Now this is a serious post and I don't want to hear any sniggering! I have been vouchsafed (gotta' love that word!) some very sad and important news. As a result of all the doom and gloom and confusion in European banks one or two little deals, which hitherto barely rated a mention, have now come to light and lay their wriggling in the unaccustomed glare of publicity. I am grateful to the WSJ for this although my own banking experience, confined as it has been for most of my life to wrestling with my overdraft, does not allow me to understand the finer points. However, the gist of it is as follows.
The hometown of actress Brigitte Bardot on the French Riviera has a €6.7 million ($9.6 million) loan on its books that carries an annual interest rate tied to the Swiss franc, according to Saint-Tropez officials. The rate currently is fixed at 3.94%. Starting in May 2012, however, the rate becomes variable and rises when the Swiss franc appreciates against the euro.
Some officials in Saint-Tropez have calculated that, unless the Swiss franc falls off significantly from the peaks reached in recent days, the interest rate on the 20-year loan signed in 2007 would soar to 30%. (My emphasis)
Now I did tell you - no giggling! It is not only the good Burghers of St. Tropez who are deaf, dumb, blind and lack a sense of smell, because there are cities in Hungary, Poland and Croatia in a similar 'Swiss roll'! Apparently, these loan products are known in 'the trade', as it were, as "structured products"! Now, just suppose you were the council leader of, say, 'Muchhumping-in-the-Dales' - look, no sniggering, I won't tell you again! - and some smooth-talking merchant banker sidled up to you and tried to sell you a "structered product". How long would you give him? Quite so, but, you see, you are not a council leader, you have much more important things to do than get involved in local politics. The prats who do that sort of thing fall for these scams time after time and, of course, it is their local tax-payers who pick up the bill.
Still, you have to feel sorry for poor Miss Brigitte Bardot, don't you?
Right! That's it!
You will all stay in and write out a hundred times: The rich people of St. Tropez are all human beings just like us.
"The rich people of St. Tropez are all human beings just like us."
And there was me assuming that they are mainly Russian criminals.
Posted by: dearieme | Wednesday, 24 August 2011 at 08:27
Harsh, DM, harsh!
Posted by: David Duff | Wednesday, 24 August 2011 at 08:52