Unfit for human consumption

I enjoyed this letter which was printed in the Times last Saturday.

Sir, The selling and buying of Northern Rock mortgages between banks reminds me of a wartime story. It involved the busy exchange of corned-beef between black-marketeers.

One purchaser complained that the beef he had just bought was unfit for human consumption. He was told that the beef was not intended for human consumption, but for trading purposes only.


The strains in the money market persist. In the UK, the focus for bank treasurers is to make sure they have liquidity over year end. This has pushed up interbank interest rates way above the Bank of England’s official rate of 5.75%. The forward cost of money over New Year is 7.23% (one month rate, one month forward), nearly 1.5% above the Bank rate. Good news for those who are long of cash (money market funds for example) but otherwise a drag on economic growth – and remember that corporate loan rates are fixed from these interbank rates too.


The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

Jim Leaviss

Job Title: CIO Public Fixed Income

Specialist Subjects: Macro economics and fixed interest asset allocation

Likes: Cycling, factory records, dim sum

Heroes: Brian Clough, Morrissey, Neil Armstrong

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