Just a few minutes to spare before I go and kill my lawyer. He is now claiming to have lost several forms I signed last week. I’ll let him off if he buys lunch. Hapless dork foisted on me for a probate transaction. His general tack is to promise to sort things by next Monday. This has now slipped to Tuesday.
Re-hypothecation is a word that Robert Peston will be wuckfitting your way soon. What it means is pawning customers’ assets several times until no one knows where the original bauble or cash is. The general rule is you can only do this to 140% of the original value, but in the City of London you can do it until the cows come home – and at this point someone turns up claiming the cows are theirs. It’s all a bit like lending your lawn-mower to a nextdoor neighbour who rents it out to the rest of the street. It has a long history going back to the times when goldsmiths lent money on gold you deposited with them for safe-keeping.
So watch out for comingled re-hypothecation and get ready to shout ‘Bingo’. Whenever you hear nonsense like these terms you should ask ‘who pays the bill’? Which is precisely the question we should ask about the City in general.