Between the Rock and a hard place

Yes its back to our old friend the Northern Rock and the complete dogs breakfast our government have made of the whole sordid business. I've said before that the government has many unanswered questions.

But the latest steps in this affair have left me decidedly underwhelmed. While I have never favoured nationalisation which puts me at odds with the party as a whole I do find myself agreeing with much of what Jonathon Wallace had to say earlier this week.

However what alarms me has been the wholesale demonisation of the shareholders during this affair. Sure some of the hedge funds are latecomers to the party and many have upped stakes as the price hit the trough it is now in and will have made a tidy profit this week however there are many of us who have held shares since demutualisation and we may yet get our revenge.

You see what people have tended to forget is that the three motions that failed at the recent EGM only did so because they needed a 75% vote all three motions secured over 65% of the vote showing a clear level of discomfort at what was planned.

So where are we now. Well despite all the Labour spin of the weekend Branson is not the only game in town , both Olivant and the new board are putting together packages and the shareholders will have the final say and with the Government finance on the table who is to say others wont appear.

And that is the rub the original Virgin offer was an insult to the intelligence of the existing shareholders. We were in effect told to double up or risk with no guarantee of returns for the foreseeable future or lose everything.

Since then the incompetent handling of the affair by our Chancellor has seen shares fall still further and the balance sheet get bleaker. So when we now see Gord and Dickie smiling at one an other in China there comes a temptation to to say sod you when it comes to a vote.

However there are more questions that now need to be aired.

Given the sensitive nature of his comments weren't Northern Rock shares suspended first thing on Monday morning until after the Chancellor had spoken in the Commons (or at the very least while he was speaking) ?

What exposure does the government have in the event of a failure and what exposure do shareholders have in the same circumstance?

And what are the government plans if the only solution they approve is Richard Branson and his plans are rejected by shareholders?

While a private sector solution looks possible nothing can be rules either in or out at this moment in time.