RBS or paraphrasing a famous rock star, the "THE GOVERNMENT INSTITUTION FORMALLY KNOWN AS THE ROYAL BANK OF SCOTLAND"

I have just read this

The market has reacted favourably to the big announcement by Royal Bank of Scotland this morning, with losses not as bad as feared.

Broker Panmure Gordon believes the favourable pricing of the asset protection scheme, along with the £25.5bn capital increase, “will remove the immediate capital concerns about RBS”, and also bodes well for Lloyds Banking Group, although Lloyds has said it may not get the same bail-out terms as RBS.

“While we do have concerns about further losses and capital strains, particularly in the £991bn of derivatives, we expect these concerns will crystallise over the next six months; for now, the markets will probably focus on the favourable terms of this bailout,” suggests Panmure analyst Sandy Chen.

Nevertheless, the broker retains its “sell” recommendation on RBS.

***this is quite incredible; I love the so matter of factness on the numbers and the fact that the derivatives number is just thrown in as an aside***

Richard Hoblyn says; Sandy Chen of Panmure's is probably the most respected banking analyst in London but even his take on the scenario unfolding appears understated. Notwithstanding that he has a reiterated SELL on RBS (personally I think the stock is worthless) it should be noted that today RBS has passed over to the UK government scheme (beautifully described as The Asset Protection Scheme) circa £325bn of toxic assets which only a matter of months ago this bank, like many others, claimed they didn't have. Nothwithstanding the fact that the taxpayer is effectively bailing out these huge bank positions (and it's unclear whether losses have been realised as yet on this transfer) it should be noted that there is no guarantee that these positions, these toxic assets, will protect the government nor indeed the tax-payer. The bravado of this ill-conceived rescue plan dwarfs anything that even Hollywood could dream up. But to really put the icing on the cake, it has been stated, now in BLACK & WHITE, that the derivatives totalling £991bn (where did that come from Sir Fred?) may yet be crystallised in the coming months. I doubt any principal asset manager would entertain any of these positions now that we know the on-balance position (& I expect there are still £trillions off-balance that we have yet to hear about; until it is too late) and presuming RBS, like all the other banks, is trying to offload these positions in an orderly way as possible the omens for further extreme losses dwarfing today's record loss of £24.1bn for 2008 is highly likely. With a bank now effectively being run by Gordon Brown I wouldn't want to bet my City umbrella on RBS surviving in its present format too much longer. With a Market Capitalisation of £11.4bn I think the London Stock Exchange has a responsibility to ask the RBS board to clarify its financial position because on the face of this travesty it would appear that a false market is being maintained which may impact badly on the status of the London Stock Exchange. As Mr Levett, the former SEC Chairman, suggested only yesterday describing the US intervention in Bank of America and Citigroup, "these banks are all but nationalised already with governments representatives on the boards". If this indeed is the case then surely the respective "Global" Stock Exchanges should suspend dealings in these rotten "BAD BANKS" shares forthwith as I don't believe there is a remit in any FREE market enterprise to maintain a market in this sort of (in)security.

Ou est la grenouille de Threadneedle Street audjourdhui?