Northern Wreck Nationalised

fizzypop

What a disaster...read Anatole Kaletsky in the Times...this government will take every investor for a ride. Watch the queues form again as every investor runs for cover.

Paul_Herring

fizzypop wrote: »

What a disaster...read Anatole Kaletsky in the Times...this government will take every investor for a ride. Watch the queues form again as [strike]every investor runs for cover[/strike]. the media over-hype the situation. Again.

Hope that helps

cloud_dog

Sooooo, if the Government hadn't stepped in and bank-rolled your huge losses what would the SP be now????

I think you should aim your frustration at the real culprits; those who made the reckless investment decisions, not the government.

jon3001

Great - every tax-payer is now an investor in the subprime housing market.

bristolleedsfan

cloud_dog wrote: »

Sooooo, if the Government hadn't stepped in and bank-rolled your huge losses what would the SP be now????

.

http://www.ft.com/cms/s/0/66aea6ca-de44-11dc-9de3-0000779fd2ac.html?nclick_check=1


"
These Spanish banks have in many respects the same business model as Northern Rock; in autumn 2007 they faced the same difficulty in financing their assets. But they have not been punished by the Spanish authorities as Northern Rock has been punished by the UK authorities and the government. The Spanish government has not threatened to nationalise them, in spite of the huge advances they have received from the ECB.

The one correct point in the argument for nationalising Northern Rock was that the value of its assets, and hence its continued solvency, depended on the Bank of England loan. If Northern Rock had been forced last September to dispose of its assets as quickly as its depositors were withdrawing cash, those assets would have been sold at far less than their true value in normal circumstances and Northern Rock would have gone bust.

But central banks exist for the purpose of preventing runs or, at any rate, ensuring that runs are met by ­lender-of-last-resort loans so the hurried liquidation of assets can be avoided. That is what is meant by the proposition, repeated in hundreds of textbooks, that “the central bank is lender of last resort to the banking system”.

If Northern Rock does repay its loan from the state in full but its shareholders receive nothing, the British government’s actions would amount to robbery under the law. "