Robert peston states:


When markets are in mayhem, as they are right now, the Treasury has a luxury unavailable to the private sector: it can take the long view.

If the Treasury took B&B's mortgages directly on to the public-sector balance sheet, it would not have to worry too much about short term cash flow or profits.

It could simply sit and wait for as many years as necessary for market conditions to improve so that the portfolio of loans could be sold back to the private sector.

Or it could wait even longer for most of the borrowers to repay, so that the loans simply run off.

The big point is that for an owner with the resources to sit out the downturn in the housing market, B&B's mortgage book should at least break even and could even generate gains.

Only the public sector, that's us as taxpayers, is able right now to invest through this horrible housing-market .

THIS ANALYSIS IS COMPLETE RUBBISH. B&B's loanbook will not improve. Pesto doesn't know what he is talking about. And even if, in some sunny period in the future, the book value of the assets rises above the loan-to-value, it will be more than offset by losses in maintenance, admin and government/bankers' oversight fees. Factor in inflation and it will not "at least break even and could even generate gains."

It's all very well making calls when you have insider tips as pesto does; but he needs to be able to crunch numbers accurately, understand past behaviour, accurately predict the future, and half a dozen other things before he can spout about potential profit & losses. He also doesn't tell the truth that to arrive at the profit to the taxpayer there's going to be loads of public sector number fiddling.

I've put my reputation on the line with factual hard calls with specific recommendations. Pesto's insider dealing in rumour and conjecture does not stand up.

I'll take a book on this if anyone fancies it.

PESTO IS WRONG.

The Test of Time will determine who has Red Pesto on their face.

Togo Joe with the motorised mojo