Saturday, Sep 15, 2007
Nicely put: we are inflated... correction due
naked capitalism: Northern Rock: A Real Bank Run
"Together with sterling and house prices, British self-regard has become unnaturally inflated. It is due for a correction"
and more worryingly ....
"At June 2007 UK banks’ cash deposits at the Bank of England were £2.4bn ($4.9bn), while the notes and coin held in their tills were worth just under £8.8bn and their holdings of Treasury bills were under £8bn. By contrast, their total sterling liabilities were over £3,150bn."
I wonder what other tinkering under the hood of the financial system will come to light and explain the house price boom (and subsequent bust)
Posted by voiceofreason @ 08:49 PM (327 views) Add Comment
6 Comments
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1. Scott said...
I recommend the series Dark Angel by James Cameron, depicting a bio-engineered woman fugitive in a post depression America in the 2020's. The post-depression theme was so convincing that he was ordered to change his second series so it was less about this doomsday future and so the second series was crap.
The most notable thing about the depiction (due to Cameron's genius) was that those who were old enough to remember what the world was like beforehand were in permanent depression and fear, but those who were born into it didn't give a sh*t and just got on with life.
Will we be this older generation? Will our kids just accept it?
2. Alan said...
As always, we will be led by the US. The Fed will not be "tinkering under the hood" !
Ben is a former head of the economics department at Princeton University, has spent most of his career in academia. His analysis is based on models, and he has greater confidence in forecasts and statistical methods than Alan Greenspan who played the economy by sense of smell (......just like Pinball Wizard).
Clearly NR believed their own financial models. They pioneered mass lending of over 100% value of the property in the mistaken belief house prices would always have double digit inflation. Models are great... it's the assumptions you need to watch.
mmm...
3. Cheekie Charlie said...
I'm hoping that all this money thats being withdrawn from NR is being transfered to the other big banks. Hopefully this will make our savings more secure. Or at least as secure than any other asset mentioned on this site!
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