So What Is £243 Million?

A £243 Million deal from Manchester City to sign Milan star Kaka is indeed stunning. (see sports news here )



However, it now appears that this £243 Million deal is peanuts given the events that happened yesterday

Yesterday, Barclays lost a whopping £27 Billion off its share value!

Published on TimesOnline.

• Barclays lost a quarter of its stock market value last night, just hours after the ban on the short-selling of banking shares was lifted.
  
  Shares of Britain’s third-largest bank plunged 32.4p to a ten-year low of 98p, wiping £2.71 billion from its value, amid speculation that Barclays will have to open its books to City watchdogs if it is to be allowed to benefit from the Government’s latest rescue package for the banking sector.
  
  This is widely expected to be presented early next week and the Government will promise capital injections if necessary. The Treasury will also hold out the prospect of creating a “bad bank”, to take the toxic assets off the balance sheets of the big lenders. These would be ring-fenced and partly guaranteed by the Government. The move would come alongside the creation of a “good bank”, possibly Northern Rock, to stimulate lending.
  
  Because Barclays previously snubbed financial support from the Treasury when Britain’s banks were recapitalised in the autumn, sources close to the negotiations believe that it will be excluded from further rescue packages – unless it opens its books to the Financial Services Authority.
  
  There was also speculation last night that Barclays faces further write-downs in the value of collaterised debt obligations (CDOs) – specialist financial instruments to which the bank’s investment banking arm, BarCap, is heavily exposed.
  
  Moody’s, the credit rating agency, downgraded the rating on a particular form of CDOs widely held by BarCap on Thursday and there have been rumours – denied by both parties – that last week’s resignation of Sir Nigel Rudd, the Barclays deputy chairman, was due partly to differences with the chief executive, John Varley, over how such instruments should be valued in the bank’s books.
  
  A downgrade in the creditworthi-ness of some credit card companies – to which Barclays, as the leading card issuer, is exposed – was also said to have been behind the decline. Analysts at Royal Bank of Scotland’s broking arm suggested that Barclays needed an extra £12 billion of capital owing to a risk of rising impairment losses in its loan book later this year.
  
  Barclays raised £7 billion in October and November, mainly in Qatar and Abu Dhabi, but came under attack when it emerged that it was paying more for this capital than RBS, Lloyds TSB and HBOS were for the £37 billion they received from Treasury at the same time. It is feared that, should Barclays have to raise new capital, it will be on far more onerous terms.
  
  Barclays insisted last night that, when publishing its annual results next month, it would reveal a solid capital position. It added: “The Board of Barclays expects to report profit before tax well ahead of the £5.3 billion consensus estimate of analysts.”
  
  City sources suggested that Barclays would make an ideal target for short-selling – selling shares of a company in the hope of profiting from a later fall in the price – after the lifting of the FSA ban imposed by the collapse of Lehman Brothers. One said: “Barclays is the obvious candidate. HSBC is just too big to short while Lloyds TSB, HBOS and Royal Bank of Scotland are now part-owned by the Government.”
  
  The Treasury is preparing a package to stimulate bank lending that is likely to extend the assets that will qualify for government guarantees.Shares of other leading banks fell sharply, with RBS dropping 5.20p to 34.70p and Lloyds TSB 5.1p to 98.4p.

So what has this got to do with City's stunning £243 Million bid for Kaka?

• MANCHESTER City owner Sheikh Mansour lost £440MILLION yesterday — nearly DOUBLE what he is set to spend on Brazilian soccer ace Kaka.
  
  The Arab tycoon, who hopes to sign AC Milan’s Kaka in a £243million deal, was stunned as Barclays shares crashed by 25 per cent — wiping £27BILLION off the bank’s market value.
  
  The Sheikh, 38, had plunged £3.5billion of his estimated £33billion fortune into Barclays last October, giving him a 16.3 per cent stake.
  
  But a banking insider said last night: “It’s fair to say Sheikh Mansour had a day from hell.
  
  “Talk about being in the Kaka. He must have watched the news with his head in his hands.
  
  “You wake up preparing to make history with the biggest ever offer to a footballer. Hours later, you’re down £440million.”
  
  A £440million loss is equivalent to the gross domestic product of African nation Gambia.
  
  Abu Dhabi royal Mansour bought Man City, managed by Mark Hughes, last September — raising hopes of an influx of star players.
  
  The Sun revealed yesterday that he hopes to take Kaka, 26, to the club by splashing £108million on a transfer, another £108million on the attacker’s wages and £27million in fees.
  
  He bought into Barclays when it raised £7billion from investors rather than lose independence in a British government bail-out. His stake is now worth £1.3billion.
  
  Barclays insisted last night it was not in any financial difficulty.

And of course Sir Alex Ferguson and the rest of the football community is simply shocked!.

• Sir Alex Ferguson admits he is "shocked and surprised" by Manchester City's stunning £108million bid for Kaka.
  
  Ferguson has never been afraid to spend big money on key players.
  
  The arrivals of Juan Sebastian Veron and Rio Ferdinand to Old Trafford broke previous British transfer records and only this summer he splashed out £30.75million on Dimitar Berbatov.
  
  But even the Manchester United boss has been taken aback by City's offer.
  
  It is not the team doing the buying that has caught him off guard, or even the fact AC Milan appear willing to sell.
  
  For Ferguson, it is the sheer enormity of the sum, well over double the most any club has paid for a player in the history of the game - Zinedine Zidane's move from Juventus to Real Madrid for £46million in 2001 - that has left him gob-smacked.
  
  "I find it hard to get my head round to be honest," he said. "It is amazing.
  
  "Football is football. From time to time you get shocks and surprises. This is surprising everyone."
  
  Ferguson is not convinced the staggering deal would have a knock-on effect throughout the game if it goes through.
  
  United midfielder Michael Carrick, who left Tottenham for a not inconsiderable £18.6million in 2006, has no view on whether lavishing such sums are morally right or wrong.
  
  However, it is clearly a move that has got the United dressing room buzzing, with the England midfielder left as stunned as his manager.
  
  "That amount of money being bandied about is a bit of a shock really," he conceded.
  
  "When Manchester City were taken over we were told they had a lot of money to spend and big names were being talked about.
  
  "But for it to be so much over the top is pretty mad really."
  
  While AC Milan seem happy to do business, City owner Sheikh Mansour knows there is a lot of negotiating to do with Kaka and his advisers before the Brazilian commits his future to Eastlands.
  
  A key meeting between the Blues and Kaka's father has been pencilled in for next week, after which the picture will become clearer.
  
  Carrick is not certain Kaka will eventually sign. But the former West Ham star would be delighted to see the former world footballer of the year in the Premier League, even if it was in the shirt of United's local rivals.
  
  "We want the best players in this league and he is definitely one of them," said Carrick.
  
  "It will be interesting to see what happens."
  
  Wigan manager Steve Bruce has pointed to the City offer for Kaka as another warning that football is in danger of losing touch with the man in the street.
  
  With City said to be prepared to offer AC Milan striker Kaka £500,000 a week and ticket prices continuing to rise while the economy heads in the other direction, Bruce fears for the future of the national game.
  
  Bruce, who takes his side to Eastlands on Saturday, is also worried the move could drive up player costs to unsustainable levels.
  
  He said: "The beauty of our game is that it means more to the average man in the street than anybody. I know the average man in the street now finds it very difficult to find £40-45 to go and watch a game.
  
  "When a big player is out there it does inflate your prices. You do worry about it and wonder if things could go belly up."
  
  Bruce added: "We are all staggered by the news. It is quite unbelievable when you are talking about a credit crunch throughout the world. But it just shows you what this Premier League is all about.
  
  "I think this year people thought the situation with finances would be a little bit more sensible.
  
  "But then along come the owners of Manchester City who want to have the best players in world at their club."
  
  However, Blackburn manager Sam Allardyce, who last week rejected a £16million bid from City for striker Roque Santa Cruz, believes the massive investment City are prepared to make could pay off if they break into the Premier League's top four.
  
  "There is only Manchester City that can spend it (£100million on one player)," he said.
  
  "Manchester United can't, Liverpool can't, Chelsea can't now by the looks of it.
  
  "The last few years it was (Chelsea's billionaire owner) Roman Abramovich and now we have got another one.
  
  "If there is going to be more to follow then only time will tell if spending that sort of money is the right thing to do.
  
  "If Manchester City end up challenging the big four then from their point of view it will be."
  
  Chelsea manager Luiz Felipe Scolari, who worked with Kaka during his time as coach of Brazil, offered no opinion on the size of the fee but insisted City would need more than money to convince him to sign.
  
  "Manchester City have money. Kaka is one of the best in the world on the pitch and off it. He is a fantastic player and they have money to spend. How much is it normal to pay? I don't know. He is a fantastic player," Scolari said.
  
  "I would not be surprised if he went to Manchester City. This is football. He is a professional player but maybe they offer to him not only money but an idea for the future. I know Kaka very well, money is not his problem."
  
  Fulham manager Roy Hodgson, former manager of Milan's city rivals Inter, said: "You're in the realms of lottery money and that's the way it is. If a club has £100million to spend and think that buying one player is the best way to improve their team then that's their business.
  
  "Richer clubs have always determined the market prices. At the moment £30million is the figure for a very good player to move from one Premiership club to another. In a few years that figure might be £100million."
  
  Portsmouth manager Tony Adams feels the potential deal will not help his club.
  
  He said: "It doesn't help us, that's for sure. It is not reality for us or most of the clubs up and down the country. It is a different world, a different planet. But that also brings another amount of pressure and stress having to deal with that.
  
  "I dropped my son off at school this morning and he loves playing those games - what if I had all this money, what would I do? - and the supporters out there do as well. It is certainly not my reality. The majority of the clubs are reducing their wages and reducing their expenditures."
  
  Spurs manager Harry Redknapp feels Manchester City fans will be delighted if the Brazil international moves to Eastlands.
  
  He said: "If you're a Man City supporter, I'm sure you're delighted to have someone like Kaka come to the club. It's an awful lot of money but if the owner wants to pay it, it's up to him. I'm sure Mark Hughes will be delighted to have a player like that at his football club."
  
  West Ham manager Gianfranco Zola does not think the move will go through.
  
  "It is a lot of money. It means they can afford it. It is difficult to judge them. They are willing to pay, so what can I say.
  
  "The whole transfer window is nonsense. It is not about dealing with players you have got and getting the best out of them. If I have lots of money then I can solve my problems by buying lots of players. I would cancel the window and push managers to work with what they have got.
  
  "It is a difficult thing for him (Kaka). I would not want to be in his place. He loves Milan and I think he will stay there."