Monday, Jan 21, 2008
More taxpayers money to Rock
BBC News: Rock plan 'best meets objective'
The gov. will guarantee NR bonds and sell them. This still leaves the UK taxpayer underwriting any defaults. Biggest financial assistance to any company in history.
Posted by stillthinking @ 04:45 PM (379 views) Add Comment
11 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. who stole my pension? said...
Lets keep slicing and dicing Are these bonds not really mortgage backed securities? Is the Bank of England not just another big bank that is going to make a hugh loss on subprime loans? Ok I now that these are bonds guaranteed by the government but is this not really the same as subprime. After all the governments can also go bust!
2. su said...
"Chancellor Alistair Darling has said his plan to save Northern Rock best protects taxpayers and depositors while maintaining financial stability."
I'm still struggling to understand why so much tax-payers money needed to be poured into Northern Rock and how this money is going to be protected.
3. paul said...
It won't be protected - in fact, it increases the taxpayers' liability manyfold.
If there is a house price crash (duh), and The Crock's asset value declines significantly, the loans will go bad and won't be sold and the taxpayers won't get much back of their £25bn (which is an eye-watering amount of money).
The Labour government has effectively made every taxpayer in the land dependent on house prices only ever going up. I hope to god this sale doesn't go through because any public auditor worth their salt should be able to say
"Hmm house prices always going up - do you think that's a safe assumption right now?!"
4. sovietuk said...
Strange - the day there are massive falls on the ftse, basket case Rock shares go up. Underlines what a sham and a sick shambles Browns' economy is.
5. stillthinking said...
If, as many of you pundits propose, we face a 40% drop in asset values, and loan to value restrictions force sales, then the government is going to lose billions and make Lawson look like a successful businessman.
Really, I am amazed at how Labour could possibly have created such an appalling situation. House shortage, falling house prices, lack of infrastructure, PFI liabilities, gov. deficit, inflation (and possibly deflation as well later!), wages squeeze, failing public services, ever increasing taxation, sterling collapse..
And I haven't even finished. You have to say wow really.
6. su said...
Thanks for the explanation, Paul.
Do we the taxpayers ever get to find out how Northern Rock spends our money?
7. stillthinking said...
Also, idiot Brown hasn't considered the fact that given guarantees, there will be no point helping mortgage holders stay in their homes, the sooner you can punt them out, the sooner you can collect on your guarantee. Given sterling is going down, going for repossession and a quick sale as soon as possible will maximise profits.
So both taxpayer and mortgage holder lose.
8. inbreda said...
That wouldn't half sting. Imagine being evicted from your own home by the bailifs, because you couldn't afford the mortgage, because taxes went up, in order to pay off The Hood and keep your mortgage company afloat, so they could evict you....
gutting.
9. bystander said...
There is no mention in the above comments of the parasitic hedge funds who bought into the Crock after it went belly-up and then increased their stakes, to bully the board and government to cover their @rses if everything went wrong - didn't they demand a buyout at 400pence per share, after they had bought most of theirs for 80p, if the government continue this farce, then every single bank that is having difficulties should demand the same and should get the same in the future, UK PLC. will be well and truly bankrupt, then who will bail us out?. This plan will be like giving those them a huge pat on the back for their clever and aggressive capitalist approach. Nationalise and be damned, privatise and be damned. This is fast turning into a very black comedy.
10. justwatching said...
but why exactly wasn't this failed business just allowed to go bust originally???
11. wiltshire said...
I think our only hope is that enough people are paying attention to what is actually occuring in this country at the moment. I know there's a hell of a lot of OK readers and 'I'm A Celebrity....' viewers but there's also a lot who are a bit more interested in how the country is run. Liebour are going to be toast at the next election. It was so telling when the queues at Northern Rock basically ignored Alistair Darling's promises that their money was safe. This government loses more and more credibility with each passing day.