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Zimbabwean Dollar Website of the Day   Manhattan Real Estate Datapoint of t...
Feb 17 2008 3:16PM EST

Northern Rock: Nationalized

Northern Rock will be nationalized, and the FT says that There Will Be Grumbling:

The government believes nationalisation is now the best option, even though it is likely to spark a political storm, an angry reaction from some shareholders and big job losses in the north-east of England.

All this depends, of course, on the baseline you're using. There would be angry shareholders and laid-off workers whatever the outcome, but maybe it's worse if the new owner is the government. On the other hand, maybe it's better: since taxpayers were ultimately taking on the Rock's risk anyway, it's good that it's also going to receive the Rock's returns.

And shareholders should probably be quite happy. (Not that they ever are, of course.) Paul Murphy estimates they'll get 100p per share from Her Majesty's Government, which is four times what Richard Branson was proposing to pay them.

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