We’re all shareholders now

October 8, 2008 at 11:26 am | Posted in British Politics | 4 Comments

Well, what you need in a time of crisis is a bit of national unity, and since the prospect of Bob Geldoff recording another charity single seems remote, I suppose we’ll have to settle for showing solidarity with these beleaguered banks by owning part of them. Personally, I would’ve rather the government bought shares for me at a time when these banks weren’t tanking, but I suppose that kind of thinking shows why I’m not an economist.

There’s not a single sane-minded person who’d want to see the kinds of mass bank runs envisaged by Will Hutton, but there’s also not a single person who’ll stake their reputation on whether it’ll work. From my own meagre understanding, the cost of the rescue plan was calculated according to how much money would be required to get banks lending again, which itself was a calculation of the value of these banks’ existing assets. So if these calculations aren’t correct, we’ll either have to commit to another expensive bailout or allow the banks to collapse and lose all the money the state’s already spent.

But success or failure is also dependent partly on whether the world’s governments can stabilise their own financial institutions over the next few days, and partly on whether this raises the level of confidence in the City. Anyone watching the news this morning will have heard that word ‘confidence’ repeated over and over again, and to a lay person it’s just astonishing that this problem seems to be getting worse because people who work in stock markets are emotionally unstable. Would it not have been cheaper putting these people on a course of Xanax, or something?


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  1. geldof?

  2. Gandalf.

    Wait. What.

  3. To be fair, my ratio of 1 mispelled word for every 2.7 posts is better than most…

  4. I miss Geldof.
    Don’t see him around very much any more.

    This is one of the most scary things ever:

    But I think that he could reinvigorate the lending markets.

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