Rocks for Brains?

And so we come to the latest stage in the increasingly ridiculous Northern Rock saga. It seems that the government can’t find anyone who’ll buy the bank as a going concern[1], or at least not on terms acceptable to the people in power.

So, the Chancellor, who I keep having to remind my self isn’t Gordon “Prudence” Brown, but Alastair Darling[2] has a Cunning Plan. He still wants a private buyer, but just to make it tempting, rather than doing the normal commercial thing of making someone buy it and take on all its responsibilities, he’s going to convert the debt into Government Bonds – effectively making the government, or rather British taxpayers continue to underwrite an effectively failed bank indefinitely. Personally, I find this a wee bit annoying. Twenty-five billion pounds is a lot of our money to be tied up in this manner. Why is it being done? To restore confidence in the economy? To reassure any other banks that if they make naive assumptions and borrow from unorthodox sources and generally make a pig’s ear of things that they needn’t worry, the taxpayers will bale them out? It can’t be to preserve the 6,000 jobs at Northern Rock. Surely even Baldrick err Captain Alastair Darling doesn’t value each job at around £4 million? I’d take less than that in cash to give up mine….

Disclaimer: I am not an economist, banker, or general finance person. It’s quite possible that there are very good and quite sane and rational explanations for the government’s actions that I don’t understand. It’s also quite possible that pigs will fly, Hell will freeze over and other unlikely things will occur.
BBC NEWS | Business | Darling unveils Rock rescue plan

[1] Funny, that. You’d have thought a bank that owes £25 billion to the government, and with no investments to back up its lending, would be just the thing that anyone with way too much money would want.
[2] Is it just me, or does everyone else get a Blackadder flashback every time he’s mentioned?