Brown's latest blunder heads for the rocks

Lloyds TSB shares fall along with those of HBOS as the merged bank is forecast to have a 420 billion wholesale funding deficit by a Credite Suisse analyst, Jonathan Pierce, quoted in the Guardian, linked here. The combined group's capital deficit is estimated by the same analyst at 10 billion. A quote: "In both nominal and proportionate terms, the combine will have more exposure to UK specialist mortgages, UK credit cards, UK personal loans, and UK commercial property than any other UK bank - all the assets we worry about, aggregating [more than] £200bn or seven times the tangible equity base." As is so now often the case in this growing turmoil, warnings of this likely outcome appeared on this blog first (almost as soon as the merger was announced) see this link.