So will today be better than Friday?

So will today be better than Friday?

    Welcome to the brave new world of nationalised banking

After the most dreadful few days on the markets last week it will be back to business this morning though with a huge difference – large sections of the UK banking industry will now find that the government is the biggest shareholder and that they’ve got much more capital to play with.

The details, as I write, are sketchy and a formal announcement is expected this morning – but the papers are reporting that there will be majority stakes in that part of the banking industry which has is located in Scotland – RBS and HBOS. Other banks, though not all, are likely to have government share-holdings.

    The critical thing is whether this will be enough to calm the markets and restore faith in the system. The reaction this morning could be key.

Gordon has so far had a “good war”. But will that be sustained as the economy goes into downturn. Who’ll be blamed as jobs go and house prices dropped?

The Guardian’s editorial sums it up thus: “…Labour has cause to hope that the blinding flash of the financial implosion has obliterated old certainties – that the state-sceptic Tories have lost their advantage. But the detonation will be followed by a chronic ache as the intensity fades. The political system must anticipate the resentments that this will produce, against government, and against all parties..For the moment, and for some time to come, leadership and technical expertise of the kind the prime minister offers will be the priority. But this is a transfigurative time; it is too soon to tell where things may head.”

In my betting having switched my positions on the commons seats spread markets yesterday I feel a little less exposed if a bit poorer.

  • The cartoon is an original by Marf for
  • Mike Smithson

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