Tuesday, September 25, 2007

Northern Wreck to shell out using your money : Insanity

Anger as Northern Rock plans dividend

Northern Rock's growing troubles have led to resentment that shareholders will profit from the taxpayers' guarantee. The bank plans to pay a £59m dividend next month to everyone on the share register this week, despite having drawn £2.9bn from the Bank of England's emergency facility just to keep the business running.

Posted by sovietuk @ 08:55 AM (796 views)
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8 thoughts on “Northern Wreck to shell out using your money : Insanity

  • People are right to complain. Why should shareholders profit from this mess?

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  • Housecrashwallop says:

    Anyone else get a feeling that us mugs are going to be paying for this whole crash in one way or another?

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  • tyrellcorporation says:

    The thing is that the dividend is being paid from BoE bailout cash and not from profits… ahhh the irony. NR should have gone bankrupt because of it’s seriously flawed business model. For some reason the authorities saw fit to stick it on life-support, a permanent vegetative state.

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  • tyrellcorporation says:

    I just lifted this from the Telegraph:

    ‘Goldman was brought in after the Treasury guaranteed Northern Rock’s debts alongside savers’ deposits eight days ago. It will advise on implications for taxpayers of any rescue plan, while considering alternative scenarios and working through the detail of the guarantee.’

    Was anyone else aware that the Treasury had guaranteed NR debts too? Totally bonkers if this is true.

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  • There has been a huge sell off, wouldn’t encouraging shareholders back help the firm? Do we still live in a Capitalist economy or what? A large number of shareholders have watched their Northern Crock stake plummet, mainly because of an aggressive City raid that was in the hundreds of millions, a mighty heist. If you are going to vent your spleen, then think about who is the correct target. I can see so many, I wouldn’t know who is most deserving of financial ruin and who should earn a few quid (or a few million in bonus) out of negligent direction of a public corporation. There are lessons to be learned here, but they are perennial and inevitable while we have a youth culture with no memory for business cycles.

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  • They’re having a laugh aren’t they. Still offering risky mortgages and still paying their shareholder dividends as if nothing has happened now that they have the taxpayer to support them. By the way, didn’t Railtrack pay a big dividend just before they went into administration?

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  • As I said on here before, this is just one of the ways that taxpayer’s money props up business profits (and therefore shareholders dividends) – others are massive subsidies, tax loopholes etc. As we have no industry of our own anymore, global and foreign companies hold the UK to ransom every day becuase we are scared of them taking jobs away. This is absolutely what I would expect from the financial system today.

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  • The only people who should be annoyed about this are people who didn’t have the foresight to be annoyed about Northern Rock being bailed out in the first place.

    Since the money is now theirs, expect them to do with it whatever will benefit them the most.

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