Tuesday, January 15, 2008

Brown: Northern Rock may be Nationalized

by Bill McBride on 1/15/2008 11:32:00 PM

From Bloomberg: Brown Says U.K. May Take Over Northern Rock, Resell

Prime Minister Gordon Brown, in his clearest indication yet that Northern Rock Plc may be nationalized, said the U.K. is considering acquiring the mortgage-lender and reselling it when market conditions recover.

``Because stability is the issue, we will look at every option and that includes taking the company into public ownership and then moving it later back into the private sector,'' Brown said in an interview with ITN's News at Ten program last night. ``So that is, yes, one of the options that has got to be considered.''

The U.K. Treasury said it may nationalize the bank in order to recover more than 25 billion pounds ($49 billion) in loans it made to Northern Rock and to protect depositors.
And here are the betting lines from MarketWatch (everything in England seems to have betting lines):
Spread-betting firm Cantor Index is offering odds of 5-to-1 on Virgin winning and 7-to-2 on Olivant. Nationalization of the bank, however, is the clear favorite with Cantor at odds of 1-to-8.
The bettors clearly think that Northern Rock will be nationalized. Heck, the New England Patriots are overwhelming favorites to win the Superbowl, and the odds are only 2-to-7.