The Poolie Bunker

quote from a branch in newcastle yesterday

People in the queue burst out laughing when one staff member asked them: "Does anyone want to pay money in?

Bloke in Cheltenham yesterday walks in and demands his million quid nest egg in one lump. When the manageress refused he barricaded her in her office until the Police arrived. Apparently he spent all night trying to transfer it on the net but the site kept crashing. These must be the same people who buy nineteen loaves of bread to keep them over Christmas and panic buy petrol.

is there any need to panic? i dont have any savings with Northern Rock although my mortgage is with them.

thank god i aint got any shares

Personally I'd be more worried if my mortgage was with them (which it isn't) than about the security of my savings. If they're really in sht for money they can call all of the debts in, including mortgages.

However Mrs R doesn't agree so she is currently stood in the queue to draw our savings out

Savers are the ones at risk. If the bank goes belly up then savings are only guranteed to be repaid up to about £3k with 90% of the next £30k. Thereafter they are alongside other creditors. Anyone with larger savings is prudent to shift their money. Those with mortgages are ok. The bank (or administrators) might sell their mortgage to another company, but borrowers could always switch to another lender if the terms aren't competitive. The loan from the Bank of England is meant to stave off going belly up

Does anyone think that this will have a knock on effect with other building societies and banks?
I heard the chancellor talking yesterday saying that mortgages have been too easy to get in the recent past, all right for some overpaid politician to say - will this lead to highger wage demands and hterefore higher inflation?

Not trying to panic anyone just seek others views.

This has been on the cards for sometime. As a stockbroker, I've been well aware that the fixed income and money markets have been knackered for weeks now - none of the banks are willing to lend money to each other, which is how Northern Wreck raised its finance (as it only has a small deposit base). Unlike the Federal Reserve in the US and the European Central Bank which have propped up their money markets, the Bank of England has just sat back and let the banks sort out the mess which they've got themselves into. And I don't blame them.

Northern Wreck has had it as an independent building society, it will be bought and bailed out by someone, but the other big mortgage lenders (Alliance & Leicester, Bradford & Bingley, HBOS) have less agressive business models and are therefore less likely to run out of funding. It's the completely sensational reporting that panicking savers.

The end result is that you ain't going to be able to borrow 5 times your salary on a 125% mortgage anymore.

I can't see it myself.

What's happened is that you might have heard the term 'sub-prime' bandied about. The American finance houses were lending mortgage sums to people with cack credit histories and then their housing market collapsed under rising interest rates, leaving people with properties worth less than their mortgage and unable to pay the increased monthly amounts. All parties lose.

Several of the British banks had their snouts in the trough, yes you've guessed it, trying to screw the people who can least afford it. How unlike a bank eh??

Well the losses they made in this market have to be made good from somewhere and so the Northern Rock asked for a bridging loan from the Bank of England until they can right their profit statement from other sectors. People got hold of the fact that they needed a loan and smelt trouble where in fact there isn't much apart from in-house. Northern Rock aren't huge and were in a bit deep is all. They aren't in any danger otherwise the BoE would have let them sink.

I agree wi Sarnia.

Banks/b socs - can only lend 45% of their savings balances - the more money that people pull out will result in them having even less money to lend and thus needing the loan from the bank of england - they havent got a loan yet - they had just had the facility agreed to.

to 'save' it/shore it up people should actually paying money into it and stop being so bloody greedy

The media are whipping up a frenzy and people are panicking. I'm interested in the £3k that people would be entitled to if it did go down & then the 90% of the next £30k. For those with savings above, would it be safer to put £3k in several banks / socieities than all in one? I know the rates are higher the more you have in a single account but it seems marginal. The impact on the housing market would be quite drastic if the financial institutions imposed tougher rules (or stuck to the ones they have already). Especially for 1st time buyers and those wth or planning families. And if people cannot afford houses where will they live, rents reflect the price of property? If there were a major crash in house prices would this would damage the economy and lead to a recession with all the bad things that go with it such as repossessions, high unemployment and high inflation? As a social worker I'm not that clued up on finance matters but I have seen the impact when a relatively stable economy takes a dive.

Northern Rock couldn't even sponsor a football team in my opinion. Withdraw your brass - freddie shepherd did!

In the case of many thousands of people being affected by repossessions etc, I think it's inevitable there would be some form of civil unrest. The bigwigs and fatcats who are owed the money can't just simply reclaim lost revenue by taking it from the people at the bottom of the pile and not expect some kind of comeback. Even if there's no civil unrest in the form of brick-throwing at police etc, all that would happen is that those people affected will stop contributing and "drop out." I know I would. They would find other, so-called illegal ways of making their way in life. Then there would be no moral high ground for the authorities and so-called public minded citizens to take, in accusing people of fiddling or moonlighting.

They've had £2 Billion withdrawn over the past two days, that's a huge hit for any bank. Whilst the initial problem was nothing to worry about the problem they now have is that its perfectly possible for this to become a self fulfilling prophecy. As the panic increases, more and more people will join this run on the bank. How many people do you think will be there tomorrow with their withdrawal slip in hand?

Remember the problem was liquidity: that means that whilst the business was successful they had a shortage of ready cash. In any other business this would be called a cashflow problem, the nemesis of almost every business that went bust.

Northern Rock are going down, as the man said; 'get your brass out'. Within a fortnight they will go into administration and be swallowed up by another financial institution who will not have to honour NR's debts. If you've got a mortgage with them, worry not. Their mortgage book is the valuable to every other financial institution and will be the parts that will the other vultures will fight over.

I walked past at around half 1 ish on Saturday and there were a few people inside but there was no queue at all, unless they were due to close or something.

Did you pick up any gems in the 45s though chip - I recall you had your scouts out for a who classic

Oops - sorry elvis although chip is no doubt an equally fine man. I notice Mr Fairweather-Low is touring just now. A quiet night with his acoustic I believe. Gin House and If paradise . . . were both top singles.

I've just been checking my, admittedly slim, collection of singles just in case Elvis. I knew I had a least one Who single, but it's My Generation, with Shout & Shimmy on the b side on the Brunswick label.

WLWH prompted me to look through after talking about Mott the Hoople. My one album of the theirs is Drive On from 1975

Do you have a long list of singles your looking for, or any particular artist(es)?

You really think the BoE will let Northern rock go bust?

Banks are based on trust, if one bank goes under who is to say that other banks wont follow suit? Faith in one bank is completely gone, faith in other banks will waiver and the lemmings will begin queuing and withdrawing at other banks. There is actually only around 10% of tangible pounds sterling in our economy, if customers want to withdraw more than that 10% banks will fold. Money will have no value. There is no point in going to go to work in the morning, the British economy comes to a standstill. (this is of course exagerated, but you get my point?).

The problem with Northern Rock is the massive publicity and media attention they have had due to the fact they have had to borrow money from the BoE. You also have to bear in mind that up until early today Northern Rock hadn't actually used any of the borrowed BoE money, it was simply a safety net.

There was nothing at all in the media a couple of weeks ago when Barclays twice borrowed money from the BoE, people simply didnt know about - therefore no panic and no lemmings queuing up outside Barclays withdrawing their savings.


The government has issued a statement saying that all Northern Rock savings are safe, they will cover them. Doesnt this in theory make Northern Rock the safest bank to currently have savings with? Would the government risk losing absolutely all confidence the general public has in them by issuing a false promise?

Think about it. The government has made the promise to cover all Northern Rock savings, Northern Rock go bust, the government then refuse to pay .... I dont really see that happening.


One last thing that has struck me as amusing. A bank that has 'cashflow problems' has managed to cope with the withdrawl of £2 billion pounds in 2 days.

Can't help with the Manfred Mann one either. I have got 5-4-3-2-1, with a b side of Without You on HMV, and Ha Ha! Said The Clown, b side Feeling So Good on Fontana.

I'm sure you wouldn't bore us with pics of your collection, well not everybody anyway!

As always you're right!!!

http://www.youtube.com/watch?v=i-XPgccjiqw

On the subject of Manfred Mann & EC(G), this isn't bad.

http://www.youtube.com/watch?v=7oDsSRZT ... ed&search=

is this thread about music or Northern Rock??
I can't remember

Is Northern Rock a distinct style of rock music, eg The White Negroes?

possibly.like this:

http://www.rathergood.com/independent_woman/

I don't even have to open the link to recognise that. Quality!

Impressive line up but just a bit of a strumfest really.

Here's presence for you:

http://www.youtube.com/watch?v=jaEcUMrsBhU