Marilyn explains why the Govt. should sell without the jibber-jabber.
Have you heard of the Greenspan Put? This refers to an implicit understanding that should things go pear shaped for Wall Street Banks US Federal Reserve Chairman Alan Greenspan would flood the financial system with so much money these banks would be able to survive. Many commentators blame the "Alan's got our back" meme for banks trading recklessly leading to the Global Financial crisis.
Many of you will be aware that I have urged the Government sell its share in Air NZ. The colourful language I used may have lead some of you to conclude I was a loud mouthed troll. Maybe I am, but there is some serious thinking going on behind the noise.
Why do I want the Government to sell? Because the airline operates under the protection of a Cullen Put. Some believe the government has an obligation to shovel cash into the airline to keep it flying if we have an Ansett MK II.
Why should the government be called on for this financial support when it has more pressing calls on its cash for things such as mental health treatment debt repayment and adequate policing. Should the airline go down does it really matter? International routes are already well served by other airlines and I am sure there would be others willing to step into the void left by the airline domestically.
By selling the government would gain a descent wad of cash and free itself from the contingent liability of the Cullen Put.
Boop boop de do
Marilyn