No Need to Panic

[sasguru]

If mortgage shares drop substantially BUT those companies don't use the Northern Rock model of high gearing, they are well worth buying.

[Sysman]

Good point ... I reckon buying shares in Mortgage lenders now is a good strategy ... at the end of the day they all have millions of people oweing them money already. ... just because getting a mortgage right now will be harder to achieve than say a week ago doesn't mean that they are all going to collapse and the whole English monetary system will be devalued to such a point that we will suffer hyper inflation and be taking wages home in wheel barrows.

That's Plan B sorted then. Wheelbarrows.

[GreenerGrass]

Bank shares bouncing from Darling's reassurance on the govt backing deposits.
Should get a further leg up this afternoon if the Fed cuts rates in the US, which is generally expected (especially if its 0.5%).

[scooterscot]

I agree with Dr Eamonn Butler who attempts to explaine the truth behind the q's:

"My economics teachers used to say that the days of a 'run on the bank' were long over.

It might have caused problems in the 1930s, but modern banking controls and accounting had consigned bank runs to economic history's dustbin.

But despite the assurances of politicians and regulators, here we have a run again.

What on earth can be happening? Well, the first thing is that people no longer believe what politicians tell them.

Their years of putting spin over principle has shattered any respect we might have had for them. Sadly, Alistair Darling's word is just not enough.

And people don't believe the regulators either.

Their vast bureaucracies have not spared us from failures and foul-up. Just ask the millions who have lost their company pensions.

If, within the regulatory alphabet soup, anyone knows what the Financial Services Authority actually is, they probably know it only as the bunch who make you produce your telephone bill and driving licence, even though you have banked at the same place for thirty years.

And despite their comforting talk, the politicians and regulators must know too that vast queues of people taking out their deposits is not good.

The financial system is highly interdependent.

It could just turn into a real crisis.

Their immediate reaction may be to make credit more plentiful, so that the banks do not run out of cash.

But that is a recipe for more inflation, which is already breaking through its target, thanks to high government spending.

Gordon Brown's chickens are coming home to roost."

[milanbenes]

'Good point ... I reckon buying shares in Mortgage lenders now is a good strategy ... at the end of the day they all have millions of people oweing them money already. ... just because getting a mortgage right now will be harder to achieve than say a week ago doesn't mean that they are all going to collapse and the whole English monetary system will be devalued to such a point that we will suffer hyper inflation and be taking wages home in wheel barrows'

Eliquent,

one small question, what if the people cannot pay their mortgages ?

Still, as ever, do you own research, what the feck do I know ?


Milan.

[BoredBloke]

I'm thinking of having a punt on NR now that the shares have had a big hit - anybody know any easy way to buy shares? Online preferably.

[King Cnvt]

I predict the shares will rise a bit and then fall again in the coming weeks when more financial institutions reveal the extent of their losses due to sub-prime derived debts.

I for one will not be putting my hard earned into shares in banks.

[milanbenes]

Tony,

if you are that eager to throw good money away, whey not jsut send it to me.

Thanks,

Milan.

[BoredBloke]

lol - they are up 10% today already. The govt are backing them (probably not a good sign). But I figured as the basis for a very short term punt they would be worth a bet - It's either them or Liverpool in the game tonight

[Spartacus]

As was only slightly ironically observed on Newsnight yesterday, why would anyone buy UK government bonds when you can get 6.9% at Northern Rock, 100% underwritten by the UK taxpayer?