Posts tagged 'nationalisation'

What Google Reader tells us about banking and nationalisation

Paul Krugman has penned a rather wonderful explainer on the economics of Google Reader, and why it makes economic sense for Google to shut down a much-loved service like Reader even if people say they are prepared to pay for it.

Krugman actually picks up where Ryan Avent left off, but the following paragraph does a good job of nailing the problem:

Basically, if the monopolist tries to charge a price corresponding to the value intense users place on the good, it won’t attract enough low-intensity users to cover its fixed costs; if it charges a low price to bring in the low-intensity user, it fails to capture enough of the surplus of high-intensity users, and again can’t cover its fixed costs.

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When stimulus becomes stealth nationalisation

A big hat tip to Climateer Investing for helping us catch up on a Telegraph story from Ambrose Evans-Pritchard on Japan’s latest plan to stimulate itself out of trouble.

It, by the way, neatly sums up the problem associated with taking QE to the next level which, of course, for the Japanese authorities might have been buying equities outright rather than buying in ETF index form, which they’ve already been doing for a couple of years or so…

Think about it — a central bank en route to becoming a majority holder in a country’s primary equity ETF, is nothing more than a central bank en route to becoming the market. Read more

Tepco and those nationalisation rumours

Shares in Japan’s distressed nuclear plant operator Tepco took a beating on Tuesday as rumours swirled that the government was preparing to nationalise the company.

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When Anglo Irish bonds are liability managing

This week, the prospect of an Anglo Irish debt ‘liability management’ exercise burst into the market’s consciousness.

Anglo Irish anguish
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Knowing our banks, knowing yours

In their latest European banking note, Citi analysts (for, errr — cough cough –they should know) look at the claim “we are all Swedish now”. That, of course, being a reference to the Swedish banking crisis in which the state nationalised two of the country’s largest public banks for a number of years at the beginning of the 1990s.

As Citi quickly points out, the team is not advocating any particular policy approach. Rather: Read more

US U-turn on tangible common equity

Here is your bitter-sweet good news of the morning, from the Wall Street Journal (HT Rolfe Winkler):

Citigroup Inc. is in talks with federal officials that could result in the U.S. government substantially expanding its ownership of the struggling bank, according to people familiar with the situation. Read more

The full faith and credit of the UK

Inevitably, on news like this

UK public finances deteriorated in December, partly because the £20bn state recapitalisation of Royal Bank of Scotland swelled the government’s net cash requirement to £44.2bn. Read more

Lombard: Nationalisation needs prudence and patience

They must be out of practice, but those in favour of rapid nationalisation are making some terrible arguments for sweeping British banks into public ownership. Here are the three worst:

1. I’ve started so I’ll finish. Read more

Nationalisation quote du jour

In some ways, it would be similar to a private equity investment… But unlike a private equity deal, the banks would go from being publicly listed to being publicly owned …

- “Let us have public ownership of Lloyds and RBS”  Read more

Nationalisation Magnus Opus

UBS’s senior economic adviser, George Magnus, has thrown his hat into the bank nationalisation ring.

Magnus, like many others, is starting to see an increasing likelihood of full-scale bank nationalisation. What’s more, he reckons it may be the best way of preventing a “bad recession” from descending into a “deflationary bust.” Read more

Nationalisation linkfest

To nationalise or not to nationalise?

The UK government has shown its hand. TARP II is underway in the US. Read more