Comments on: Northern Rock nationalised: A nation now in hock to a housing bubble http://monevator.com/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/ Make more money, invest profitably, retire early Tue, 22 May 2012 19:41:38 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Hands off our falling house prices | Monevator.com http://monevator.com/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/comment-page-1/#comment-278 Hands off our falling house prices | Monevator.com Fri, 18 Apr 2008 19:23:49 +0000 http://monevator.com/2008/02/17/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/#comment-278 [...] In urging the banks to immediately cut mortgage rates in response to Bank of England rate cuts, the Government is asking them to go back to the cutthroat margins that first fuelled the credit bubble. By saying it’s their duty to lure in over-stretched first-time buyers, the Chancellor is implicitly asking the banks to return to the very same reckless practices that eventually led to the sub-prime meltdown, and to the ensuing credit crisis. [...] [...] In urging the banks to immediately cut mortgage rates in response to Bank of England rate cuts, the Government is asking them to go back to the cutthroat margins that first fuelled the credit bubble. By saying it’s their duty to lure in over-stretched first-time buyers, the Chancellor is implicitly asking the banks to return to the very same reckless practices that eventually led to the sub-prime meltdown, and to the ensuing credit crisis. [...]

]]> By: Two signs the crisis for financial shares may be abating | Monevator.com http://monevator.com/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/comment-page-1/#comment-155 Two signs the crisis for financial shares may be abating | Monevator.com Fri, 04 Apr 2008 11:23:44 +0000 http://monevator.com/2008/02/17/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/#comment-155 [...] collapse in confidence in the financial system and plunging bank stocks. In the UK we’ve seen Northern Rock crumble, while in the US the investment bank Bear Stearns lived up to its name after jitters led to rumours [...] [...] collapse in confidence in the financial system and plunging bank stocks. In the UK we’ve seen Northern Rock crumble, while in the US the investment bank Bear Stearns lived up to its name after jitters led to rumours [...]

]]> By: Wall Street made this mess. Wall Street must pay for it | Monevator.com http://monevator.com/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/comment-page-1/#comment-69 Wall Street made this mess. Wall Street must pay for it | Monevator.com Fri, 14 Mar 2008 14:40:51 +0000 http://monevator.com/2008/02/17/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/#comment-69 [...] was much worse than the consensus believed. In the UK, we’ve even seen the FTSE 100 bank Northern Rock (eventually) nationalised as a result of the credit [...] [...] was much worse than the consensus believed. In the UK, we’ve even seen the FTSE 100 bank Northern Rock (eventually) nationalised as a result of the credit [...]

]]> By: The Investor http://monevator.com/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/comment-page-1/#comment-43 The Investor Mon, 18 Feb 2008 16:28:56 +0000 http://monevator.com/2008/02/17/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/#comment-43 @ Tom, agree, the whole thing has turned out to be a pointless wander in a woods they can't see for the trees. Indeed, from listening to Alastair Darling today they still don't seem to know what they're aiming to do. Nationalisation makes sense if they're going to sell off the loan book piecemeal (though as I've said here before in my view they could have achieved the same end with administration, without disrupting market forces) but I don't believe they have any business running a UK bank in the medium-term. Yet they're sort of implying they might, albeit if for an eventual sale. Such a sale would no doubt make profits, provided there's no housing crash, but they could achieve the same end by flogging it off in bits -- and anyway it's not the UK governments job to make profits out of private enterprise. Let's leave that to the private sector and bongo tinpot developing world regimes. Muddying the water here benefits nobody long-term. e.g. Even National Savings produces frequent commercial conflicts (e.g. compare its tax-free savings rates with what the commercial banks can muster). @ Tom, agree, the whole thing has turned out to be a pointless wander in a woods they can’t see for the trees. Indeed, from listening to Alastair Darling today they still don’t seem to know what they’re aiming to do.

Nationalisation makes sense if they’re going to sell off the loan book piecemeal (though as I’ve said here before in my view they could have achieved the same end with administration, without disrupting market forces) but I don’t believe they have any business running a UK bank in the medium-term. Yet they’re sort of implying they might, albeit if for an eventual sale.

Such a sale would no doubt make profits, provided there’s no housing crash, but they could achieve the same end by flogging it off in bits — and anyway it’s not the UK governments job to make profits out of private enterprise. Let’s leave that to the private sector and bongo tinpot developing world regimes. Muddying the water here benefits nobody long-term. e.g. Even National Savings produces frequent commercial conflicts (e.g. compare its tax-free savings rates with what the commercial banks can muster).

]]> By: Tom http://monevator.com/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/comment-page-1/#comment-42 Tom Sun, 17 Feb 2008 22:33:30 +0000 http://monevator.com/2008/02/17/northern-rock-nationalised-a-nation-now-in-hock-to-a-housing-bubble/#comment-42 The original reason for giving the emergency funding to NRK was that the govt was worried that if NRK was allowed to fail, investors would stop buying mortgage backed securities from all the other UK banks as well. Given this has already happened (meaning that the UK housing market crash is assuredly on the way) and is still the case, it all seems like a bit of a pointless exercise now. The original reason for giving the emergency funding to NRK was that the govt was worried that if NRK was allowed to fail, investors would stop buying mortgage backed securities from all the other UK banks as well. Given this has already happened (meaning that the UK housing market crash is assuredly on the way) and is still the case, it all seems like a bit of a pointless exercise now.

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