Northern Rock.
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As this panic has been caused by Liar Loans sold in the US, perhaps we should start extraditing those who caused this global problem and grab their assets.
How about start with Wall Street and all those brokers who sliced and diced the debt, or The Rating Agencies hoodwinked people into thinking it was A+ debt, All those sales people who were flogging loans to people who couldn鈥檛 afford them, the US Government, lets drag them over here kicking as screaming and sue them for every penny they have.
I think when Alistair Darling says there's nothing to worry about, it's time to panic.
As anyone asked the people who have withdrawn all their money what they are going to do with it ?
It will be ironic (but not that suprising to me at any rate) if it is not re-invested in some other
"Excellent money making scheme"
I can remember being told many years ago by an old policeman all ths myths about London just prior to and during the London blitz.
His words, which I can still recall were "Those with money, mate, could not get out of London quick enough Dunkirk spirit my a... more like rats and sinking ships"
Well my Mother has decided not to panic over her 拢35,000 - after I have explained to her that the chances of the bank going under are very remote.
She would still loose a substantial amount (拢4000) if the worse was to happen though.
Impossible to log into the website but a nice letter on the front page from the chairman.
Incidentally - Mum got straight through on the phone to the Bournemouth branch who where extremely reassuring (well they would be) but did say they had no queues.
What is really annoying is how the majority of the media are excacerbating the situation.
News 24's captions as I write:
Queues getting bigger ..... applied to the Bank of England for help ....
And on Sky News - showing huge queues and just interviewed a gentleman who has been told he won't be seen today. He told the journalist he had withdrawn most of his money on Friday - and about to withdraw the remaining amount as he didn't want to loose it.
Why did the journalist NOT mention that they are all safeguarded for the first 拢2000 savings and 90% of the rest up to 拢31,700 ?
Too much media scaremongering going on!
Dave (1):
I think the panic has been caused more by the media, not sufficiently explaining what the loan from the Bank of Engand actually meant, and instead whipping up a frenzy of rumour and supposition.
Why is nobody pointing out the double standards? Going by the unsustainable level of personal debt, the great British Public has no problem about getting a loan to tide themselves over, so what's the problem with a bank doing the same?
Why oh why oh why aren't schools teaching basic personal financial concepts?
*grump*
iJ (5)- agree completely! I keep thinking of Its A Wonderful Life. Maybe if people just calmed down a little the panic would also lift. I'm keeping my money where it is for the time being.
I also seem to remember hearing that Northern Rock hadn't even taken advantage of the money when this all started, it was there as a 'just-in-case'. Though this may have been a misreported titbit.
Dave (1):
I think the panic has been caused more by the media, not sufficiently explaining what the loan from the Bank of Engand actually meant, and instead whipping up a frenzy of rumour and supposition.
Why is nobody pointing out the double standards? Going by the unsustainable level of personal debt, the great British Public has no problem about getting a loan to tide themselves over, so what's the problem with a bank doing the same?
Why oh why oh why aren't schools teaching basic personal financial concepts?
*grump*
Would this have happened if Northern Rock had remained a building society?
If yes, is there any safe place in this country for our savings?
If no, then why not get the carpet baggers to put their money back! I have no sympathy for them.
Staff at the Northern Rock in Albert Square, Manchester are handing out sweets to people stood in the queue.
Well said, jonnie and witchi.
So - is this how the next Great Depression (which some people are predicting will happen soon, in the US, and over here - because, as we know, when America coughs, the world catches a cold) starts?
Because some greedy idiots in the States lent money to people they knew couldn't afford to buy their own homes?
How sordid.
Please repeat the legal position for savers: the first 拢2000 is 100% guarenteed. Over 拢35000 is 90% guarenteed. Any saver with more than this kind of money in a savings account should have put it somewhere else anyway.
Financial assets are doomed for the foreseable future. Gold does not lie, cannot be printed, is in demand, is in limited supply and most importantly, its value is not a function of someone else's word or opinion.
I know where my own money is heading!!
Our GDP is largely dependent on debt fuelled consumption. Against this background, any politician stating that the economy is "strong" is either a lier or a fool, or perhaps both!
i just heard a suggestion in the interview with Andy Burnham that the government should guarantee to cover any lost savings from Northern Rock Customers. i am not in support of this. no investiment is risk free, including a savings account. customers of Northern rosk have had the benefit of the interest rate on their savings and with that came the risk that they may lose their money if the bank goes bust.
if i can't afford my mortgage, which is a form of investment, i do not expect the government to bail me out.
whilst i have much sympathy for those who believe that thier money is now at risk; the moral of this story is 'no investment is riks free!!!'
Am I the only one who feels that the 'panic' we see on the streets can be entirely attributed to the inflammatory comments made in the media. I have sympathy for investors in Northern Rock as their confidence has been continuously undermind by scare mongering. If Northern Rock fails it will have everything to with panic whipped up by rumour and innuendo rather than any nothing to do with the financial solvency of Northern Rock.
Either we are snowed under with zillions of comments, or the frog is broken by 502s and malice.
Bah.
What a poor interview with the government minister. Once again "Steady Eddie" was shown not to understand that when there are systems in place they should be allowed to run their course. Much more exciting to badger a minister who he knows will not say anything that will leave the government as a "hostage to fortune". I know a bank crash is a much more exciting story for the media than one where the system works but the 大象传媒 are supposed to give impartial reports not "scare stories".
It would help if news reports at least mentioned the investors compensation scheme.
Though, looking at the limits it is striking how much better investments are protected than savings.
See www.fscs.org.uk/consumer/key_facts/limitations_of_the_scheme/compensation_limits/
If I were an investor or saver with Northern Rock if I hadn't paniced before I expect I would be now after hearing the weasel words of the governments representitive in your interview.
Not getting straight answers to straight questions is exactly the reason people are panicing.
Will this govenment never learn? Spin and deceipt is past it's sell by date.
What a poor interview with the government minister. Once again "Steady Eddie" was shown not to understand that when there are systems in place they should be allowed to run their course. Much more exciting to badger a minister who he knows will not say anything that will leave the government as a "hostage to fortune". I know a bank crash is a much more exciting story for the media than one where the system works but the 大象传媒 are supposed to give impartial reports not "scare stories".
*sigh* (in response to #12, I'm basically repeating what #5 said)
Please repeat the 'legal position' correctly and clearly the FSCS (details on the internet) will give you back:
100% of the first 拢2,000
90% of the next 拢33,000
(so the maximum you can get back is 拢31,700; this is per customer across all their accounts)
Please repeat the legal position for savers: the first 拢2000 is 100% guarenteed. Over 拢35000 is 90% guarenteed. Any saver with more than this kind of money in a savings account should have put it somewhere else anyway.
Did Financial Regulations require Northern Rock to reveal that it was asking the Bank of England for a loan ?
Jonnie;
Maybe no queues in Bournemouth, but queues in Stockport at midday around 200 people strong.
News24 commentators and experts since Friday have emphasised the deposit protection you mention. They had a bunch of people over the weekend who repeatedly made the point that this is mass hysteria writ large and that people's money is safe. All to no avail. When I walked past the queue in Stocky today I felt like bleating at them all, sheep that they are.
SO has her mortgage with NR and wondered over the weekend if she should be 'doing something'. I pointed out that she owes them money, not the other way around, which settled her down.
Witchi is quite right that this agreement is only a facility, not even drawn on yet. These people withdrawing their cash are like lemmings plunging off a cliff. There's no guarantees that the place they are putting their cheques isn't in an even worse condition, but has perhaps kept quiet thus far.
If, let's say, Alliance & Leicester or Barclays now make a similar announcement, with many NR ex-savers no doubt having dumped their cash in there, where will they go then? Will it be ring-a-roses between financial institutes in the high street, as savers scramble to get their money out and then haven't a clue where they can put it for safety?
Si.
How dare the weasel twins Applejoy(or whatever) and Darling (!!) continue to reiterate that Northern Rock Customers are able to remove their money if they want to. I do want to, and I can't. I have a silver savings online account to which access is blocked and now totally locked.
With huge relief, I finally got through to a login box at 3.am this morning, only to correctly enter ID which was not recognized and after 3 attempts at entering my mother's maiden name which oddly enough I am able to remember accurately, I was informed that now my access was 'disabled'. I must now contact customer services for 'help'. Need I say more ? Internet savers are very clearly being blocked from their money and are the fallguys in this horrendous situation. My life savings which is also my pension ( I receive monthly income) are on the line here. I'm fed up with people telling me 'not to panic' when they are not in a similar position.
Surely Gordon and all treasury ministers might be expected to move their funds to Northern Rock as a sign of confidence? Just as Tony Blair went into Iraq with the first wave . . .
it just goes to prove that a million idiots can break a bank :) granted some of them my not be all round idiots, some I'm sure are clever at some things but I guess that enough have no idea what the bank did or why and are just following the herd. Which is nice, makes one glad to be of the same species.
with regard to people demanding that the Gov guaranteeing the savings of the public in NR, I can see they would want other people to pay when they are out of pocket - being, as it is that the Gov money is in fact, Tax-payer money. I don't mind some of my tax going to recompense the less well off loosing their life savings but when I hear of people withdrawing 100,000 of savings (so on top of pensions, house etc) I'm not so keen. And if the Gov were to fully cover someone who had a million in NR and 100 million else where one might ask about the fairness of it.
I am highly suspicious of the Bank of England's involvement. It is clearly an attempt by the government to start nationalising the housing stock. Stealth taxes as chancellor, now socialism by stealth as Prime Minister
I鈥檓 beginning to feel much the same as the person who e-mailed to say that he would have hung on to his account but that the Chancellor鈥檚 seemingly slippery language this morning made him lose confidence. Like many, I鈥檓 sure, I have more deposited with Northern Rock than would be covered by the FSA formula; a very substantial proportion of my pension lump sum pension is in one of NR鈥檚 internet accounts. It has been impossible to get to it most of the time. I had intended to withdraw a very small amount initially, just to make sure that withdrawal arrangements work, and then to watch events a bit longer. However, even though I managed to log in on one occasion this morning, I had no success in operating the withdrawal and got timed out by the site. Since then, it鈥檚 proved impossible to log in. I imagine that if the Chancellor offers too much support, it will not only send the wrong signals to other poorly managed companies but, for all I know, may even contravene some European regulation or other. Nevertheless, just saying 鈥測ou can take your money out鈥 is insufficient. It seems that I cannot even achieve a small transaction at the moment. So if things really do go belly-up, will my failure to act in time and 鈥渢ake my money out鈥 (now) theoretically leave me exposed to loss above the 拢34k level? As you rightly pointed out, the level of trust in the government鈥檚 assurances is not enhanced by its past behaviour.
Why does the UK not have a reasonable deposit protection scheme? At least 100% of GBP 50,000 as in the USA and not just GBP2,000.
Oh, the power of the media. If the Northern Rock isssue had been handled resposnsibly rather than sensationally, there's be no panic. I believe my 拢200,000 savings were safe on Friday, but by the time the media has finished their feeding frenzy, who knows. Let's hope there's some other "crisis" to attract their attention overnight.
I am writing to complain about Eddie Mair's interview of Mr Andy Burnham, Chief secretary to the Treasury as part of the item about Northern Rock.
Mair was rude, constantly interrupted Burnham and didn't allow him to put his answers in context of the position as a whole. He (as always) did not listen to what Burnham was saying when putting his next question.
Unbelievably he kept asking Burnham questions that he knew full well Burnham could not answer. For example - "would you put money into Northern Rock?". There is no way that a man in Burnham's position would ever be able to answer that question - it would simply be incompatible with his position as Chief Secretary. Mair must have known that - or if he did not he should not be doing the job that he is doing and being very well remunerated by the licence payer. He kept asking that question - presumably trying to trap Burnham into saying something rash. To his credit Burnham did not fall for this, but Mair's job is to provide information - he failed yet again by asking his questions in such an arrogant condescending aggressive manner that Burnham was not able to give the public the information we wanted to hear. Instead all we got was Mair's own voice (which he is very fond of) belittling someone trying to give the public useful information in a crisis. He then asked a ridiculous question about whether the government would guarantee savings - to which we all know the answer is no.
This is not the first time I have complained about Mair - yet nothing ever seems to change. Would you please change the presenter of PM to someone who sees it as their job to present news fairly and objectively, and who is on top of the topics. Mair does not.
Sir,
There is one simple solution to the UK banking mortgage market.
Make the lenders as responsible as the borrowers. If mortgage contracts were made so that in the event that property values declined and a forced sale was made by the lender then no come back on borrower be allowed, lenders would be a lot more prudent in their lending policies before jumping onto a high rate risky bandwagon.
Higher salary multipliers over longer periods with inadequate monitoring of applications is bound to lead to cashflow problems and the lenders should be made to take responsibility and pay the price.
I doubt if any political party or government had the stomach for such a measure.
Free market + free credit restrictions = Free fall
I'm fat, greedy, and stupid... why doesn't the government do something about it !
They're not teaching the right history.
Back in the 60s and 70s Emil Savundra ran an insurance "scam" with "Fire, Auto, Marine" policies. I didn't have a policy with F A M but when it collapsed, many motorists switched to "Vehicle and General"; its "potential" liabilities then exceeded its assets and it, too, went under.
The liquidators took a whille to sort it out but despite the costs in the process, the policy holders of "V & G" received 95% refunds.
Knowing how property assets are practically given away at auction I fancy that the company was viable and could have survived if it had been allowed to continue trading.
Dr. Evil Savundra died, but not until 1976. He was 53 - I've outlived him by 10 years (to date).
Some consolation.
Well, given malice and 502s I shall try again.
Me, I am wondering about the sale value of those LPs and things. If the shares in Northern Rock and Alliance and Leicester have fallen by a third in a day, there might well be a killing to be made by buying their shares *now*; if they don't go under completely, which is incredibly unlikely, they are almost sure to go up and make me a lot of money.
[added as the news broke] The investors' money is now guaranteed: will that stop people from queuing for four or five hours to get a cheque for their savings so that they can, erm, put it into another similar place, I wonder? I do hope so, it's a very silly way to spend one's day.
I look forward greatly to the Northern Rock people, three or so months down the line, giving a bonus to the people who stayed with them and didn't get into a flap, but not offering a bent cent to anyone who got their money out of Northern Rock and put it under the matress. :-)
Ref(8)
Schools do try to teach basic personal finance (although it's unlikely to include USA sub-prime lending!).
It is not easy. Try to interest 20 and 30 year-olds in pensions. Then you will realise how 14-16 year-olds are not exactly fascinated by saving schemes.
What is likely to happen to NR mortgage holders? If a takeover is successful in the next days are the terms you agree to with NR honoured?
What makes you think that they were staff of NR, Tommy (10)? If the report on tonight's PM programme is anything to go by, they were as likely to be ambulance chasers from other banks looking for buisness.
H.
Well it was bound to happen sometime. I can only reiterate and agree with the words voiced by media commentators, we live in a culture which promotes debt and has been upheld by politicians. Is this government to blame, yes, but not just this government. This has been bought about by successive governments trying to promote a wealthy economy. They seem content to sit in their ivory towers and apportion blame to each other rather than rectify the problem. Their solution is usually another inquiry, which comes up with recommendations which your average citizen does not entirely comprehend and institutions do not have the resources to implement. The media don't get off scot free either, as they regularly promote greed by celebrating celebrity lifestyles and property programmes which allude to get rich quick schemes.
Today a treasury minister on Radio 4 could not even give a straight answer as to why every one is taking their money out of Northern Rock or if he would invest in the company. The answer is simple, because they no longer trust or believe what the government has to say. Political reassurances are worthless. There is an old saying that power corrupts (have you ever seen a poor politician!) I certainly wouldn't want to tar them all with the same brush but how often do we see 鈥渃ash for questions鈥 inquiries. How often do you get a direct answer out of the government, I certainly don鈥檛 recall many and I have been an avid listener of Radio 4 PM for years.
Markham (17), the systems are in place and should be allowed to run their course? Is that why the system was thrown out less than 45 minutes after the guest insisted (in response to a question via a listener) that there would be no 100 per cent guarantees?! I shall of course take your advice and restrict myself in future to "is there anything you would like to tell the nation, minister"!
Markham (17), the systems are in place and should be allowed to run their course? Is that why the system was thrown out less than 45 minutes after the guest insisted (in response to a question via a listener) that there would be no 100 per cent guarantees?! I shall of course take your advice and restrict myself in future to "is there anything you would like to tell the nation, minister"!
Shall I repeat that again? No best not...some odd foul-ups in our system earlier. But the systems are in place... ;o)
The badgering tone of your interview with the Chief Secretary to the Treasury, Andy Burnham, on Monday鈥檚 PM did you no credit. Instead of informing listeners, you couldn鈥檛 resist resorting to 鈥渨hen did you last beat your wife?鈥 type questions and, at one point, self-righteously demanded 鈥渁 straightforward answer鈥 In the current hysterical atmosphere, surely questions such as 鈥渨ould you put your savings in Northern Rock?鈥 are mischievously loaded and unhelpful.
Here is a suggestion for what it is worth. Why don鈥檛 you bring Anthony Hilton on to your programme? His excellent piece in Monday鈥檚 Evening Standard should help you in your quest to discover where the real blame rests.
I've been wondering if anyone in January wished Northern Rock a prosperous New Year?
Yer think we've got problems...
According to inside contacts the Japanese banking crisis shows no signs of ameliorating. If anything, it's getting worse.
Following last week's news that Origami Bank had folded, we are hearing that Sumo Bank has gone belly up and Bonsai Bank plans to cut back some of its branches.
Karaoke Bank is up for sale and is (you guessed it!) going for a song. Meanwhile, shares in Kamikaze Bank have nose-dived and 500 back office staff at Karate Bank got the chop. Analysts report that there is something fishy going on at Sushi Bank and staff there fear they may get a raw deal.
Richard, (43) when I "demand" an answer from a guest it's not self-righteous but an effort to get the guest to answer the question on behalf of the listener. Indeed, twice in the interview last night I was putting points raised by listeners in emails.
If ministers prefer to ignore the question and stick to prepared thoughts, I make no apology for trying to get answers. I will carry on asking for straightforward answers.
#46 Well said Eddie and thanks for saving my NR funds. In less than an hour Gifted Gordon backed down thanks to you.
Gifted knows about money. He is the only man in Britain that can borrow money at 3% but instead he borrows it at 35% and gets us to pay the interest. Sharp Eh?
I once dealt with a complaint to Northen Rock on behalf of my mother. They were quite the rudest people I have ever spoken to* -- and I've dealt with the "Customer Services" people of many a financial institution over the years.
I also knew someone who used to work for them as a manager in their call centre, but left because she could earn more, and suffer less stress, working as an entry-level clerical assistant in a university finance department.
*Not the stupidest though -- that was the girl from another financial institution who rang me three weeks after my husband died demanding to speak to him and refusing to dicuss the reason why with me. When I managed to get a word in to tell her what had happened and that, as executor of his estate, I was the person with whom she would need to deal, she replied "Yes I know he's dead -- I'm ringing about getting a copy of his death certificate".
I promise you that that is true.
Thank you, Lee. LOL. Good to read you again on a serious thread.
Eddie, since you seem to be here: I have a bet on about the number of times you repeated "millions" when yiou were talking about "millions and millions and millions and millions" of pounds last night in that interview.
You don't happen to remember, do you? There is a reputation riding on that and on whether it was two English billion or two American billion pounds that had been withdrawn from Northern Rock yesterday, and I don't see how I am ever to be declared the winner now.
I can't help but smile at the cynical Northern Rock customer quoted by a correspondent to You & Yours:
"I wasn't at all worried until the government started making reassuring noises(!)"
Thankfully, as the queues outside Northern Rock branches have dwindled, he's in the minority.
But I'd like to know who all these people are with more than 拢35,000 in savings - that kind of deposit would certainly make buying my first home a lot easier... :)
Although if a miracle happens and house prices do stagnate, I'll have the opportunity to save a bit more deposit (currently 拢5,000) before the houseprices skyrocket out of reach...
Just wondering...
After receiving a '419' email today, I wonder how long it will be before some enterprising scammer either (a) claims they're a Northern Rock customer who needs to reinvest their money elsewhere, or (b) claims to be a customer of a mythical foreign bank in dire straits...
-oOo-
In case you're confused as to what a '419' is, it's a form of Advanced Fee Fraud, named after the relevant section of Nigerian Penal Code. The scam emails always take the form of a story along the lines of the scammer has millions of pounds worth of money tied up in a foreign bank account, but can't access it directly. If you reply to him (presumably handing over your bank details at some point), he claims he'll transfer all this money via your account, for which you'll get a few million pounds as a reward.
Of course, in reality this lottery-sized bank account doesn't exist and the scam works around luring you into giving them money as an advance fee for setting up the transaction, which you'll never see again (let alone see any money from the scammer entering your account!)
Chris, it is extremely unlikely to be English billions. Northern Grain of Sand's entire deposit book was only 拢24,000,000,000. English billions have fallen out of everyday use and replaced by (US) trillions. PS I hope you didn't go ahead with that thought on Monday that you were going to buy more shares in the Grain of Sand - its shares are currently trading at around the 190p mark, a further 30% down on Monday.