Let me see: twenty-four billion pounds will buy you Barclays Bank; another fifteen will get you the Royal Bank of Scotland. Add on fourteen billion for Lloyds TSB and chuck in five billion pounds for HBoS. At today's fire-sale everything-must-go oh-it-already-has prices, that's only* fifty-eight billion to buy the lot.
So if you're going to spend fifty billion anyway… why NOT just buy them all?
Well, the obvious answer is because that is NOT where you want the money to GO. Buying the EXISTING shares puts billions into the pockets of shareholders but leaves the banks no better off. Investing in NEW shares gives the banks new money to play with. Hmmm, "play with": putting it that way it doesn't sound so reassuring, does it. But a half-share of a bank that is a going concern has got to be a better idea than the whole of a bank that is bust.
It is taking the markets some time to work out whether this was a good thing or not.
The roller-coaster began when Sooty popped up on Tuesday morning to say that HE wasn't going to make the mistake the Americans had made of announcing a plan and then dithering about it. He then spent the day dithering about it and wiped out upwards of a quarter of the value of British banks.
Come Wednesday morning and he's telling us the plan… and seeing the markets crash further. Lunchtime startles them out of their plummet with the news of a coordinated cut in interest rates, but by mid afternoon they've lost their nerve again and so down they go. And again on Thursday, with a rally on Wall Street starting the day off on an up, before a renewed bout of nerves sends it down again.
The political roller-coaster appears to have taken another switchback too, with Mr Frown's fortunes rising almost as the economy goes under.
Daddy Alex wonders if this isn't because as events unfold it becomes more and more apparent that this truly IS a GLOBAL event, that people are now more willing to FORGIVE Mr Frown because it doesn't look like his FAULT.
He has the biggest SCAPEGOAT in the world, of course, because it genuinely looks like we're all caught up in the inevitable consequences of putting the World Economy in the hands of the Monkey-in-Chief… like sticky-taping the monkey's hands to the steering wheel of a shiny silver rocket ship has the inevitable consequences of a huge smouldering crater.
Now of course, you and I know that ACTUALLY Mr Frown really IS to blame for not controlling the housing boom or the explosion of credit here in Great Britain. His idea of "light touch" regulation of the City turns out to asking the good chaps if they're all behaving like good chaps and never doubting the good chaps' word when they said that they were because after all a good chap wouldn't.
But it may be that he's going to get away with that not just because matters in Americaland are so much more SPECTACULARLY WORSE, but because of the huge popularity of saying: "not our fault, blame America"!
On the other fluffy foot, I suggest to Daddy that it may ALSO be that people have taken the opportunity to size up the alternative in the form of the response to the crisis by Her Majesty's Loyal-but-completely-unnecessary Opposition and in particular Master Gideon Oboe.
To extend my METAPHOR: it may look like we have a MONKEY at the steering wheel, but the alternative in the passenger seat is a FISH. Probably a FLOUNDER.
Like Senator Oven-Chip in America, the Conservatories have had to perform a SCREAMING hand-brake turn, about-facing their position from "even light-touch regulation is too onerous; let slip the dogs of MORE" to "we must defend the interests of the common man from these rapacious beasts, (no, not you daddy)."
And like Senator Oven-Chip they find it difficult saying the words.
Notice how their UNNATURAL position leads them to be over-cautious at a time when we need BOLDNESS to counteract the FEAR that is driving down the economy. Having opposed independence for the Bank of England, they're now caught out opposing a much-needed interest rate cut, saying: "no, no, no! We mustn't interfere to tell the Bank to lower interest rates; you cannot compromise the Bank's independence except in the GRAVEST of economic crises!"
Hello! Wake up and smell the COFFEE (subject to your Starbuck having been closed)! This IS the gravest of economic crises.
Even Sooty realises this, as he indicated with his typically unsubtle hints on the The Today Programme, telling nice Mr Evan:
"ooh, the Bank of England act says that the Bank must set interest rates with consideration for inflation AND the wider economic situation. That's the WIDER ECONOMIC SITUATION! Do you see what I'm saying? WIDER… SITUATION… oh look there's going to be a rate cut at lunchtime, all right?"
And even Mr Balloon's usual nose for the bandwagon deceives him, so when he calls for assurances that taxpayers' money won't be spent on "rewards for failure" he's missing the point big time.
As Mr Clogg says:
"When a ship is sinking you send out the lifeboats - you don't argue about who has steered it into an iceberg. That's a debate for another day."
It looks like Mr Balloon is too busy pinning the blame on the RATS to help man the buckets.
*this, by the way, is using the word "only" in the ECONOMIC context of being a "mere" one thousand pounds per person living in Great Britain.
Having said that, it's not that you actually have to cough up ALL the dough.
In theory, the Government will borrow a thousand pounds on your behalf and in return buy your something that is worth a thousand pounds, if not more in the long term.
In PRACTICE, though, what will happen is that the government will have to pay interest on the extra borrowing – of which there is tonnes and tonnes and TONNES… seriously, Sooty is going WAAAAAY past Fatty Clarke this time – and that interest will have to be PAID out of current earnings i.e. TAX, while the return on the asset, either in dividends or a profit when they get sold, might not be realised for some time (at least not until after the credit crunch is over) meaning that even if we make a gain in the long term, taxes may have to go UP in the meantime to cover the NEGATIVE CASH FLOW.
Say 5% interest to pay on a grand a head… so "only" fifty quid a year each worse off then. Enjoy your bank. Ho, very ho.