Thursday, 30 October 2008

Hedge funds punished

Guy Kewney has an interesting take on the recent surge and fall-back in the Volkswagen share price. One wonders how much the ban on short-selling by various governments was purely a response to a populist outcry (typical was Alex Salmond) or down to pressure from banks who realised it might embarrass hedge funds.

Goldman Sachs has frequently acted as an adviser to HM Treasury.


Anonymous said...

I was interested to hear on Radio Two this morning, that Barclays have looked to secure loans from the Middle East, specifically Qatar and Abu Dhabi. "...Unlike other big UK banks, Barclays did not want to accept cashe from the UK government and said the move would keep it "Strong and Independent"..."

Frank H Little said...

It's not quite what I had in mind when I said that sovereign wealth funds should be more active to get the wheels turning again.

Certainly Vince Cable was very scathing on "World at One" just now. He reckoned that the independence that Barclays board wanted was to carry on paying themselves & their senior people huge bonuses, which the UK government would hopefully have reined in. The investment is going to cost the bank more money than if they had gone to the Treasury, and their shareholders' investment is going to be more diluted.

Frank H Little said...

Vince Cable also commented to the Guardian. Here is the link from Liberal Democrat Voice.

Anonymous said...

Point I'm trying to make is that this particular bank (Barclays) is sticking it's thumb to it's nose and doing a Queen Anne wave to the UK government and saying "sod you!"

Vince Cable has been warning on this downturn to the government for yonks; I find it really ironic and somewhat partronising that the UK government is trying to blame it on the "global downturn" which it created in the first place.

Anonymous said...

See Vince Cable was on "Have I got News for you!" last night, the subject of these hedge funds did come up at one stage in the programme.