Northern Rock

[Kryten]

Yeah, I know - another news topical thread.

But just a collection of thoughts - for any customers on these forums, does it bother you?

I can't understand people's reactions. There was never a huge problem in the first place, but the problem there was has now been vastly exasperated by the retarded reaction of large groups of panicing morons.

All those tits standing outside their local branch in a queue, some since the break of dawn - if anything happens - it's your fault!

I can't be the only one thinking that - why can't these queuing lepers see that?I understand from TV that most of the people queuing were old and probably a little easily confused, but that's besides the point - surely investigation before panic would save a lot of hassle in the long run.

I think it's proving the point that a person is intelligent - groups of people can be downright retarded. (panic theorum?)

 

[Jarakin]

Northern Rock mortgage customer here, personally i'm fairly certain that I don't have much to worry about as if things do indeed go tits up, my mortgage will more than likely be bought out by another lender, i'm hopeful that it's quite safe. However, if I had a whole load of savings with them just now, after the way people have reacted exacerbating the situation, i'd be cacking myself.

 

[Mazling]

I don't think calling them lepers is very nice

 

[Kryten]

Sorry, bit out of line. Lepers can't help being like that.

 

[Thadius]

All the money withdrawl isnt helping, just making it worse.

 

[taB]

People en-mass are idiots, this is all blown out of proportion. For the Bank of England to have made the deal it has means that people aren't going to be left in the shit.

To be honest though I'd never heard of Northern Rock before this. I hear they had good interest rates (?may be lies). I'm sure lots of people switch banks once a months these days anyway to get that extra 5p.

I'm happy to stick with my bank, especially when situations like today arise: Some motherfuckingcunt withdrew the total of my current account to the nearest '000 rupees. I don't recall visiting India in the last 24 hours but there we go. My bank knows who I am and I know all of them by first name, therefore it gets sorted.

Happy fucking birthday taB

 

[Chilly]

The bank wont be allowed to go totally titsup, the money is safe.

 

[Frizz]

I think it's proving the point that a person is intelligent - groups of people can be downright retarded. (panic theorum?)

Surely the one person must still be stupid to be so easily swayed in the first place? The kind of people that are afraid of superstitions.

 

[Tom]

I have my mortgage with them. I couldn't care less about what's going on.

All those people queueing are just stupid lemmings. They're the 50% of people statistically less intelligent than the average person.

 

[Calaen]

aye mostly morons camping outside, Surely its a good time to buy shares in the company? having had a 3rd knocked off the price of them I have no doubt they will rise again.

 

[Kryten]

Sir Frizz : It's a balance of mind over matter, and unfortunately whilst a single mind may be able to decide what that single person thinks is best, they are easily swayed by the actions of others - i.e. peer pressure etc - something accountable for lots of "issues" - schoolkids smoking before they get as far as secondary school, condom sales being higher to under 16s than under 25's, etc etc.
If a single person see's one other person doing it - "I'm not the only one". More than one other person doing something "perhaps I should be, too"

That could of course all be bollocks, I'm no psychiatrist (although my own psychiatrist keeps telling me i should be at times ) - but it just seems to be rather true in more than one circumstance and this is certainly no different.

 

[Furr]

The news is becoming unpalatable in how sensational everything is being portrayed at the moment its like they are all trying to copy the Fox News show plan in how to read the news, I guess its their way of trying to compete with the interweb by turning everything into a 'massive drama' with theme songs and tales of kittens being killed because the credit crunch has made it too expensive to feed them....

Gah....

 

[Chilly]

and now the government has stepped in to stop those stupid ***** (the customers withdrawing) from getting the bank into further trouble. They have guaranteed deposits.

 

[MYstIC G]

Input -> Process -> Output

-or-

Molehill -> Media Coverage -> Mountain

 

[old.user4556]

I wouldn't be keeping my money there.

But then, i bank somewhere proper.

 

[Ono]

If they get bought out it'll be because of the idiots moving their money. NOt the credit crunch.

 

[ECA]

Its sort of amusing to me that if media coverage wasnt calling it a "crisis" etc then none of the panic withdrawals would be occuring :/

 

[Kryten]

On the plus side, if you're in the market for shares - knock yourselves out!

 

[Poag]

Its sort of amusing to me that if media coverage wasnt calling it a "crisis" etc then none of the panic withdrawals would be occuring :/

I was just listening to "Angry Mob" 'Easily Swayed' seemed kinda comical

I never noticed before...well i did but never thought of it. Theres a Northern Rock branch just down the road from my and Jups office.

Now this is city trader land, lots of pink shirts and Sheiks visiting there banks, people who work around here are generally not that thick.

There was a queue outside said branch this morning that stretched up the road to City Wall..about 80-90 mtrs.

Now there was no queue there yesterday..or on Friday. Thus it seems like the people around have taken note of whats going on elsewhere and are moving there money out.

But indeed, the non problem....after all BoE has now guaranteed all savings...is looking to be become an actually problem due to sheepage in the population.
One goes "Maah" they all do...

Not that I really blame them...i wouldn't want my savings to evaporate

 

[Munkey]

My own 2 cents is: yes, it is a case of people crying sheep. But people have been hearing about the sub-prime fiasco in America and now people are finding out that their bank has credit issues.

I doubt the people full understand the nature of Northern Rocks problems, however I do understand the point that it is their money and life savings they are taking out. Which no-one wants to play silly buggers with and lose.

 

[Furr]

There was this good analogy post on the bbc HYS section

"I’ve just had a very bad night at the casino after losing heavily on the dogs yesterday, this is causing me a short term liquidity problem which may result in my not being able to house or feed my family, I would like to ask the Bank of England for a loan to cover my short-sightedness. I really do realise how stupid I have been with money but without the loan my dog will suffer; a few hundred million should cover my ineptness.

Thanking you in advance for bailing me out.

Northern Chump"

 

[GReaper]

I'm just shocked at the angry attitude of some of the Northern Rock customers, they really feel as if they've been cheated and let down.

It seems as if all their panicking has left most of them without a brain.

 

[yaruar]

My own 2 cents is: yes, it is a case of people crying sheep. But people have been hearing about the sub-prime fiasco in America and now people are finding out that their bank has credit issues.

I doubt the people full understand the nature of Northern Rocks problems, however I do understand the point that it is their money and life savings they are taking out. Which no-one wants to play silly buggers with and lose.

The only thing is that NR didn't have any credit issues really, the market has credit issues and no one can borrow large sums of money in interbank loans at the moment. They had issues with their agressive growth and the ratio of deposits they hold (we are one of the few countries which doesn't mandate a minimum percentage of deposits to lending which is another issue) And they were reporting that they were only going to make half a billion in profit for the current period.

Although the problem is that once some of the sheep take their money out in panic everyone has to because no one wants to be the last in line when all the money runs out. It isn't anything to do with NR, any bank in this country would collapse if it had a run on it, it's the nature of banking.

 

[DaGaffer]

All I can think of when I see this story is the It's a Wonderful Life pastiche in The Simpsons;

Jimmy Stewart-like Bank Manager: I don't have your money, Its in Bill's house and Joe's house...
Moe: What the Hell's my money doing in your house Bill? *Whack*

 

[old.user4556]

I was OUTRAGED to read the suggestion that tax payer's money was on stand by to bail them out or to "cover it", whatever the term.

I feel utterly robbed by the government already (particularly when it gets handed out to the waste of spaces up here in scotland who refuse to work), and to read that was just a joke.

 

[Vae]

The Bank of England is not really bailing them out. Our tax money is not disappearing to bail out a failed company. It is acting as lender of last resort because Northern Rock is still financially solvent i.e. Assets>Liabilities. If it wasn't financially solvent the FSA and BoE wouldn't let it continue to trade.

The problem they have is that the institutions that normally lend money overnight such as banks, pension funds etc aren't doing so. Therefore overnight rates have increased and in some cases they aren't lending at all.

Northern Rock is more exposed to this than most banks because it finances it's lending from the moneymarkets more so than from ordinary savers.

The compounding problem Northern Rock have faced is that people are sheep and the media seems to like exagerrating and promoting panic. The media have promoted Northern Rock using the Bank of England as a lender of last resort as a disaster preceeding a collapse and everyone losing their savings. This despite the fact that normally they would borrow the same amount of money from other lenders and all is fine.

The only reason the government has stepped in and said it will guarantee peoples savings is because people are stupid, don't understand the situation and don't believe the company is solvent. Rather they act like sheep, follow the media, panic and cause a problem (i.e. the run on the banks cash funds) themselves. In this current credit crunch if any bank had all it's savers withdraw all their cash they would have to draw on other lenders and ultimately the Bank of England to cover their current liquidity problem despite being healthy companies with a surplus of assets.

In short people are stupid.

N.B. Of course if there is a housing market crash, people default on their mortgages and the collateral (houses) aren't worth enough to cover the bad debts then the equation changes and there is more risk. That's why you are seeing more banks making large provisions against the mortgage debt they hold.

 

[JingleBells]

The only reason the government has stepped in and said it will guarantee peoples savings is because people are stupid, don't understand the situation and don't believe the company is solvent.

I think you'll find the reason is that a large amount of Northern Rock customers are likely to vote labour

 

[Poag]

in addition to Vae..who will probably know a damn sight more about this little aspect than i do.


For banks to trade and operate in the UK, dont they have to tank out an "insurance" policy against the BoE which covers certain things like terrorist attacks and covering customer deposits. This is then put into the pot with the other banks in the UK, thus if a bank gets into trouble it draws on this policy against the BoE.

If i am correct in this then the tax payer would not be paying out..although BoE would it would come from the insurance "pool"


Maybe wrong maybe right...i can't remember where i read about this previously

 

[yaruar]

The Bank of England is not really bailing them out. Our tax money is not disappearing to bail out a failed company. It is acting as lender of last resort because Northern Rock is still financially solvent i.e. Assets>Liabilities. If it wasn't financially solvent the FSA and BoE wouldn't let it continue to trade.

Tax money would be used to bail out the bank if there was a continued run on it though as their business model is more vulnerable to runs (not that any bank isn't vulnerable) maybe the government should put it's policy where it's mouth is and introduce minimum reserve ratios. This would screw up banks such as NR and A&L though as they are agressive, risk taking lenders.

I'm not sure there is compulsory deposit insurance in the UK either, i can't find information on it, although i did find an amusing essay on the BoE site on the Moral Panic caused by deposit insurance by Ronald MacDonald

 

[Gumbo]

On the plus side, if you're in the market for shares - knock yourselves out!

I hope no one here knocked themselves out...

BBC NEWS | Business | Northern Rock shares fall further