The Great Debate UK
It may be junk but it’s cheap junk
– Neil Collins is a Reuters columnist. The views expressed are his own –
Tuesday, May 12 was just another day in the twilight zone that is the market for bank debt and preference shares. As usual, that day’s dividends were paid on time, including the one due on Lloyds Banking Group 6.0884 percent preference shares.
The price hardly twitched; on Collins Stewart’s Thursday daily list, it was offered at 337.50 pounds per 1,000 pounds of stock, to produce a net yield of 18.0 percent.
That hefty return assumes the dividend will go on being paid. It may not be, and missed payments do not accumulate against that distant day when Lloyds returns to prosperity.
Barclays’ conjuring trick
– Margaret Doyle is a Reuters columnist. The opinions expressed are her own –
Abracadabra! Yet again, Barclays has pulled another rabbit out of its hat. With just days to go before the end-March deadline for the bank to apply for a government guarantee of its dodgier loans, it may again wriggle out of state control.
from The Great Debate:
Nationalization: Terrible but inevitable
-- James Saft is a Reuters columnist. The opinions expressed are his own --
Nationalization of weak banks in Britain and the United States may be preferable to current plans for insurance and soft "bad banks" schemes which risk being swamped by future losses as assets, especially real estate, continue to crater.
An insurance program, getting banks to identify their riskiest assets to the government which will insure them for a fee, is one of the main planks of a UK plan to bail out banks unveiled this week.
