Jump to content
House Price Crash Forum
Sign in to follow this  
Smell the Fear

Northern Rock Crisis Good For Brown

Recommended Posts

Most insanely optimistic article of the week goes to John Rentoul (Rent-a-tool?)

Independent

"The Northern Rock crisis has just saved Gordon Brown's bacon. The Prime Minister should be privately pleased at the im-promptu re-enactments on the high streets of Britain of the scene in Mary Poppins where eight-year-old Michael asks the bank for his penny back."

"Yet a bit of panic may be just what the British economy needs right now. The mongers of economic doom have been warning for some time about growing indebtedness. It is one of those artificial themes used by the professional blood-chillers of the journalistic trade, who often write as if queues of worried savers are precisely the outcome they seek. But there are two sides to every transaction, and higher borrowing is just as much a good sign as a bad one. It means interest rates are low and people are confident about the future."

"The optimistic case runs as follows. If the real threat to economic stability is people borrowing more than they can afford – or, as there are two parties to every transaction, banks lending irresponsibly – then what banks and borrowers need is a fright. If it makes borrowers think twice and lenders more cautious, it reduces the risk of an unsustainable credit bubble."

"Meanwhile, because central banks know more about how to manage these crises than they used to, no one should get seriously hurt. Savers with Northern Rock are protected. Shareholders in the company will lose money, but that is the price they must pay for the poor decisions taken by their executives. That too will help other lenders rediscover the virtues of prudence."

"The point about house prices is that they depend largely on interest rates and employment. Interest rates are still low by historical standards, and employment high, with no one forecasting much change."

"Far from being a portent of doom, the troubles at Northern Rock are a sign that the system works. The company expanded too fast and unwisely; it has suffered the consequences, with minimum harm to savers."

"What is the biggest threat to Gordon Brown's plan to win a fourth Labour election victory? It's the economy, stupid. But it is not simply that he would be punished if the long boom that we have enjoyed since 1992 came to an end. People know that the fate of the British economy depends largely on what happens in Europe, America and the Far East, but that what Brown and Alistair Darling do can make a difference at the margins. The nudge to the system administered by Northern Rock makes it more likely that the economy can ride out other surprises in the next few years."

:lol:

Share this post


Link to post
Share on other sites
Guest wrongmove

That is a cracker! Bank run good for the economy!

There is a chance that things will not end up in the favour of the uberbears though.

If the NR crisis does blow over - e.g. NR gets bought up, savers all get their cash, borrowers are uneffected - no resets or anything, then this could actually boost confidence, rather than completely hammer it. "The system works, the government won't let bad things happen, we can all go back to sleep again" type (mis)thinking.

A lot depends IMHO on whether this spreads to any other banks. It seems however that a lot of NR cash is ending up at B&B, A&L etc, so no sign of that yet.........

Share this post


Link to post
Share on other sites

...this is the sort of piffle written, when there is no opposition in Parliament....'Greenie Cameron' has thrown away deliberately or otherwise any chance of election and this will be the reason Gordo gets back in ......certainly not because of the waffle from the Independent.... :lol::lol::lol::lol::P

Share this post


Link to post
Share on other sites
Guest Winnie
That is a cracker! Bank run good for the economy!

There is a chance that things will not end up in the favour of the uberbears though.

If the NR crisis does blow over - e.g. NR gets bought up, savers all get their cash, borrowers are uneffected - no resets or anything, then this could actually boost confidence, rather than completely hammer it. "The system works, the government won't let bad things happen, we can all go back to sleep again" type (mis)thinking.

A lot depends IMHO on whether this spreads to any other banks. It seems however that a lot of NR cash is ending up at B&B, A&L etc, so no sign of that yet.........

Clearly being a "veteran" does not always bring wisdom.

Share this post


Link to post
Share on other sites

Nice to read somthing for balance, I feel so much better now. :lol::lol:

Most insanely optimistic article of the week goes to John Rentoul (Rent-a-tool?)

Independent

"The point about house prices is that they depend largely on interest rates and employment. Interest rates are still low by historical standards, and employment high, with no one forecasting much change."

:lol:

I love this statement, it is trotted out almost as much as the lack of supply. In essence they are both correct but it amazes me people can't see the fact that this can not support house prices to the moon which is where they are now.

Even in the mist of the credit crunch they fail to see that it is credit driving the prices backed up by ill informed article like this. It will be interesting to see where employment and interest rates go if this credit crunch persists, it has already given some pretty good clues!!!

Share this post


Link to post
Share on other sites
If the NR crisis does blow over - e.g. NR gets bought up, savers all get their cash, borrowers are uneffected - no resets or anything, then this could actually boost confidence, rather than completely hammer it. "The system works, the government won't let bad things happen, we can all go back to sleep again" type (mis)thinking.

Yes. This may be why they prevented Lloyds or RBS doing a deal last week - they wanted a sacrificial lamb and guess what, it's the NR shareholder. They can protect the depositors and that's all that matters politically.

Nobody is as smart as they think they are or as stupid as others think.

Share this post


Link to post
Share on other sites
Most insanely optimistic article of the week goes to John Rentoul (Rent-a-tool?)

Independent

"The Northern Rock crisis has just saved Gordon Brown's bacon. The Prime Minister should be privately pleased at the im-promptu re-enactments on the high streets of Britain of the scene in Mary Poppins where eight-year-old Michael asks the bank for his penny back."

"Yet a bit of panic may be just what the British economy needs right now. The mongers of economic doom have been warning for some time about growing indebtedness. It is one of those artificial themes used by the professional blood-chillers of the journalistic trade, who often write as if queues of worried savers are precisely the outcome they seek. But there are two sides to every transaction, and higher borrowing is just as much a good sign as a bad one. It means interest rates are low and people are confident about the future."

"The optimistic case runs as follows. If the real threat to economic stability is people borrowing more than they can afford – or, as there are two parties to every transaction, banks lending irresponsibly – then what banks and borrowers need is a fright. If it makes borrowers think twice and lenders more cautious, it reduces the risk of an unsustainable credit bubble."

"Meanwhile, because central banks know more about how to manage these crises than they used to, no one should get seriously hurt. Savers with Northern Rock are protected. Shareholders in the company will lose money, but that is the price they must pay for the poor decisions taken by their executives. That too will help other lenders rediscover the virtues of prudence."

"The point about house prices is that they depend largely on interest rates and employment. Interest rates are still low by historical standards, and employment high, with no one forecasting much change."

"Far from being a portent of doom, the troubles at Northern Rock are a sign that the system works. The company expanded too fast and unwisely; it has suffered the consequences, with minimum harm to savers."

"What is the biggest threat to Gordon Brown's plan to win a fourth Labour election victory? It's the economy, stupid. But it is not simply that he would be punished if the long boom that we have enjoyed since 1992 came to an end. People know that the fate of the British economy depends largely on what happens in Europe, America and the Far East, but that what Brown and Alistair Darling do can make a difference at the margins. The nudge to the system administered by Northern Rock makes it more likely that the economy can ride out other surprises in the next few years."

:lol:

how on earth do they work this one out???

elections are won and lost on the performance of the economy at the time of polling.

the only hope Gordon has left,is there are SO many dependent on state handouts that the electorate are too scared to do the right thing and address the real problem....which is too much public money spent on non-productive public-sector non-jobs,a monster of Gordon's own creation.

Share this post


Link to post
Share on other sites
Guest wrongmove
Clearly being a "veteran" does not always bring wisdom.

Er - that's senior veteran to you, thank you! :P

Share this post


Link to post
Share on other sites
Guest wrongmove
elections are won and lost on the performance of the economy at the time of polling.

That is not entirely true - Major won in the aftermath of a disasterous recession and HPC.

People vote for who they see as the moct competant. A recent poll asked "if the economy hit problems, who would you trust to sort them out?"

Labour won something like 60:30 - a massive margin.

Link: In Gordon Brown we trust – so will he seize the day?

".....The most striking finding is over a hypothetical – but perhaps all too real – question: “If Britain’s economy were to face problems in the months or years ahead, who would you most trust to deal with it in the best interests of Britain?” According to Populus, this is a clear victory for Gordon Brown and Alistair Darling over David Cameron and George Osborne, by 61 to 27 per cent. Even a quarter of Tory voters (23 per cent) favour the Brown/Darling team, as do two thirds of Liberal Democrats........"

Share this post


Link to post
Share on other sites
".....The most striking finding is over a hypothetical – but perhaps all too real – question: “If Britain’s economy were to face problems in the months or years ahead, who would you most trust to deal with it in the best interests of Britain?” According to Populus, this is a clear victory for Gordon Brown and Alistair Darling over David Cameron and George Osborne, by 61 to 27 per cent. Even a quarter of Tory voters (23 per cent) favour the Brown/Darling team, as do two thirds of Liberal Democrats........"

Of course!

Every day, up until yesterday, all we could hear about the UK's economy was how strong it is and has been under the leadership of Gordon for the last 10 years. Without the media regularly carving him and the UK's economic policies to pieces he will win everytime.

As RB has started to say, when the Sun changes so too will sentiment.

Share this post


Link to post
Share on other sites
Of course!

Every day, up until yesterday, all we could hear about the UK's economy was how strong it is and has been under the leadership of Gordon for the last 10 years. Without the media regularly carving him and the UK's economic policies to pieces he will win everytime.

As RB has started to say, when the Sun changes so too will sentiment.

This is a good point, but it makes me sick to see the attempts to spin the bad to look good.....GB will have the no 1 worst prediction ever with 'no more boom and bust' when this mess is finally unwound

Share this post


Link to post
Share on other sites

That is not entirely true - Major won in the aftermath of a disasterous recession and HPC.

and here is the rub.

1n 1991 we were in deep doo doo.

...so what do they do....START A WAR!!!!

The war is the joker in the pack,whenever one of these happens,people will vote to keep the status quo.

worked in 1983(falklands),and 1987(libya).....and 1992(iraq)...and 2004(iraq)....and 2008(iran)

you'll notice I left 1997 out...what happened there??...oh change of guard.

kosovo was in 1999 wasn't it??

oh,and who does john major work for now??

Edited by oracle

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 356 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.