Sunday, January 13, 2008

Bad weekend for Crash Gordon and Captain Darling then

Fate of Rock rescue is in PM’s hands

Looks like it's all down to the magnificent two over a bottle of port at chequers then.

Can anyone explain the financial jiggery pokery in plain English!

Posted by enuii @ 12:01 AM (555 views)
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6 thoughts on “Bad weekend for Crash Gordon and Captain Darling then

  • As long as everyone apart from the depositors and mortgage holders (and lets face it they both are reasonably innocent in this crapstorm) get badly burned by this experience (including Darling, Brown, FSA, shareholders, investors and management) then that’ll be just fine by me.

    They are all to blame, but most of all Brown and the FSA.

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  • Be careful what you wish for Paul, if you pay tax, you are about to get burned also

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  • We (the tax payer) will end up paying either way!

    Brown is a spendaholic, he has frittered all the cash away and I cannot think of a single policy that has led to “money well spent”.

    “Burns night” this year should involve Mr Brown’s political career and a box of matches!

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  • I’m not so sure that the taxpayer can be burned so badly by this – Darling and/or Brown will get roasted first.

    Pass the basting syringe.

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  • stillthinking says:

    Doesn’t underwritten by the BoE mean that they purchase anything not taken up by the market? Also, why would anyone want to buy these bonds if the potential value is shrinking on a daily basis?
    I don’t understand how this represents a solution because it doesn’t explain why those who have no interest in funding a take over, would be interested in a stake instead. Surely the problem is that nobody wants to be involved with NR.
    ??

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  • @ ST -IMO the government will issue bonds that are government debt as opposed to the government underwriting the sale. People will buy this debt because it will yield more than the other equivalent gilts so the government will claim a success. The trick will be just what yield premium will the govement have to pay. I would think they would issue convertible debt – that could be converted into stock. There are then 2 ways this could go a full nationalisation where the government pays shareholders to take over or in effect the issuance of bonds and the maintenance of the ownership by the sareholders. Either way this is nationalisation by the back door. The alternative is that the government merely underwrites the issue (as you say purchase anything not taken up by the market). I take your point who would want them? Well the market would BUT the yeil would have to be more excessive then the price at which the government, whoops BoE lends to them anyway (which defeats the whole purpose). With that level support the business could be a going concern -depending on the loan book yeild, AND o course the increase f anybody coming off fixed rates soon. In fact i might just buy some calls.

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