Reply to: More people need to question ......

[AtW]

So with all of your wonderful wisdom, AtW, just explain why HMG nationalised the Rock when there were FOUR offers on the table.

The only viable offer (and I am glad Govt did not use it) was when LTSB asked for £20 bln loan from BoE to buy NR before queues - thankfull this did not work out as I bank with LTSB and extremely pleased they did not do it. I now hope they will reverse that stupid HBOS buy too.

All the other offers AFTER NR collapsed were basically about private companies using Govt money to make profits for themselves - none of them had any money to purchase, they all wanted to keep BoE loans. In all probability they would have failed before end of this year so Brown had no choice but to nationalise it.

Personally I'd say what they should have done is this:

1) jail NR management including those who recently left the company and those advisors who devised those contracts with Granite thingy
2) take all saver accounts and either sell them separately like they did with B&B or move over to any other bank while guaranteeing them 100% with BoE money
3) sell morgages that NR had on auction - whatever the price they go.
4) close NR down, destroy their office with bulldozers and put a huge fark off stone with a single word on it: GREED.
5) if any of the jailed people in #1 are still alive then make sure they are on a permanent prison rota to hand out soaps in the showers.

HTH

[Cyberman]

I know how the system works. I also know how it should work.

Nothern Rock used shady offshore company that sold them morgages - NR was contracturally required to buy this toxic crap from that company, so NR had to have a flow of funding. It is that thing that killed them once funding dried up - they could not just fire salesforce and act as a head office for collecting morgage payments and dealing with default, they were bust because they HAD TO buy those morgages even if funding disappeared. Just what kind of retard would sign up to such a contract? Those guys should be in jail yet they bogged off with millions in hand shakes.

B&B seems a bit different though I'd be suprised if they don't have even dodgier morgages than NR - I mean they "cornered" market for self-certified morgages, ffs, bankers themselves called tham "liars loans", it's crazy that they were allowed to do these things, just wtf FSA and BoE were doing?



I've got 3 degrees in finance, business and real estate. But in reality even if I was a caveman then my knowledge of economics would have been still much greater than yours.

So with all of your wonderful wisdom, AtW, just explain why HMG nationalised the Rock when there were FOUR offers on the table.

[AtW]

Atw, you just show by those comments that you do not know how the system works.

I know how the system works. I also know how it should work.

Nothern Rock used shady offshore company that sold them morgages - NR was contracturally required to buy this toxic crap from that company, so NR had to have a flow of funding. It is that thing that killed them once funding dried up - they could not just fire salesforce and act as a head office for collecting morgage payments and dealing with default, they were bust because they HAD TO buy those morgages even if funding disappeared. Just what kind of retard would sign up to such a contract? Those guys should be in jail yet they bogged off with millions in hand shakes.

B&B seems a bit different though I'd be suprised if they don't have even dodgier morgages than NR - I mean they "cornered" market for self-certified morgages, ffs, bankers themselves called tham "liars loans", it's crazy that they were allowed to do these things, just wtf FSA and BoE were doing?

Before slagging me off, I suggest that you firstly educate yourself.

I've got 3 degrees in finance, business and real estate. But in reality even if I was a caveman then my knowledge of economics would have been still much greater than yours.

[Bagpuss]

There should have been more stringent lending controls but Blair and Brown were obviously against this to sustain a credit-boom economy. They are both culpable here of creating an unsustainable mountain of debt.

The boom wouldn't have happened without it

[Cyberman]

The only culpability is the policy of leaving interest rates too low for too long and stoking the furnace of a disasterous property bubble. When House price inflation was hitting double digits interest rates should have risen, it should have been nipped in the bud at least 5 years ago, when most sane people were thinking things had gone too far.

There should have been more stringent lending controls but Blair and Brown were obviously against this to sustain a credit-boom economy. They are both culpable here of creating an unsustainable mountain of debt.

[Bagpuss]

The only culpability is the policy of leaving interest rates too low for too long and stoking the furnace of a disasterous property bubble. When House price inflation was hitting double digits interest rates should have risen, it should have been nipped in the bud at least 5 years ago, when most sane people were thinking things had gone too far.

[Cyberman]

Are you suggesting then that NR had not securitised ANY of their loan book and sold it on? Could be the case, but UK lenders have been securitsing it in various ways since at least the early '90s.

This has been the major cause of massive lending and US subprime exposure for our banks, by virtue of US banks selling on packages of mortgages to other banks and thus enabling banks to keep loans off book. The FSA and thus HMG allowed this to carry on and thus permitted banks to bypass lending controls. Our authorities are thus just as culpable as the banks for allowing the current mess to ensue.

[Platypus]

I suggest that you firstly educate yourself.

practice

[ASB]

Banks borrow short and lend long, and thus have to refresh their borrowings periodically on the moneymarkets.

Are you suggesting then that NR had not securitised ANY of their loan book and sold it on? Could be the case, but UK lenders have been securitsing it in various ways since at least the early '90s.

[Cyberman]

The problem in my view was idiotic structure of NR and some other "banks" - ok, they stopped getting funding, what's the problem - stop issueing new morgages, fire all sales people and start counting money from existing morgage base (or losses from defaults). The real problem was that those clowns used shady offshore entities that required them to buy new morgages all the time! Now that became a problem as soon as funding dried up - whoever signed such contract should be in jail already, alongside those who created it in the first place (probably the same person). I'd throw into the same cell with those guys and guy named Rock also Cyberman for his inane rumblings on subjects he does not understand.

Atw, you just show by those comments that you do not know how the system works. Banks borrow short and lend long, and thus have to refresh their borrowings periodically on the moneymarkets. This is normal banking practise(and stopping lending would not have solved the lack of funds problem!!), but due to the US subprime fiasco(the Rock owns NO US subprime) the money markets dried up. This was nothing to do with the Rock whatsoever, but the Rock became a victim. It was then victimised again by HMG and the BofE by them refusing to act as Lender of the Last Resort, and ironically it has reversed its policy ever since!!!!

HBOS has now hit the same problem because it needs approx. 200 Billion pretty rapidly and that may not be forthcoming.

Before slagging me off, I suggest that you firstly educate yourself.

[oracleslave]

Cyberman for his inane rumblings on subjects he does not understand.

Is that irony? . I can't see the wood for the trees


Edit: I do agree though

[Moscow Mule]

Never trust a hippie.

Or a thin chef.

[HairyArsedBloke]

Dunno. I can't stand him, but I will definitely buy a copy.

Never trust a hippie.

[AtW]

no Northern Rock didn't have any US subprime but plenty of UK subprime so they couldn't get funding.

The problem in my view was idiotic structure of NR and some other "banks" - ok, they stopped getting funding, what's the problem - stop issueing new morgages, fire all sales people and start counting money from existing morgage base (or losses from defaults). The real problem was that those clowns used shady offshore entities that required them to buy new morgages all the time! Now that became a problem as soon as funding dried up - whoever signed such contract should be in jail already, alongside those who created it in the first place (probably the same person). I'd throw into the same cell with those guys and guy named Rock also Cyberman for his inane rumblings on subjects he does not understand.

[Bob Dalek]

Is Branson's book out yet?

Dunno. I can't stand him, but I will definitely buy a copy.