Alistair Darling - Don't be fooled

dwsjarcmcd

Steve_xx wrote: »

You mean enlightening and not "enlightened", and you mean guarantee, not "guarentee".

I think I've already stated that the guarantee is not infinite. I accept your view that he can't do right for doing wrong, but I do not share it.

I did not say how anyone could give an infinite guarantee. What I did say was the this guarantee was not infinite.

I would accept spelling is not a strong point, many thanks for telling me what I already know.

You have so far managed to enlighten us with what you don't like about this announcement, accepted that this can't be an infinite, or indefinite (don't really care which) but have failed to teach us what the Darling should have done. Given your 'logic' it appears that it can only to have not made any guarentee (hope that is spelt right!) at all and let the runs continue to get worse. Brilliant!

Steve_xx

dwsjarcmcd wrote: »

I would accept spelling is not a strong point, many thanks for telling me what I already know.

You have so far managed to enlighten us with what you don't like about this announcement, accepted that this can't be an infinite, or indefinite (don't really care which) but have failed to teach us what the Darling should have done. Given your 'logic' it appears that it can only to have not made any guarentee (hope that is spelt right!) at all and let the run continue. Brilliant!

No, no I did not say whether I liked or disliked the chancellors statement. What I did was to point out that the guarantee on deposits offered yesterday was not for an infinite period. I did not seek to advise what the chancellor should or should not have done. You have read into my original post more than I actually wrote and you have regurgitated it.

Tim_L

Old_Slaphead wrote: »

Pity they didn't do the same with Equitable Life. Told everybody to stay calm but couldn't wait to get their own money out asap!!! Only the mugs stayed in.

Equitable Life was essentially running investments for pensions, but had a guarantee of returns that was completely impossible to sustain. They were told by the courts that they couldn't remove the guarantee, so were left in an impossible situation.

It's a completely different situation from Northern Rock, which is running deposit savings accounts, and which remains solvent. The government can make this guarantee quite happily, because it knows there is not a snowball's chance in hell it will actually cost them anything.

There is a fundamental difference between gold plating the security already offered to users of low risk savings accounts, and providing guarantees for riskier investments, which no-one would do. The point is to try to improve customer confidence and stabilise the situation, it's not a long term thing. It would actually cause more harm than good longer term as essentially banks would know they had a one way bet on risky strategies.

Flynn_2

Steve_xx wrote: »

Alistair Darling - Don't be fooled

Yes let's keep the hysteria going for as long as possible and the headless chickens running in circles.

Where will you get your fun when this all goes quiet? :rolleyes:

Steve_xx

Flynn wrote: »

Yes let's keep the hysteria going for as long as possible and the headless chickens running in circles.

Where will you get your fun when this all goes quiet? :rolleyes:

Thanks for your useful imput. That's really good.

peawack

Steve_xx wrote: »

Alistair Darlings assurance on deposits is given in light of the "current" market turmoil. He did not put a timer on his assurance, except to say that it is valid during the "current" market turmoil. Therefore the assurance could end at any unspecified point. Therefore it is prudent for people to reduce their deposits in any single banking institution to £33k, thus allowing for interest to accrue bringing this amout to £35k within a year.


"The simple fact is that the chancellor has made it clear that all existing deposits in Northern Rock are fully backed by the Bank of England and are totally secure during the current instability in the financial markets,"

I don't think it was Mr. Darlings intention to 'fool' anyone. More like to try to stabilise an unfortunate situation which could have been avoided, but could get much, much worse without his intervention. Well done to him.

EdInvestor

Tim_L wrote: »

Equitable Life was essentially running investments for pensions, but had a guarantee of returns that was completely impossible to sustain. They were told by the courts that they couldn't remove the guarantee, so were left in an impossible situation.

Not at all: to fix that problem the cost was around 1.5bn which they had.

Equitable's real problem was there was an additional "black hole' in the accounts that was much larger - and this was way too big to be filled and was the reason it couldn't be sold.

Investors were lied to about this - and the lies are stiull going on.That's why they now don't believe what the regulators say.Once bitten twice shy.

The lack of compensation paid has made things worse, and the disgraceful performance of the Ombudsman (FOS)has further embittered people.So has the scandal over the lost occupational pensions.

With the queues outside Northern Rock, the Government is reaping what it sowed.

The regulations on investor protection must now be reformed and properly enforced if it wants to restore confidence.As was also obvious earlier from the efforts to reclaim unlawful bank charges, people won't be taken for mugs any more.

Flynn_2

Steve_xx wrote: »

Thanks for your useful imput. That's really good.

Compared with your imput, apparently designed to keep the problem going for as long as possible, I would tend to agree.

Steve_xx

peawack wrote: »

I don't think it was Mr. Darlings intention to 'fool' anyone. More like to try to stabilise an unfortunate situation which could have been avoided, but could get much, much worse without his intervention. Well done to him.

Yes, I agree with your comments.

Though it is fair to point out that the guarantees offered are not permanent.

Steve_xx

Flynn wrote: »

Compared with your imput, apparently designed to keep the problem going for as long as possible, I would tend to agree.

Lovely, thanks once again for your useful input.