Northern Rock
 

Hi all

I hear the rescue package to help Northern Rock equates to 'borrow' £2000 from each family in the UK.

I am confused because I checked my post today and could not find an application from them to me requesting this together with an application fee of £100 !

Also I think I will insist on a higher rate of interest as they 'cocked up' before and I want to ensure I get my money back.

Has anyone else received theirs, as maybe mine has got lost in the post !!!

Mike

Re: Northern Rock
 

It's Gordon lending other people's money - like all politicians he's very good at using other people's money!

Re: Northern Rock
 

If they used their own money, they would probably be a bit short come the nhs budget negotiations

Re: Northern Rock
 

This is really ironic, taxpayers money is being used to bolster the economy while inflation sky rockets so it can catch up with itself due to past creative accounting and is an attempt to falsely hold down interest rates for the very people who would be both subjected to and annoyed at increased interest rates. Sorry but it has to be said. Con of the millenium springs to mind. Still the warning signs of this has been around for a while, there comes a point where you just run out of bananas to throw into the economy.

What you will be pleased to know if your a present homeowner looking at past rises is anyone who owns a 3 bed semi today their property may well be worth close to a cool million in approximately 50 years time, perhaps just before you die, however a loaf of bread will also be around a nice brown spot, 4 pints of milk will be approximately a brown and a bluey. You will need a fifty to purchase a pint of beer, a bag of crisps or nuts and get some smalll change, change that would not fit in the pool table or one armed bandit, if beer is still legally available an so on. At least by then the penny, tupence, 5p and any demonitation below a quid will likely be long gone. If we are unlucky we would retain the 50p at around this point. The bad news is if your a millionaire in 2050+ then you will not be considered rich or even well off, perhaps comfortable if your lucky would be the term. You would need to be a multi-trillionaire at least to be in the top 100. The gap between those at that level and those on 50% or so of the national average salary will be at least tenfold that it is today.

The only people who are going to benefit from bolstering the economy with tax payers money is the banks themselves, and they will charge you for the privelage, reposess your house when desired etc, gotta love the free and democratic non-corupt society we live in today. Corruption may not be a qualification required to become a politician but it certainly seems like its one thats required to remain one.

Re: Northern Rock
 

Whats the alternative? Allow the bank to collapse? Without the bonded loan no private group will look at continuing with a purchase.

It would be interesting to know how many of you hold PHD's in economics.

Do you really think this was Browns or Darlings idea? More likely the heads of the Bank of England made it very clear the economy would not cope with the collapse of one of our main banking institutions.

Re: Northern Rock
 

Brown's in between a rock and a hard place on this one and rumour has it that Darling isn't best pleased over his leader's dithering. Nationalise the bank formally and it smacks of Old Labour, sell it (if they can) and us taxpayers will come a very poor second best to those who take over. The bonds idea still leaves the taxpayer with considerable risk and potential profits for other institutions. Whichever way you look at it Brown's in big trouble over this one and we're all going to wind up paying for yet more ineptitude.

Re: Northern Rock
 

The trouble is that if all those people hadn't paniced and ran to the bank to remove there money we wouldn't be in this mess that we are in now.

Re: Northern Rock
 

Errm surely its what caused the panic (bad economic management, bananaism etc) that is at fault and not the people who actually had savings in the bank. People who actually had cash in accounts are probably the last to support a banana economy which is one based on cash that does not actually exist. A banana economy is also usually endowed with low interedst rates for some time which is something else cash holders do not like. You can easily profile cash holders as far as investments are, they are poeple who do not like to take high risk investments, at least not with what they have put to one side for the rainy days, in general prefer stable interest rates and a balanced eeconomy, not one founded on lies and creative accounting.

Re: Northern Rock
 

Many people have a share of the blame here I'm afraid. When things are apparently going well few people want to ask difficult questions and see it all come to an end do they. Homeowners taking on ever larger mortgages on the back of notional property values to fund lifestyles they can't really afford and bank executives blinded in one eye by the lure of huge profits and bonuses. The Govt. and regulators are culpable too - chocolate teapots overseeing murky deals and chancellors in denial about the problems because just about the only thing keeping UK PLC afloat is personal debt.

Remember all the Lloyds Names who despite knowing full well that theirs was unlimited liability continued to accept what had been guaranteed profits for zero effort and then started whining like stuck pigs when the massive claims started coming in and the reality of their liability dawned on them.

Now is the time to pass the buck of course but in reality the blame is very widely spread. Self delusion on a grand scale is the key to this problem and even those of us who've been more sensible with our finances are going to pay for it.

Re: Northern Rock
 

Could not have said it better myself, their money was ok while the Northern Rock was earning millions then as soon as the sub prime news came out they hammered the bank leaving it in a bad position. Where has all this money gone to that was taken out of the Northern Rock??

Re: Northern Rock
 

It's in other banks and under mattresses.

Re: Northern Rock
 

http://news.bbc.co.uk/1/hi/business/7209500.stm

What, yet more ineptitude at the top?? Surely not............:rolleyes:

IMRO, SIB, SFA, PIA ............?? Of course the answer is to appoint someone to oversee the watchdog (FSA) which was set up to prevent this sort of thing - more cushy jobs for the boys!

Re: Northern Rock
 

I blame the following.

tv channels promoting home ownership probably to protect vested interested.
poloticians promoting home ownership for same reason as above as well as owning a home making you feel wealthier than what you are.
a economy that has been fueled by rising house prices and credit in general meaning interest rates need to be kept low to keep it going but the cost is prudent people who save instead of borrow lose out and price of goods increase (inflation).

There is only one fix and that is a correction which will involve a housing price crash to correct the value of money and bring down inflation as well as a probable recession. Credit needs to cut so people start learning to spend within their means only again. The problem with the solution for politicians is it is not going to win them an election.

Re: Northern Rock
 

So I take it none of you sad lot bought any Northern Rock shares last Friday for a quick sale on Monday. 35K between a few of us - easy money - easy money indeed.

Anyway keep hypothesising errr I mean dreaming about a housing crash. One thing is for sure current prices have been stagnant which equates to 'crash' but in situations like this there will always be buyers lined up. Its an interesting time... I'm trying to get hold as much capital as I possibly can over the next year to capitalise on the situation.

Very good point about the credit crunch this is indeed an issue as some people have stupidly taken their house value as part of their assets errrr wth ! The house does not belong to you. I myself - technically don't own any property but if I was a dreamer I would say I'm a millionaire on paper --- err yeh right.

The equation I have been using for a long time is (this keeps be very safe)

House value = Price you bought it for + Interest you have paid since the purchase.

This is the bottomline figure otherwise the banks would never give us a mortgage. This is the break even line and something you should really bare in mind at all times.

Market value will always be the market value regardless - you pay what the market dictates it has no representation to the true value of what you are buying, but to cover yourself you must make sure that your debts are not countered with fictious housing market prices.

Re: Northern Rock
 

It's going to be nationalized:

http://news.bbc.co.uk/1/hi/business/7249575.stm

Re: Northern Rock
 

Surprise, surprise.............. :rolleyes:

Re: Northern Rock
 

So it's going to be flush with money then from now on? Why the heck should the tax paying public of the UK have to bail out a bank that was left in the mire by it's customers drawing out hundreds of millions a day leaving the bank in a perilous state, the customers earnt the interest the bailed out, are they going to be paying that interest back to the Government when they take over the running of the bank?

Re: Northern Rock
 

Bailing out everyone who took risks and the message now to other banks will be dont worry if you mess up we will bail you out. Meanwhile cuts are been made elsewhere to fund this bailout.

Re: Northern Rock
 

Darling lends NR 50.000.000.000 and demands back 200.000.000 in interest that's 0.4% interest, assuming NR pays it back in year (fat chance).

Can I borrow few million on that rate?

Re: Northern Rock
 

Hasn't anyone spotted those fine strings hanging down behind Darling every time he speaks? It may be just co-incidence but rumour has is that, since becoming PM, Gordon Brown has become an expert puppeteer.........

Re: Northern Rock
 

is gordon brown the pm and the chancellor ,cos his role is confusing the hell out of me, this nationalisation has pear shaped written allover it

Re: Northern Rock
 

Senior members of the Northern Rock bank are over-paid a good salary to see that the bank runs smoothly. This sadly happens too often in many failing institutions and these "fat cats" always walk away with a golden handshake that is far better than their customers get, thereby rewarding failure.

Maybe in future we will have a situation where customers will take out savings protection to cover them in the event that their bank displays poor financial management & is unable to repay their money. In this way the government would not have to bail out failing banks and could allow the bank to fold without customers losing money.

Perhaps too we need some mechanism to deal with the "fat cats" so that they do not benefit financially. A very large fine plus a ban on working in any financial institution( or business) and in the event of proven malpractice perhaps a stiff jail sentence would deter others from following the same route. Or maybe a lawyer on behalf of the customers could sue "fat cats" personally for negligence and recoup money in that way too.

Re: Northern Rock
 

If there is proven malpractice then the FSA can take action, such as banning them from working in any financial situation

Re: Northern Rock
 

Golden Hello, Golden Handcuffs (you can demand this every year), Golden Good bye, lovely bonuses :D

Nothern Rock has been a scam for long time, they gambled the lot and lost. The fat cats salaries cannot cover 50bn loss, that's 50 000 000 000 quid

Re: Northern Rock
 

but that presupposes that the FSA aren't inept. Furthermore I understand that there is some legal doubt about how HMG has acted (not for the first time eh!!) in all of this and that disgruntled shareholders will be pursuing the matter through the courts.

I wonder what Gordy would have instructed his puppet Darling to do had this debacle unfolded after he'd just won a general election or had the insititution involved been for example one which was southern based and identified more with a middle/upper class customer base.

Re: Northern Rock
 

True but it can act as a deterrant to others and it can make sure that those who took the decisions do not benefit themselves while their customers lose out.

Maybe there is a case for the Bank Of England issuing periodic warnings to financial institutions about the extent of a bank's bad risk loans granted so that losses are kept in check. The Bank Of England should be empowered to step in when the level of bad risk loans approaches those limits.

Re: Northern Rock
 

I think it was already in a perilous state before the 'run' on withdrawals.

Re: Northern Rock
 

Well, not nationalising it had 'rip off the taxpayer' written all over it, and the Conservatives seem to be advocating that. Lets be clear, this is the NR suits' fault, but they'll put up a defence like 'we were complying with the relevant legislation' which ought to put the focus back on the relevant legislation. Since a lot of this was put in by G. Brown at the behest of his banking chums and since the Tories are bang onside with doing stuff at the behest of bankers, this won't get much scrutiny.

I'm wondering what we can nationalise next, now we've lost our collective virginity. Let's act like real sluts - BAA, perhaps? BT look ripe...

Re: Northern Rock
 

No the Government has pear shaped written all over it. Yet another Government fiasco :rolleyes:

Re: Northern Rock
 

Since its privatization, NR was a ruthless organization, putting up accounts with high interest rates, attracting deposits, then reduce the rates of those accounts, create "new" accounts with high interest, and do the same again with a cylce of a few months. This scam went on and on, where was the FSA?
They did similar scams with the mortgages....

The expansion of NR was frightening, where was the FSA to regulate? And then NR came up with the idea to borrow from the markets, and we know what happened...

Whatever NR did is/was legal...

Re: Northern Rock
 

we could nationalise rover [oops to late]

Re: Northern Rock
 

I think they should nationalise Virgin Media,

Re: Northern Rock
 

As I've mentioned elsewhere, finanical regulation in the City has been a joke for many years. Every few years they give the incompetent fools a new name but nothing much else changes.........

Re: Northern Rock
 

So.....


Does this mean that the Government now own my house?

Re: Northern Rock
 

lol yes your house is now nationalized! we all own it!
(when can i come down and inspect please?) :D

Re: Northern Rock
 

Yes Raistlin and HMG aka 'The Taxpayer' now also own any dodgy debts which NR has been involved in too.

Re: Northern Rock
 

Anyone watching "Dispatches: How the Banks bet your money"?

Really reassures me about the competence of the Treasury, Bank of England, & the FSA... :erm:...

Re: Northern Rock
 

HMG likes to take the kudos and profits when times are good in the City and appoint the likes of the FSA to carry the can when the wheels come off as they inevitably do from time to time.

Re: Northern Rock
 

romours about there will be an estimated 250bill of taxpayers money pumped into the banking sector anonymously during this year and hsbc is in trouble.

Re: Northern Rock
 

From what I hear Barclays is in trouble, it borrowed money on twice on on an emergency basis. HSBC seems to be doing relatively well, as a predominantly (22% of its profits) Chinese Bank has invested heavily in China and Hong Kong and that's +150% the last two years, ok it was +210% in November 2007 but....

Re: Northern Rock
 

I wouldnt excatly say they are in troble. 1% less profit than last year, but still 7.08bn isnt too bad.
http://news.bbc.co.uk/1/hi/business/7252060.stm

Re: Northern Rock
 

The Barclays share price is down 40% for a reason, and that despite the fact that Barclays bought back massive amounts of their own shares and they increased the dividend to make their shares more attractive. They run out of money twice, in both cases they claimed to be a technical error. Barclays Capital is doing brilliantly, but liquidity overall might me a problem..

Re: Northern Rock
 

Yup. Given the Government's mania for illegalising things, it's odd that they overlooked 'running a bank into the ground and screwing up the public finances' when drawing up some of those 3500 new offences.

Re: Northern Rock
 

Seems that the banks and the government have forgotten that crises are avoided and they run well when people have confidence in them. Unfortunately, the actions of the banks and the government do not inspire public confidence.The way things are it won't be long before we have a run on another bank.

Re: Northern Rock
 

If it does happen again, do they immediately nationalise it to stop the run, rather than mucking about for six months pouring money down it? What about the third or fourth time? Perhaps we can all be given our own bank after a while?

Re: Northern Rock
 

not that i want to see people loose their jobs but i do think its funny that by nationalising northern rock it will be the labour party that will be responsible for all the job losses that are likely to happen.

Re: Northern Rock
 

bradford and bingley next?

Re: Northern Rock
 

Interesting piece about a bit of the background to the whole credit crunch - very rich people being unsure of the value of certain financial instruments and thus being unwilling or unable to trade.

I wonder if Karl Marx is laughing? Lenin did say 'Capitalism will sell us the rope with which we hang it', but I'm not sure even he expected it to be suicide.

Re: Northern Rock
 

had the bank been called Southern Rock, it would have been allowed to go to the wall

Re: Northern Rock
 

Cobblers - the bank was badly run* in the sense that it had no resilience against credit shocks on the world markets, but those credit shocks are real and serious enough (see above). The Labour/North East thing is a pathetic right wing joke/smear from a pathetic right-wing joke of a man, considering 40% of the NR workforce are probably going on the dole soon.

It's also rather insulting to the workforce who had no say in the bank's management, no say in the sell-off plans and no say in the nationalisation. Now a lot of them are going to have no jobs. If this is an example of Labour treating its loyal supporters well what on earth do they do to their enemies? Still, it's Simon Heffer in the Telegraph, and those dirty northerners probably deserve it for daring to live outside the shire counties and vote Labour in the first place. Revolting man.

* Both Labour and (even more so) the Tories think allowing banks to be badly run is Just Fine. None of that nasty old regulation here! The Telegraph shares some of the blame, since it's firmly of this view, too, so no reason to try and find someone else to blame there, then.

Re: Northern Rock
 

Excuse me? The telegraph shares some of the blame simply for having the same view?
Wow. How do you work that one out?

Re: Northern Rock
 

;):D

Re: Northern Rock
 

news paper fight .. i bagsy the anglin times:rolleyes:

Re: Northern Rock
 

Well I was just fishing....:D