Northern Rock

[Mike]

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

[bonzoe]

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

[lostandconfused]

Originally Posted by bonzoe

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

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

[NitroNutter]

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.

[WHISTLED]

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.

[Osem]

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.

[Hom3r]

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.

[NitroNutter]

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.

[Osem]

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.

Originally Posted by Hom3r

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.

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??

[Osem]

Originally Posted by Nidge

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??

It's in other banks and under mattresses.

[Osem]

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

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

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!

[Chrysalis]

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.

[The Jackal]

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.

[downquark1]

It's going to be nationalized:

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