Government is now propping up the credit bubble

[King Cnvt]

from the BBC:

"The Bank of England also announced that it would inject £4.4bn into financial markets, offering cheap credit through a so-called emergency tender at a rate of 5.75%."

All this will do is inflate the bubble again and delay the crash. I assumed this is tax payers money going into these banks, who will give it away in city bonuses to a select few.

[Andy2]

I think they will keep pumping the bubble till next elections
no worries then

[VectraMan]

I think they should just print some more money. That'll solve the problems.

[Sysman]

I think they will keep pumping the bubble till next elections no worries then

When are the next elections? I see some scope here

[wendigo100]

"Government is now propping up the credit bubble"

The government itself is already losing money hand over fist.

How long before the IMF are called in?

Welcome to Gordon Brown's miracle.

[King Cnvt]

The government has completely underwritten NR. This precedent is dangerous. Bankers like to take big risks to make big gains, but that risk taking is always tempered with the thought of bringing the bank down.

If BOE underwrite NR customers, it means the NR bankers can speculate wildly on the markets, chasing the biggest profits regardless of risk, since if it all goes tits-up, the BOE will pay all the depositors of the bank.

The bubble will now go super nova. Time to buy some more property, the BOE has underwritten all the risks.

Madness New Labour style.

[Spartacus]

The government has completely underwritten NR. This precedent is dangerous. Bankers like to take big risks to make big gains, but that risk taking is always tempered with the thought of bringing the bank down.

If BOE underwrite NR customers, it means the NR bankers can speculate wildly on the markets, chasing the biggest profits regardless of risk, since if it all goes tits-up, the BOE will pay all the depositors of the bank.

The bubble will now go super nova. Time to buy some more property, the BOE has underwritten all the risks.

Madness New Labour style.

Not necessarily as the institutional shareholders would lose their shirts and ultimately the shareholders call the shots (in theory). In practice however, anything is possible under New Labour's economic miracle.

Either way, as was only slightly ironically observed on Newsnight yesterday, why would anyone buy UK government bonds when you can get 6.9% at Northern Rock, 100% underwritten by the UK taxpayer?

[AlfredJPruffock]

"Government is now propping up the credit bubble"

The government itself is already losing money hand over fist.

How long before the IMF are called in?

Welcome to Gordon Brown's miracle.

Aye W !

Well it does give a good excuse for the Armys withdrawl from Iraq - we are broke - about time Saudis sent their troops there anyway - who knows perhaps Bin Laden will be the next President of Iraq - you read it here first !

[TheFaQQer]

The government has completely underwritten NR. This precedent is dangerous. Bankers like to take big risks to make big gains, but that risk taking is always tempered with the thought of bringing the bank down.

Not quite - the government has effectively said that if NR goes under during the current financial market situation, then they will nationalise it.

Good old fashioned socialist principles.

Also, what constitutes the "current market situation"?

[sasguru]

Not quite - the government has effectively said that if NR goes under during the current financial market situation, then they will privatise it.

Good old fashioned socialist principles.

Also, what constitutes the "current market situation"?

You mean nationalise, shirley?