Is anyone else bored of the Northern Rock saga? “It’s a bit like the Archers,” quipped one of Cityblogger’s contacts this morning. “It goes on and on.” Too right.  Cityblogger has – quite literally - had it up to here with the beleaguered mortgage lender. He was forced to eat his hat on Monday after Mr Branson – aka the Bearded One – emerged as Between a Rock and a Hard Place’s preferred bidder and the bowler is still being digested with difficulty. Cityblogger’s neighbour kindly suggested peppermint tea might be of assistance. And now these culinary adventures may have been for nothing given BRHP’s shareholders have bought more stock apparently to try to block Mr Branson’s bid. So given the mere thought of anything Rock related, be it stone-baked pizza or especially rock cakes, brings on nausea Cityblogger is distracting himself by pondering the following conundrum: where will the market be by the year end?

The FTSE100 has dropped by around 1 per cent almost every day this week and stood at 6131 earlier this morning. This is disappointing after some of Cityblogger’s pals thought it could reach 7,000 by the time the year was out. Now it’s possible it could slip below 6,000.

“I did say it could reach 7,000 and it wasn’t far away at one point this year,” says Mark Dampier at Hargreaves Lansdown. “But I think forecasting it is a total waste of time right now. It’s so difficult to read, it’s the most difficult I’ve known it for 20 years. It could be 500 points higher, it could be 500 points lower by the end of 2007. There’s so much bad news that some good news could push it up. I think everyone’s too pessimistic and central banks will cut interest rates.”

Could now be a good time to trade the FTSE? Mr Dampier is sceptical. “I don’t think it’s worth trading at the moment,” he warns. “This sort of market will move quickly and once you’re out it’s more difficult to get back in.”

Howard Wheeldon, senior strategist at BGC Partners, is similarly cautious. “I suspect it will end the year lower,” he told Cityblogger. “I think we’ll see a 7 or 8 per cent drift off, although there will be some good days.”

But he thinks things could improve next year. “As we move into the New Year we should see some confidence resume. The sub-prime issue should dampen down by the second quarter. We’re at risk of talking ourselves into a recession but I don’t think we’ll get to that stage. [Economic] growth is growth, even if it’s only 1 per cent.”

Oh dear, more peppermint tea required it seems.

Where do you think the FTSE100 will end the year? Would you risk buying the index now?

Cityblogger has dug out his old and somewhat weather beaten bowler hat and placed it on a nice china dinner plate, along with some tasty tomato chutney, ready to tuck into if need be. He expects it will taste a lot like a combination of liquorice and cardboard - a bitter taste Northern Rock shareholders are no doubt familiar with by now.

Such extreme measures have become necessary, it would seem, since it appears The Bearded One – aka Richard Branson – could soon be the proud owner of the ailing mortgage lender. Something Cityblogger and his City pals once considered risible a few months ago, but should see taxpayers breathing a sigh of relief.

Mr Branson’s scheme is thought to have found favour with the government because of his plan to pay back £11bn of the £23bn taxpayers’ loans to Between a Rock and a Hard Place almost immediately. Laughably these funds have been secured partly by Mr Branson and his consortium borrowing rather a lot of money from other banks, although a rights issue will also be launched. This is partly robbing Peter to pay Paul - what got Northern Rock in a fix in the first place! And it does seem that Our Dickie is taking on rather a lot of risk.

The shares have been all over the place this morning, initially falling around 16 per cent to 72p and then jumping 84 per cent to 132p. But while Cityblogger has been reticent to stick his bowler under the grill until absolutely necessary, it looks likely Branson’s takeover will go through.

“The shareholders don’t have an awful lot of say in the matter if the company owes £23bn to the Bank of England,” says Jan Luthman, director at Walker Crips Asset Management. “What this is is a rights issue, which is what shareholders, such as RAB Capital, wanted. So I don’t think it’s going to meet any fundamental opposition. Virgin is probably one of the most credible brand names in Britain and that matters if you are to rescue it. You need a name the retail client believes in. I think it’s a credible bid and it has political blessing.”

However, Nic Clarke, banking analyst at Charles Stanley switched his rating on Northern Rock shares from hold to sell this morning. He says he is “wary about how politicised this issue has become” and argues that “shareholders come some way down the list of priorities” for the Chancellor’s favoured outcome. Mr Clarke believes the shares are “not for the faint hearted” and could face further challenges in the future. Too right!

There’s nothing for it - pass me the knife and fork, Tiddles.

Messieurs Alistair Darling and Steve McClaren are arguable the two most unpopular gentlemen in England right now. So it amuses Cityblogger to imagine the two of them slumped miserably over the bar in some smoky, seedy little joint somewhere, drowning their sorrows with a couple of mugs of sherry. What a shame the reality of the smoking ban ruins this little image!

Mr McClaren’s number is up after England lost an abominable 3-2 to Croatia last night. While Mr Darling is spending half his time wandering door-to-door around the City trying to flog Northern Rock/a selection of quality dusters from his battered old despatch box (Cityblogger imagines he’ll have more luck with the latter), and the other half scrabbling about on his hands and knees at HMRC looking for a disk with the entire country’s names, addresses and bank details on it.

Unfortunately Mr Darling’s disk remains AWOL and JC Flowers is the only suitor to bid so far for all of Northern Rock, although US outfit GMAC is supposedly sniffing around. Meanwhile the shares continue their freefall, slipping a further 13 per cent on Wednesday, now trading at 81.5p.

And if Mr McClaren didn’t have enough woes with the disappointment of the nation on his shoulders, sports retailers blame the England’s defeat for lacklustre sales of replica kits. Sports Direct, the company the City loves to hate, issue a profits warning today saying full year earnings will be below expectations because of England’s failure to qualify for Euro 2008. Umbro said its revenues would also be hit. Luckily analysts at Citigroup say Nike’s bid for Umbro is unlikely to hit the skids, although shareholders may find it difficult to secure a better offer now.

And if we weren’t all miserable enough, with no football glory in the offing (ok – no different from any other year!) and little to look forward to than some ID thief helping himself to our bank balances courtesy of HM Gov, the doomsayers reckon a recession is on the way.

If this really is the case, which Cityblogger is sceptical about, where should the investor shore up? Traditionally drug and tobacco companies are defensive havens in times of crises. It may not be PC, but tobacco continues to demonstrate growth opportunities, especially in developing markets, although the drug companies are struggling due to patent expiries. Surprisingly, analysts at Numis reckon the unloved eating out sector is worth a butcher’s. They claim the recent de-rating due to concerns about consumer spending is unwarranted, and that industry drivers such as people eating out because they are ‘time poor’ remain in place. Their tasty picks include Carluccio’s, Prezzo, Domino’s Pizza and the Restaurant Group.

Meanwhile, a very happy thanksgiving to our dear American chums.

Do you think a recession is on the way, or is it just scaremongering? Leave a comment.

Greetings! Cityblogger has been tending his garden on a relaxing week off. However in a philosophical moment, brought on by interfacing with Mother Nature/ a fine glass of Chardonnay, he set to pondering if the pebbles he’s filled his patio pots with for drainage are worth more now than his Northern Rock shares.

Shares in the sickly mortgage lender tanked by over 20 per cent on Monday to 104.2p and a further stomach-churning 38 per cent at one point in the morning's trade today to just 65p. They were also suspended this morning! Altogether, shareholders have seen 94 per cent of the value of their shares disappear since this time last year. Not what you’d expect of an investment in the banking sector and a warning to us all.

"YOUR MONEY IS SAFE WITH US!" Insists Northern Rock's website - well, not if you're a shareholder!Despite the government stepping in and supposedly rescuing NR and a handful of suitors sniffing around, nobody has yet tabled an acceptable bid for the whole entity. There are a number of players in the frame, including Richard Branson, JC Flowers, ING and Cerberus, as well as a consortium including Alfred Gooding, but many of the proposals were pitched “materially below” the share price on Friday. They may look more attractive today!

And securing a takeover deal won’t be easy. Alistair Darling told Parliament he would block any bid which wouldn’t protect taxpayers’ loans. Mmm…Cityblogger wonders if beggars can be choosers. Meanwhile EU rules on state subsidies could limit how long the Bank of England can prop up the company, and the Treasury says there is no guarantee the loans would stay in place after February. In which case, administration or nationalisation could be looming and shareholders will be the losers.

“Mr Darling reassured us that the loans are all fully secured,” says a sceptical David Buik at Cantor Index. “He must have his prayer mat out, hoping for a fairy godfather to come down from heaven and sweep Northern Rock up in his arms and take it away to be nursed back to full health. All I can see is hard-nosed business men, which eat nails for breakfast and spit rust out, hovering around Newcastle.  The world of finance is not a philanthropic society and after so much government prevarication, shareholders will be larruped! Even Uncle Richard [Richard Branson] is as tough as teak and will be taking no prisoners if he lands the spoils!”

Time to wake up and smell the rust, Mr Darling. And for Cityblogger to stick those NR share certificates on the compost heap where they belong.

Quelle horreur! The London Stock Exchange’s whizzy trading system went down yesterday afternoon less than an hour before the close of trading. All pandemonium broke loose as the data went haywire and could not be relied upon by my brother traders. Cityblogger was forced to drink a round of medicinal whiskeys to calm himself, and not for the first time this year.

Apparently there was a problem with the electronic connection between the order display system and the market. Or to put it in more technical terms, the hamsters had given up the ghost. The last time a similar glitch of this magnitude happened was back in 2000.

“It’s sod’s law that it happens when the markets are weak,” David Jones, chief market analyst at CMC Markets, told Cityblogger. “It was all over the place. The data was completely unreliable and everyone was panicking. But it’s just one of those things.”

Critics have been quick to point out that this embarrassing cock-up is a particular blow to the LSE considering a handful of banks are planning to introduce a competing system called Turquoise.

“Yesterday’s debacle with the LSE’s trading system will really irritate the market as unnecessary losses may have been incurred,” says David Buik at Cantor Index. “It is seven years since this happened last time. So is it unfair to expect the LSE to run systems in duplication to avoid inconveniencing the market, which should be unnecessary. Ms Furse will be only too aware that competition will increase in the months to come."

Surprisingly, shares in the LSE were up 2.4 per cent in Thursday’s morning trade to 1748p. But then according to data released earlier this week by the exchange, trading in October was buoyant, with order book trades in UK equities up 71 per cent to 552,715 on October 2006.

What made Cityblogger chortle is the little video clip on the LSE’s website pushing its TradElect Release 2 as ‘the future of trading’. Apparently this little blighter, as well as making the tea, “further improves the performance of the new system” and delivers the LSE’s “suite of MiFID solutions”. Ah, what did we do in the days before ‘solutions’ one wonders. Maybe things actually worked.

If you’ve got a spare couple of minutes it’s jolly fun to watch, and features a rather sweaty-looking runner sprinting along looking very serious and dynamic. Cityblogger wonders if they’ll now edit in a little extra section where the poor chap trips over his laces.

Cityblogger is taking a little break next week and will return the following week. In the meantime, happy trading, my friends.

Remember, remember the fifth of November. Gunpowder, treason and plot. So goes the saying. Not that it’s required to jog the memory. It was pretty hard not to notice bonfire night, even considering Cityblogger’s two pairs of ear plugs – one for him and one for Tiddles cowering from the bangs emanating from Cityblogger’s nouveau-trash neighbours’ back garden.

And Guy Fawkes visited the markets where there were plenty of fireworks. The FTSE was off 1 per cent fuelled by the resignation of Chuck Prince at Citigroup, and the collapse of Delta II’s bid for Sainsbury – both credit crunch victims.

So we shan’t get to see Jamie Oliver barbecuing chicken wings in the Qatari desert after all. Shame. Cityblogger was looking forward to it. It’s more likely to be kebabs in Southend now after Sainsbury shares slid 21 per cent on Monday to 440p. How typical after analysts told Cityblogger on Friday the bid was more likely to go through than not. Famous last words…!

But while it’s unlikely a new suitor will emerge because of the big stakes held by Delta II, Robert Tchenquiz and the Sainsbury family, Sam Hart, analyst at Charles Stanley, thinks Delta II could come back. “The possibility of Delta returning with another bid after six months cannot be ruled out, particularly if more favourable conditions in credit markets lead to lower funding costs,” he says. “Similarly, Robert Tchenquiz has a 10 per cent stake and his future intentions are unclear.”

What’s more, Jose Marco, analyst at Numis Securities, reckons food retail is a safe haven in the coming consumer slowdown. “We believe food retail is one of the better places within retail to be as it is less exposed to the vagaries of economic cycles,” he argues. “Its companies are benefiting from price inflation, they have strong balance sheets and can still make significant in-roads to non-food retailing.”

Nevertheless, Sainsbury’s rating looks pretty toppy at 22 times 2008 earnings, although analysts reckon its tasty property portfolio supports it. Judging by the strong results this morning, M&S looks like another good hiding place in the consumer crunch. Insiders reckon it will be the discount end of the retail market that’s hit the hardest.

Meanwhile, Mervyn King, the Bank of England’s governor, is on Radio Four tonight telling his side of the Northern Rock crisis. He told Robert Peston, the BBC’s business editor, he wouldn’t publicly tell borrowers not to panic during the run on the bank because “it would have been rational to take your money out without a government guarantee.”

Our Merv also reckons the sector is recovering. “We’re going in the right direction,” he says. “Although there’s always a possibility that a shock from outside could cause further fragilities.”

Mmm…that sets our minds at rest!

Cityblogger fears Tesco is taking over his life. He does his grocery shopping there (usually accompanied by a surprisingly left-wing trolley for such a capitalist’s dream), Tiddles is now insured for battle scars courtesy of the supermarket giant, and Cityblogger once suffered the indignity of being turned down for a Tesco’s bank card. It’s only a matter of time before Cityblogger’s modest home is swathed in wallpaper decorated with thousands of tiny Tesco logos.

Can nothing stop the march of this monster, which began life as a East End market stall? Not the Competition Commission, it seems. In its wisdom the Commission found no evidence of foul play in the supermarket space, although Tesco and its peers could have to flog off land after claims the supermarkets are buying it up to keep out competitors. And Tesco’s shares have this week reached a year high.

“I’ve been covering this sector for nearly 20 years and this was the umpteenth review into competition,” Freddie George, analyst at Evolution Securities, told Cityblogger. “I think the findings were as expected – that’s it’s a very competitive market.”

PharmaTimes’ Great Oxford Debate this year was entitled ‘this House believes Tesco should take over the running of the NHS’. Cityblogger scratches his head. It’s not such a bad idea really. Could we eventually see a Tesco cabinet? This was partly explored in that charming TV drama featuring Jane Horrocks as the naïve supermarket manager propelled to the position of Prime Minister. Gordon Brown has something of the bank manager about him, so why not a supermarket manager? Mrs Thatcher was a grocer's daughter, so Tesco running the country is only one step further.

And yet Sainsbury is on the verge of being taken over by an obscure Qatari outfit. Taste the difference, indeed.

Titan Tesco could have further growth in it yet. Analysts at Citigroup are excited about its US expansion and reckon the shares are relatively cheap. Freddie George agrees. “The shares could go up further in the long term as Tesco has an analyst trip arranged to the US for us to see the Californian operation,” he says. “I don’t think they’re perfect but they do things better than other retailers, although they’re probably getting a bit too big. But there’s lots of opportunities for them in UK non-food retail too.”

George believes the Sainsbury bid will probably go through. “I’ve been up and down emotionally with this one,” he admits. “It’s by no means a done deal but it’s more likely to go through than not.”

Cityblogger is a patriot and sad to see any UK company fall to foreign predators, but it may be worth it to see Jamie Oliver reduced to cooking on a camel’s hump.

Cityblogger thought he’d take time out to polish his broomstick ahead of Hallowe’en but it looks like the other City warlocks have beaten him to it.

It seems the doomsayers are already abroad bewailing the state of the economy and cooking up in their cauldrons a grim Christmas for the retailers.

True, some of the recent economic data is a bit of a witches’ brew. Nearly half a million fixed-rate mortgages will end over the next three months, which, La Salle Investment Managers say, is likely hit the consumer’s willingness to put his hand in his pocket as his mortgage payments become steeper. (That said, Cityblogger has never been particularly willing to part with hard cash at the best of times, mortgage or no mortgage). What’s more, according to the Bank of England, mortgage approvals and enquiries dropped in August and, data from RICS shows house prices dropped in September. Cheery stuff.

However, on the other hand, according to the Office of National Statistics, retail sales volume increases were stronger than expected in August, although retailers had to drop their prices to entice customers. And, La Salle says, the retailers are becoming concerned about rising consumer debt.

Now, normally at a time like this Cityblogger would pick up the Bat Phone and call Richard Ratner of Seymour Pierce, the City’s King of Retail for his expert view. But sadly the gentleman known affectionately in the City as ‘Rattie’ passed away earlier this month from a heart attack. Cityblogger sends his condolences to Rattie’s family and his good friends at Seymour Pierce. He will greatly miss his valuable insight and friendly banter.

Help was at hand, however, from Sam Hart, retail analyst at Charles Stanley, who reckons the sector will be in for a visit from Santa Claus after all. “Given the behaviour of the consumer so far this year has been surprisingly resilient, we are not expecting to see a slowdown before Christmas,” he told Cityblogger. “The ONS retail figures for September were the strongest we’ve seen for three years.”

Hart doesn’t expect more discounting to entice shoppers into their emporia either. “I don’t think we’ll see any more discounting than has been the case in previous years. You may get a few retailers that discount before Christmas but most should maintain their full pricing strategy.”

That said, he is pretty lukewarm about the sector going forward. “Looking longer term we are fairly cautious on the sector,” he says. “We are most positive on Halfords – we think it’s pretty defensive and the valuation looks pretty reasonable. Marks & Spencer is also a firm hold as it’s one of the most defensive companies in the sector. Because it owns about 70 per cent of its property operational gearing is fairly low. It’s the high fashion end of the sector that is most vulnerable to a slowdown.”

Cityblogger is relieved that his high fashion days are over. Have a happy Hallowe'en.

Got a hot story for Cityblogger?  Email cityblogger@hotmail.co.uk

Earlier this month Cityblogger was looking forward to tucking into some new issues, and polishing his best cutlery in anticipation.

The enticing thing about new floats is that they are fresh and new – the companies’ management are often wide-eyed and full of hope. Their naivety about the City can sometimes be charming – well, with the great exception perhaps of our friends at Sports Direct who have turned it into an art form. And investors can cast off their frustration at other investments that have disappointed and embrace something new.

Argentinian-themed restaurant chain Gaucho and Wagamama were on the new floats menu. But it seems that credit jitters have put some companies off their stride. While Gaucho’s listing is still going ahead, Wagamama’s private equity owner Lion Capital got indigestion and is putting the noodle chain up for sale instead. Investors are thought to have choked on the proposed stock market valuation of £225m.

By all accounts the new issues market is in the doldrums. The boffins at Ernst & Young said this week that the number of new IPOs (initial public offerings) dropped by 75 per cent in the third quarter. What’s to blame – yes, you’ve guessed it, the good old credit crunch.

On the front line the story, sadly, corroborates E&Y’s findings. “There haven’t been many this year but there are IPOs out there – you’ve just got to have a bloody good story before you approach the investors,” says Cityblogger’s tame PR guru. “And it’s always difficult for the smaller companies [to get air time]. We’re not in the heady days of the internet bubble or 2005 when it was very busy for floats. I’ve seen a lot of companies who’ve said ‘yes, we’ll be floating’ and then heard nothing from them again.”

However, she thinks things could pick up in 2008. “There’s a lot of floats queuing up for next year,” she says. “The first half of 2008 should be busy, but then again they might be put back to the second half. And there are doom and gloom merchants who are mentioning the ‘R’ word [recession]. Look at Merrill Lynch’s results today.”

Jan Luthman, director at Walker Crips Asset Managers, agrees. “It’s been very quiet,” he says “We haven’t seen anything, certainly nothing of appeal. People are finding it difficult to raise capital and sentiment is moving towards the large cap companies. Smaller companies and the FTSE250 have taken a pasting this year and the chances of getting an IPO away are less rosy.”

Cityblogger has put away his cutlery for now. Well, a diet would probably be a good idea all round. 

“ECHOES OF BLACK MONDAY” shrieks The Guardian Online. “FTSE PLUMMETS 20 YEARS ON,” screams The Scotsman. “CITY BRACES ITSELF FOR REPEAT OF BLACK MONDAY,” yells the usually sensible Telegraph.co.uk. Dear oh dear!

Even the ITV lunchtime news, which usually concerns itself with man-eating hospital superbugs, features a special report on the supposed market hysteria. According to our wonderful British press, the ghosts of BLACK MONDAY (not black Monday but BLACK MONDAY) are back in force.

All of a jitter, Cityblogger spluttered consommé over his best pinstripe suit and dashed to his trading screen, expecting to see his portfolio dissolving into a BLACK MONDAY vacuum…

Yes indeed, the FTSE fell a couple of percent, but it’s hardly in the league of Black Monday now, when the FTSE fell 11 per cent in one day. Get a grip my friends. It’s not Black Monday, to paraphrase Bernard Sumner it’s not even Blue Monday, if anything it was a mildly light-grey Monday. A faun Monday. A slightly middle-aged Monday. That doesn’t sound so bad, does it? Perhaps it won’t sell newspapers, however. And the FTSE has recovered today, up 51 points this morning. Even BP’s third quarter results were better than feared after all the fuss that the results would be “dreadful”.

Cityblogger recognises us Brits like to talk ourselves down but it’s getting ridiculous. The danger is we’ll talk ourselves into a recession. “You can always talk yourself into a bear market,” Mark Dampier at Hargreaves Lansdown tells Cityblogger. “People will say, ‘I won’t book that holiday after all’, there’s always the potential. But I think the press have lost it. They’re using language that is emotive to describe things that are ordinary – ordinary market movements. What will happen when there’s a genuine market fall?”

Howard Wheeldon at BGC Partners points out that the only correlation between 1987 and today is “probably only coincidental” – that the US economy is weak now as it was then. The major difference is that equities are not overvalued and absent is the complacency common before a stock market bubble bursts. Quite the opposite!

“Equities are still basically undervalued,” says Dampier. “And the market falls of 2001-2003 are very fresh in people’s minds. Plus what we don’t have is the complacency. And a big fall in the market usually comes from something you can’t predict. I can’t invest for the US bombing Iran, for example.”

In the words of our American chums, it’s high time we all ‘bigged up’ the markets and stopped worrying ourselves into an early grave.

What do you think the markets will do going forward? Have we learned the lessons of Black Monday?  Leave a comment.

Cityblogger confesses to being a closet soul fan, with a passion for the late Godfather of Soul James Brown, Aretha Franklin and the late great Otis Redding. Alas, he is often forced to pretend to prefer the champagne flute-shattering caterwaulings of Glyndebourne to impress his City colleagues.

Earlier this week Cityblogger admitted that he and his sources had some misgivings about Virgin Money’s possible bid for Northern Rock, thinking it was all a bit of a publicity stunt and unlikely to happen. But perhaps the offer could have a dollop of soul to it after all. It seems that other more illustrious figures see the logic.

In fact, Joe Lampel, Professor of Strategy at Cass Business School, reckons The Bearded One, alias Richard Branson, has not entirely taken leave of his senses. “Virgin’s declared intention of acquiring Northern Rock has surprised some observers, but close examination of the move suggests a clear strategic logic,” he muses.

In fact, he thinks a high street base would help Virgin Money attract punters who have so far avoided online banking like the plague. “Despite initial optimism during the dot-com bubble, consumers have displayed a reluctance to trust their money to pure online financial services providers,” the good professor explains.  “In banking and financial services, consumer confidence is closely correlated with high street walk-in establishments.  But setting up a banking and financial services network with adequate national coverage is difficult and expensive.  By acquiring Northern Rock, Virgin is gaining in one fell swoop a bricks and mortar counterpart to its online operations.”

But Lampel admits it won’t all be plane sailing. “The move is not risk free.  Virgin will be taking on an organisation with a severely damaged reputation," he says.  "It will have to restructure the management, and deal with disaffected shareholders.  Virgin's own solid reputation, however, and the trust it inspires, particularly among young people should go some distance towards remedying this damage."

If Virgin pulls it off the acquisition would make it the first pure online financial services provider to enter traditional banking.

Cityblogger has been raking through his record collection trying to find a suitable soundtrack for the acquisition. The excellent Think by Ms Franklin comes to mind and two by Mr Redding - Try A Little Tenderness and Mr Pitiful. Mmm…Although Northern Soul purists might prefer Ain’t No Soul Left In These Old Shoes by Kenny Bernard or Amen by The Impressions.

Can anyone offer any theme tune suggestions for Scottish & Newcastle, currently fending off unwelcome attention from Carlsberg and Heineken? Chin chin!

Since Cityblogger was a diminutive chap in short trousers he has always held firm to his mother’s sage words - “never trust a man with a beard”. And generally this advice has proved just as sound throughout most of Cityblogger‘s life in the City, as when he was a tender three year old starting A-levels at boarding school.

So he has always remained slightly suspicious of Richard Branson (Mr Branston as Cityblogger’s dear old pickle-loving grandmother used to call him) despite the man’s obvious Herculean achievements. (Incidentally, if one owns a international airline why does one choose to travel by air balloon? Highly suspicious.)

Yet it seems that The Bearded One is now offering himself and his company Virgin Money, as part of a consortium including AIG, as a white knight for Northern Rock.  Indeed, Between a Rock and a Hard Place confirmed this morning press reports it is being circled by suitors. Private equity outfits JC Flowers and Cerberus are also believed to be interested in mopping up the ailing mortgage provider.

Speaking on BBC Radio this morning Jane Anne Gadhia, chief executive of Virgin Money, a former managing director of RBS, claimed there “are real synergies" between it and NR and that NR “has got a lot of things going for it” provided she can solve its problems. Ms Gadhia also pledged to keep as many jobs as possible, though of course not senior management positions. Although she admitted the Northern Rock brand would disappear under Virgin as “everyone agrees the brand is dead”. Quite.

But investors in Northern Rock might not be as keen as Ms Gadhia on Branson’s plans - the shares plunged 20 per cent this morning, although to be fair  they have been anything like rock solid lately.

“Northern Rock is just a casino right now,” David Jones, chief market analyst at CMC Markets, told Cityblogger. “Even on a quiet day it’s moving in a 20 per cent range. Maybe today’s fall is sanity coming back. People are waking up to the fact that if nothing happens [on the takeover front] the company could be in trouble.”

Mr Jones and other City commentators are dubious that Virgin Money could pull off the deal. “I think it could be a bit of a publicity stunt by Branson,” he says. “If a takeover does go through Northern Rock will go to a mortgage bank, not Virgin Money.”

And certainly, for the superstitious among us, the runes might not be favourable - especially given today is the 20th anniversary of Black Monday! A sobering thought.

Cityblogger was all set to tuck into a nice quiet Friday luncheon, accompanied by an equally charming little Merlot, when indigestion struck. Apparently our charming chancellor Alistair Darling will be unveiling the Pre-Budget Report (PBR) on Tuesday next week at 3.45pm precisely. Whoopee. And what a cheery performance it will no doubt prove to be after all Mr Darling’s recent grumblings on the crumbling state of the economy. He has been forced to redo his sums because of the global credit crisis and is downgrading his forecasts for UK growth next year. Suddenly Cityblogger felt sure he could taste something resembling a fly wing in his tomato soup…mmm..

Of course, not to be unfair to our Darling, most of the excitement today about the PBR is less about him and more about whether this means Mr Brown will be calling a November election. Some pundits think Gordy could still have time to make the announcement on Tuesday afternoon after Mr Darling’s turn and might in fact be spending this weekend mulling it over. On the other hand Mr Cameron and his friends put on a surprisingly strong performance at their conference this week and are catching up in the polls. One of my City contacts was so impressed she is, out of respect for Mr Cameron, considering adopting a hoodie.  

However, David Buik at spread betting firm Cantor Index isn’t convinced. “I think an election won’t be called until Spring next year at the earliest and it could even be in two year’s time,” he argues.

And Mr Buik doesn’t think like there will be much in the way of sweeteners for investors or Johnny Voter in the PBR either. “It’s tough on Alistair Darling, but because of the credit crisis he’s going to have to forecast UK growth down to 2.2 or even 2.1 per cent for next year,” he says. “And because of the huge government commitment to education and the Health Service he’ll have to do more borrowing. But his scope for opportunities to sweeten the electorate are extremely limited. He could tinker with corporation tax or inheritance tax (IHT), but I think he’ll be struggling.”

Not to mention that if he does propose IHT changes Darling will look like he’s stumbled across George Osborne’s conference notes.

Meanwhile our tax-canny friends at Grant Thornton also think “room for manoeuvre on any major initiatives will be limited”, although there could be more incentives given by the government for companies going green.

Cityblogger will once again be hoping against hope that Darling ditches stamp duty on share trades - it’s a perennial wish but nothing ever seems to come of it, a bit like Cityblogger’s dream of West Ham winning the league. But there you have it. Meanwhile he plans to seek solace in another glass of Merlot. Have a good weekend.