Northern Rock - Example of Panic Selling?

[fibonelli]

http://www.prisonplanet.com/articles/september2007/180907prolonged.htm

*If this story below is true, then it would explain Mr Paulson's visit.

"........By intervening directly in this crisis, Mr Brown signalled to the whole world that assurances from the Bank of England are worthless; and the Governor of the Bank of England, Mervyn King, will find that his five-year contract will not be renewed this coming November. The Prime Minister also set a very dangerous precedent which, should the banking situation deteriorate dramatically – as could still happen at any time – would imply that the British banking system might even be nationalised.

Because what he actually did, in so many words, was to 'guarantee' the entire UK banking sector, which has never happened in any advanced non-Communist country before. This alone shows to what an extreme degree of danger the overall situation has been allowed to deteriorate, as these American official crooks have scrambled like rats in a sack to find a solution to the end-game triggered by Wantagate, as described in our reports on this website..........".

Source: http://www.worldreports.org/news/80_wanta__embezzled_by_

*No coverage in the lame stream media

 

[bypath3]

"every penny guaranteed" isn't it....the collateral worthy of lending against exceeds the liabilities which is not the same as your comment........

Yeah, I was on about the new government guarantees, I guess I do get at least something out of being pinned to the news :cheesy:

I asked about it being wise to set a precedent..... I don't think the guarantee is as cast iron as they're making out, If barclays suddenly went tits up tomorrow, do you really think the depositors would have a 100% guarantee on 100% of their deposits? I don't think so, although this is what's been forwarded to ALL retail banks. Again, I don't think NR is in anywhere near as much trouble as is being made out, and other banks even less so; I don't think there's any danger of the entire system breaking down. There'll be a few more controversies no doubt, but I maintain my :!: PREDICITION :!: , buy buy buy all the way to £4....

 

[chump]

"buy buy buy all the way to £4...."...any price then..and where is your stop

 

[Atilla]

*If this story below is true, then it would explain Mr Paulson's visit.

"........By intervening directly in this crisis, Mr Brown signalled to the whole world that assurances from the Bank of England are worthless; and the Governor of the Bank of England, Mervyn King, will find that his five-year contract will not be renewed this coming November. The Prime Minister also set a very dangerous precedent which, should the banking situation deteriorate dramatically – as could still happen at any time – would imply that the British banking system might even be nationalised.

Because what he actually did, in so many words, was to 'guarantee' the entire UK banking sector, which has never happened in any advanced non-Communist country before. This alone shows to what an extreme degree of danger the overall situation has been allowed to deteriorate, as these American official crooks have scrambled like rats in a sack to find a solution to the end-game triggered by Wantagate, as described in our reports on this website..........".

Source: http://www.worldreports.org/news/80_wanta__embezzled_by_

*No coverage in the lame stream media

That is an interesting thought. Are you implying Mervyn King decline to guarantee all deposits and government has gone over his head?

I can see what you may be getting at but I still feel Government and belatedly BoE done the right thing.

Whilst I don't believe this crises was intentional you certainly have to manage the crises. Doing nothing is not an option.

Especially as in these scenarios the wealthy power players have so much more to lose than have nots.

We certainly live in interesting times.

 

[chump]

this for your general amusement...it's a piece from the work of Rothbard exploring the "panic of 1819" in the US...the only thing that might be new are 'the labels on the can'...the concepts remain true nearly 200 years later....

 

[bypath3]

My stop's 30p below where I bought it, but I doubt it'll venture back down there, if it does, of course therir as good as gone. As for any price, I'd certainly buy up to 3.60, but I've already got enough exposure to them.

 

[Order_Entry_Clerk]

You might like to look at stock lending amounts with CREST a.k.a EuroClear before betting the ranch on this one.

Its been hovering in 34% region for a few weeks now.

P.S. should l wait to replace my Newcastle F.C. shirt ?

 

[bypath3]

It's down to just over 20 this month, would have probably loaned it myself if I held it back in august...

As for the kits, I reckon the sponsorship'll be the last thing to disapear from view :cheesy:

 

[chump]

When I saw the govt foot in mouth manouver this was almost the first issue that occurred to me along with equitable life etc...

http://business.timesonline.co.uk/t...ectors/banking_and_finance/article2485411.ece

In effect it means that depositors risk is perceived by govt to be different to the risk run by people investing long term for their pensions..interesting because the govt for an awful long time through regulatory bodies said something very different.

 

[Jack o'Clubs]

When I saw the govt foot in mouth manouver this was almost the first issue that occurred to me along with equitable life etc...

http://business.timesonline.co.uk/t...ectors/banking_and_finance/article2485411.ece

In effect it means that depositors risk is perceived by govt to be different to the risk run by people investing long term for their pensions..interesting because the govt for an awful long time through regulatory bodies said something very different.

As someone who lost his pension through the Equitable Life debacle, the thought had occured to me too.

 

[Atilla]

As someone who lost his pension through the Equitable Life debacle, the thought had occured to me too.

I have stopped contributing into my pension back in 1996 sometime. We had a big debate with my brother who took out two one for him self and his Mrs. He has also subsequently stopped contributing since he found out what he'll be getting in return for his collosal contributions. Their answer was the gains will increase in later years. Yeah right. 40% of contributions go into administration charges and losses I guess.

Speak to any black cab taxi driver or accountant in London and they'll give you the score. Buy property or tangible assets.

Pensions are not guaranteed. They should be. (Ie Pension contributions + inflation linked increases)

Deposits should also be 100% guaranteed.

I thought Mervyn King took his eye off the ball and pleased the Government stepped in.

Whilst I can see the paradox in approach to pensions and deposits, two wrongs don't make a right.

 

[Splitlink]

I don't think that the government gives a damn about how much money we lose, either as investors or depositors, except that depositors are more likely to suffer from severe cashflow problems which, in turn, could rock everyone's boat, both corporate and private. With the debt problem as bad as it is just think what would happen if those who can and do pay the mortgages and credit repayments suddenly found their funds cut off.

Pension funds are investors who should take their chances along with all the other shareholders. They are large enough to have some clout at the board meetings and make sure that their interests are being served properly. They don't do that, though. Afterwards, they moan. I only feel sorry for them because of the pensioners they represent.

In addition to that we are living in a cult of buy now and pay later. Bankruptcies are treated as an inconvenience so that those who are owed money don't get paid, so those that do have some money in the bank should, at least have some protection.

 

[chump]

The basics appear to me to be that no mature western economy can afford to unravel all of their prior economic largesse that pertains to future promises on social costs etc etc and of course maintain political popularity sufficient to keep themselves in office therefore their only way forward is to expand/inflate their way out of any contraction crisis that presents itself (including the present)...this is manifested then in comments above...why 'save' for the future when such savings will be nullified by one means or another..."buy tangibles"...the implicit here is many people are now of the opinion that this, rather than pension contributions, will be the only long term way for them to preserve the value of their purchasing power when they arrive at that time of life when their income can be expected to taper off. Will it ? Time to be out of that box as well I think. Nothing so commonly held to will persist long term at the same level. Time to exploit fully the spread between mature and less mature economies...follow the corporate lead and get your nose into the same trough.

 

[Splitlink]

The basics appear to me to be that no mature western economy can afford to unravel all of their prior economic largesse that pertains to future promises on social costs etc etc and of course maintain political popularity sufficient to keep themselves in office therefore their only way forward is to expand/inflate their way out of any contraction crisis that presents itself (including the present)...this is manifested then in comments above...why 'save' for the future when such savings will be nullified by one means or another..."buy tangibles"...the implicit here is many people are now of the opinion that this, rather than pension contributions, will be the only long term way for them to preserve the value of their purchasing power when they arrive at that time of life when their income can be expected to taper off. Will it ? Time to be out of that box as well I think. Nothing so commonly held to will persist long term at the same level. Time to exploit fully the spread between mature and less mature economies...follow the corporate lead and get your nose into the same trough.

How do you do that? Via currencies?

 

[chump]

In theory you want to be in the economies with the highest growth rate/most undervalued currency relative to your host country...exposure to the eventual appreciation of their currency is what you are looking for...now who do we know that deserves to be on that list... (edit...who doesn't deserve to be on that list would be shorter) ...just be sure not to get 'carried' away by it...LOL...actually there's a damn good argument for buying every pullback made by our overleaveraged friends if it's long term you are looking for....in fact if you look at some currency pairs I think that is exactly what we can see ...at least at the moment.

 

[chump]

"My stop's 30p below where I bought it, but I doubt it'll venture back down there, if it does, of course therir as good as gone. As for any price, I'd certainly buy up to 3.60, but I've already got enough exposure to them"...well they might eventually get to 400p ,who knows , but for the moment today suggests the price is still mopping up supply so unless you are scalping there's nothing here for us small guys until we see that supply drying up.

 

[fibonelli]

When I saw the govt foot in mouth manouver this was almost the first issue that occurred to me along with equitable life etc...

http://business.timesonline.co.uk/t...ectors/banking_and_finance/article2485411.ece

In effect it means that depositors risk is perceived by govt to be different to the risk run by people investing long term for their pensions..interesting because the govt for an awful long time through regulatory bodies said something very different.

The government is propping up the fraudulent fractional reserve banking system (see my earlier post re M Rothbard). Guaranteeing depositors' money is merely the means of propping up this system.

 

[chump]

Fib,
I won't argue with what you say ,but it's a little bit more than that IMO...the fiat system is a bit like getting yourself a pet lion to clean up your rodent problem...once it's done how do you get rid of the lion without becoming cat burgers ? ...in this case when the fiat system as been around as long as it has and basically as been used for decades to fund promises which are not actually backed by anything ,but good faith in it ,just how do you undo those 'financial' promises ? Remember , everybody living and breathing in western economies is currently owed to a greater ,or lesser degree promises re pensions , 'std of living' (accumulated expectations that is), education ,heath ...etc etc.... take away the fiat system/fractional banking and just how would you suggest those promises are going to be paid for next week,year etc. ...you'd have the mother of all cashflow problems from day one...I'd go further than that..you'd have a complete breakdown in society as you know it. In that sense all they can hope to do is inflate slower than the erosion in the cost of future promises to be paid ...same to be gradually passed back to the individual and related in a more appropriate way to what you use ..is what you pay for.
It isn't simple,but dumping fractional banking in any kind of sudden manouvre won't happen no matter what anyone thinks of it.

 

[TheBramble]

Northern Rock's shares are already near its minimum estimated standalone run-off value.

Cashflow from operations are valued at 91 pence per share and the present value of capital releases at a further 142 pence per share, making a total of 233p.

 

[chump]

Either Mervyn King is going schizo ,or something 'strange' is going on behind the scenes. Whilst anyone might reserve the right to change their view ,his appears to be standing on it's head in incredibly quick time. I can't help wondering what the BoE ,treasury and Paulson found so rivetting to talk about the otherday.