Thursday 10 January 2008

Goldman's roll the dice on Northern Rock


Alistair Darling has today admitted that it may not be possible to put together a private deal to sort out the Northern Rock mess.

Goldman's who are advising the government have also announced an idea to try and sell the Wreck debt as bonds (junk bonds anyone?).

This is surely nearly the end game. It is highly unlikely that the EU would allow the bonds to be issued as they would be government guaranteed which means illegal state aid.

What this activity does show is that Goldman's perhaps know more than they are letting on about the prospects of the RBS and Citigroup lending to one of Virgin Money or Olivant.


The taxpayers are going to be in the hole for a long time...

11 comments:

  1. Nah, the sovereigns will bail us out !

    and they'll fund a slack handfull of nucs !

    bring 'em on, I say

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  2. That is a good point - let Qatar but Northern Rock. I am all for sovereign funds, us Brits are notoriously bad at senior management so the influx of talent must be a good thing. The idea that nasty foreign powers will just run things down to suit their own ends is nonsense: we have the Labour party for that.

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  3. By the way, isn't EDF effectively a sovereign fund?

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  4. The BBC had an article yesterday suggesting that GS was speaking to a large re-insurer to give the bonds an investment grade rating. Do the experts on this blog thing there is any mileage in that do you think?

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  5. I wonder how much the Goldman Sach's advice is costing us?

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  6. Well it's selling its mortgages to JP Morgan. Who says that the Brown/Blair alliance is over?

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  7. Anonymous6:59 pm

    Our deposits are now all protetced for 100% of the first £35k; how long do you think that will last? One more sizeable run, I'd guess, and then the govt will have to say alas, the cost is putting the surviving banks at risk so you'll be covered for, let me guess, 100% of the first £2k and 50% of the next £18k.

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  8. RE - smokescreen by Goldmans, no way the EU will allow the bonds to go as it would be state funding!

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  9. Are you sure about that CU , , I cannot imagine the EU would be seen to be to blame for a regional disaster.I bet theres a way to work round the rules theer always is

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