Ok, first Northern Rock - who next?!

EdInvestor

The regulators are reaping the reward for the doubt they sowed in many older people's minds with their treatment of the victims of Equitable Life - especially after allowing people to keep on transferring in money long after the authorities knew it was in serious trouble, and then failing to compensate for their losses.

No doubt NR has many older customers because of its popular Silver Saver accounts and you can see there's quite a few oldies in the queues outside the branches. A lot of people have now figured out that the health of the City and its institutions comes a long way ahead of the protection of the financial consumer on the list of the regulator priorities.

We can probably expect this run to run and run.

Moorepart

Think that NR could be a candidate for a takeover from a sovereign investment fund such as the new one set up by China (State Administration of Foreign Exchange or SAFE). The Chinese have over $1.3tn in foreign reserves, some of which they have earmarked for overseas investment for the first time this year. I am sure that they are itching to get their hands on some real assets with all that fiat cash that they have.

This is how HSBC came in the UK, when they bought the troubles Midland Bank Group. After about five years, they gradually rebranded the Midland Branches to the HSBC brand name. Maybe we will have branches of the People's Bank of China in Newcastle in five years time?:cool:

old_codger1

What do you call ordinary people withdrawing their money from banks and building societies coz they don't think it's safe? - hysterial plonkers

What do you call banks, building societies, hedge funds, investment managers, etc, selling shares, forcing house sales unnecessarily, refusing credit to companies that are perfectly viable? - market sentiment.

theredfox_2

I wouldn't sneer at individual folk worried about their money. Everyone is worried about their money, one way or another. Its not nice to do that.

However, this mob behaviour does annoy me. It is part of the problem:

"However, sources close to the company said that if customers continued to draw their deposits at the same alarming rate, Northern Rock would be forced to break up."


http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/16/cnrock116.xml

old_codger1

Aegis wrote: »

Contingency plans are one thing, but planning to deal with an increase of several hundred percent of expected capacity is another. Please don't believe the nonsense that claims (without evidence) that they are doing this on purpose.

I think you'll find it's several thousand percent of expected capacity.

old_codger1

dunstonh wrote: »

Yes I do. However, it appears you do not. If you quote those you may as well quote the Titanic or the meteor that wiped out the dinosaurs as they have about the same similarity.

When expected yields dropped equitable life became insolvent, i.e. it had an excess of liabilities over assets. Literally - it couldn't pay off it's creditors even if it could get all the money it was owed by it's debtors and it knew that at the time. That was why it tried to bilk it's 90,000 guaranteed return investors.

Northern Rock is NOT insolvent. The only thing causing this problem is people THINKING there's a problem and creating a liquidity crisis but if NR gets all the money it's owed in and pays off the people it owes money to, there will be money left at the end of it. Whether there's enough to pay the shareholders... ah! that's another matter.

dumby1

Given the chancellor's assurances,

Sorry, but where have you been for the last 10 years?

Personally I don't see too much to worry about but when New Labour -synonymous with lies, spin and deceit - step in, to say that the sky is not falling, then i'm first in line to buy an umbrella.

free4440273

dumby1 wrote: »

Sorry, but where have you been for the last 10 years?

Personally I don't see too much to worry about but when New Labour -synonymous with lies, spin and deceit - step in, to say that the sky is not falling, then i'm first in line to buy an umbrella.

indeed, they are hypocrites, writ large:mad:

[Deleted User]

Who next?

Total financial meltdown is a possibility...

http://www.iii.co.uk/articles/articledisplay.jsp?section=ShareTips&article_id=7645920&catEnforce=BillAdlard

Flynn_2

free4440273 wrote: »

indeed, they are hypocrites, writ large:mad:

Hypocrisy from politians? Surely not. What we need is a return to John Major's "family values". Well maybe not Major's because he was bonking Edwina Currie when he said that but you know what I mean. I'm sure Jeffery Archer or Jonathan Aitken could give some advice now they're out of clink.



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