Saturday, January 12, 2008


British Treasury between a Rock and a hard place

Robert Peston, the BBC's business editor, reports that "a full plan for nationalisation of [Northern Rock] is in place." Of course the Treasury is making every effort to avoid it. A black eye on free-market capitalism, you know—not to mention the government's failure to exercise its regulatory authority in the lead-up to the bank's debacle.

Now a hedge fund holding 9.9% of "the Rock" is threatening to sue the government under a 1998 "Human Rights Act" if the bank is expropriated for less than "the book value of Northern Rock's assets at the last balance-sheet date - or more than 400p [$8] a share." I'm always gladdened when hedge funds develop an interest in "human rights."

Well, there's more. Alistair Darling, Chancellor of the Exchequer (equivalent to the U.S. Secretary of the Treasury), "pointedly refuses to give the ... commitment that he won’t erode the Bank of England’s powers relating to the maintenance of the stability of the financial system." It's as if Treasury Secretary Paulson had announced that the Treasury Department would be taking back some powers from the Federal Reserve.

It would be ironic if the British government decided to do the sort of thing Hugo Chávez is voluntarily attempting in Venezuela to the gnashing of teeth of neoliberal economists and the Bush administration.

What you may conclude from all this is that the British (and international) banking system is extraordinarily "fragile," as Fed Chairman Bernanke so delicately described the "financial situation" on Thursday.

Related posts
Shades of 1929 (9/15/07)
"First" of the Day (12/27/07)


Thursday, January 10, 2008


Understatement of the Day

On the whole, despite improvements in some areas, the financial situation remains fragile, and many funding markets remain impaired. —Federal Reserve Chairman Ben Bernanke speaking today at the Women in Housing and Finance and Exchequer Club Joint Luncheon

Impaired, my Aunt Fanny! They're on oxygen.

Here are a few more gems I've extracted from the crude ore of Bernanke's financialese—



1The Federal Open Market Committee (FOMC), "the monetary policymaking arm of the Federal Reserve System." [back]

Tuesday, January 08, 2008


News of note — Jan 8 08



Gored Ox of the Day

Epiphany follows Christmas, and it appears that a Ron Paul libertarian has had his own little epiphany concerning a trusted news source—

It's amazing that I once considered Fox to be less biased, or at least biased more in my direction. It turns out that if you deviate from their party line at all — that is, the neoconservative Republican establishment ... — all pretense of journalistic objectivity goes straight out the window. —Charles M., administrator of, writing in "Fox News Editing Ron Paul out of AP News Stories"

I'm devastated. Now who's going to tell me what to think?


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