Thursday, Jan 17, 2008
His house depends on it. Is he a shareholder too?
Evening Standard: Darling's plan to pay off Rock investors
The Government is drawing up plans to compensate angry Northern Rock shareholders as nationalisation of the mortgage lender draws ever closer.
Posted by yoyo1 @ 04:44 PM (684 views) Add Comment
14 Comments
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1. Fwb said...
Why? Why doesn't he just say they're insolvent, and if you don't like it, give us all the money back that we lent you 'as lender of last resort'? If I bought some shares and the company went bust, I wouldn't ask the government to pay out.
I do feel sorry for that Geordie who bought 6K's worth of shares instead of 'giving it to Mr Ladbrooke'. However, if he'd wanted safe he should have stuck it in bonds.
Does anyone think that there will be people in the media saying they shouldn't bail them out? It is tax payers money covering bad investment decisions.
2. mark said...
this should be bankrupt by now, all this messing around with taxpayers money...
3. Mikedx said...
How about this for compensation
"Stop your moany whining and be grateful you havent lost your house. Next time invrest more wisely greedy bast..."
4. it_is_going_with_a_bang said...
They should not compensate anyone who bought shares after all this mess started - those 'shareholders' just thought they could make a killing on the back of a big problem. They were making a BIG bet. They have lost their bet - thats all. Tough Sh*t.
I have some sympathy for long term investors - but not alot.
5. bystander said...
Bloody hedge fund parasites
6. yoyo1 said...
It's concerning to me that the leader of our nations economy invested his own home on the least credible bank. If he had no concern of his own, then that's terrifying.
7. it_is_going_with_a_bang said...
I have a friend who I said before on this blog, bought 2k worth of Northern Rock shares after all this started, I think they were about £2.50 a share. Because they watched a TV pundit say how good value the share now was.
They bought the shares because they thought they could make a killing. They placed a bet. Quite literally.
I have absolutely no sympathy. They may aswell of put 2k on The No.2 Dog at the Greyhounds Stadium on the 7.30 race.
Compensate them??? You have to be joking ... Darling...
8. paul said...
When exactly do the taxpayers get a return on their money then?
9. shipbuilder said...
This should be legally challenged, or else anyone who has ever lost money on shares should be compensated as well.
10. Si said...
Ridiculous.
The last person to be paid off is the shareholder following the collapse of the company. Before them all the debts should be paid off (ie us). When you buy shares you take the risk. Full stop.
That's how business works. Why is this one any different?
11. Ingermany said...
Northern Rock and the sub-prime lenders are an elaborate pyramid scam. Like any pyramid scam they rely on selling goods of little or no intrinsic value on the promise that the value will increase. The value can only be increased by convincing more buyers to buy in at higher and higher costs. You have to sell the idea that a 1 bed flat in Middlesbrough is a snip at 500K because next year it will be worth a million. Because no wealth is created, the pyramid has to be fed from the bottom for those at the top to profit. This means more and more poorer people have to be persuaded to pay up and join (because there are only so many rich folk and they're already in on the game). The minute newbies stop joining in, the game is up. The guys at the top scoop up their winnings and run. the guys at the bottom wonder what hit them.
The lenders and government are entirely culpable in this scam. Lending huge multiples to people who couldn't afford repayments, using advertising and "News" to convince everyone they had to get on "the ladder" etc etc. It is a pyramid scam in the same mould as those in Albania in the 90s. The question is, why would the government use taxpayer money to subsidize the scammers and why nationalise a pyramid scheme? The IMF analysis of the Albanian experience was that normalisation (after riots and public disorder settled) occurred much quicker because the government refused to step in to compensate for losses or to interfere in the process. Trying to prop up the pyramid just a little longer will only prolong the agony and make the final collapse more catastrophic.
12. sovietuk said...
What happened to Brown's Golden Rule? It seems the solution nowadays is just to hosepipe money at anything and everything regardless of the consequences, picking and choosing who does and doesn't get decent a pay rise, who gets taxed and who doesn't. The whole thing has descended into insanity.
13. Mr Plumbase said...
We don't want to risk economic stability do we!
Bale out these t**sers? Should have let the whole rotten edifice crumble to the ground, a testament to greed and mismanagement.
And a warning to others.
14. bystander said...
Shipbuilder - "This should be legally challenged, or else anyone who has ever lost money on shares should be compensated as well."
I agree, how do you start a petition on the government site to stop this going through? The taxpayer has poured enough money into the Northern Crock and we should not be paying for others mistakes, especially those parasitical hedge funds, who bought in and increased their stake to be able to put the governmnet in this position. 400p a share, they'd have bought them initially for 2.50p and then again when it bottomed out at 80p. If the government agree to anything above current valuations of 61p per share then this is a mockery and smacks of corruption. Again, does anyone out there no how to set up a petition on the governments web site to put a stop to this insanity?