It did not take the bond markets long to fulfil my prediction of a few days ago and give the latest EU idea a raspberry. The idea of funeling these offerings via the EIB (European Investment Bank) lead to EIB 10 year bond spreads blowing out to 90 bps over bunds and close to Spanish levels indicating where the market thinks the money will go.
Dresdner are quoted as saying the yields on EIB bonds could go through the average for EU countries if the EU persists with this idea. You can fool Darling Gordon but you cannot fool with the bond market! EIB debt is not government guaranteed so why buy it when there is so much sovereign issuance around?
RBS are paying a fee of just 2% to insure their vast supply of toxic assets with the Bank of you and me. The B shares in RBS will only pay 7% when they get around to paying a dividend cf 12% HMG got on its previous bank rescue prefs. Good deal for RBS and a bad deal for us, our children and grandchildren
I found Junius very funny on Dippy Denny and MI5. Unless DD has connections to OBL then I cannot see how he can be of the slightest interest to the British authorities.
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