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neilrich

Bbc Breaking News - Another Goverment U-turn!

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It's called spin. Now the turmoil has calmed, somewhat, they change their minds. Mind you this has been in public domain for a few days now.

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The BoE/Treasury/PM are starting to look like a beaten boxer hanging on the ropes and preying for the bell to ring. Turning desperately this way and that trying to dodge the blows, they are actually feeding the turmoil now :o

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saw on the bloomberg ticker this morning that there is a group of people causing a stir because tax payers money is being used to prepare a dividend scheme for shareholders at northern rock- cant find the article though

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BBC News Home Page

Few days ago it was all accounts in all British Banks would be guaranteed!!

I don't think this is a U turn. I remember the report I saw when the announcement was made that it stated "existing deposits", although not much was made of it at the time.

The question is, if you withdrew the money before the announcement then put it back after, would you still be covered?

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..starting to look like their 'ERM moment'

what do i mean, starting to..?

seen any "green shoots" anyone?

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..starting to look like their 'ERM moment'

Heheh, yes, it's had that look for a few days now.

Promise the impossible, have a lil' pop at achieving the impossible, give up and let nature take it's course, blame someone else.

Politicians never change, and that particular mode of operation applies across all they do. I'd say we're on about the 'g' of 'achieving' at the moment.

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I don't think this is a U turn. I remember the report I saw when the announcement was made that it stated "existing deposits", although not much was made of it

Thats correct. Its just the media clutching at straws. The words "existing deposits" were very specific

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There is a problem here which is as follows:-

Darling said publicly he would guarantee NR existing deposits. That is not in dispute.

However, he also said he would guarantee ALL deposits with ALL banks that are solvent.

He separately said that the FSA would not allow any bank to trade which wasn't solvent.

QED, it can be taken as read that ALL banks taking deposits are solvent. (else FSA would have stopped them trading).

It was a stupid statement to make on Monday and it has created an impossible 2-tier deposit system as a result.

With NR share prices plumetting again I cannot understand why anyone would leave their cash in NR. The situation is no better than last week.

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Stupid BBC headline.

This was spelled out in the original statement: EXISTING deposits were to be guaranteed.

Causing the rather peculiar paradox that while only exising deposits at NR were guaranteed, all deposits at other banks would be guaranteed should they appear in danger of failing

:blink:

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They said that the scheme would apply to all British Banks on existing deposits so long as the bank remains solvent!

All accounts opened post 9/17 aren't covered!!? I better go and join the queue!

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The Govt is having its, yeah but no but yeah but no but I did not mean that moment.

Note to General Public, "you are getting shafted right up the ars&"

Feck me if the GB public lap up this bullsh^t then they deserve everything they get.

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The Govt is having its, yeah but no but yeah but no but I did not mean that moment.

Exactly. The statement was ambiguous and had more wriggle room than a tub full of worms. All pre-existing savings before 19 Sep but no new accounts? So what happens, for example, if you withdrew all your money from NR and closed your account and now want to put it back again? Presumably this will involve opening a new account with a new number, and so will this money be covered?

Either this is a deliberate attempt to wriggle out of the 'moral hazard' accusations, or the government is being totally incompetent, acting like a rabbit in front of headlights.

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Shares in Northern Rock, Alliance and Leicester, Bradford and Bingley and HBOS all starting to head down again

this fine morrow.

Top 10 losers

value

change

%

Northern Rock

202.25

54.75

down

21.30

Bradford & Bingley

300.25

27.75

down

8.46

Alliance & Leicester

764.50

51.00

down

6.25

BLUEBAY (WI) ORD 0.1P (WI)

427.75

28.50

down

6.25

TAYLOR WIMPEY ORD 25P

287.00

18.00

down

5.90

HBOS

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The Govt is having its, yeah but no but yeah but no but I did not mean that moment.

Note to General Public, "you are getting shafted right up the ars&"

Feck me if the GB public lap up this bullsh^t then they deserve everything they get.

All Brown was interested in was stopping the NR queues. That was his only reason for getting Darling to talk the "all savings are safe" bullsh*it.

Now they have to take it all back - what a bunch of losers the government really are.

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saw on the bloomberg ticker this morning that there is a group of people causing a stir because tax payers money is being used to prepare a dividend scheme for shareholders at northern rock- cant find the article though

The Taxpayer's Alliance.....

http://business.timesonline.co.uk/tol/busi...icle2492892.ece

September 20, 2007

Taxpayer fury at troubled bank’s vow to pay dividendChristine Seib

Northern Rock yesterday vowed to press ahead with a £60 million shareholder payout, despite having been forced to obtain an emergency loan from the Bank of England to stay in business.

The move infuriated organisations representing British taxpayers. A spokesman for the Taxpayers’ Alliance said that Northern Rock shareholders should be made to “take a hair-cut” while the Government was underwriting the bank’s operations.

Following the Chancellor’s decision on Monday to guarantee the safety of savings with Northern Rock, taxpayers will face a £28 billion bill if the bank goes bust. They also face the prospect of having to offer similar guarantees to other banks that get into trouble.

A spokeswoman for the Newcastle-based bank said yesterday that the dividend guidance given by Northern Rock two months ago remained unchanged. The company promised to spend almost £60 million on a 14.2p per share dividend, up more than 30 per cent on the previous year to try to appease investors who were disappointed by a profits warning in June. The dividend payment will be made in October.

The spokesman for the Taxpayers’ Alliance said: “Having enjoyed all those years of fantastic returns, bank shareholders must be made to take their haircuts. This is not a one-way bet.

“Before taxpayers are required to shell out a bean, the Northern Rock shareholders must lose everything. They’ve had the upside, and now they must pay the price.”

But stockbrokers said that they could not recall a recent example of a company pulling a declared dividend. One broker said that even Partygaming, which saw its shares plunge 57 per cent in one day in September last year, continued to pay its dividend

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LONDON (ShareCast) - Shares in mortgage lenders slumped again this morning as the government indicated its rescue of Northern Rock (LSE: NRK.L - news) (Advertisement)

would only apply to accounts opened or re-opened by last night.

In a statement, the government said it its proposed guarantee for mortgage lender depositors would cover all accounts existing at midnight on Wednesday 19 September and reopened accounts.

It has agreed to cover future interest payments, movements of funds between existing accounts, new deposits into existing accounts and existing, renewed wholesale deposits and existing and renewed wholesale borrowing that is not collateralised.

"Since it would otherwise be unfair to other banks and building societies, the arrangements would not cover any new accounts set up after 19 September, other than re-opened accounts," the Treasury said on Thursday.

The government added that the guarantee will not cover other debt instruments including covered bonds, securities issued under the "Granite (GRNT.TA - news) " programme, and subordinated and other hybrid capital instruments.

Northern Rock, meanwhile, has been criticised by taxpayers group for insisting it will pay its latest dividend despite effectively going bust. A spokesman for the Taxpayers' Alliance told reporters that Northern Rock shareholders should be made to "take a hair-cut" while the government was underwriting the bank's operations."

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Well it's gone now. Do ya think Gordy called the BCC to stop scaring the sheeple?

It's back

http://news.bbc.co.uk/1/hi/business/7004109.stm

The Treasury has explained the limits of its guarantee to savers in the Northern Rock bank - three days after the Chancellor announced the plan.

The unlimited support for savers' deposits covers accounts that were in existence up to midnight on Wednesday 19 September.

It also covers accounts reopened in the future after being shut in the panic between 13 September and 19 September

But new accounts opened after 19 September will not be protected.

"This guarantee covers future interest payments, movements of funds between existing accounts, and new deposits into existing accounts," said a Treasury statement released to the stock market at 0700BST.

"Since it would otherwise be unfair to other banks and building societies, the arrangements would not cover any new accounts set up after 19 September," it added.

The guarantee will stay in place until the Treasury judges that the crisis in the financial markets has abated.

The Northern Rock welcomed the Treasury's announcement.

"This further clarifies and improves the situation for Northern Rock savers," a spokesman said.

The Northern Rock has already pledged that any savers who withdrew money in the panic could put it back, without any form of penalty charge or transfer fee, by 5 October.

Run on bank

The offer of unlimited support to Northern Rock savers was made late on Monday afternoon by the Chancellor Alistair Darling.

However enquiries by the BBC revealed later that the authorities did not appear to have any plan in place to put this guarantee in action, should it be needed.

In the event, the Northern Rock savers are now unlikely to need to rely on the Chancellor's pledge as the run on the bank has ended.

The Northern Rock has, so far, not even needed to draw on the first emergency overdraft at the Bank of England announced last week.

The Treasury makes clear that its guarantee does not cover bonds and other IOUs issued by the Northern Rock to other banks and financial institutions.

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There is a problem here which is as follows:-

Darling said publicly he would guarantee NR existing deposits. That is not in dispute.

However, he also said he would guarantee ALL deposits with ALL banks that are solvent.

He separately said that the FSA would not allow any bank to trade which wasn't solvent.

QED, it can be taken as read that ALL banks taking deposits are solvent. (else FSA would have stopped them trading).

It was a stupid statement to make on Monday and it has created an impossible 2-tier deposit system as a result.

With NR share prices plumetting again I cannot understand why anyone would leave their cash in NR. The situation is no better than last week.

No wonder things are in turmoil when you have got mendacious idiots like Darling in charge. As was said earlier in the week the promise to underwrite deposits in solvent banks is essentially meaningless as the conditions by definition can never arise. Savers need to do their own due diligence. If you think your bank has been been indulging in unsustainable lending practices then you are perfectly entitled to panic and get your money out. Given this government's past form in its treatment of those in occupational pension schemes that have been wound up you can be sure their guarantees are no better than if they had been written on air and carved on water.

Edited by up2nogood

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