Wednesday, August 15, 2007

How Solid is the Rock?

Northern Rock acts on funding fears

Northern Rock suffering from low B of E base rates which largely determine the pricing of mortgages, have not risen in line with wholesale funding costs. This highlights how little control the B of E / Gordon Brown ultimately has with its interest rate tool.

Posted by enuii @ 09:55 PM (561 views)
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3 thoughts on “How Solid is the Rock?

  • Whenever I have been to the repossession hearings, they are quite frequent claimants.

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  • Two things:

    First, this “thing” that the UK is somehow a financial island and is not about to go the way of everything else is pure fantasy. Nothing more than that. How do you think all these cheap mortgages in this country were financed that allowed all this “house price growth”. Yes. Thats correct. The international debt markets and the very same instruments that have been so badly mispriced.

    Second, the UK will fall later and harder than most other countries. Its as simple as that. (later in this market by the way – could be this Friday or next Friday – thats how fast things really move).

    The UK is not some place where house prices are “speical” and are going to the moon. Are we really saying that? Has it come to the state where we are so confused by data , real and manipulated that we abandon logic and are REALLY saying that?

    It is not a hope that it ends. The hope was that people would wake up and do something productive before it was very bad. That is the only “hope” that was dashed here.

    The fact that the bubble collapses is as certain as the sun rising tomorrow.

    The ~8000 people a day that are arriving (how many are leaving?) to seek an inflated fortune to send back home will leave more rapidly than they came when GBP falls and everybody is clawing for money once their credit lines are pulled.

    Other than that its all rosy.

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  • “Northern Rock’s business is almost entirely based on the UK market, which has not had any of the problems seen in the US.”

    Don’t they mean…. NOT YET !!!!

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