Monday, Feb 18, 2008
Banking Mad?
The Times: Absolutely, incredibly, utterly wrong!
"Why should a Government that has consistently refused to offer public funding for potentially viable commercial projects of real national importance - aerospace, public transport, nuclear power - now be spending tens of billions on supporting a bust mortgage bank?"
Posted by quiet guy @ 01:33 AM (707 views) Add Comment
11 Comments
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1. cornishman said...
So that GB can keep the housing market afloat for a year or so with 150% sub-prime mortgages to anyone who wants one?
2. bystander said...
...............from an earlier blog
Here are my ideas:
Government now has huge vested interest in the performance of the property market so:
1) Pressure put on MPC to drop onterest rates like a stone over coming months and hold them there far too long. (side effect - high imported inflation- lower standards of living due to much higher living costs - food, fuel, reignited housing bubble)
2) Re-inflate property bubble, based on even cheaper debt.
3) Northern Crock Mortgage book looks extremely good.
4) Northern Crock sold to private equity firm for massive profit to the government and subsequently Tax payer gets their money back. Seen to be a big success.
Brown and Co. become opposition after next general election.
5) HPC put on hold for another few years, probably after the Olympics
6) HPC finally happens, Torylib government stuffed with huge GDP deficit and crashing house prices.
Crash and Darling end up having a real go at the new Torylib government from the safety of the opposition bench.
How does this sound?????
Sunday, February 17, 2008 08:22PM
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3. Ilejustwait said...
because if the government turn Northern Rock around they think they will earn more `Brown ie` pionts from the public !!
4. alan said...
Everyone knows about NR's flawed business model. However, when Metronet got it's numbers (and operating method) wrong, Ken and the government forced it into administration. The principal shareholders were offered nothing.
This seems to show two different attitudes towards UK industry.
5. bystander said...
with any luck RAB and SRM will RIP after losing most of their investments - but in reality I think through bully-boy tactics and legal loopholes they will probably end up with a tidy profit. I agree Alan - the financial industry does appear to be above the law and as such can do whatever it wishes with little or no fear of ever having to reap what it sows, except ofcourse when thing are going great and its bonus season. As they say sh*t floats.
6. it_is_going_with_a_bang said...
The principle involved here has nothing to do with caring about Northern Rock workers and everything to do with trying to protect the reputation of the Gordon Brown.He may stick little Darling up to give us all the news but everyone knows who's operating that muppet.
The problem not is that they stepped in to 'save' Northern Rock. So the only realistic option - to close it down and get the taxpayers money back - would be a huge climb down. Not something Gordon likes doing.
"£100 billion that the Government is now devoting to just 6,000 jobs at Northern Rock"
Quite absurd.Totally out of proportion.
Why is it that Darling thinks he is saving the banking industry? If you run a company on a bad business model and it fails - then it fails. Big deal. Everyone can see why they failed. It should be taken as a lesson by all other banks. Or is that really what this is about? He doesn't want anyone to learn a lesson. Because if they did learn it well then HPC would be guaranteed.
Maybe he should be more honest and just say "we're on the edge of a huge house price crash and I will do anything to convince you we are not."
7. Hyrax said...
...boecause Britain long ago forgot that wealth creation invlves the value-added manufacture of technology goods.
The ar*e-on-seats finanical flipping jobs were and still are considered a suitably brainy and forward looking activity to support a whole country, where grace
and favour has far more value than smart action, technological advancement and good old meritocracy.
8. This comment has been removed as it was found to be in breach of our Blog Policies.
9. An Bearin Bui said...
What annoys me is that this kind of ending to the NR story was obvious from the beginning: it had a rubbish loan book, was a dodgy lender and based on nothing but securitised lending. NR should have been allowed to die a death, as Anatole K. suggests in this article, at the beginning of this fiasco i.e. being wound down slowly with savers' deposits transferred to NS&I, mortgages slowly paid off, bonds converted to govt bonds etc. That would have finished the bank and its employees would have been fired but so be it.
Now instead the taxpayer is forced to support the irresponsible lending of Applegarth et al and the unsustainable speculation of BTL investors and Together mortgage-holders. What a fiasco. And yet those of us who objected to the NR rescue package back in August were accused of being uncaring and too harsh when we were right all along. Why weren't the media speaking out against this government intervention from day one instead of only speaking out now when it has turned into a fiasco that will weigh on the public purse for decades to come?
10. Plato said...
Has anyone checked the investment interests of Family, Friends, Associates, Connections etc.?
Something doesn't smell quite right here.
11. Plato said...
I've got to put a footnote to this.
This Government has just signed their Death Warrant. This will bring them down for certain. The Justice in Britain although diluted by their manipulation will see them sentenced.
What a bunch of morons!