Rinoa Posted January 23, 2009 Share Posted January 23, 2009 LONDON (ShareCast) - Northern Rock (LSE: GB0001452795.L - news) is in line to receive an extra £10bn of government money to help the nationalised bank ramp up mortgage lending.There's also talk in the City that the Newcastle-based lender, taken over by the government in February last year, may start hiring new staff. The injection may take the form of equity and a new loan, which will include the £3bn already set to be converted from part of its loan to the bank into equity, according to the Telegraph. Rock may receive the money in the form of a 50:50 split between new equity and a loan, with some £5bn of new equity giving the bank the firepower to do about £50bn of new lending. LINK So, instead of telling their current customers to take their business elsewhere, it would appear they'll soon be lending again on a massive scale. Quote Link to comment Share on other sites More sharing options...
Timm Posted January 23, 2009 Share Posted January 23, 2009 Rock may receive the money in the form of a 50:50 split between new equity and a loan, with some £5bn of new equity giving the bank the firepower to do about £50bn of new lending. Oh shit, I hope the MSM don't get hold of this. "Money as Debt" free with the Mail on Sunday. "I'm Jeremy Vine, and tonight on Panorama we show you how the banks magic up money from thin air." Quote Link to comment Share on other sites More sharing options...
Mr Prudence Posted January 23, 2009 Share Posted January 23, 2009 So the taxpayer is going to spend money to keep housing unaffordable. Nice. Quote Link to comment Share on other sites More sharing options...
ImA20SomethingGetMeOutOfHere Posted January 23, 2009 Share Posted January 23, 2009 Can somebody tell me how "new equity" is different from getting the BoE to print money and give it to Northern Crock to bring back the 125%er? Quote Link to comment Share on other sites More sharing options...
Confounded Posted January 23, 2009 Share Posted January 23, 2009 After staff receive their unbelievable bonus for running the books down they will now be given bonuses for expanding their books. Incredible. Quote Link to comment Share on other sites More sharing options...
ImA20SomethingGetMeOutOfHere Posted January 23, 2009 Share Posted January 23, 2009 Since it's Friday afternoon I thought I'd make a little cartoon to express my feelings: Quote Link to comment Share on other sites More sharing options...
sbn Posted January 23, 2009 Share Posted January 23, 2009 hang on - average mortgage required say... what.. 200K? 5 of them in £1M 1000 of those uses up the £50B? so this will shift 5000 houses HPC OVER!!!!!!!!!! Quote Link to comment Share on other sites More sharing options...
terryturbojr Posted January 23, 2009 Share Posted January 23, 2009 (edited) hang on - average mortgage required say... what.. 200K?5 of them in £1M 1000 of those uses up the £50B? so this will shift 5000 houses HPC OVER!!!!!!!!!! Surely if average mortgage £200k then 5 in £1m so 5,000 in £1bn so 25,000 in £5bn and 250,000 in £50bn Edited January 23, 2009 by terryturbojr Quote Link to comment Share on other sites More sharing options...
Neil B Posted January 23, 2009 Share Posted January 23, 2009 So the taxpayer is going to spend money to keep housing unaffordable. Nice. I don't think it means this, I believe quite the opposite will happen: Housing will become affordable again as prices drop to match the available mortgages. The injection of money into the system ensures that Northern Rock can again offer more Mortgages and Loans, though only un-risky ones. Quote Link to comment Share on other sites More sharing options...
Concrete Jungle Posted January 23, 2009 Share Posted January 23, 2009 (edited) Ooops my bad Edited January 23, 2009 by Concrete Jungle Quote Link to comment Share on other sites More sharing options...
Timm Posted January 23, 2009 Share Posted January 23, 2009 EU say no? http://uk.reuters.com/article/rbssFinancia...N47545220090123 The European Commission is threatening to veto the British government's revised plan to allow nationalised mortgage bank Northern Rock to lend more, the Guardian reported on Friday. The newspaper said in an unsourced report that European Union Competition Commissioner Neelie Kroes and her senior officials believed the British government's latest instructions to Northern Rock may break EU state aid rules. Quote Link to comment Share on other sites More sharing options...
sbn Posted January 23, 2009 Share Posted January 23, 2009 Surely if average mortgage £200kthen 5 in £1m so 5,000 in £1bn so 25,000 in £5bn and 250,000 in £50bn Bugger - you're right! Is it all over then (knew I shouldnt've had that second pint at lunch) Quote Link to comment Share on other sites More sharing options...
0q0 Posted January 23, 2009 Share Posted January 23, 2009 IMA20SOMETHING that really made me laugh! Yes looks like they're desperate to get lending going, so they're going to irresponsibly lend again - anything to get re-elected, just anything. But nothing's going to save them. It's all over for Labour. Quote Link to comment Share on other sites More sharing options...
Y-QUERK Posted January 23, 2009 Share Posted January 23, 2009 (knew I shouldnt've had that second pint at lunch) of turpentine? Quote Link to comment Share on other sites More sharing options...
Hip to be bear Posted January 23, 2009 Share Posted January 23, 2009 I don't think it means this, I believe quite the opposite will happen: Housing will become affordable again as prices drop to match the available mortgages.The injection of money into the system ensures that Northern Rock can again offer more Mortgages and Loans, though only un-risky ones. So prices will come down because there is lots of mortgage money going around.?.?.? Huh? That must be why prices came down so much between 1997 and 2007....due to all that mortgage money being available Quote Link to comment Share on other sites More sharing options...
sbn Posted January 23, 2009 Share Posted January 23, 2009 of turpentine? Look, Ok, I admit - I had a sibley moment. But I'm Saving the my bottle of vintage turpentine until £ parity with the Zimbabwe dollar Quote Link to comment Share on other sites More sharing options...
Pindar Posted January 23, 2009 Share Posted January 23, 2009 (edited) It doesn't say what the lending criteria will be though does it? This will probably only be available to existing BTL who are on SVR and those with already enormous equity. But I agree, the taxpayer is being used to keep houses unaffordable. Pretty disgusting. Edited January 23, 2009 by Mouse Quote Link to comment Share on other sites More sharing options...
Bearfacts Posted January 23, 2009 Share Posted January 23, 2009 The real point here is the cynicism and boneheaded stupidity of the government. They have learnt absolutley nothing. And are immoral to boot. The UK economy is in recession because we produce sweet FA and have been living on debt for the last ten years at least. How do our masters attempt to resolve our economic woes - not by investing money into research and development , encouraging manufacturing or anything else remotely productive or of use but by borrowing money to give to banks that lent irresponsibly to go and lend irresponsibly again in a desperate bid to push house prices back up to levels that proved to be unsustainable. You really couldnt make it up ... I dont know whether to laugh, cry or just leave this country. Our governmment are now borrowing money from our children to ensure that they will never be able to own a property ! UNBELIEVABLE Quote Link to comment Share on other sites More sharing options...
bobthe~ Posted January 23, 2009 Share Posted January 23, 2009 EU say no?http://uk.reuters.com/article/rbssFinancia...N47545220090123 I would say that's illegal state aid, and unfair on other banks. For instance Woolwich at the moment are doing trackers of 3% over base rate. If NR come in at 0.5% over base rate, they have an unfair advantage, because they have access to govt money. Quote Link to comment Share on other sites More sharing options...
shindigger Posted January 23, 2009 Share Posted January 23, 2009 The real point here is the cynicism and boneheaded stupidity of the government. They have learnt absolutley nothing. And are immoral to boot. The UK economy is in recession because we produce sweet FA and have been living on debt for the last ten years at least. How do our masters attempt to resolve our economic woes - not by investing money into research and development , encouraging manufacturing or anything else remotely productive or of use but by borrowing money to give to banks that lent irresponsibly to go and lend irresponsibly again in a desperate bid to push house prices back up to levels that proved to be unsustainable. You really couldnt make it up ... I dont know whether to laugh, cry or just leave this country.Our governmment are now borrowing money from our children to ensure that they will never be able to own a property ! UNBELIEVABLE 100% agree. Wake me when her majesty's opposition decides to mention any of the above. Quote Link to comment Share on other sites More sharing options...
terryturbojr Posted January 23, 2009 Share Posted January 23, 2009 Bugger - you're right!Is it all over then (knew I shouldnt've had that second pint at lunch) I had 3 pints (which meant I went over those figures about 10 times to make sure I wasn't incorrect in my correction ) Quote Link to comment Share on other sites More sharing options...
gavp Posted January 23, 2009 Share Posted January 23, 2009 Can somebody tell me how "new equity" is different from getting the BoE to print money and give it to Northern Crock to bring back the 125%er? The only difference is that, as far as we know, the government is still funding this from borrowing rather than printing mon...sorry, 'quantative easing'. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 23, 2009 Share Posted January 23, 2009 If they have 5bn in cash to lend, then thats what they can lend. They are not taking deposits any more I beleive, so they cant do the banking shuffle. i expect most of this money will be to renew existing EOL mortgages already with them, as they were turing thousands away to the rest of the market. Their other impaired assets and mortgage book is probably a mess too. Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted January 23, 2009 Share Posted January 23, 2009 EU say no?http://uk.reuters.com/article/rbssFinancia...N47545220090123 Could the EU actually do something i agree with? Quote Link to comment Share on other sites More sharing options...
Neil B Posted January 23, 2009 Share Posted January 23, 2009 (edited) So prices will come down because there is lots of mortgage money going around.?.?.? Huh?That must be why prices came down so much between 1997 and 2007....due to all that mortgage money being available No - prices will come down to match the available mortgages - i.e. prices will equal maximum loan values = 3 - 5 x salary - there are plenty of mortgages at these multiples available right now. The reason that prices went up between 1997 and 2007 was for the same reason - available mortgages, but becuase the mortgages were risky, sometimes in excess of 10 x salary, the prices went up to match - its a simple rule of supply and demand Edited January 23, 2009 by Neil B Quote Link to comment Share on other sites More sharing options...
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