HBOS and Lloyds
The Republic of Mancunia’s football team (the American one , not the Arab one) appears to have a new shirt sponsor by proxy.
The AIG logo currently on the front of Manchester United’s shirts may soon be replaced. AIG is now 80% owned by the US Treasury which neatly completes the Americanisation of the team.
So what about the new logo? The Statue of Liberty? The Stars and Stripes? Uncle Sam? Or perhaps, more appropriately, a $-sign?
Will they now be known as the Manchester United States?
AIG was very much involved in the once possibly toxic and now definitely lethal sub-prime mortgage market and had been drawn into substantial dealing with the now-collapsed Lehman Brothers.
Just to illustrate the incestuous nature of the financial services market, you may be surprised to learn that AIG owns Ocean Finance. Perhaps they can help AIG to consolidate all of their debts into one easy monthly payment. Below the belt? I don’t think so.
Most financial services institutions are nervously awaiting the tap on the shoulder – although many will argue that death by sadistic accounting is not fair.
Yesterday, HBOS shares began their short journey down the financial toilet amid claims that they were in good shape and did not deserve the negative speculation. However, just to be on the safe side, Halifax branches were circulated with a memo asking them to monitor cash withdrawals.
One day later they have announced that they are in advanced talks with Lloyds-TSB with a view to a merger. Their shares are now in recovery mode but the proposed merger has all the characteristics of desperation and is the equivalent of two institutions hugging each other in a time of self-induced strife.
Who is saving who? But have you noticed how Lloyds-TSB have kept very quiet during the last couple of weeks? They must have been in discussion for some time now – but whatever happened to due diligence?
HBOS and Lloyds are clutching each other like Hansel and Gretel in the dark forest; comforting each other just before the Evil Witch eats them up.
Mind you, nowadays the Evil Witch is spoilt for choice. Many have lost their way in the forest.