In other words, the bank [HSBC] was able to gear itself at around 20 times its shareholders capital.
Meanwhile:
In other words it [the Bank of England] was able to gear itself more than 110 times its shareholders total capital.
What the fuck is the government up to?????
7 comments:
What the fuck is the government up to?????
Why are you asking us? They don't know, so how the hell are we supposed to?
I think it may have been a rhetorical question.
"My dear, when rape is inevitable, you should lie back and enjoy it"
Okay, HSBC was running at D/E of 20 - too high for a bank, I am happier with 13, buy at 9, get out at 17.
We cannot sell the BoE, it's stuck there like some useless telco we bought in '99.
The country is like an enormous log you have dropped in the bog. Flush all you like, it impudently sits there. The only solution is to mash it up.
Obo, yes this is worrying, no it is not as dramatic as it seems.
1. The BoE is still quite small (double the size of Northern Rock, for example).
2. As you are no doubt tired of hearing, "inter-bank lending has dried up". Banks don't trust each other so they put their spare cash into the BoE. Other banks need to borrow, and the only bank who will lend to them is the BoE, as 'lender of last resort'. So the BoE is now a glorified middleman between the other banks.
As future PM, you really ought to know all this.
You are John Redwood's evil twin and I claim my five pounds.
@Prodicus: I take it you didn't follow the source in my post then? :o)
Ah. The curse of the busy speed reader. I withdraw my demand.
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