Comments on: Bank nationalisation http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/ Incisive and topical campaigns and commentary on today's issues and tomorrow's problems Wed, 23 May 2012 13:35:04 +0000 hourly 1 By: Ian Evans http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/#comment-7595 Ian Evans Mon, 03 Nov 2008 15:17:38 +0000 http://www.johnredwoodsdiary.com/?p=1960#comment-7595 # Michael Won : Barclays have had to raise £3bn of their new capital (Reserve Capital Instruments) at an hair-raising 14% interest rate (payable through to 2019). Though it should be noted that this 14% rate is tax-deductible whereas the 12% the government demanded on the preference shares was not tax-deductible (Broon of course wanted to have his cake AND eat it!). i.e. the Arab loans are actually cheaper after allowing for tax. Even so it does seem an extortionate rate - I wonder who has just bought a new yacht?! # Michael Won :
Barclays have had to raise £3bn of their new capital (Reserve Capital Instruments) at an hair-raising 14% interest rate (payable through to 2019).

Though it should be noted that this 14% rate is tax-deductible whereas the 12% the government demanded on the preference shares was not tax-deductible (Broon of course wanted to have his cake AND eat it!). i.e. the Arab loans are actually cheaper after allowing for tax. Even so it does seem an extortionate rate – I wonder who has just bought a new yacht?!

]]> By: Michael W http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/#comment-7594 Michael W Mon, 03 Nov 2008 03:01:59 +0000 http://www.johnredwoodsdiary.com/?p=1960#comment-7594 Barclays have had to raise £3bn of their new capital (Reserve Capital Instruments) at an hair-raising 14% interest rate (payable through to 2019). It seems a huge premium to pay to avoid the clutches of Broon, or maybe it reflects their estimate of the kind of damage the Broon Plan is likely to do in the next few years. Either way it seems ominous... Barclays have had to raise £3bn of their new capital (Reserve Capital Instruments) at an hair-raising 14% interest rate (payable through to 2019).

It seems a huge premium to pay to avoid the clutches of Broon, or maybe it reflects their estimate of the kind of damage the Broon Plan is likely to do in the next few years.

Either way it seems ominous…

]]> By: Tony Makara http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/#comment-7593 Tony Makara Mon, 03 Nov 2008 01:09:25 +0000 http://www.johnredwoodsdiary.com/?p=1960#comment-7593 We should certainly continue to develop good relations with China but in so doing we have to be watchful that this is a nation with a clear anti-western agenda. Their objective is to corner export-markets that have traditionally been our domain. Our shift to services and the decline of manufacturing has opened a window of opportunity for the Chinese. It will be interesting to see the reaction of Beijing when the west, as a response to savage trade deficits, moves back into exports as a way out of the recession. A great concern must be energy as Chinese consumption soars, Russia will be key here, a good reason why we need to improve diplomatic overtures with the Russians and stop any possiblity of a Sino/Russian strategic alliance. It doesn't help to have John McCain and others talking about the formation of a 'League of Democracies' because such a body would literally drive Russia and China into each others arms. We should certainly continue to develop good relations with China but in so doing we have to be watchful that this is a nation with a clear anti-western agenda. Their objective is to corner export-markets that have traditionally been our domain. Our shift to services and the decline of manufacturing has opened a window of opportunity for the Chinese. It will be interesting to see the reaction of Beijing when the west, as a response to savage trade deficits, moves back into exports as a way out of the recession. A great concern must be energy as Chinese consumption soars, Russia will be key here, a good reason why we need to improve diplomatic overtures with the Russians and stop any possiblity of a Sino/Russian strategic alliance. It doesn't help to have John McCain and others talking about the formation of a 'League of Democracies' because such a body would literally drive Russia and China into each others arms.

]]> By: mikestallard http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/#comment-7592 mikestallard Sun, 02 Nov 2008 21:59:52 +0000 http://www.johnredwoodsdiary.com/?p=1960#comment-7592 I am so glad you raised this important point. In the 1930s, when the last real recession was on, Japan was in the same position (roughly) as China is today. They were strong, exporting a lot and they needed raw materials urgently. They had two choices: cut back or expand militarily. Germany, too, was in the same boat. That is why they went for Russia. Today China can expand peacefully into the chaos that we left behind when we walked out on our responsibilities in Africa. The Chinese are not like us. The African are slowly learning this, to their cost. Luckily, the Chinese do not seem to be using their military muscle/economic mega riches to steal from other people - yet. I am so glad you raised this important point. In the 1930s, when the last real recession was on, Japan was in the same position (roughly) as China is today.
They were strong, exporting a lot and they needed raw materials urgently. They had two choices: cut back or expand militarily.
Germany, too, was in the same boat. That is why they went for Russia.
Today China can expand peacefully into the chaos that we left behind when we walked out on our responsibilities in Africa. The Chinese are not like us. The African are slowly learning this, to their cost.
Luckily, the Chinese do not seem to be using their military muscle/economic mega riches to steal from other people – yet.

]]> By: colin http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/#comment-7591 colin Sun, 02 Nov 2008 20:08:47 +0000 http://www.johnredwoodsdiary.com/?p=1960#comment-7591 Are New Labour the new Nasty Party? There's nothing new about their nastiness... Are New Labour the new Nasty Party?

There's nothing new about their nastiness…

]]> By: Stuart Fairney http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/#comment-7590 Stuart Fairney Sun, 02 Nov 2008 12:14:13 +0000 http://www.johnredwoodsdiary.com/?p=1960#comment-7590 As the Adam Smith Institute confirmed, if Labour had only increased spending in line with inflation since 1997, income tax could now be totally abolished. So every time you hear those drones on the government benches cheering some spending announcement, they are applauding our tax serfdom. So forget Clegg and his 'Johnny-come-lately' calls to cut 2p off income tax, lets abolish it all together and be free men again As the Adam Smith Institute confirmed, if Labour had only increased spending in line with inflation since 1997, income tax could now be totally abolished. So every time you hear those drones on the government benches cheering some spending announcement, they are applauding our tax serfdom. So forget Clegg and his 'Johnny-come-lately' calls to cut 2p off income tax, lets abolish it all together and be free men again

]]> By: mikestallard http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/#comment-7589 mikestallard Sat, 01 Nov 2008 21:29:02 +0000 http://www.johnredwoodsdiary.com/?p=1960#comment-7589 Are New Labour the new Nasty Party? Are New Labour the new Nasty Party?

]]> By: Tony Makara http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/#comment-7588 Tony Makara Sat, 01 Nov 2008 19:36:18 +0000 http://www.johnredwoodsdiary.com/?p=1960#comment-7588 Interestingly, the Chinese refer to their hoard of US Dollars as being their 'Economic Nuclear Option'. We have to understand where China is coming from, this is a nation that has talked openly about ending Western pre-eminence in world trade. A nation that has quietly and busily been engaged in the economic colonization of Africa. Refering to Africa as being the feeder nation for the great Chinese economic project. All this while the West has fallen over itself in its attempts to make sure that China has access to even more markets. Mitt Romney has said that the day may come when we, the West, will have to face China down. What a pity Romney was not McCain's running mate, for Romney is one of the few politicians waking up to China's ambitions. I've strayed off topic here I know, but the matter of the coming global economic war, the West Vs the East, is one that should worry us all. Interestingly, the Chinese refer to their hoard of US Dollars as being their 'Economic Nuclear Option'. We have to understand where China is coming from, this is a nation that has talked openly about ending Western pre-eminence in world trade. A nation that has quietly and busily been engaged in the economic colonization of Africa. Refering to Africa as being the feeder nation for the great Chinese economic project. All this while the West has fallen over itself in its attempts to make sure that China has access to even more markets. Mitt Romney has said that the day may come when we, the West, will have to face China down. What a pity Romney was not McCain's running mate, for Romney is one of the few politicians waking up to China's ambitions. I've strayed off topic here I know, but the matter of the coming global economic war, the West Vs the East, is one that should worry us all.

]]> By: Bazman http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/#comment-7587 Bazman Sat, 01 Nov 2008 19:17:54 +0000 http://www.johnredwoodsdiary.com/?p=1960#comment-7587 Rich bankers don't pay taxes. Why should I? America: Freedom To Fascism. <a href="http://video.google.com/videoplay?docid=-1656880303867390173" rel="nofollow">http://video.google.com/videoplay?docid=-16568803...</a> Rich bankers don't pay taxes. Why should I?

America: Freedom To Fascism.
http://video.google.com/videoplay?docid=-16568803…

]]> By: Mark http://johnredwoodsdiary.com/2008/11/01/bank-nationalisation/#comment-7586 Mark Sat, 01 Nov 2008 17:02:04 +0000 http://www.johnredwoodsdiary.com/?p=1960#comment-7586 Vince Cable appears not to understand that it might be in the interests of existing shareholders to receive dividends over the next few years (although there are, perhaps, legitimate questions as to whehter existing Barclays shareholders should have had the chance to participate on the terms offered to the sovereign funds). And, of course, shareholders want their bank to try to make money, not to act as an arm of government. Nor does he understand that existing employees, and not just the main board, of Barclays might have an interest in not having their salaries fall under Treasury control. I fear it was just headline grabbing, feeding on the public's Pavlovian reaction to any mention of the words "banker" and "bonus". Vince Cable appears not to understand that it might be in the interests of existing shareholders to receive dividends over the next few years (although there are, perhaps, legitimate questions as to whehter existing Barclays shareholders should have had the chance to participate on the terms offered to the sovereign funds).

And, of course, shareholders want their bank to try to make money, not to act as an arm of government.

Nor does he understand that existing employees, and not just the main board, of Barclays might have an interest in not having their salaries fall under Treasury control.

I fear it was just headline grabbing, feeding on the public's Pavlovian reaction to any mention of the words "banker" and "bonus".

]]>