The surreal part was to see the morning Guardian with last night's £50bn headline next to the afternoon's Evening Standard with Darling's 7:30am £500bn.

The evening standard calls it 'half-nationalisation' as the £25bn (extendable to £50bn) recapitalisation facility will be in exchange for preferred shares.

City traders call this too little, too late. You heard that right. Too little.

Countdown to wholesale nationalisation...

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

LONDON (AFP) - Britain rushed out a package worth up to 875 billion dollars Wednesday to head off a banking collapse as markets went into freefall over fears the worst financial crisis in decades has still not hit a peak.

Panic selling set hit key European and Asian stock exchanges and a drop of nearly 10 percent in Tokyo prompted Japanese Prime Minister Taro Aso to voice "huge fears" for the future of the world's second biggest economy.

Central bank moves to increase the amount of available credit did little to calm the frenzy.

Unveiling a package which will see Britain's eight main banks part-nationalised, Prime Minister Gordon Brown said "extraordinary times call for... bold and far-reaching solutions."

£50 bn in buying preference shares of 8 banks.

£200 bn into the "Special Liquidity Service" - which launders toxic assets by exchanging them for Treasury instruments. (Government is stuck with them?)

Central banks launch co-ordinated rate cut

Central banks around the world announced a co-ordinated cut in interest rates on Wednesday, in response to mounting fears about the impact of the financial crisis on the world economy.

The US Federal Reserve, the European Central Bank, the Bank of England, and the central banks of Canada, Switzerland and Sweden all cut their main lending rates by 0.5 percentage points.

German and UK government bonds fell sharply on the news. In London, shares initially rose, but then drifted lower, and at 12.30 local time the FTSE 100-share index was down about 0.7 per cent on the day.

This is all about saving the City: the current crisis was created by too much cheap debt - how on earth will more cheap debt help solve that?

Lending to the real economy is not constrained because it is too expensive to borrow money, but because banks don't want to take on any additional risk (even good risk) because they realize they are carrying too much of the wrong kind and need to reduce that - and thus the price for risk (the risk premium) has skyrocketed.

Interest rates have 3 components, in fact:

1. the cost of money (set by ECB)
   
2. the cost of liquidity (or the risk on other banks, which is skyrocketing)
   
3. the cost of actual transaction risk (which hasn't changed much for good counterparties, but has also skyrocketed for the toxic stuff)

Bringing the first one down is not the solution to the crisis, which impacts items 2 and 3.


In the long run, we're all dead. John Maynard Keynes

When do we admit that we are slaves to the Communist Chinese govt.?  I get the feeling that all of the shit we're currently seeing is prelude to the world bankers/govts./rich folk going to the Chinese for a bailout.  Our fates are no longer our own and we're too stupid to realize it (yet).

McCain/Palin ... total sacks of SHIT!

However one of the things that seems obvious to me is that the banks got into this mess with their own profligate behaviour, especially in terms of rewarding dangerous levels of risk. Yet this money seems to be a message to carry on doing what they were doing. I will not be alone in being angered when traders start getting their multi-million Xmas bonuses on my taxes. this money shoudl comew with strings attached that say "you're all civil servants now and you don't get bonuses for doing your job".

Within a week of AIG being baled out by the US, the entire senior staff pissed off to a spa resort for a week, running up a bill of hundreds of thousands of dollars. Maybe there ought to be a group of aggrieved taxpayers turfing fat cats out of fancy restaurants saying, "Not on my money, you ain't".

Entire departments need to be phased out of existence, entire transaction disciplines need to be rendered illegal, certain fiscal methods needs to be curtailed. Banking needs to be neutered to prevent it ever threatening the economy again, it's infrastructure and should be rendered a low-profit activity.

And I still think we should guillotine a few of 'em and parade their dripping heads through the streets on poles.

keep to the Fen Causeway

I expect Comrade Brown and Comrade Darling laugh about how they pretended to be right wing New Labour hacks, while they waited for the inevitable collapse of capitalism.

The measure is seen in Spain as the other extreme of the Paulson plan... being the spanish plan the perfect middle....

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

and the British house price bubble just began to deflate.

Lich King/Caribou Barbie 08
Pain brings Katharsis