Northern Rock

[deadite66]

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.

[etccarmageddon]

bradford and bingley next?

[BBKing]

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.

The simpler way of saying they can't assign a value to the more obscure financial instruments is that no one can put a price on them. Without a price they can't trade. They become invisible. The market freezes.

The Germans are suggesting that all of the central banks get together and figure out a way to create a market by offering to start buying certain instruments. When they sell, the price will be set, transparency will be re-established over time and the market will relax.

The problem is that it will mean that the price will likely be somewhere between 20 and 60 cents on the dollar for most instruments, if that much, and some very very wealthy people will have to take huge losses. These are the same people who have the power (under Bush and Merkel and Sarkozy) to prevent the central banks from taking that action, which means every day we get closer to the brink and the Arabs get richer, with their commodity markets absorbing all of the liquid capital that refuses to go into frozen credit markets. The sovereign wealth funds are just an expression of this problem, not the problem itself.

In short, the super rich, "Homo Davos," are playing musical chairs and seem perfectly willing to take the whole system down rather than be the first to take their losses. Shorter yet--capitalism can't function without losers, but the losers are so big that they can postpone their fate indefinitily. Or until someone bails them out. Guess who!

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.

[Ramrod]

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

When Northern Rock started to go pear-shaped last August, it was soon represented as a crisis in the banking system. It wasn't. It was one bank with abysmal management and a dreadful business plan. Ignorance on the part of Alistair Darling, the Chancellor of the Exchequer, about how finance actually works precipitated the panic-stricken train of events that resulted in last Sunday's nationalisation. But that so many of its mortgagors and depositors were from Labour's heartland in the North-East counted for much more.

[BBKing]

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.

[Xaccers]

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

[Ramrod]

[papa smurf]

news paper fight .. i bagsy the anglin times

[Ramrod]

Originally Posted by papa smurf

news paper fight .. i bagsy the anglin times

Well I was just fishing....