shortorlong
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Atilla
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he's probably been buying today, knowing that he will be on the telly later
I think Gordon Brown did the right thing today guaranteeing all deposits - £24bn
The word of the BoE rests on NR.
Must not fail. Otherwise bad news for ALL.
I don't really care much for the shareholders but depositers must not lose their monies.
Banks will rip us off and claim it back anyway. Look at their overdraft fees of £30 & £60 for automated letters. Probably costs more to print a £50 note than one of those automated letters and yet we get charged £60. Where is the logic. :cheesy:
I'm still gob smacked of all places it's London having a bank run. I really am.
I am genuinely embarrassed about it.
JTrader
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fibonelli
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I think Gordon Brown did the right thing today guaranteeing all deposits - £24bn
The word of the BoE rests on NR.
Must not fail. Otherwise bad news for ALL.
I don't really care much for the shareholders but depositers must not lose their monies.
Banks will rip us off and claim it back anyway. Look at their overdraft fees of £30 & £60 for automated letters. Probably costs more to print a £50 note than one of those automated letters and yet we get charged £60. Where is the logic. :cheesy:
I'm still gob smacked of all places it's London having a bank run. I really am.
I am genuinely embarrassed about it.
Hey Atilla,
Isn't that the same G "New World Order" B who sold this country's Gold Reserves at a pathetically low US$280 to his illuminazi mates?
The global elite are conspiring to send oil prices crashing through the $200 dollar a barrel mark as part of an organized agenda to hike profits, bring about a global economic crash and torpedo the middle class, and they're not afraid to attack Iran as a means of achieving their goal.
Time to wake up boys and girls.
leovirgo
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Newspaper recommendations for NRK..
1) 03/04/2007 - Telegraph said buy
(2) 29/04/2007 - Sunday Telegraph said sell
(3) 28/06/2007 - Telegraph said buy
(4) 26/07/2007 - Times said buy
(5) 27/07/2007 - Telegraph said buy
(6) 29/07/2007 - Sunday Telegraph said sell
(7) 17/08/2007 - The Independent said hold
1) 03/04/2007 - Telegraph said buy
(2) 29/04/2007 - Sunday Telegraph said sell
(3) 28/06/2007 - Telegraph said buy
(4) 26/07/2007 - Times said buy
(5) 27/07/2007 - Telegraph said buy
(6) 29/07/2007 - Sunday Telegraph said sell
(7) 17/08/2007 - The Independent said hold
the latest news is in fact that the govt have declared they will guarantee all depositor funds...so collateral...what collateral ? ...solvency...what solvency? Whilst I believe in commercially based support this isn't it at all. I wonder if they really understand what they have done ?
I believe that they have, hopefully, stopped a run on that and other banks. What they have done wrong has been to build an economy of 1.3 trillion pounds of debt, which has been Brown's policy (with Blair as PM) for more than a decade. The chickens are coming home to roost.
Unfortunately for Brown, he is now prime minister. Bad timing. He should have tried to get this to happen whilst the opposition was in power. Good timing for Blair, though. On purpose?
Split
Atilla
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Yep definately true. Failure of NR would have meant most other banks come under a big microscope.
Look at the pound...
Government & BoE acted a little late but right decisions in the end.
i havent read much this morning, so cant comment regarding the full deposit cover....does that mean deposits in the branches, or does that mean full liability cover?
this is key to know if the signal is only wrong, or totaly wrong.
anybody has any info on the matter?
this is key to know if the signal is only wrong, or totaly wrong.
anybody has any info on the matter?
They have not stopped anything,but what they have done is create a further problem.
1.stopped a run on other banks ? what run ,have depositors been seen rushing to other banks ? I have not seen any. I have seen shareholder activity which the market can sort out for itself on a commercial basis as usual. A run is imagination , it is emotion ,it is not what is happening outside of the NR which had been dealt with as far as it could be dealt with at this time.
2.we had been enjoying the relative strength of the gbp against the $ and this had been sheltering us from the inflation attached to anything priced in dollars including of course other pegged currencies and their trade ...kiss that goodbye.
3.Unlimited liability..that's what they have signed for...let's rephrase that ..unlimited devaluation of our currency because we could only make good on the promise by printing more money than you ever though possible.
4.Interest rates...now firmly attached to the above issue and virtually out of the hands of the BOE.
To summarise ,the govt have preempted something that needed no preempting..that is solved a nonexistent problem and in doing so have created a potentially much larger one. The best analogy I could make is they have behaved like novice traders panicking when all they had to do was sit and watch and play what was actually happening. Their stop has been run. They lost their nerve. Moreover ,here's a prediction which is unusual for me, depositors will continue throughout this week to withdraw funds from NR regardless of govt guarantees , the treasury will negotite a deal to sell NR in the sense they put some funding terms on the table,both of these events would have happened anyway.
1.stopped a run on other banks ? what run ,have depositors been seen rushing to other banks ? I have not seen any. I have seen shareholder activity which the market can sort out for itself on a commercial basis as usual. A run is imagination , it is emotion ,it is not what is happening outside of the NR which had been dealt with as far as it could be dealt with at this time.
2.we had been enjoying the relative strength of the gbp against the $ and this had been sheltering us from the inflation attached to anything priced in dollars including of course other pegged currencies and their trade ...kiss that goodbye.
3.Unlimited liability..that's what they have signed for...let's rephrase that ..unlimited devaluation of our currency because we could only make good on the promise by printing more money than you ever though possible.
4.Interest rates...now firmly attached to the above issue and virtually out of the hands of the BOE.
To summarise ,the govt have preempted something that needed no preempting..that is solved a nonexistent problem and in doing so have created a potentially much larger one. The best analogy I could make is they have behaved like novice traders panicking when all they had to do was sit and watch and play what was actually happening. Their stop has been run. They lost their nerve. Moreover ,here's a prediction which is unusual for me, depositors will continue throughout this week to withdraw funds from NR regardless of govt guarantees , the treasury will negotite a deal to sell NR in the sense they put some funding terms on the table,both of these events would have happened anyway.
full liability insurance....mmmmm
that BOE loan is a capitalisation, i dont need the hard data anymore to know.
i knew it smelled fishy.
agree with your prediction chump, 100%
now wait and see who's next. hopefully nobody. a banking crisis is not a nice thing to live.
i am now thinking that someone was truly fiddling with their fingers with this particular case for the last 6 months.
that BOE loan is a capitalisation, i dont need the hard data anymore to know.
i knew it smelled fishy.
agree with your prediction chump, 100%
now wait and see who's next. hopefully nobody. a banking crisis is not a nice thing to live.
i am now thinking that someone was truly fiddling with their fingers with this particular case for the last 6 months.
They may have stopped something, we shall see how successful the attempt has been. This should have been stopped long ago. Savers may continue to withdraw but, after what the government has said, I would no longer bother. What I am doing is wondering to which currency I should convert. I don't think that I am the only one.
When stirling was being defended in 1992, I asked myself why I should worry when, with a phone call, my capital could be converted to Dms, so that's what I did. Lots of institutions and capitalists have been withdrawing from shares lately. Where do you think the cash has been going? To the safe old British pound? I remember 1992 too well.
That flow from stirling is what is worrying the BOE right now---not the savers in Northern Rock.
Split
JTrader
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It most definately could be. But will it? its another gamble really.
rols
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Atilla
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Are you sure about that?
If the BoE and Gov did nothing consequence would be disastrous.
If you don't call the queues a bank run what to you call it?
Even healthy banks could go down with this kind of panick.
I have just gone long on NR. Bit of a gamble but I see it stabilising. Expect a Fed drop in rates will help the situ.
I think NR expanded it's market share the fastest. Other banks and institutions don't have the same level of exposure.
Reputation of the lady rests with this one. I'm glad all is being done that should be to save depositors. That is the all important aspect. Shareholders beware as that's another story... :cheesy:
fibonelli
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Making Economic Sense
by Murray Rothbard
Chapter 78
Bank Crisis!
"..........Put more pointedly, why does this domino process affect only banks, and not real estate, publishing, oil, or any other industry that may get into trouble? Why are what Samuelson and other economists call "good" banks so all-fired vulnerable, and then in what sense are they really "good"?
The answer is that the "bad" banks are vulnerable to the familiar charges: they made reckless loans, or they overinvested in Brazilian bonds, or their managers were crooks. In any case, their poor loans put their assets into shaky shape or made them actually insolvent. The "good" banks committed none of these sins; their loans were sensible. And yet, they too, can fall to a run almost as readily as the bad banks. Clearly, the "good" banks are in reality only slightly less unsound than the bad ones.
There therefore must be something about all banks--commercial, savings, S&L, and credit union--which make them inherently unsound. And that something is very simple although almost never mentioned: fractional-reserve banking. All these forms of banks issue deposits that are contractually redeemable at par upon the demand of the depositor. Only if all the deposits were backed 100% by cash at all times (or, what is the equivalent nowadays, by a demand deposit of the bank at the Fed which is redeemable in cash on demand) can the banks fulfill these contractual obligations.
Instead of this sound, noninflationary policy of 100% reserves, all of these banks are both allowed and encouraged by government policy to keep reserves that are only a fraction of their deposits, ranging from 10% for commercial banks to only a couple of percent for the other banking forms. This means that commercial banks inflate the money supply tenfold over their reserves a policy that results in our system of permanent inflation, periodic boom-bust cycles, and bank runs when the public begins to realize the inherent insolvency of the entire banking system.
That is why, unlike any other industry, the continued existence of the banking system rests so heavily on "public confidence," and why the Establishment feels it has to issue statements that it would have to admit privately were bald lies. It is also why economists and financial writers from all parts of the ideological spectrum rushed to say that the FDIC "had to" bail out all the depositors of the (insert bank), not just those who were "insured" up to (insert guarantee amount] per deposit account. The [insurer] had to perform this bailout, everyone said, because "otherwise the financial system would collapse." That is, everyone would find out that the entire fractional-reserve system is held together by lies and smoke and mirrors, that is, by an Establishment con.......".
"...........Yes, the (BOE, Fed, ECB etc) could, in the last analysis, print all the cash and give it to the banks, under cover of some emergency decree or statute. But . . . there's a hitch. If it does so, this means that all the trillion or so dollars of bank deposits would be turned into cash. The problem, however, is that if the cash is redeposited in the banks, their reserves would increase by that hypothetical trillion, and the banks could then multiply new money immediately by ten-to-twenty trillion, depending upon their reserve requirements. And that, of course, would be unbelievably inflationary, and would hurl us immediately into 1923 German-style hyper-inflation. And that is why no one in the Establishment wants to discuss this ultimate fail-safe solution. It is also why it would be far better to suffer a one-shot deflationary contraction of the fraudulent fractional-reserve banking system, and go back to a sound system of 100% reserves.
http://www.mises.org/econsense/ch78.asp
by Murray Rothbard
Chapter 78
Bank Crisis!
"..........Put more pointedly, why does this domino process affect only banks, and not real estate, publishing, oil, or any other industry that may get into trouble? Why are what Samuelson and other economists call "good" banks so all-fired vulnerable, and then in what sense are they really "good"?
The answer is that the "bad" banks are vulnerable to the familiar charges: they made reckless loans, or they overinvested in Brazilian bonds, or their managers were crooks. In any case, their poor loans put their assets into shaky shape or made them actually insolvent. The "good" banks committed none of these sins; their loans were sensible. And yet, they too, can fall to a run almost as readily as the bad banks. Clearly, the "good" banks are in reality only slightly less unsound than the bad ones.
There therefore must be something about all banks--commercial, savings, S&L, and credit union--which make them inherently unsound. And that something is very simple although almost never mentioned: fractional-reserve banking. All these forms of banks issue deposits that are contractually redeemable at par upon the demand of the depositor. Only if all the deposits were backed 100% by cash at all times (or, what is the equivalent nowadays, by a demand deposit of the bank at the Fed which is redeemable in cash on demand) can the banks fulfill these contractual obligations.
Instead of this sound, noninflationary policy of 100% reserves, all of these banks are both allowed and encouraged by government policy to keep reserves that are only a fraction of their deposits, ranging from 10% for commercial banks to only a couple of percent for the other banking forms. This means that commercial banks inflate the money supply tenfold over their reserves a policy that results in our system of permanent inflation, periodic boom-bust cycles, and bank runs when the public begins to realize the inherent insolvency of the entire banking system.
That is why, unlike any other industry, the continued existence of the banking system rests so heavily on "public confidence," and why the Establishment feels it has to issue statements that it would have to admit privately were bald lies. It is also why economists and financial writers from all parts of the ideological spectrum rushed to say that the FDIC "had to" bail out all the depositors of the (insert bank), not just those who were "insured" up to (insert guarantee amount] per deposit account. The [insurer] had to perform this bailout, everyone said, because "otherwise the financial system would collapse." That is, everyone would find out that the entire fractional-reserve system is held together by lies and smoke and mirrors, that is, by an Establishment con.......".
"...........Yes, the (BOE, Fed, ECB etc) could, in the last analysis, print all the cash and give it to the banks, under cover of some emergency decree or statute. But . . . there's a hitch. If it does so, this means that all the trillion or so dollars of bank deposits would be turned into cash. The problem, however, is that if the cash is redeposited in the banks, their reserves would increase by that hypothetical trillion, and the banks could then multiply new money immediately by ten-to-twenty trillion, depending upon their reserve requirements. And that, of course, would be unbelievably inflationary, and would hurl us immediately into 1923 German-style hyper-inflation. And that is why no one in the Establishment wants to discuss this ultimate fail-safe solution. It is also why it would be far better to suffer a one-shot deflationary contraction of the fraudulent fractional-reserve banking system, and go back to a sound system of 100% reserves.
http://www.mises.org/econsense/ch78.asp
JTrader
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