Wednesday, Sep 19, 2007
Time to make a mark in the sand: got a prediction?
FT.com: Recriminations fly over Rock crisis
The FED is all over the place. The BofE is all over the place. Time to record some predictions and forever be held to account.
Posted by whiteknight @ 02:33 AM (531 views) Add Comment
5 Comments
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1. whiteknight said...
i posted this by accident into the main stream. Can somebody remove it pls.
2. inbreda said...
"Northern Rock’s chairman, said the bank would concentrate on “rebuilding shareholder value”. "
As opposed to the other option he has of just telling the shareholders to get lost.
Genius
3. paul said...
The recriminations can fly, but they all eventually point to the same place.
The Bank of England kept interest rates unsustainably low for too long, even when other countries were raising rates. Remember Kate Barker's languid remark last November
"Meetings every two months could be better prepared, take a longer view, give more serous consideration to the wider range of responsibilities and reduce the use of minor shifts in response to short term fluctuations."
Well now that lackadaisical attitude is biting the MPC in the ar5e in the form of a mega expensive bailout of a private debt-levered lender with a questionable long term business strategy.The MPC knew all along that business would form business plans around cheap rates, but ignored the buildup of unsafe lending heavily dependent on the money markets and rising asset prices.
They are being bailed out at the expense of taxpayers too. Capitalism for the poor (if you can't repay your loans you get repossessed), socialism for the rich (central bank writes a cheque at the taxpayers expense).
In other countries, that's called corruption - and the EU appears to be labelling it just as much.
Sack the MD of Northern Rock? Absolutely.
Sack Mervyn King and the current MPC members for incompetence? Probably not a bad idea.
4. Jeremiah said...
The amazing thing about this is MacCavity Brown's reaction - vanish, leave Darling to take the heat, and then start shifting the blame onto Mervyn King for being pressured into a (probably illegal) bail out
5. crash bandicoot said...
"But Northern Rock executives believe the run could have been averted if the Bank had temporarily accepted less liquid assets, such as mortgage-backed securities, as collateral just as the European Central Bank and the Federal Reserve do"
Nice idea, dump all of your worthless rubbish on to the BOE and then make a run for it (pun intended).