Seventies Socialism Returns
In 1975 Britain was told by Tony Benn that the nationalisation of British Motor Holdings and the Leyland Motor Corporation would be "partial". Alistair Darling today says the nationalisation of Northern Rock will be "temporary".It is worth taking a moment to reflect on how we got here. When Northern Rock's troubles became critical there was no systemic risk to the financial system. There was a risk to 6,000 regional jobs which was a political risk in a period of election fever in Labour's North East heartlands.
If Northern Rock had been put into administration the shareholders and probably the employees would have lost out. No mortgage holders would have been worse off, depositors would, since we are told by the government the bank's assets are good, have got their money back.
The only cost to the taxpayer would have been the unemployment benefit payments to redundant Northern Rock staff - most may have kept their jobs with new owners of the business (Lloyds TSB was said to be interested). Instead of the normal commercial and legal run off process taking its course, the government intervened. The result is the biggest nationalisation of the century.
Many would argue convincingly that depositors would have not been able to extract their money in the event of a liquidation, or at least not in good time. The government could have in that case guaranteed the deposits and collected the money back as a normal creditor. For a moment in the beginning that did seem to be a real possibility. That would have been a much smaller risk to the taxpayer.
Now we have a situation where £100 billion of taxpayer's money is being bet on the UK property market as it teeters on the edge. Gordon Brown repeats the mantra that the public's money is secured against the bank's assets. The bank's assets are what exactly? The equity in mortgagee's homes belongs not to the bank, it belongs to the homeowners. The only properties Northern Rock has an interest in are it's own branches and offices. The only homes it owns are those where it forecloses, usually and increasingly at a loss due to negative equity (remember all those 125% offers). The other major asset the bank owns is it's profit stream from the spread it makes on lending versus borrowing. That has disappeared because of the credit crunch. Right now there is no profit stream to speak of, that is why the bank is bust.What is most disturbing about the new legislation being proposed is that it will empower the state to nationalise more banks. Which seems to contradict Darling's claim that this is a "temporary and exceptional" measure. It has always been the objective of British socialists to nationalise the banks. Thirty years ago they wiped out the British owned car industry, now they are coming for the banks. New Labour is dead. Socialism is back...
UPDATE : Anatole Kaletsky agrees - wind-up the bank.
108 comments:
Sounds like a spot of envy here, Guido. Think - if, like Gordon Brown, you had once pursued a thrusting career at Scottish TV for 3 whole years then you too would probably now be able to bestride the square mile like a colostomy bag.
If the 70's are back, I'm going on strike.
Power to the people.
I wonder how Channel 4 news will report this tonight -- Oh! I forgot -- Channel 4 is also state-owned.
A broadcaster, a bank -- I wonder what's next? Maybe the government should acquire Yahoo?
The problem in all this is not the fact that Labour is taking themselves down but they're taking the country with them as well.
This lot couldn't run the "proverbial" in a brewery successfully
I think Darling will have a lot of explaining to do at the Prime Minister's press conference at noon.
Hang about!
If it's Prime Minister's press conference then why does Brown take Darling along? Blair never used to take along his chancellor.
Is it to respond to all the awkward questions that Brown doesn't want to deal with and to take all the shit away from Brown?
That's not very courageous of Brown is it?
We're all doomed...aye
So said Private Frazer in Dad's Army. 'Frazer was tight with money, had wild staring eyes and was known for issuing regular pronouncements of doom'
Does that description remind you of anybody?
This is a brilliant summary of the Government mishandling of the affair. If only there were resources to post this to every home in Britain.
New logo for Newcastle players needed:
Newcastle Brown
should do nicely. No more Northern Cock. Not tonight Darling.
Brown screwed-up this decision when he bottled the election.
The left like to accuse business of "short-termism", but when an election is looming there is nobody as short-termist as those worthless cunts. Remember the money they "invested" in Rover before the 2005 election? It did no good, but hey, let's party, it's other people's money.
Now Adam Sandler is getting £90k a MONTH. Would any NuLab trolls care to comment? Aren't they supposed to be against "fat cats"? Where's Polly Tithead when we need her?
Meanwhile, in today's papers, we read of a soldier whose face was burnt to a shrivel as he served his country - no doubt under-supported and ill-equipped. He gets £100k NOT per month, year, or decade, but as a one-off.
New Labour have no sense, no shame, and no ideas. They are as bankrupt intellectually as the nations is financially. If you voted Labour, you are as thick as pig shit.
The scariest thing of all though is that Ron Sandler has got eyebrows akin to Darling!
Compare & contrast
Thanks to Brown's reckless profligacy and mismanagement the meltdown in the UK economy gathers pace:
"In Britain we must rebuild our smashed credibility. We face a decade of grinding debt deflation, like Japan. Thank you Mr Brown."
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/18/ccview118.xml
Unlike Ambrose, however, I and many others, including the editor of the FT, believe Brown will ditch the rapidly failing pound and take us into the euro within 18 months at most.
BL, the 1970s, Red Robbo on the shop floor, the magnificent Allegro and Morris Marina rolling off the factory lines, only to stall and fall apart en route to the delivery truck,a fucking useless Labour government in control, nationalisation, state ownership and control, unlimited immigration, race riots in the making.
Fuck me bring back Watneys Party 7s and happy days are here again!
Now where did I leave my old green card and leave to reapply papers...
" NuLabour = NuCock-up "
Currency trader has a point. This will be used by nuliebour to show us why we cannot manage our own affairs and how we would be much better within the 'stability' of the 'strong currency'. They'll be working on the spin now.
Your synopsis Guido is bang on the money. You can take cl4.4 out of the constitution but you can't take it out of the socialist.
From the BBC this morning---
Brown came to power on the day Northern Rock gave a profits warning, the first indiction of trouble ahead.
Another example of the Brown jinx!
Is it just me because I thought that the banks, in this case the Rock owned the houses untill you recipiant of the loan piad it off in full. So the bank does own the houses that it morgages. Also the government had to do somthing to stop the original bank run from spreading to other finantial institutions.
Also I dont know what the shareholders are getting to annoyed with the government for. They know when they invest in a company that its vale can go down as well as up, and they could loose everything they invest, its just the way the markets work. If you loose your investment because of the companies miss managment, tough.
Something else has just occured to me. Ron Sandler was the clown who instituted the financial services price controls called 'stakeholder' - pensions and the like. The price set meant that no-one could make any money and hence not a lot was sold.
Will he apply those principles to Northern Rock? I mean why would he want the bank to make any money? Surely if he follows his principles he will apply a price of 1% to mortgages. That is with BoE base rates at 5.25% he should lend at 6.25% variable. That would be the most competitive price in the market. And with the Government backing him with the cheapest money in the land he could get the Rocks distribution back up to 20% of the mortgage market in no time.
The only good thing about a return to the 1970's and a bankrupt economy is perhaps we can have another dose of punk rock - bring it on! As far as Britsh Rock or Newcastle Brown, we already have a socialised bank in the North East - its called National Savings and as that other great band of the 70's, Sparks, would say, "this town ain't big enough for the both of (them)"
Might I respectfuly sugggest that Brown and Darling fuck off back to Scotland?
Meanwhile, I see that Hattie Harperson says that the Tory Party are still the "nasty party". Gosh, what insight and intellect from the Labour Party's, er, No 2.
What next Hattie, "Vote Labour or I'll scweam and scweam and make myself sick! (I can)."
geordie scoot @ 10:36
I sense that a 1970s 'winter of discontent' is welling up. Bean is floundering around upping the anti on "Crime" because people will not obey his diktats.
Northern Crock Hits The Fan...
OT - Ken been fiddling again?
http://preview.tinyurl.com/2fcxeg
just to help the Labour trolls, if the bank had been wound up its asset book was at the time worth a lot. more than enough for shareholders to have received more than few pennies for their shares.
What Brown has done is to seize this pot of gold on 'our' behalf rather than leave it in the private sector. He wants shareholders to get as little as possible to help boost his failing public finances.
bradford and bingley next I wonder?
And, when you try to work out whether these clowns can actually run a bank, remember the standard NuLab template excuse, used by Mandy (twice) Blunkett (twice) Hain, Harmnan, Prescott (I'm boring myself here, you get the drift) "I am not I crook, I am merely incompetent".
Not something you generally see on the CV of most bank chairmen. Well, perhaps it was on Adam's, in the small print!
It may look like a dead bank, but are you sure it's not just sleeping? The Northumbrian Blue is a bit like that.
Now I have £3,500 invested in British Rock, can I get a preferential mortgage rate?
The great shame about all this, is that in the early days call me Dave went along with Brown's cunning plan to save the Northern Crock. Doesn't Dave Know that Brown is a Jonah and all that he touches turns to shite, or did he want some votes from oop North too?
Guido
You are so right
Doomed
We're all doomed
BUT wasn't it someone like Jefferson Davis who said after Gettysburg :
"Nil romanae reipublikae desperandum est [dinna despare of the European Reich]
Mr Darling reassures us that the fundamentals of the Economy are sound
Time to head to the Bomb-Bunker, with a month's supply of gin .... make that 3 months'
Jason:- NR does not 'own' the houses it lends money on. It has a first charge. The money it lends is secured on those houses.
It loaned money at up to 120% / 125% of the 'value'. If these borrowers default the bank will have to repossess the house. In a falling house price market - i.e. now - the bank will not ge back all its money. Also typically repo's usually are priced at 75% of the forced sale value achievable in six weeks. It's unlilkely that NR will get back all it loaned.
Brown is banging on about the security offered by borrowers.
To be sure we need to know the the structure of the book. If a high proportion are sub- prime and leant on high LTV ratios and the market is falling, he is talkingh bollocks. Which given his history since 1997 is a racing certainty.
He is a pathalogical liar.
"bestride the square mile like a colostomy bag" - lovely, Mr Tuscan!
Jason @ 10.32, yes, it's just you. The bank have a lien on the houses it mortgages, the owners own them and any equity in them until such time as they default. They will still own any equity in them, except of course there won't be any - see above, 125% loans etc.
We have a production line of genii
oop north, whose level of financial competence is in direct inverse proportion to the distance North of Watford. Geordieland is comatose, while Jockland as Stanislav will confirm, is clinically brain-dead.
BTW isn't Adam Sandler a comic actor, or is there no difference?
How can Labour pretend to run a bank when that thick-head Jowell admitted she can't even manage a mortgage application form?!
Any it is all very well Darling repeating "it was the right thing to do..." a la his boss Brown. Doesn't he know the difference between a reasoned argument and an assertion?
That type of bluster worked once, but we know New Labour too well now.
Just watching the McBean-Darling press conference now. Utterly apalling to see these two shysters lying to all and sundry. Brown still banging on about the UK being in the best position to steer through global turbulence. Darling sniggering at one point after spending time having a go at John Humphries for misquoting him. How about some priorities you complete wanker?
Here is a story that illustrates the quality of NR's mortgage book.
A buy-to-let shake-down artist bought a one-bedroom flat in our block for £225k a couple of years ago. No doubt he also availed himself of the £55k cash advance that NR were willing to 'secure' on the property as part of their 125% deal. He found a cash tenant who was paying a fraction of his mortgage costs, so he very soon defaulted, the flat repossessed and the tenant evicted.
The flat is now on the market for £295,000, which is presumably what NR feel entitled to because that's the scale of the damage. But it hasn't sold for 12 months, and it would be lucky to clear £200k at auction.
No doubt this looks like a 'rock solid' piece of business in the NR balance sheet. From today it belongs to all of us.
What an amazingly insightful analysis Guido! Are you George Osborne in disguise?
You write, completely wrongly, that
"When Northern Rock's troubles became critical there was no systemic risk to the financial system."
Wrong, wrong, wrong. Shares in Bradford& Bingley; HBOS and Alliance and Leicester were also in freefall. It is precisely the wider systemic risk to the financial system that meant that Northern Rock had to be supported by the government. That action stopped the panic immediately back in September 07.
For you to claim that this is some ideological return to widespread nationalisation is boll*cks of the highest order.
Did you know that every bank in America is insolvent? I will repeat that: *every bank in the USA is insolvent*. Hedge funds, global banks etc owe more in uncovered derivatives than the GDP of planet earth; effectively the world has gone bust...Socialism never went away; we were softened up with cultural marxism via the ideas of Marcuse et al; these have undermined the West, we call it Political Correctness. Now we are socially weak. The current financial crisis has been created by central bankers in order to replace the nation state with a world wide socialist superstate. Capitalism will be blamed for what interventionists in free markets have created. The crisis is only just begining; you have been warned.
One awaits the re-emergence of a neo Red Robbo to harangue the TUPE'd (well i hope they've been properly and legally taken on) employees of NR, to strike and hinder the fascist state from re-possessing failed mortgages and only allowing depositors to withdraw paltry sums each week, whilst demanding guarantees of job security for life.
What a shambles.
Even the Germans have done far better with IKB Deutsche Bank, which is in a similar state.
To Anonymous 10.56.
I think you'll find it was Norwegian Blue. Let's get this right seeing as we truly have a Monty Python of a government. No, on second thoughts that's grossly unfair to MP, who were clever and funny. Let's just say we have a shower of shite for a government.
In that case Ted Heath was an ardent socialist
now the bank is nationalised watch the default rates on its mortgages soar. the first thing sandler will do is introduce realistic credit controls resulting in a much tougher stance on delinquent customers.
defaults will rise far above industry norms and the massive black hole in its books, which caused its collapse in the first place, will become apparent.
good work gordo you nonce
Anon 11:17...and what is more I bet NR know it is at the wrong price.
There is another NR flat near here that should be repo'd but isn't being, just so as NR can claim the mortgage is in 'arrears' which menas that they do not have to crystallise the loss. A similar flat in the same block, also repo'd, was sold for 50% yep, 50% of its selling price of about 2 years ago.
Anon 11:19 - agreed. We live in very dangerous times for the future of freedom. You can just see them manouevering us into the giant bureaucratic super state.
such a pleasant irony that outgoing NR chairman, academic and doctrinaire writer Matt Ridley, banged on endlessly in the Telegraph on the theory of why nationalisation was a Bad Thing
Gordon mentioned that there were three German banks that had been taken under state control. I know about one – IKB, which is very controversial inside Germany. What are the other two? Have I missed something?
If this is so obviously "the right thing to do", why did they take so long to do it?
If pivate sector banks do not want NR at this price, why should taxpayers?
If it is so important to protect depositors, why was Brown so against compensating pensioners that he stiffed - aren't pensions a type of saving?
Keep Jowell away from ANY mortgages!
On BBC Radio Wales this morning the presenter doing the "Northern Rock" piece mentioned that Alistair, Darling, has a mortghage with Northern Rock.
Anonymong @ 11.19,
The banking sectors share prices being down does not constitute "systemic risk" you idiot. There was no systemic risk from one mortgage bank going bust.
You lot have never really liked markets, so don't now pretend to understand them.
WWMHD ? What would Maggie have done ?
She would have let them go to the wall - and quite right.
Can't we sue Darling for using public money for political purposes ? Surely its a clear case of conflict of interest ?
If that woman from Westminster council can be sued for selling a few council flats to change the political make up of a ward - surely Darling and Brown deserve to be banged up for life !
guido, the idea that brown and darling actually want to nationalise things is far-fetched. they've got stuck with this by their own dithering and desire to save 6000 jobs in a labour heartland. so we are now in the worst of all worlds, true, but it certainly isn't as a result of either latent socialist urges or anything like that. it MAY be as a result of them not understanding markets, which i suppose might amount to almost the same thing. either way, we're in for a white knuckle ride.
NR posed absolutely no systemic risk - and I think King knew this. It's a small mortgage bank that was basically overtrading.
I remember the County BS based in clacton going bust in the 80's and being taken over quietly by Woolwich - same problem. No-one died. No-one lost any money, except a few employees perhaps.
Bank share prices have been on the slide for some time, which has nothing to do with NR. Any value investor worth his salt was out of banks yonks ago. And their share prices will keep falling until they reach the equivalent of the their baisc capital (which I think is called tier 1) which equates to about 8 - 12% of their balance sheets.
Guido
Left unchecked, there was a very real risk that the run would have extended to other banks - which does constitute systemic risk. (Some basic knowledge of economic history would avoid your analysis being total garbage).
And the declining share price of other banks was leading to declining confidence in the system as a whole. The government was right to act.
As for people like me not "really liking markets", I actually work in the private sector - and know more about how they work than professional peddlers of hearsay and bullshit like you.
Read something about how failing financial banks in the late 20s and early 30s led to a worldwide economic crash. And then you might know what you're talking about. Twat.
Elby the beserk: Nice link to the latest Leninslime scandal. I also tried to find those poll results weeks ago and couldn't see them on the MORI website.
Let's look at Ken's release in more detail. Read it carefully and you'll see it is shot through with holes - suspicious terminology, leading questions, irrelevant questions, stating the obvious, and skirting round the issue.
Even if the central claim is true - that two-thirds support a higher charge on SUVs - what does it show other than another Livingshit scam driven by the politics of envy?
18-12-2007 Poll shows strong support for higher charges for the most polluting cars
New polling released today shows that two thirds of Londoners support proposals to charge cars with the highest greenhouse gas emissions £25 a day to drive in the central London congestion charge zone and introduce a zero charge for the lowest emitting vehicles.
The results, announced today by Ken Livingstone, Mayor of London, come from polling carried out by Ipsos Mori as part of the recent consultation on the emissions based charging proposals.
The survey found:
91 per cent of those questioned said that they thought climate change was "important" or "very important"
(Does that include those who think it is "very important" that we should stop being so fucking hysterical about climate change?)
Two-thirds (66 per cent) of respondents were in favour of the proposal upon which Transport for London has consulted, with 38 per cent strongly supporting it. Only 21per cent opposed the scheme.
63 per cent of respondents stated that the higher charge would act as an incentive to use a lower CO2 emitting car.
Over two-thirds (68 per cent) of respondents believed that the proposals as consulted upon would benefit London, of which 32 per cent strongly agreed. Only 17 per cent disagreed with this.
PS Easy solution to Northern Cock: Buy the whole outfit with Shukuk bonds, like they're doing with the Treasury buildings. So what if a few hundred thousand private homes become financed under Sharia law? We're almost there anyway.
anon 12:04pm - you are quite probably Ron Sandler and I claim my Sharia mortgage.
Lets watch over the coming month's Brown's pitiful attempt to reinflate the housing market, as he uses Norther Rock to flood the market with cheap government-backed sub-prime mortgages.. Oh sorry, I mean as he helps thousand more British people to become homeowners
Whether the bank is in liquidation or nationalised its assets remain the same. So I don't quite get the theory that the government could have liquidated the company, repaid depositors and collected the money as an ordinary creditor. That is basically what they have done by guaranteeing all deposits.
It is wrong to say "what assets do the company hold?" as if they have none. Every mortgage they have drawn down is an asset secured against the owners homes. Even in difficult times most people still make their mortgage payments. So while there may be some losses it will be nowhere near the 100 billion figures that are banded about.
Still pretty embarrassing for our blessed leader and he should definitely be kicked up and down the commons today.
t would have been cheaper to provide economic regeneration to the North East region after Northern Crock's death, rather than throwing it a £100bn tax payer's lifeline.
Just to help CityUnslicker - the market in mortgage loans books is practically non existent - perhaps if you now of a good place where the Northern Rock loan book could have been disposed of without suffering an enormous discount because the market is near illiquid then you should have bid for Northern Rock. Funnily enough none of the buyers seem to have taken that option seriously - they wanted the State funding to be guaranteed for as long as period as possible.
bogeyman, as you hint, the results Livingshite is publishing are risible. I would vote for any and all taxes that didn't affect me personally, most particularly if those taxes were the source of my living.
A more enlightening poll would ask those respondents who were in favour of the higher taxes on 4x4s etc a) do you drive, b)if yes, what, c) the source of your income.
I don't believe Livingscum himself drives, and we know the source of his not inconsiderable income. QED.
Guido
Whatever the reasons behind the decision to nationalise, I am sure they do not include "protecting 6,000 regional jobs which was a political risk in a period of election fever in Labour's North East heartlands."
If NuLab cares so much about North-Eastern jobs, why were Siemens and Fujitsu not nationalised when they crashed with similar consequences for the regional job market in 1998/99?
Nick Drew
I think George Monbiot noticed the irony first see
http://www.monbiot.com/archives/2007/10/23/libertarians-are-the-true-social-parasites/
Matt Ridley the former Northern Rock chairman was of course the nephew of arch-Thatcherite and German hater Nick Ridley - and based on his writings his own political views were not much different.
Perhaps the moral is never put Old Etonian Tories in charge of anything to do with finances.
"If NuLab cares so much about North-Eastern jobs, why were Siemens and Fujitsu not nationalised waffle waffle..."
So you must be the only northerner not working for the Government, then.
A high-risk investment strategy under the chairmanship of a free market ideologue (most notable quote: "exchange makes two and two equal five")
A deregulated financial system unable to spot the warning signs.
A private sector incapable of coming up with a viable rescue package.
Perhaps a little 70s socialism might be no bad thing.
All these NR "assets" - remember folks, they sold, what was it, £11 billion's worth of the dodgy ones to some off-shore pawn brokers - ?Granite? are they called? - in Jersey. Do we now "own" these as well? And will we not get monstrously stiffed on these when the mortgagees give up?
imho the reason rock was supported was to stop a run on other banks..laudible?sensible? no......i have another theory...look at all the politicans who are directors of banks doing sweet f/a for large salaries and perks.look at tony bliar...how much will this scumbag get from deals with jpm etc? it's all about feathering their own nest and tough luck to the morons(us).........brown is talking complete bollocks as usual.the company is worthless and the properties it has loaned money on will probably sell at 50% of their book value if it has to liquidate lots of repossessions?
lessons learned? none as usual.......brown pre-announced the gold sale which any child would tell you meant the price collapsed.......bofl
why do the new £notes look like €uroz?
Well all our dosh is now in the hands of Ron Sandler a Zimbabwean Jew @ 90k a month ie £1,080,000 pa and Ann Godbehere a Canadian @ 75k a month ie £900,000 pa.
Makes the £2m odd that Adam Applewhateverhisnamewas took away as bye bye money from Northern Crock look small.
Perhaps it would have been better to give Lloyds the guarantees they wanted to acquire Northern Rock rather than prattling on about "moral hazard". Yet Mervyn King has just has his contract renewed.
????????
One can imagine the scenes being played out over unusually-good-for-a-Monday City lunches today. After the guffawing dies down a bit, that is.
"Chaps, wouldn't it now be a good idea to collect together all our sub-prime trash and assorted embarrassments, dump them all into some other piece of crap pretend bank and then sink it? Prudence will take it on. We might get shut of a good load of rubbish. Christ, we might even get to have a third go before she twigs what she's done."
Bradford and Buggered might be just the beast.
The Man Who Sold The World
My name is woman on a raft and I just popped down the shops for a bottle of Windolene, tripped over the kerb and banged my head. I've woken up in 1978. Am I dreaming, in a coma or have I time-travelled?
Bugger. It appears I had my accident in 1997 and I've gone forward, not backwards. But it all looks so authentic; right down to everybody being skint, rubbish piling up on the streets, rumours of the banks being nationalized and the government taking ever-more repressive measures to control the civilian population, which is beginning to turn against the police. Whaddaya mean - not rumours? (Faints clean away).
Gene Hunt
"Right Lads, that's another Northern Wreck casualty - 200 and counting - grannies fainting in the street and the Commissioner wants to know what we are doing about it".
pvt. Pike character
"But Guv, isn't that one for the public health wallahs or the FSA or maybe even the SFO?"
Hunt
"Don't give me all yer fancy college-talk TLAs. Somebody is making Her Majesty's pound note worth less than a packet of cola-flavoured Spangles and unless we catch the bastard we can look forward to every beige Metro on the Hanger Lane Gyratory System stopping dead with an unconscious senior citizen in each one. Need I remind you gentlemen that one good traffic jam can bring the whole city to gridlock, and if this city gridlocks the Commissioner will have my bollox for earings."
pvt. Pike
"Blimey, that's serious guv, where do we start"
Hunt
"I interviewed that slippery bastard Healey last time this happened. He got 3.9 bn - lorra lorra money - from the IMF and wriggled out of it. Well, he's not worming his way out of it this time. Right lads, polish yer truncheons, we're off to have a word at No 11."
45govt: The one I particularly like is "63 per cent of respondents stated that the higher charge would act as an incentive to use a lower CO2 emitting car."
Does this mean
a)I might give up my SUV if you charge me £125 per week. Bleeding obvious or what?
b)What incentive? I drive a 700cc SmartCar.
All bollocks. How I would love to see a proper breakdown of the questions and answers.
Stephen Rouse sayeth ;
"A high-risk investment strategy under the chairmanship of a free market ideologue (most notable quote: "exchange makes two and two equal five")
A deregulated financial system unable to spot the warning signs.
A private sector incapable of coming up with a viable rescue package.
Perhaps a little 70s socialism might be no bad thing."
Para 1 - true but only owrkable if money too cheap. Why money too cheap? Gordon Brown.
Financial system NOT deregulated. Big giant regulator FSA in the room. Plus mates at BoE and Treasury. All failed to spot Rock. Understand that regulation as practised now is just as likely to fail as any of the things it regulates.
Private sector can come up with rescue package - but not at super silly price demanded by Brown Darling for bailing out the problem of their creation. It's a buyers market.
Even a little 70's socialsim would be a Very Bad Thing.
My my you English Tory boys are funny.
Here is a private bank run by some English Tory Boy city wunderkinds which goes belly up because the greedy short term chancers couldn't hack it.
After middle class panic and weeping and wailing from sundry middle aged Tory types the State steps in to save their bacon at the cost of several billion to the working class. Then the ingrates winge when the state nationalises because the private sector declines the offer.
Jeezo and you clowns think the private sector knows better. How come then they are begging the state for help?
I say the mistake was to give the buggers apenny from the taxpayer. Let NR and the rest go down. what differnc will it make to the unbanked and low paid Council house sector of society. None
Yet agian the English middle classes get a hand out.
Paul Linford,
6,000 jobs, endless extended families and knock-on bad publicity. N.E. Labour MPs never stopped going on about the jobs despite the wider national interest in not bailing out failing mortgage banks.
German banks in probs are:-
IKB Deutsche Bank
KfW which supported IKB
LBBW (This bank is the biggest public sector bank in germany, problems caused by its purchase of LRP in 2005.)
See article:-
http://www.haaba.com/news-story/german-banks-ride-rescue-subprime-hit-ikb-again
If we're in a climate change crisis, the government should start acting like it, and if we're going to have £100bn in exposure, we better get our money's worth.
Labour likes to talk about eco-homes and eco-villages, but the real problem is that even with tens of thousands of carbon-neutral homes, we need to retrofit the existing housing stock.
So, strangely, the nationalisation of a major mortgage lender is an opportunity. Northern Rock could focus on lending around ecological renovations, loans to sustainable small business and social enterprise, this "3rd Sector" everyone's talking about.
That should be the priority, rather than this idea of arms-length control.
Socialist Scot: Yet agian the English middle classes get a hand out.
Yet again? YET AGAIN? You know very well the English middle classes are robbed blind. Without them the country would not just be sinking, it would be twitching on the sea-bed.
By the way, it's spelt "again" down south. If you were a proper Scot you'd spell it "agin". But since you're a fucking socialist you probably can't tell the difference.
Mr Scottish Socialist Republic,
Notwithstanding the hopelessness of your analysis, you are precisely correct when you say...
"I say the mistake was to give the buggers apenny from the taxpayer. Let NR and the rest go down."
Alas, that's what we are all saying - Tories or not. Do try to pay attention or Stanislav will be round and a trip to a mineshaft will be on the menu.
Why was it nationalised? Ask another question would it have been nationalised if it was called Southern Rock and based in Guildford.
The North East is a labour heartland, which has been undisturbed for decades, by anything so troubling as a change in governance. It too has had a massive property boom, thus potentialy allowing all sorts of fun to be had, with planning applications etc. Who better to help out, than the local banker.
Had it gone into liquidation/administration all sorts of nasty/embarrassing court cases might have started as the liquidators/adminstrators chased the money, as they have to by law.
Much better to keep it all in house....though go through a pretence of selling.
All the above is pure speculation, I have no inside info at all....but putting at risk a decent percentage of £ 100 billion of the countries money and wrecking your own record of supposed economic competence.....just to save 6000 jobs, doesn't make any sense at all and no the system was not at risk.
Doesn't the old Bristish Leyland logo remind one of water going down a plughole?
You know you're fucked when Snotgobbler announces it's the best possible deal for the taxpayer.
scottish socialist republic - that says it all really you cretin:-
"Yet agian the English middle classes get a hand out."
Even you can't believe that crap, for as you well know if it weren't for the well-fucked English middle-class taxpayer, with the sometime assistance of that northern bloke for whom work is an irregular verb, Jockland would have sunk under the weight of its ginger-minger fried-Mars-Bars-filled cunts.
I keenly look forward to your independence, and accompanying penury, for as the world knows, any Scot worth a light emigrated inth nineteenth century or earlier. You who are left are the state-supported dross of no commercial or indeed any value.
Cunts, one and all, and if you doubt me survey Holyrood. The very best you can produce is the Gay Gorgon, Bendy Wendy and the likes of Tommy-Swinging-Perjuring-Sheridan. God give me strength.
What else were they meant to do? They should have let the bank go under in the first place. This would have been the courageous thing and then let the market sort itself out. Nationalisation is the only realistic option at this stage.
Osbourne and the Tories are making a mistake politicising this. Darling may be a useless tit but Osbourne is not conviuncing that he will be any better.
Aye, 45govt, and remember fucking Culloden.
So Blair brought Oasis in-house to boost his PR...
and now in a binding flush of perspiration Brown brings home the Northern Crock - what an outfit, I hear they're primely responsible for the Brickplop movement.
What a boring he is fuck too.
45, for the Tuscan, one of the greatest enigmas of the 21st century is why on earth £ 500million+ J K Rowling lives in Edinburgh - her owlishly bespectactled hobbit of a husband held down a job as a "dockie" there for a while but I think he packed that game in a couple of years ago. Is it possible the whole Harry Pointer (whatever) series was ghostwritten for her by Alastair Campbell?
A kodak moment - word verify: kcoon
Bloody racists!
Its 18 degrees in Cannes, the sun is shining, the wine is suitably chilled and the foie gras starter is just about to be served.
Can't think of a better place to be as Brown and Darling carve up the UK while everyone does nothing to stop them.
The Bliar and his dumpy witchypoo troll of a missus must be hugging themselves with glee....
Manic eyed, twitchy, greying, trendy dad eyes gathering storm clouds. Feels itching in his Teflon skin and makes a call to his perma- glowering next door neighbour ...
"Well Gordon, me old mate, me old mucca, what it is right, I've decided the time is right for you to take the reins"
@anon 2:25pm.
Spot on. Utterly corrupt. Trouble ahead.
As a member of Middlesex County Cricket Club I would just like to say how reassuring it is to be sponsored by Her Majesty's Government. Lesser counties eat your hearts out.
11:33 AM said:
the first thing sandler will do is introduce realistic credit controls resulting in a much tougher stance on delinquent customers.
Which will last until the first batch of newpaper headlines appear with an eight year old saying "Gordon Brown threw me out of my house".
I've been watching the debate about the nationalization and have come to the conclusion it's all a big joke to all parties and to all MPs some of whom seem to have been to the Lunchtime O'Boozer Refreshment Bar for some snifters juding from the florid complexions. Perhaps that could also be due to their elevated blood pressure at the thought that their investments might be hitting the floor soon.
Guido you're so right about Kaletsky finally seeing the light that its really worth repeating part of what he said:
"He should have announced that Northern Rock would be nationalised not to keep it in business, but to close it down; that the bank would stop lending new money or accepting new deposits as of tomorrow; that all the company's retail deposits would be shifted immediately to the National Savings system, while all the wholesale bonds would be replaced with Government gilts. The company would then be put into run-off, with the Treasury recouping its money gradually as existing borrowers repaid their mortgages over the years.
Nationalisation, in other words, made sense only as a necessary legal stepping-stone to the orderly liquidation that Northern Rock required as soon as it ran out of money in September.".
Tony will Sandler really provide me with a sharia mortgage? We-hey
Well Osama, as a Nazarene, you have clearly chosen to be a member of a rather exclusive and unusal Jewish Chistian sect, and I can therefore tell you that the answer is not bloody likely, old son. Come back after the conversion.
Sandler will be cutting the bank down to half its present size anyway, so all this taxpayers' money is going to save around 3,000 jobs in safe Labour seats. This at the time when the goverment's finances are in a complete mess, and we're facing a potentially very serious downturn in the economy.
Inflation on everyday items is spiralling ever further out of control, 100,000 people are going bust every year, the government is printing extra money at an irresponsible rate and the country is swimming in an ocean of debt that Brown his self did nothing to discourage.
Economic competence? They're not fit to shine Ken Clarke's shoes. Brown and Darling are no better than the lamentable Lamont.
I always felt that whoever designed the old BL plughole logo knew exactly where the money would go!
‘Anonymous idiot 11.19 am
Wrong, wrong, wrong. Shares in Bradford& Bingley; HBOS and Alliance and Leicester were also in freefall. It is precisely the wider systemic risk to the financial system that meant that Northern Rock had to be supported by the government. That action stopped the panic immediately back in September 07.
For you to claim that this is some ideological return to widespread nationalisation is boll*cks of the highest order.’
What a load of arrant bowlocks! What has the share price of any of them got to do with systemic risk? The other mortgage lenders you mention did (and do) not have the same mismatched assets and liabilities that Northern CRock had/has. That was the sole cause of NCRock’s problem.
Incidentally, Prat Darling said on Humpty’s programme on R4 this morning that a sale of NCRock today would give rise to a loss. How the fuck do Nuliebor think that they can change this, and why did Humpty not ask him this directly instead of trying, and failing, to get him to admit that he had previously said that nationalization was the worst option? NuLiebor politicians ALWAYS lie!
Peter Grimes
‘anoymous idiot 12.04pm
Read something about how failing financial banks in the late 20s and early 30s led to a worldwide economic crash. And then you might know what you're talking about. Twat.’
Twat yourself! The bank failures in the 30’s were because the security for their loans failed or because the borrowers could not make interest payments or repay.
You actually work in the private sector do you? Has that given you a privileged insight into the working of banks then?
Seems not!
12:04 PM, February 18, 2008
Peter Grimes
10:04 AM
Oh pleeeez...don't give them any ideas...
Guinness have got the Nigerians running the foreign export side of tings...we can trust them...but the Brits? Definitely not. Their government is not good for you.