We all knew it was coming.
The Royal Bank of Scotland has been nationalized. Investors took up just 0.24 percent of today's rights issue, leaving the UK government owning almost 60 percent of the beleaguered bank.
State ownership has started badly. The rights issue was offered at 65.5 per share. Today, the share price stood at 52.7p, which immediately racked up a huge multi-billion paper loss for the Treasury.
The reluctance of investors to buy into RBS is perfectly understandable. With Brown and Darling threatening to force banks to lend, and total confusion about dividends policy, no sensible investor would touch this bank with a barge pole.