Tuesday, Feb 10, 2009
Britain is in deep trouble, which may grow into a cluster foxtrot on a scale witnessed recently
Huffington Post: Will Obama Have To Bail Out Britain?
According to the Financial Times, RBS has a balance sheet of around $2.7 trillion, much of it toxic. The GDP of the entire British economy is $2 trillion. Not only is RBS too big to fail, it's bigger than the entire annual British economy. RBS fails, Britain might as well.
But it gets worse. The balance sheets of the largest British banks total nearly $9 trillion, or 4.4 times the size of the British economy. That $9 trillion is also about 65% the size of our own U.S. economy. It might take the U.S. $3 trillion or so to fix our banks, my best guess is it would take about $750 billion to bail out Britain.
Posted by troy @ 08:20 AM (550 views) Add Comment
7 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. flashman said...
Ron Galloway did a degree in industrial productiuon (not economics or finance), was a failed financial analyst and then devoted his career to writing abot Walmart. He recently was a supporter of the brain dead Sara Pallin and is an arch Republican. He strongly supported deregulation and othe typical Republican causes.
2. rotten tomato said...
Look this is just skimming on the surface, and the figures the banks give us are only what they want us to see - otherwise they wouldn't be coming back for new bailouts again and again. Considering that according to the best estimates of the Bank for International Settlements (the central bank of central banks), the outstanding derivative pile of crap which is waiting for bailouts amounts to roughly 4-600 trillion US $. Now considring that is 50 times the entire gdp of the world, would it not be better to write off all that pile of crap, and start fresh? Let the greedy financiers who specualted on it take the loss. If they go bust, then the government can put fund in to the creation of new healthy banks, with better, regulation and honest people in charge. The current model of saving the financier psychopaths and saddling the taxpayers with the debt is pure madness.
3. shining wit said...
The scenario painted here makes p4ac and s2r1's predictions look very realistic. I know this is a week or two old now but this story is going to run and run and run.
I sit here watching a load of old farts (former leaders of RBS and HBOS) being interviewd by a load of old farts (treasury select committee) and know that none of these people, have any banking qualifications at all. The are all amateurs. According to the article the RBS assets are $2.7 trillion (according to the FT), and most of this is now 68% in government hands. The value of HBOS (the single largest supplier of the mortgages in the country) is now coupled with Lloyds as part of the Lloyds Banking Group and is now the largest financial instituion in the UK, which is now 43% in government hands.
We have travelled, in just over 1-1/2 years, from Gordon Brown revelling in the city's 'success' at his Mansion house speech in june 2007* "While never the biggest in size, nor the mightiest in military hardware, I believe we are - as the city's success shows - capable of being one of the greatest success stories in the new global economy." To an almost unstoppable crash in the UK banking system, forget about the property market, that's just a chicken running around without a head!
Will Obama Have To Bail Out Britain? - By the time he thinks about the UK, he had better have a very big bucket indeed! He has got to find his way pout of the massive US problem first.
*Read the entire speech here:
http://www.hm-treasury.gov.uk/press_68_07.htm
4. Tyke said...
Slightly off topic:
Obviously Galloway doesn't know his history either when he says "Sixty-seven years ago the U.S. stepped up to save Britain from the Nazis." Where were the Yanks from September 1939 to December 1941?
5. shining wit said...
Tyke.....
Pretending the Nazi's weren't that bad really!
6. inbreda said...
or in the case of bush's family, they were supporting the nazis and making a few quid out of it to boot.
7. Dan said...
'Will Obama have to Bail out Britain?'.......................wouldnt it be kinder to just nuke us?
Save me the next forty years of unpayable debt at least :)