We're all bankers now.

  Forum Editor 15:44 17 Feb 2008
Locked

The Northern Rock bank is to go into public ownership.

click here

  TopCat® 16:31 17 Feb 2008

Methinks downsizing and job losses will be a major item on the agenda, once the deal is made. As this news will undoubtably affect the share price, I expect the shareholders will be even more nervous as well. TC.

  GANDALF <|:-)> 16:41 17 Feb 2008

'UK taxpayers are now subsidising the bank in loans and guarantees to other lenders to the tune of about £55bn'......

why should I use my taxes to guarantee the savings of private investors and what monetary benefits will I get out of this debacle?

Why should I and the rest of UK taxpayers compensate the dim shareholders in this ramshackle business? I will have a cursory look later but I do not think that the UK tax payers are helping any of my shares in various companies...and nor do I expect them to.

G

  Forum Editor 16:45 17 Feb 2008

that if I was a shareholder I would be encouraged by the news. The British taxpayer is already propping up the bank to the tune of £55 billion, and maybe we all stand a better chance of getting all of our money back if we own the business.

The future as far as Northern Rock is concerned very much depends on the management team that is going to run it. There are some extremely good banking minds in the City - some of the best in the world, in fact - and it remains to be seen whether we can tempt one or two of them across the private/nationalised line. It might seem a little like offering a poisoned chalice, but if the money is good enough.........

  GANDALF <|:-)> 16:46 17 Feb 2008

Oh, forgot to mention that as house prices around me have dropped by around 10% from January 2007 (that is if the owners can sell) it does not take a genius to work out that investing in a bank whose only asset is mortgages, may not be the cleverest idea in the world. There is a lot more grim financial news to come from the States as well as the UK and heavily investing in a business model that is based on guaranteed value of assumed price assets is worthy of a General Haig award for being away with the fairies.
I await for the proverbial to hit the rather large fans that are starting up as I type.

G

  TopCat® 16:47 17 Feb 2008

I note Mr Darling has said the public ownership will only be temporary. Any guesses on how long that will be? TC.

  citadel 16:55 17 Feb 2008

shares are risky and you can not complain if you fail to cash in when the price is high.

  Al94 16:58 17 Feb 2008

Probably longer than Darling will be around!!

  Kemistri 16:59 17 Feb 2008

"Damned if you do, damned if you don't" is the phrase that springs to my mind. I agree with all of G's points and feel the same way, yet I can imagine the media-led complaints -- not without foundation -- if NR was left to drown and take its employees' jobs with it. I would have some sympathy for them, particularly in the current climate. It will obviously have to be turned around and fixed up if it is not to become a great big white elephant.

  realist 17:09 17 Feb 2008

So we, the taxpayers, have a Northern Rock passbook with £55 billion in it and now the company is to be nationalised. We can kiss that money goodbye then, and lots more with it no doubt.

  Forum Editor 17:10 17 Feb 2008

may not be the cleverest idea in the world, at the moment, but frankly it's a whole lot better than risking the total collapse of a bank.

People who know about full-blown recessions (and how they start) know that if a bank went down in this country right now we would really see the proverbial hit the rather large fans.

Nationalisation is generally anathema to me, but to be honest I don't see that there was a better option, given the circumstances. I can't believe that anyone in the Virgin consortium possesses the secret recipe for a revival of Northern Rock's fortunes.

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