Wad Posted March 26, 2008 Share Posted March 26, 2008 Taxpayers May Be Liable for Billions From Bear, Mortgage Rescue http://www.bloomberg.com/apps/news?pid=206...&refer=home Regulators ``are playing with fire,'' said Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh. ``With good luck, none of these liabilities will come due. We can't expect that good luck, and we haven't had it.'' This will not happen in the UK as the Northern Rock has a high quality loan book. Quote Link to comment Share on other sites More sharing options...
Nelly Posted March 26, 2008 Share Posted March 26, 2008 Taxpayers May Be Liable for Billions From Bear, Mortgage Rescue http://www.bloomberg.com/apps/news?pid=206...&refer=home Regulators ``are playing with fire,'' said Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh. ``With good luck, none of these liabilities will come due. We can't expect that good luck, and we haven't had it.'' This will not happen in the UK as the Northern Rock has a high quality loan book. Thats a cracking business model to run a bank on.....good luck maybe they should use some fairy dust and wave a pixie wand at it too Quote Link to comment Share on other sites More sharing options...
Guest grumpy-old-man Posted March 26, 2008 Share Posted March 26, 2008 the thing is, they are getting away with it though. The people just don't understand what is going on & if they ever do, then it's too late, their pensions have been robbed & the pot will be empty. I keep seeing the 'Great Pensions Robbery' headlines in the Independant et al, but no-one seems to be worried......ah, that's because they have opted for a btl bricks'n'mortar pension instead. oooops. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted March 26, 2008 Share Posted March 26, 2008 There is worse. Wifey was looking for somewhere to put her dosh having moved some from lester and its friends. She looked up the FSA guarantee, through MSE She read that the scheme only guarantees a TOTAL of only £5bn ( Might have been 4bn but its early) the point being there wont be enough in the coffers if ONE SINGLE Smallish BANK fails. If more would be needed, a deal would have to be done with the treasury. werent the savings in NR around £35bn???? Quote Link to comment Share on other sites More sharing options...
kilroy Posted March 26, 2008 Share Posted March 26, 2008 Taxpayers May Be Liable for Billions From Bear, Mortgage Rescue http://www.bloomberg.com/apps/news?pid=206...&refer=home Regulators ``are playing with fire,'' said Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh. ``With good luck, none of these liabilities will come due. We can't expect that good luck, and we haven't had it.'' This will not happen in the UK as the Northern Rock has a high quality loan book. This is different to Northern Rock. The FED is effectively bailing out the bondholders and the shareholders of Bear whereas with Northern Rock, bonds are trading at +300bps (i.e. bondholders can still lose their money) and (hopefully) shareholders will get diddly squat. Another difference is that the loan to the SPV by the FED is non-recourse (i.e. like most US mortgages, you can just stop paying and the collateral holder has to be content with just taking the value of the collateral; they cannot chase you for any shortfall). Currently, the northern rock deal just guarantees depositors at the expense of bondholders, with any shortfall being paid by the government (i.e. the taxpayer). However, I think that this is a good deal for savers as your money is guaranteed and if you have you can earn decent interest risk-free which covers your part of the tax bill should it all go t1ts oop. Interest I have already earned more than covers the tax bill so the rest is quite literally risk free for me. Quote Link to comment Share on other sites More sharing options...
rich6400 Posted March 26, 2008 Share Posted March 26, 2008 I telephoned the FSA to check that my bank (Investec) was covered by the £35k guarantee. I spoke to two people, neither had a clue what they were talking about and both sounded like they had just been drafted in from the dole queue. In real terms they answered my question; Should a run on a bank occur, take your money out of the bank before the situation even gets close to being passed over to the FSA. P1ss up and brewery comes to mind! Quote Link to comment Share on other sites More sharing options...
bobthe~ Posted March 26, 2008 Share Posted March 26, 2008 I telephoned the FSA to check that my bank (Investec) was covered by the £35k guarantee. I spoke to two people, neither had a clue what they were talking about and both sounded like they had just been drafted in from the dole queue. In real terms they answered my question; Should a run on a bank occur, take your money out of the bank before the situation even gets close to being passed over to the FSA.P1ss up and brewery comes to mind! Didn't Investec buy Kensington Mortgages last year? Get your money out NOW!!! Quote Link to comment Share on other sites More sharing options...
rich6400 Posted March 26, 2008 Share Posted March 26, 2008 Didn't Investec buy Kensington Mortgages last year?Get your money out NOW!!! I think I will! - are we starting another run on a bank? ;-) Their share price has been falling at a similar rate to Bradford and Bingley and the other ususal suspects... Quote Link to comment Share on other sites More sharing options...
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