Tuesday, April 22, 2008

Pain Man

Very quick post between gutter repairs and other essential admin.

Yesterday's blog praising Mervyn King attracted some slightly bemused comments- aren't we still just bailing out the effin' banks?

Well, nobody would start from here, but given all the pressure, King did as good a job as a job as anyone could expect. His aim was to get the key interbank markets working again, but to ensure that the banks' shareholders continue to bear the pain of all those losses.

These things are never perfect, but looking at the banks share prices this morning, I reckon so far he's pulled it off. Most of the banks seem to have given back the price gains they made last week (eg HBOS is down 8% since Friday night), reflecting market realisation that it's the shareholders who are going to stepping up to the plate in terms of rights issues like RBS, and lower future dividends.

Merv really does deserve at least a silver star.

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