Northern Rock

The FT reports that Northern Rock will hold talks with a US private equity firm JC Flowers, these talks may lead to a takeover bid.

The shares in Northern Rock rose a meagre 9% on the news, to around 146p (they have been trading at over £12 less than 12 months ago).

In other fallout from the Northern Rock debacle, the Bank of England's offer of £10BN of emergency liquidity remains unwanted, untouched and unloved.

Banks are instead flocking to the European Central Bank (ECB), which is offering far better terms and the guarantee of anonymity.

The "Old Lady of Threadneedle Street" appears to be somewhat out of touch with the markets these days, that should be a matter of concern to us all.