Northern Rock Even More Bust Than Before!

lemonjelly

Whilst I appreciate that this exercise is going to cost the taxpayer, I have a gut feeling that it is the lesser of the evils.

The run on NR was a strange situation, almost mythical in how it snowballed. However I doubt that the location etc of NR is the reason why it was taken under the governments wing. I hope that this was done because the impact of NR imploding would have been more cost exhausitve, and the implications for joe public would have been worse.

I'd argue I don't have particular political allegiences. My feeling is that, whilst there have been mistakes made, generally I do think the economic downturn has been handled as well as could reasonably be expected. Yes, we're in a bad position, but looking around, the eurozone is way, way worse (spain unemplyment almost 19%, Germany 7%, France 9%).

I think there is more to come, but it really could have been worse.

Rochdale_Pioneers

Generali wrote: »

I was under the impression that the Labour Government took the decision to keep NRK going rather than winding them up. Was that not the case? I distinctly remember them announcing it.

They did, and it was clearly the right decision. At the time we had long queues outside their branches as people withdrew all their money. The contagion of a bank run wasn't something that anyone wanted to see, so they stepped in to keep it running.

The alternative was to do a Lehman Bros and let it fall. And as we saw in the States that had a catastrophic effect on banking confidence. Aside from the usual loons on MSE have any serious economists advocated letting NR fail without any rescue for savers?

chucky

Generali wrote: »

I was under the impression that the Labour Government took the decision to keep NRK going rather than winding them up. Was that not the case? I distinctly remember them announcing it.

correct - they are also the current Government not just a politcal party called the labour party.

purch

I think if the Govt hadn't acted at the time, the consequences for the whole UK Banking Industry would have been catastrophic.

The other point, about allowing the still trading NR Bank to circumvent the rules is a seperate matter. The Govt have had long enough to find a solution, and allowing the Bank to continue trading outside the rules is not tenable or sensible in the long term.

Cannon_Fodder

Generali wrote: »

I heard about that. Perhaps this is what is known as 'kitchen sinking' - shoving all the losses you can into a single quarter so that you can then announce an amazing rebound.

Sounds like what they've decided to do with GDP...

Tuck some of Apr-Jun away in Mar, to allow Q2 to be the awesome rebound that allows a snap Autumn election...?

Generali

Cannon_Fodder wrote: »

Sounds like what they've decided to do with GDP...

Tuck some of Apr-Jun away in Mar, to allow Q2 to be the awesome rebound that allows a snap Autumn election...?

Rename April 10th March 41st retrospectively? It sounds more like what the Tories used to do with the unemployment figures in the 1980s! You never know with the current mob though.

Cannon_Fodder

Generali wrote: »

Rename April 10th March 41st retrospectively? It sounds more like what the Tories used to do with the unemployment figures in the 1980s! You never know with the current mob though.

I hadn't realised quite how "estimated" the figures were...

"Around 85 per cent of the latest estimate for Q1 2009 is based on data, the rest being modelled. This compares with 45 per cent when the estimate was first published in April."

http://www.statistics.gov.uk/cci/nugget.asp?id=192


I'm sure there must be some justifiable "judgement calls" to make over whether numbers fit in one scenario or another, and the cynic in me just can't stop wondering how convenient it was that the revision of Q2 2008 never got annouced until well after the recession was already official...

andygb

lemonjelly wrote: »

Whilst I appreciate that this exercise is going to cost the taxpayer, I have a gut feeling that it is the lesser of the evils.

The run on NR was a strange situation, almost mythical in how it snowballed. However I doubt that the location etc of NR is the reason why it was taken under the governments wing. I hope that this was done because the impact of NR imploding would have been more cost exhausitve, and the implications for joe public would have been worse.

I'd argue I don't have particular political allegiences. My feeling is that, whilst there have been mistakes made, generally I do think the economic downturn has been handled as well as could reasonably be expected. Yes, we're in a bad position, but looking around, the eurozone is way, way worse (spain unemplyment almost 19%, Germany 7%, France 9%).

I think there is more to come, but it really could have been worse.

The unemployment figures in Spain may have a lot to do with the way they calculate their figures - honestly. However, the rest of the Eurozone is not "far worse". Our figures from 17th June, indicate overall unemployment at 7.2%, but more importantly bode ill for the future, when you look at the figures for the 18 - 24 age group - 16.2%.
Where are the jobs going to come from? Where is growth going to spring from, if more people are losing their jobs, and more businesses going to the wall?

lemonjelly

andygb wrote: »

The unemployment figures in Spain may have a lot to do with the way they calculate their figures - honestly. However, the rest of the Eurozone is not "far worse". Our figures from 17th June, indicate overall unemployment at 7.2%, but more importantly bode ill for the future, when you look at the figures for the 18 - 24 age group - 16.2%.
Where are the jobs going to come from? Where is growth going to spring from, if more people are losing their jobs, and more businesses going to the wall?

Wouldn't really disagree with you at all to be honest. Those 18-24 figures are going to get so much worse next month/quarter, as all the achool/college/university leavers will be signing on, as there is nothing out there for them.

1984ReturnsForReal_2

ad9898 wrote: »

No surprise here, the government is corrupt and bankrupt of ideas. I thought Blair was bad but this lot take the biscuit.

Bliars' Government kept Rover alive just before the elections.

You have a short memory. Blair was just a bad. In fact it was worse because they kept the media in check with the lies.