown up I'd suggest you first take a butcher's at this (below) - which seems to sum it up. I suspect that it is RBS knowledge of this that led them to demand the instant repayment of the 2.8 million overdraft.