Northern Rock

[BrowneIssue]

There's a bloke being interviewed on Radio 2 saying how us taxpayers are guaranteeing Northern Rock to the tune of £2,000 each now.

And then went on to say that in his opinion - it'll still go bust.

[BrowneIssue]

So the "master economist" is being firmly held by the goolies then?

What a numpty.

Never mind. It's only our money they're giving away.

So we can look forward to a ... does some sums ... 4% increase in Income Tax to pay these banks off then?

Brilliant.

[AtW]

4% increase in Income Tax to pay these banks off then?

No - much worse: inflation.

[BrowneIssue]

Farepak 'only' owes £38m. Couldn't that just be chucked on the bottom of our Northen Cock bill?

[AtW]

Farepak 'only' owes £38m.

It was a local failure that only affected people involved - if NR gone bust proper in September it would have affected a lot more people than those who put money into it. That's why it was rescued - correct decision under circumstances, but looks like the Govt screwed this one up too.

[Sockpuppet]

It was a local failure that only affected people involved - if NR gone bust proper in September it would have affected a lot more people than those who put money into it. That's why it was rescued - correct decision under circumstances, but looks like the Govt screwed this one up too.

What about rover then. They could have been world beaters with £54billion to play with.

Oh well got to save el gordos friends in the banking sector. After all they are allowed to charge interest on the money but not lose it when it goes tits up.

I have around £2000 in student loans. Could el gordo not pay that off for me instead.

[AtW]

What about rover then.

Rover was local too - if anything collapse of them has lead to improvements in sales in other car manufacturers located in the UK, so here death of the least capable actually helped others, but in case of banking industry, unfortunately, such a major collapse at that time would have lead to panic that could have crashed other banks.

Personally I am pleased to be holding money in Lloyds TSB - it turns out they are very conservative and don't gamble - only lost £200 mln on subprime.

[Cyberman]

What about rover then. They could have been world beaters with £54billion to play with.

Oh well got to save el gordos friends in the banking sector. After all they are allowed to charge interest on the money but not lose it when it goes tits up.

I have around £2000 in student loans. Could el gordo not pay that off for me instead.

The big misconception here is that this is money thrown down a black hole. These are LOANS that Northern Rock can repay on the back of assets that it owns(approx 100 Billion pounds in mortgages), once the global liquidity crisis dissipates. Rover would not have repaid this money, that is for sure!!

[AtW]

The big misconception here is that this is money thrown down a black hole.

Initially the money that the Govt was throwing into NR were actually withdrawn and put into proper banks - this was cheap supply of money to those banks without having them ask for cash, this was good move actually.

The problem now is that this Crock is still asking for cash - well more than cash depositors actually deposited. So why the heck the Govt won't let it die now? Assets of NR are of highly suspect quality - IMO they should suffer most from imminent house pricing crash, the best thing now is to call administration and sell off parts of debt portfolio on auctions.

[Cyberman]

Initially the money that the Govt was throwing into NR were actually withdrawn and put into proper banks - this was cheap supply of money to those banks without having them ask for cash, this was good move actually.

The problem now is that this Crock is still asking for cash - well more than cash depositors actually deposited. So why the heck the Govt won't let it die now? Assets of NR are of highly suspect quality - IMO they should suffer most from imminent house pricing crash, the best thing now is to call administration and sell off parts of debt portfolio on auctions.

If they let it go under that will set a precedent and then there are other banks with major liquidity problems. They will then end up nationalising a lot of banks whereas with patience liquidity will return and the crisis will end. Northern Rock also have many thousands of employees in the north who would lose their jobs. The housing 'crash' will also be mild as interest rates are now falling.