Back in Old Blighty, pundits are trying to sort out what the Bank of England’s effective nationalisation of Northern Rock (LON:NRK) means for capitalism and for the current credit crisis. Let’s save them the trouble.
Capitalism is dead. With the current lot of central bankers on the job, Hillary Clinton headed for the White House and Gordon Brown pulling the strings at the BoE, we wouldn’t be surprised at the second coming of Karl Marx. His earthly socialist paradise is nearly complete. Now we just need to make sure all the cops have tasers to deal with any lingering public dissent.
Judging by the stock market, you’d think the worst is over. We suggest you keep an open mind. The Fed’s move is a giant attempt to change the subject, like a stupid party trick someone makes to distract you from the folks puking in the bushes. It’s worked for now.
“Hold my beer and watch this,” are the famous last words of countless morons. Bernanke is at least in a sharing mood. “Have a beer and watch this,” he seems to have said. We can hardly bear to watch. But we can’t resist either.
“Is this the end of the story of crisis and contagion?” asks Martin Wolf in the Financial Times. “‘Far from it’ is my guess. If we can have such trouble with the financial system when the real economy is healthy, I tremble at what may happen when conditions start to become worse…The financial system looks more insecure than I feared. The unwinding of past excesses may well bring more unpleasant surprises.”
Hold on to your beer. This is going to be good.
Markets and Money