Martin Lewis - Money Saving Expert - Out Of His Depth

[Converted Lurker]

Just caught a bit of his advice on R5, ****, elbow isn't in it. "Everything will be fine, the BoE would not support if they did not believe NR was solvent" was his overall message. Was adamant folk are protected by govt below 35K muppet

[Confiteor]

Like many pundits, he'll just be making sure he has his money exactly where he wants it before then admitting leaving money in NR (or some others) is complete madness.

They are going through the motions of portraying the queuing savers as irrational, but they know getting your mitts on your cash is exactly the right thing to do.

The FSCS scheme is losing credibility by the hour but, even if it did guarantee a full payout, the time involved in applying for and eventually receiving the money would be a nightmare.

[Converted Lurker]

Like many pundits, he'll just be making sure he has his money exactly where he wants it before then admitting leaving money in NR (or some others) is complete madness.

They are going through the motions of portraying the queuing savers as irrational, but they know getting your mitts on your cash is exactly the right thing to do.

The FSCS scheme is losing credibility by the hour but, even if it did guarantee a full payout, the time involved in applying for and eventually receiving the money would be a nightmare.

someone suggested a separate thread on the compensation scheme, its already here, needs bumping.

[Its time to buy]

They are told what to say at this stage. Under no circumstances will the pundits say withdraw money out now and turn a panic into a riot.

[mybrainhurts]

Just caught a bit of his advice on R5, ****, elbow isn't in it. "Everything will be fine, the BoE would not support if they did not believe NR was solvent" was his overall message. Was adamant folk are protected by govt below 35K muppet

I think he is right on this occasion. It is politically inconceivable, after all the reassurances from Brown and Darling, that NR will be allowed to go down the drain. It is also politically inconceivable now that any other uk bank will be allowed to fail because that would look as if NR depositors had received special treatment. So uk banks have been awarded a gold-plated version of the "Greenspan put" and the idea of moral hazard is obsolete. another triumph for new labour!

[Bear Goggles]

IMO Martin Lewis is enough of a well known figure to have to be careful what he says! He could cause panic if he said "Get your money out now!".

The media pundits have a huge amount of responsibility now not to spook the herd. Imagine being blamed for a banking meltdown?

[Ash4781]

IMO Martin Lewis is enough of a well known figure to have to be careful what he says! He could cause panic if he said "Get your money out now!".

The media pundits have a huge amount of responsibility now not to spook the herd. Imagine being blamed for a banking meltdown?

Did you not receive the MSE emergency crisis email ?

Edited September 17, 2007 by Ash4781

[Blue Peter]

I think he is right on this occasion. It is politically inconceivable, after all the reassurances from Brown and Darling, that NR will be allowed to go down the drain. It is also politically inconceivable now that any other uk bank will be allowed to fail because that would look as if NR depositors had received special treatment. So uk banks have been awarded a gold-plated version of the "Greenspan put" and the idea of moral hazard is obsolete. another triumph for new labour!

Presumably it's just the depositors which have been awarded this? I don't think that they are going to save NR, apart from allowing it to be taken over in an orderly fashion, are they?

Peter.

[Orbital]

so, what, you guys are saying that the problem isnt made worse by people rushing the bank? The irony is that its the panic that will send the bank down. If people didnt have the mentality displayed in this very thread there wouldnt have been a prob.

[bearORbullENIGMA]

so, what, you guys are saying that the problem isnt made worse by people rushing the bank? The irony is that its the panic that will send the bank down. If people didnt have the mentality displayed in this very thread there wouldnt have been a prob.

But, isn't that the very reason many people are opposed to the whole fractional reserve banking thing....that the system is fine unless the mentality you refer to is displayed (ie people rushing to get their money out)?

[thecrashingisles]

so, what, you guys are saying that the problem isnt made worse by people rushing the bank? The irony is that its the panic that will send the bank down. If people didnt have the mentality displayed in this very thread there wouldnt have been a prob.

Did people start queueing up to get their money before or after NR applied to the BoE for a life-support credit line?

[Converted Lurker]

Did you not receive the MSE emergency crisis email ?

quite and in answer to others he has no responsibility, or need, to get involved in discussing this mess, he is out of his depth as was proved by some of the answers he gave. The only guarantee NR depositors have is in the fatih of their own decisions made by analysing all the available (credible) advice. Those queing up and bombarding the NR site to shift their money are dead right. They're acting with 'gut feeling' but as the compensation thread proves their gut feeling Fri. morning onwards was spot on.

There is no protection, other than the mutuality of contributing banks/building societes and the value of that scheme does not even extend to the amount already withdrawn. Mr Lewis should have had the dignity and common sense to stay out of a debate were other than bluster and motor mouth tactics he was out of his depth. He managed to plug his site surprised he didn't ask folk to buy his book

[Converted Lurker]

so, what, you guys are saying that the problem isnt made worse by people rushing the bank? The irony is that its the panic that will send the bank down. If people didnt have the mentality displayed in this very thread there wouldnt have been a prob.

[mybrainhurts]

Presumably it's just the depositors which have been awarded this? I don't think that they are going to save NR, apart from allowing it to be taken over in an orderly fashion, are they?

Peter.

The shares are trading at about 300p at the moment. That may not be a lot but it is rather more than a zero value. And the management may not feel too good about themselves at the moment but to be allowed to preside over an orderly takeover is I would have thought orders of magnitude less horrible than presiding over an insolvent liquidation. So I don't think it is just the depositors who benefit.

[Woody Finch]

quite and in answer to others he has no responsibility, or need, to get involved in discussing this mess, he is out of his depth as was proved by some of the answers he gave. The only guarantee NR depositors have is in the fatih of their own decisions made by analysing all the available (credible) advice. Those queing up and bombarding the NR site to shift their money are dead right. They're acting with 'gut feeling' but as the compensation thread proves their gut feeling Fri. morning onwards was spot on.

There is no protection, other than the mutuality of contributing banks/building societes and the value of that scheme does not even extend to the amount already withdrawn. Mr Lewis should have had the dignity and common sense to stay out of a debate were other than bluster and motor mouth tactics he was out of his depth. He managed to plug his site surprised he didn't ask folk to buy his book

So Martin Lewis is 'out of his depth' but people on this site aren't??

Anyone is entitled to their judgement. What matters is whether it is sound or true.

In this case Lewis is right. No one is going to lose their savings from NR nor from any other bank. The people who are really shafted are the NR shareholders.

This is mainly because NR is solvent. But more importantly because the British govt has effectively guaranteed that no one will lose their savings and it would be politically impossible for them to renege on that.

Unfortunately this post doesn't fit into the seemingly most favoured 'fire and brimstone' style of posting and will therefore probably be ignored or ridiculed.

[Bloo Loo]

As Ive posted on another thread- for the media to advertise that a financial institution is in trouble would cause a run on that institution- if he breathed a word about A+L or B+B then there would be queues there too.

My advice- draw down to safe levels in accounts in all banks- if they go down, at least all its cost you is a couple of grand and some hassle

Keep the rumours to yourselves or it all becomes a self fulfilling prophecy. And Martin the MSE knows this only too well.

[Solvent Celt]

so, what, you guys are saying that the problem isnt made worse by people rushing the bank? The irony is that its the panic that will send the bank down. If people didnt have the mentality displayed in this very thread there wouldnt have been a prob.

If the bank IS solvent then a run won't take it down.

If the bank can't meet it's debts as and when they fall due then they are bust. Same as any other business.

Except the BOE is standing by with a blank cheque.

[Laughing Gnome]

But more importantly because the British govt has effectively guaranteed that no one will lose their savings and it would be politically impossible for them to renege on that.

Have they? Apparently Corporal Jones danced around a question of 100 percent guarantees this morning.

Incidentally, what's stoozing?

[Converted Lurker]

So Martin Lewis is 'out of his depth' but people on this site aren't??

There is far more expert opinion on this site contained in many threads on the subject than from Mr Lewis today IMHO

Anyone is entitled to their judgement. What matters is whether it is sound or true.

Confused?

In this case Lewis is right. No one is going to lose their savings from NR nor from any other bank. The people who are really shafted are the NR shareholders.

You can guarantee that how, don't tell me 'they' won't let it happen?

This is mainly because NR is solvent. But more importantly because the British govt has effectively guaranteed that no one will lose their savings and it would be politically impossible for them to renege on that.

Again do you research, the govt do not guarantee anything, the compensation scheme is not you and me turning up at Threadneedle st. showing a pass book and walking out with a smile after an apology. The paperwork is horrendous.

Unfortunately this post doesn't fit into the seemingly most favoured 'fire and brimstone' style of posting and will therefore probably be ignored or ridiculed.

Nonsense, you are unlikely to have found a better more balanced and informed debate on NR than any other forum IMHO.

Edited September 17, 2007 by Converted Lurker

[Sour Mash]

so, what, you guys are saying that the problem isnt made worse by people rushing the bank? The irony is that its the panic that will send the bank down. If people didnt have the mentality displayed in this very thread there wouldnt have been a prob.

What's your point?

What causes the situation of the bank imploding is irrelevant. The fact is that investors could lose their money, so they are doing exactly the right thing to safeguard themselves by withdrawing it.

Even if it increases the risk that what they fear will come to pass, doesn't matter to them as their money is now safe®.

It's the people who believe the official line of 'no need to panic' that stand to lose out. Standing around after the fact whining that it was a self-fulfilling prophecy caused by 'idiots who panicked' isn't going to provide any comfort to them is it now.... Who's the idiot - the person who has all their savings or the person who loses everything above 35k?

Remember - the whole point of putting your money into a savings account is that you are risk averse. If there is significant risk of course savers are going to withdraw their money.

[Woody Finch]

Except the BOE is standing by with a blank cheque.

The BoE LENDS MONEY to the bank, a debt which must be repaid, like any other, and at a penalty rate.

So it's not a bailout, it's not a blank cheque, it is just a short term loan until idiots and panic-stricken money market muppets realise that stopping lending completely is at least as stupid as lending to anyone. And it does not imply insolvency in any way.

But of course I must be work for NR / be a government spin doctor / BTL investor to even be contemplating this...

[Bloo Loo]

If the bank IS solvent then a run won't take it down.

If the bank can't meet it's debts as and when they fall due then they are bust. Same as any other business.

Except the BOE is standing by with a blank cheque.

The bank may be solvent, but in a run, it becomes illiquid- its not the same as a standard business because of this fractional reserve thingy- they rely on you NOT drawing your money out at the same time as everybody else- thats the whole danger in their business model

[needle]

"Everything will be fine, the BoE would not support if they did not believe NR was solvent" was his overall message.

I dont understand the logic here -

It doesnt need help, so we'll help.

If it did need help, we wouldnt help.

WTF sort of logic is that?

[margesimpson]

But, isn't that the very reason many people are opposed to the whole fractional reserve banking thing....that the system is fine unless the mentality you refer to is displayed (ie people rushing to get their money out)?

You are joking. Stop 100 people in the street and ask them if they are opposed to "the whole fractional reserve banking thing" and they won't have a clue what you are talking about.

People are rushing to get their money because they have problems accessing it and they don't want to lose it.

Orbital is spot on. There isn't a problem in Spain where banks have had to get similar Central Bank help. No queues. No panic. No problemo.

[Woody Finch]

So Martin Lewis is 'out of his depth' but people on this site aren't??

There is far more expert opinion on this site contained in many threads on the subject than from Mr Lewis today IMHO

There is expert opinion on this site, and also total eye-swivelling nonsense - sometimes it's hard to tell the two apart.

Anyone is entitled to their judgement. What matters is whether it is sound or true.

Confused?

Why are you confused? What I'm saying is that it's stupid to attack peopple simply for having a VI / not being experts. People should address themselves to the reasons and justifications being given not facts about the person speaking. (Ad hominem attacks are invalid.)

In this case Lewis is right. No one is going to lose their savings from NR nor from any other bank. The people who are really shafted are the NR shareholders.

You can guarantee that how, don't tell me 'they' won't let it happen?

This is mainly because NR is solvent. But more importantly because the British govt has effectively guaranteed that no one will lose their savings and it would be politically impossible for them to renege on that.

Again do you research, the govt do not guarantee anything, the compensation scheme is not you and me turning up at Threadneedle st. showing a pass book and walking out with a smile after an apology. The paperwork is horrendous.

You don't bother to respond to my point that they are solvent. Is that being disputed? Horrendous paperwork is hardly reason for disputing the validity of the general guarantee. The only thing that will make this guarantee worthless will be if panic reaches such epic proportions that everyone tries to withdraw all their money at the same time. Unfortunately that appears to be an event that some people here would like to encourage.

Unfortunately this post doesn't fit into the seemingly most favoured 'fire and brimstone' style of posting and will therefore probably be ignored or ridiculed.

Nonsense, you are unlikely to have found a better more balanced and informed debate on NR than any other forum IMHO.

Sometimes you get balanced and informed debate, but unfortunately in the last few days, as sentiment has been changing in the mainstream media, the quality of debate here has plunged dramatically.