Banana Monarchy: Britain Is Bigger Credit Risk Than McDonald’s

ONCE great, Great Britain as now revealed to be a bigger credit default risk than McDonald’s.

Ronald or Gordon? Scotland awaits the answer…

Which one’s in the clown boots?

Dec. 9 (Bloomberg) — Investing in U.K. government debt is almost
twice as risky as buying bonds sold by McDonald’s Corp., based on prices
in the credit-default swap market.

The CHART OF THE DAY compares the cost of protecting against a decline in the creditworthiness of the two borrowers. U.K. protection became more expensive on Sept. 29, when the pound suffered
its biggest one-day loss against the dollar in 16 years after the government took control of Bradford & Bingley Plc, Britain’s biggest lender to landlords.

Britain risks being viewed pejoratively as a banana republic “apart from the technical disqualification that we have a monarch and so cannot be a Republic, and it’s too cold to grow bananas anyway,” says Sean Corrigan, who helps oversee about $8.5 billion as chief investment strategist at Diapason Commodities Management SA in Lausanne, Switzerland.

Yes, we have no bananas, we have no bananas today…

Anorak

Posted: 9th, December 2008 | In: Money, Photojournalism Comments (3) | TrackBack | Permalink