Northern Rock

Originally posted by Kathy+Mar 20 2008, 01:42 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Kathy @ Mar 20 2008, 01:42 PM)</td></tr><tr><td id='QUOTE'><!--QuoteBegin-archie@Mar 20 2008, 01:33 PM
Have to be brief but I also work at HBOS and your comments totally misrepresent the situation here.
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I was going to ask where you worked Archie as I had a feeling you were yet another one that worked in the "industry". Thanks for confirming that. :)[/b][/quote]
I have worked in industries associated to banking for getting on for 30 years now but never, per se, as a banker. The Birmingham Sports Argus once described me as a Herefordshire merchant banker and the fact that I was living in St Albans at the time wasn't the only error made!
I did 20 years on the IT side ending up as a service manager and the last 9 years on statistical research for Bank of England reporting purposes. That gives me no special banking sector knowledge, just knowledge of the people who actually work there.
The fact that you are happy enough to be associated with the standard of veracity associated with Express Newspapers in this of all weeks really says all there is to say in words more eloquent than I can muster. You are happy to spread any rumour on the basis that it is up to the reader to check its bone fides. I'd like to think that you'd be prepared to pay £550k when proved wrong.
 
Archie, I have investments that I need to keep an eye on on a daily basis. For that reason, I am happy to listen to rumours especially ones that wiped over £17 million pounds (evidently) off of HBOS shares yesterday.

For Gods sake, the rumour I commented on was top news in nearly every paper worth it's salt today, on the national news and on nearly every financial website. I said to Gareth don't shoot the messenger when he told me it was rubbish. I am one of millions that probably heard the rumour yesterday so why you have singled me out as if I started the rumour is absolutely ludicrous. I have spent the best part of today moving money around. Something I do on a regular basis.

I had a bizarre conversation with First Direct today. I won't go into details but it is an account I will be closing on the 1st April.

Some of you may work on in the Financial Sector. I depend on a lot of my income on knowing what is happening in the financial market and reacting quickly.

You and BtB can continually rubbish what I say, but I advise anyone with investments to keep an eye on the news (and the rumours) on a daily basis. When things move, they move fast, and like with Northern Rock, it doesn't take long for a rumour to turn into something far more serious in a very short space of time. The BoE can only keep throwing money at the problems until even they are unable to fill the black hole.

I'm not a financial expert, never said I was, but I like to think there is enough information on the internet - if you know where to look- to keep up with some of what is going on despite those people that keep trying to reassure us there is nothing wrong. There is.
 
The early stages of this thread were about whether people would lose money as depositors in NR. I said they would not.I also said the share price at the time was vulnerable.

Does anyone still think it is foolish to put money in NR or that people were nuts not to get their money out. Did the share price collapse. Yes. A win double methinks.

I am going for a treble - HBOS is not in any more deep doo-doo than most of the other leading banks .Anyone care to bet against the performance of HBOS shares relative to another named UK bank over say six months?
 
I wouldn't really have a clue if your apparent need for a bit of delayed back slapping on your amazing double is correct or not - especially as so much has happened since this thread was first started and I can't be bothered to go and read it all again. I'll give you the benefit of the doubt, so well done and please go to the top of the class!

Even I know that the financial markets are changing on a daily, almost hourly basis, so excuse me if I don't have a bet with you about which banks will continue to appear to perform well, especially as many banks are probably still being pumped full of money from the BoE. The government will NOT allow there to be another Northern Rock situation so their figures, their predictions and their results will no doubt be massaged in a way to try and rebuild much needed confidence in the financial sector over the 6 months you are talking about.

My personal prediction is that either you or BtB (or both) will tell me that this is complete and utter rubbish. :laughing:
 
Originally posted by Bar the Bull@Mar 21 2008, 11:23 AM
Nobody laughed at my subprime pun, which is a bit upsetting.
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I frequently laugh at you BtB. Just not at that particular comment.
 
Originally posted by Tout Seul@Sep 17 2007, 06:31 PM
Even worse are those who are spreading or talking about the existence of rumours of other banks in trouble.

Kathy you confirmed that A&L were one of the bank's that were in difficulties, could you please let me and the BoE know who the other banks are as you are so well informed. Or could it be that you get a kick out of repeating unsubstantiated rumours of the type that can cause runs on banks which could severely damage not only the banking system but also the economy of the UK which is hugely dependant on a stable financial market for a great amount of its income.

Irresponsible actions in this scenario must be roundly condemned as how can every bank pay back all its depositors from its own funds when they have been lent out. No bank can sustain a prolonged run on its deposits without borrowing. T
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Anything to add to this thread, TS?
 
I got ridiculed and personally insulted by some on this forum for stating that other banks were evidently in trouble after the Northern Rock debarcle (check from page 3 and onwards on this thread) became top news last year. The news about some major banks also having financial problems is now also making the headlines. This thread has gone fairly quiet so I wondered if any of those that took great pleasure in basically telling me I was talking cobblers would like to give us an update on what they think is happening in the banking sector at the moment. shrug::


Tout Seul

Even worse are those who are spreading or talking about the existence of rumours of other banks in trouble. As I stated earlier the share prices are falling because the cost of interbank borrowing , which in normal times is trillions every day, has gone up. This impacts bank's profits and therefore the shares go down, not sfa about going under, otherwise the share price would not exist.

Kathy you confirmed that A&L were one of the bank's that were in difficulties, could you please let me and the BoE know who the other banks are as you are so well informed. Or could it be that you get a kick out of repeating unsubstantiated rumours of the type that can cause runs on banks which could severely damage not only the banking system but also the economy of the UK which is hugely dependant on a stable financial market for a great amount of its income.

Irresponsible actions in this scenario must be roundly condemned as how can every bank pay back all its depositors from its own funds when they have been lent out. No bank can sustain a prolonged run on its deposits without borrowing. T

This post has been edited by Tout Seul on Sep 17 2007, 06:33 PM

Desperate Dan Posted: Sep 17 2007, 08:09 PM

TS,
I`m afraid you are fighting a losing battle in trying to douse the ridiculous, ill-informed gossip and speculation on this and other subjects. The facts are nowhere as juicy and titillating as the gossip. Thus the gossip will always thrive.


Bar the Bull Posted: Sep 17 2007, 09:22 PM
Excellent posts, Tout Seul. These rumours are a load of cobblers. Barclays had to borrow at the emergency rate from the Bank of England in the middle of last week. But that is more a reflection of a lack of liquidity than anything else.

Interbank rates have been going up. But as Tout Seul says, they have gone up by about 1% from 5ish percent to 6ish percent, rather than tripled.

Libor rates have actually started to come down in recent days.

Trust me, if somebody posted on the Racing section the ill-informed piffle that I have read here, they would be laughed off the forum.
 
Kathy.
If you feel personally insulted and ridiculed by my postings on this subject then I suggest you are acting as if paranoid. My postings have been critical of anyone perpetuating unfounded rumours when they do not understand the basic facts, ignore postings that explain the damage they as wider group can cause and deliberately ignore attempts to explain the real nature of the problem.

In September , the beginning of the problem, you us that A&l were in deep do-do. Later that HSBC was in a similar position. Have either gone bust or had to make calls for money on their shareholders. Do I hear No!!? Are they worse than most other banks? Surprisingly no.

This whole thing has evolved into a dual crisis, not because the banks are stuffed to the gills with bad loans but the requirement to mark to market which has led to a crisis of confidence and lack of liquidity. When one can understand that one can understand why governments are so ready to assist and why investors will stump up new capital. The explanations are on this thread.
 
Originally posted by Tout Seul@Sep 18 2007, 08:27 AM
Kathy you have such an inflated ego and it would seem a fair degree of paranoia.

I and several others that are fully aware of the facts of the Northern Rock situation have demonstrated that on this topic you have acted irresponsibly and spouted some absolute rubbish. It is therefore not surprising that we have pointed it out. As BtB stated "if somebody posted on the Racing section the ill-informed piffle that I have read here, they would be laughed off the forum."

If I was as certain that anyone was continually talking rubbish on any particular topic I would point it out as I would expect others to do should I act similarly.

If you feel it is becoming a habit for some to criticise some of your comments, have you ever considered that you might be deserving of such comments. Of course discussion is to be encouraged but a worthwhile discussion, of which there are fortunately still a large number on this board, contains an exchange of views, some of which may be contrasting, and not tripe.

I, and I would imagine the others you named, have no personal feelings either positive or negative towards you, you aren't that important, Finally there is no conspiracy as far as I am aware.

Added. Warbler posted a comment that he is prepared to admit could be wrong, that is a normal and appropriate action in a discussion , neither praiseworthy nor a failing on his part, just normal.
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TS, you are priceless. Do you still feel, that after I commented that other banks were possibly in trouble, that this rude response was completely necessary? I still can't work out why you kept saying I was "spouting rubbish" but I am sure you will be delighted to tell me. Please note there is absolutely no point trying to baffle me with your flowery language about a subject I do actually know something about however rude you are to me and however desperately you continually try and put me down.
 
Do you know more than one of the finest economics brains there is?
Loss of liquidity not insolvency.
I found this article today. It pretty well covers all I and others have said earlier. I only wish the author had shared his knowledge with others in his newspaper and the rest of the press.
 
I have never said I have known more about economics than anyone - but I do know that your comments about me were rude and unjustified and that perhaps a little of what I said seems to be bearing fruit. I am sure in a couple of hours/days/weeks you will come back with another of your very useful financial findings from another of the finest economic brains. I can't wait. :brows:

Have you not written your own article on the subject as you are clearly very qualified (well, according to you you are) in commenting on this very subject.
 
I started my banking career in the team that kept one of the clearing banks out of the BoE lifeboat in the early 70's, then played a major role in growing a £70m UK banking operation into one of the top 10 in the UK and Europe. I therefore have greater experience than most of what happens in a financial crisis. In the early 90's I initiated moves that gave greater protection to employees and company pension members when an employer was in difficulties. These ultimately resulted in legislation which if the Government had moved more quickly would have prevented the Maxwell problem. In the same era I persuaded my bank to provide billions of liquidity to a leading UK Bank, an action which was followed by others to prevent precisely what is happening now.

That said I have but a fraction of the understanding of global economics that Kaletsky has and have never claimed to have more. Kaletsky is one of the leading economists regularly writing in the press. Check it out, though as you sarcastically indicated in your latest post you would not find it useful as it disagrees with you and it might even use flowery language.
 
Oh well....you are not going to give up are you? shrug:: I will continue with my opinions and you will without doubt continue with yours but please try to refrain, if you can, from being rude and condescending. It doesn't do your personal opinions, or your vast experience in the banking industry any credit at all.


Oh, and thanks for your CV! :)
 
Anyone would think that some people were taking pleasure, nay frolicking in delight at any smallest possible prospect of a house market crash and the inevitable recession that would follow.
 
For anyone interested in how the Labour government are handling this possible banking crisis - read on. It just gets better and better..... :what:

Courtesy of The Times on Line.
Alistair Darling plans unprecedented £50bn bank bailout

Francis Elliott, Grainne Gilmore and Rebecca O’Connor
Money Central: how to survive a property downturn
An unprecedented £50 billion injection to bail out Britain’s ailing banking system could be doubled if it fails to stave off a collapse in the housing market.

Alistair Darling will tell MPs tomorrow that the Bank of England is to allow lenders to swap assets for government-backed bonds in an attempt to restore confidence and ease the effects of the credit crunch.

The initial offer is for £50 billion worth of bonds but senior Treasury sources told The Times today that further cash injections up to a total of £100 billion were possible.

However, they admit that there is no guarantee that the bailout will lead to banks offering cheaper mortgage deals. Mr Darling is also braced for a row over whether the bonds should be counted as government debt.

British banks, uncertain which institution has lost what, have sought to hoard cash reserves to protect their own positions. Mr Darling said that the move was intended to “ease” the market. “We believe that this will be an essential step in trying to get the financial market stabilised. That in turn will help the mortgage market too,” the Chancellor said. However, he gave warning that in return he expected that “banks begin now to disclose the extent of their losses and explain how they are going to rebuild their capital”.

Under the terms of tomorrow’s announcement banks will be allowed to swap hard-to-trade mortgage-backed securities linked to their previous lending for specially-issued Treasury bills.

Mr Darling is expected to press for mortgage lenders to ease lending conditions, especially for first-time buyers, when he meets them on Tuesday. “He’s not holding a pistol to their heads but he wants to do everything he can to help people get on the property ladder,” a Treasury source said.

Vince Cable, the Liberal Democrats’ Treasury spokesman, said: “We cannot have a situation where the banks are able to privatise their profits and nationalise their losses. Since the mortgages from the banks are of inferior quality and higher risk than the government bonds which they are replacing, the implication must be that taxpayers are shouldering the risks and losses of the banks. This cannot be right.”

A spokeswoman from the British Bankers' Association said: “In principle, if this is an injection of liquidity, we are all in favour. We have been supportive of the Bank's moves in recent months but, if as reported, the Bank and the Government are now moving to provide significant and sustained liquidity we are very supportive.” The association denied that the plan was a bail-out for lenders. “Banks are not being bailed out. They are paying commercial rates for the loans offered by the Bank of England.”

The Council of Mortgage Lenders said that more detail was needed before it would become clear how much mortgage borrowers would benefit. Michael Coogan, director-general, said: “It is still not clear if specialist lenders or smaller lenders who do not have mortgage-backed securities will be involved. Also, we have to wait and see what the rates on the Bank’s loans will be, and how those funds will then be recycled into the mortgage market through pricing and products.”

The council is also set to press for more state support for homeowners who fall into arrears with their mortgage payments.

There are fears that smaller building societies, almost 20 per cent have of which have either had to withdraw from the mortgage market completely or stop offering the majority of their deals, could be left in dire straits as the bigger banks get a leg-up from the Bank of England. The majority of building societies do not issue mortgage-backed securities, so are unlikely to benefit from the Bank’s latest move.

Despite a sharp rise in deposits in building societies in the wake of the run on Northern Rock, many of the smaller mutuals are finding it nearly impossible to offer competitive mortgages as they are overwhelmed with demand. A spokeswoman from the Building Societies’ Association said: “Some societies were inundated with applications, and had to restrict their lending to local areas.”

An industry source said that the plight of the smaller building societies was not being helped by more onerous liquidity requirements being enforced by the City watchdog. It is understood that while many societies have plenty of cash, they are not able to offer as many loans as they would like in order to meet liquidity requirements.

Bath and Earl Shilton societies withdrew temporarily from the market a month ago. Since then, another six — Harpenden, Loughborough, Monmouthshire, Vernon, Ecology and Stafford Railway — have all stopped selling home loans. A further seven only have one or two deals left.

A rise in the popularity of cash appears to be one consequence of the economic conditions. Cash is now used for 60 per cent of all sales, up from 54 per cent last year.
 
"Vince Cable, the Liberal Democrats’ Treasury spokesman, said: “We cannot have a situation where the banks are able to privatise their profits and nationalise their losses. Since the mortgages from the banks are of inferior quality and higher risk than the government bonds which they are replacing, the implication must be that taxpayers are shouldering the risks and losses of the banks. This cannot be right.” "

Cable's is spot on. What Brown is doing is quite extraordinary, and wrong.
 
Originally posted by Venusian@Apr 20 2008, 09:49 PM
"We cannot have a situation where the banks are able to privatise their profits and nationalise their losses. "
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Isn't this what nearly all our major companies do?

Does anyone believe if the likes of British Gas or BT or any of the big concerns that were privatised in the 1980s suddenly became in danger of going bust they wouldn't seek government (ie taxpayers') help?
 
The HMG funds will only be made available backed by the security of good quality assets. They will not buy the bonds and therefore the risk is that the bank goes under and the bonds are not as good as thought. With the liquidity provided, on a commercial basis, the banks will be in a position to lend not only for mortgages but for all other purposes, such as building new homes, investing in new machinery, etc,etc.

What HMG are doing is not to bail out the banks but to lubricate the system to enable it to work. Clearly one would hope that at least for another decade the banks will have learnt their lesson.

If no action is taken then all those pension funds, people's savings etc could suffer huge losses , there could be redunduncies on a scale not seen since the 30's. At the same time other economies such as China, India et al would make hay and avoid us.
In the past we had an empire with all its resources to support us when we sought to get out of trouble, not so now. In a worst case situation ie a greatly prolonged continuation of present circumstances- say for 2-3 years- then the UK could go into a terminal decline. Unrealistic, perhaps, but long term without the appropriate funding for investment and entrepreneurs then this little group of islands has not got a lot to offer that would sustain the standard of living we currently enjoy.

A few decades ago UK plc owned great chunks of other economies, the boot is now on the other foot. What is more we no longer have the military means to enforrce the ownership of those assets we do have abroad.
Punish the banks, shame the bosses, find a way to reduce their salaries, all quite reasonable actions but to risk everything this country has gained over the years in a misguided mission to let the banks suffer and reduce house prices is gross shortsightedness.

The history of the 20th century contains a number of instances in which economies were devastated with war and famine the result. The great recoveries came about when vast sums of money were pumped in, often using banks as a medium. Japan, Germany (twice), parts of the US (the bill which was ultimely paid for by the expenditure of the major part of the UK's assets), all needed much more than lubrication and we if we don't oil things, then like a car engine we could seize up and require major repair without having the means to afford the repair.
 
Dear HM Treasury

Last year I did very well at Cheltenham, Aintree, Royal Ascot and Epsom and was able to spend away lots of my profit sustaining my lifestyle, which is clearly money I don't want you to have and share. However, I blew quite a lot at Goodwood and can no longer use this to lubricate the economy. Any chance you can give me my lost stakes back please, and in return I'll promise to learn my lesson (even though history suggests I won't)
 
Dear Mr. W Arbler,

As long as you are 100% truthful in the amount you tell us your stakes amounted too we can see absolutely no reason why we cannot cover your total stakes, plus a bit for good measure as we can't have the economy suffering can we.

Now, don't do it again will you? Promise? OK, I hear there are alot of people in the same boat as you, and don't worry, they can all claim from us as well. It's a bit of a free for all to be honest. Afterall, it's only money and if we run short, we will just print some more! Easy peasy lemon squeezy! :)

The cheques in the post!

Signed
HM Treasury
 
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