Hinkley Point passed! Woe for Capitalism

Oh dear, for once we want the EU to intervene on state aid grounds and it decides not too. I guess the greenie influence is too strong and in a very warped way they don't want to scare the horses re UKIP and a UK referendum.

The counter-factual to this decision to underwrite via a derivative contract the cost of energy of 35 year is this:



The price of oil is collapsing as is the price of gas. The derivative contract would mean in this situation that the UK taxpayer becomes more and more 'out of the money.' When this happened in 2008, the banks that had written these contracts and the firms that had placed them all went bust. The biggie here still being worked out was derivatives that were supposed to protect against rising interest rates, when rates went down instead, the purchasers were left with huge losses that Banks foreclose on.

In this case, we get a nuclear power station that is sucking money direct from UK taxpayers to French owned EDF - and the more the price of oil decreases, the larger the amount will wend its way across the channel.