City Traders And Newspapers Headlines Both Deal In Fantasy
THE Daily Mail leads with news that “£40,000 A FAMILY” was used to “fund the £850bn bank bail out.”
The Telegraph has a different headline figure:
Rescuing the banking system has cost the equivalent of more than £5,500 for every family in the country, an official audit has found.
Neither headlines is true:
The Telegraph goes on to say:
The Government spent £117 billion buying shares in banks and lending directly to financial institutions, the National Audit Office calculated. That represented a liability of £5,530 for every one of the 21.1 million families in Britain.
A liability is not a cost. It is a risk.
The Mail says that it’s headline figure is composite mix of loans, guarantees, bailouts and insurance. So again, not all money spent. It is risk.
The real thorn, though, is that bankers are to get huge bonuses. While this sticks in the craw, it’s not a good idea to protect your investment by keeping the finest minds in the City greedy to make money?
As for the rest of it: are derivatives any more real than newspaper stories?
Posted: 4th, December 2009 | In: Money Comment (1) | TrackBack | Permalink
