Northern Rock.

[Guzlin Adnams]

£25 Billion to prop up Northern Rock:mad:. Now let me think, what would that buy for the Armed Forces:hmm:. Better housing, some better rates of pay and descent equipment and more of it? I could make a list but feel that, as a family man, I really should take time out to check to make sure that nobody has tapped into my bank account without my knowledge, courtesy of a certain lost disk.:= What a F-----g mess:ugh:


As an important aside, and further to the thread covering that superb programme on Chinny ops in Stan, the Vikings will be exercising the freedom of the borough in Bury St Edmunds this coming Friday at 11:30 according to our local paper, The Bury Free Press. I hope a good crowd turns up to show appreciation. I've booked the day off to pop along.

[stickmonkeytamer]

Anyone want my 3200 shares? I'll put them on Ebay, starting at 99p, but, by that time, they won't be worth that!!!

SMT

[BEagle]

The rot started with greedy American banks dishing out loans to trailer-trash who could never afford them....

How many trillion dollars is Uncle Spam in debt for now?

[Another St Ivian]

Actually I understand it was a lot more to do with the bonus system at NR and the way in which their staff went about getting it (borrowing short to lend long &c).

[harrogate]

Let's not forget, it's not actually spent money... yet.

However, interesting to read that the government are well down the list of creditors when it comes to getting money back if/when it goes balls up.

NR's 'strong mortgage book' that everyone keeps going on about is largely co-funded and propped up by a hell of a lot of other creditors, all of which will be reimbursed before Darling gets our cash back.

Abroad, anyone?

[LFittNI]

ANOTHER is perfectly correct--it's nothing to do with the US "sub-primes" (a term which is not correctly understood over here).

NR's business plan was something like this---do heavy marketing of mortgage lending and higher rate savings, but, oooops, without wide base of investors to prop it all up. Solution? Easy--borrow from the markets at LIBOR+ and hope for inflation to carry it all through. Plenty risk.

The only good thing about this business is that Alaster Darling has a mortgage with Northern Rock..........tee hee.

[Roadster280]

IMHO, it's got everything to do with the US Subprime mortgage crisis.

Easy--borrow from the markets at LIBOR+

This only works when there actually IS money to borrow in the markets - which there isn't any longer.

How do I know? Well, as a subprime (because I'm a foreigner) borrower in the US, I got my mortgage from a "high street" lender who would lend to people such as me, with no US credit history. Well guess what? My mortgage bank went bust, for exactly the same reason, ie. it could no longer borrow money itself.

If the govt holds onto the loan to NR, it may be worth something in the future. But to write it off would be criminal, if one single soldier/sailor/airman dies as a result of not having the right kit for financial reasons.

[Navaleye]

Its a lot more complicated than that. But NR are doomed sadly. I was at a meeting with someone today figuring out how to carve them up. IMHO the govt have wasted a great deal of our money. Only part of the loan (Tier 1 capital) is secured, the rest is not. Any other answer is a lie. I feel for Steve Jones for the small team in their treasury department (clients of mine) who have had to live through this nightmare. They don't have any Chaff to deflect incoming.

[norilsk]

One wonders if HMG would have been as ready to bail it out if it was called "Southern Rock" and been based south of the M4

[VinRouge]

Even more disgusting when you find out that NR is one of the biggest financial supporters of the noo lab government.

If you think that NR will be the only big UK bank to get wiped out as a result of this then think again; the figures some BS's will release as to their exposure to any potential downturn (lots of people about to snap out of fixed rates to the variable rate) will, i believe, start a downturn in the UK economy since the winter of discontent... Time to batten down the hatches and buy gold methinks...:eek:

[The Green Scopie]

MoD Equipment Procurement 08 Budget Shortfall = £1.5B (Near enough anyway.)

Money lent to Northern Rock = £25B

Discuss.

Good job we're not flighting 2 wars or anything.