Chapter 985 Strategic Missile?
If we look at the yield, it is obvious that Morgan Stanley's performance has been somewhat poor since the subprime mortgage crisis until now.
From March 2009 to the present, Morgan Stanley and Goldman Sachs have lagged far behind banks including Wells Fargo, Citigroup and Bank of America in their share price gains - commercial banks have performed far better than investment banks.
In comparison, during the previous five-year bull market from September 2002 to September 2007, the S&P 500 Index rose by 87%, with the financial sector as a whole rising by 66%. During this period, Goldman Sachs rose 228% and Morgan Stanley rose 124%, both significantly outperforming the market.
In the next year, these banks and investment banks will generally have an increase of at least 10% or more...
The reason why Barron's said that now is "not the right time" does not mainly mean that the stocks held by BFT funds still have room to rise, but also because of the exchange rate of the pound against the US dollar.
Initially, when the Bank of England injected 25 billion pounds into the BFT fund, the pound-to-dollar exchange rate was around 2.1.
When the BFT Fund first returned the principal and corresponding interest of 13.5 billion pounds, accounting for 25% of the total debt to the British government, the exchange rate of sterling to the U.S. dollar was 1.45, so this 13.5 billion pounds was equivalent to less than 19.6 billion US dollars. .
Now, the exchange rate of the pound against the U.S. dollar is around 1.67. Compared with the last time when the British government repaid 25% of the debt and related interest, the exchange rate of the pound against the U.S. dollar has increased. Then the return of this also accounts for 25% of the debt and related interest. The funds required for related interest are close to 14 billion pounds (the excess compared to last time is the interest accumulated during the period), which is equivalent to nearly 23.4 billion US dollars.
After all, the assets currently held by BFT funds are all denominated in US dollars, so that they can obtain additional benefits from the lower exchange rate of the pound against the US dollar.
But this is not a big problem. Just like the last time the BFT Fund returned part of the British government's debt, it was not raised by the fund selling its own shares, but "moved" from other places.
After all, the British government's 50 billion pound investment this time, the interest provided by the BFT fund was not low - at that time, it had not gone through these rounds of quantitative easing policies, and it had not gone through rounds of interest rate cuts - so for example, the BFT fund needs to be returned to the British government. Government £13.5 billion, then they can raise this money elsewhere at the same interest rate...
Just like Youcheng Insurance Group controlled by Barron, there is a considerable amount of sterling funds deposited in the British business. The relatively high-interest "debt" used to purchase BFT funds is enough to cover the need to return the BFT funds. Funds to the British Government.
This time, the same operation can still be done. The further time goes by, and as the exchange rate of the British pound against the U.S. dollar decreases, it will be more cost-effective to convert their U.S. dollar assets back into British pounds for transfer.
……
As for Barron's proposal to Cameron to repay part of the British government debt, it is related to Britain's national security.
"Although we are close allies with the United States, our country's nuclear deterrent capability still needs to be in our own hands, not controlled by the United States as it is now..."
"What do you mean?"
"We need our own strategic missiles for precise delivery!"
Why do you say that? Because now the button for Britain's strategic nuclear deterrence is not in its own hands, but requires the consent of the United States.
Speaking of which, Britain originally wanted to reduce financial pressure, but ended up being "taken advantage of" by spending money... In 1952, with the assistance of the United States, Britain exploded the atomic bomb it developed, and then in 1957, it successfully exploded hydrogen bomb.
As a result, Britain became the third country to possess a hydrogen bomb after the Soviet Union (1953) and the United States (1954), before China (1967) and France (1968).
The reason why Britain was so active in developing atomic bombs and hydrogen bombs at that time was because it was worried about the invasion of the Soviet Union - after all, the Soviet Union's steel torrent was close to Western Europe at that time, and the Soviet Union already had atomic bombs and hydrogen bombs.
The British nuclear strategy at that time was "minimum nuclear deterrence" - maintaining a limited and effective strategic nuclear force, and claiming to target the enemy's important cities, causing the enemy to bear unacceptable losses, and thus deterring potential enemies. Dare to launch a nuclear attack easily.
To put it bluntly, you, the Soviet Union, can "nuclearize" the British Isles, but I can at least use Moscow as your backing...
However, due to funding issues, Britain finally gave up on research and development of nuclear weapons delivery vehicles, and instead signed an agreement with the United States to abandon the "Trinity" nuclear strike capability and only retain sea-based strategic nuclear submarines as nuclear strike capabilities. By purchasing and using American strategic missiles to carry their nuclear warheads - and according to the agreement, Britain can continue to develop nuclear weapons, but its experiments need to be conducted within the borders of the United States...
So in the end, there was a situation where Britain manufactured its own nuclear warheads and nuclear submarines, but needed to use the American Trident for delivery.
Theoretically, the British Prime Minister can issue an order to launch the "Trident" strategic missile without prior approval from the White House...
But this is only theoretical. After all, the manufacturing and maintenance of the "Trident" strategic missiles all depend on the United States. If the United States refuses, then even if the British launch the "Trident", will they be able to achieve their designated purpose? Land is also a problem...
This is also the reason why in the classic British drama "Yes, Prime Minister", it is said bluntly that "Britain is the missile base of the United States."
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"You mean we will no longer use the American Trident and develop strategic missiles ourselves?"
After hearing Barron's words, Cameron's eyes widened and he asked.
This is not something that can be decided casually. In addition to the reaction of the United States, a large amount of money will definitely be invested in the research and development of this strategic missile. When the time comes, let alone the opposition party, it will be within the Conservative Party. , I'm afraid there will be many doubts - is this necessary?
"Of course we don't need to do research and development independently. I understand that this is very difficult, but what if we cooperate with other countries to develop research and development? For example, France and Italy..."
Seeing that Cameron was still silent, Barron continued:
"You even just need to put forward this idea first and make it an option..."
When he said this, Cameron finally reacted:
"But over there in America..."
"We cannot follow the footsteps of the United States like we did during the Blair period. Only by maintaining a certain degree of autonomy can we be more valuable to be won over, Mr. Prime Minister."
(End of chapter)