Wednesday, 6 August 2008

Northern Rock/Cock Up

Economics are not that difficult unless of course they get mixed up with politics. More going out than coming in, trouble. Take this scenario and ask the question are the people likely to suffer traditional government voters? If the answer is yes then you get into the economics of the loony bin. Government takes over a bank at enormous expense to us the tax payers. Government promises to get back the money. After six months bank makes a whopping loss because the position with its book was worse than expected. Government in effect says oh dear lets just write off £3B it’s only £100 per tax payer in UK. This cannot make economic sense unless its votes that count. I want my 100 quid back because I would not invest in this bank at this time. The previous chancellor dithered over the various ways to save pension funds that he had helped steal and had gone into liquidation and a pension’s minister claimed they had to be sure the schemes eventually offered were “value for money” and then they only offered partial recovery of what is in effect a saving scheme for the future. There is no value for money option in what is being spent now. If this is Gordon’s plan for a revival of fortunes I fear “more needs to be done” This gets the thumbs down from me. Could a nationalised bank bankrupt a country? Because that is what is happening here.


Bob Piper said...

No it isn't Bob, and this entire piece is a nonsense. Perhaps you would tell us what you would have done with Northern Rock?

Let it go to the wall and throw thousands on the dole and threaten the mortgages of tens of thousands of people?

Or take it in to public ownership, invest some money in making it stable, and in three or four years time, when the markets are steady, sell the business to another mortgage provider at a PROFIT to the taxpayer?

When the later happens, I hope you will be sending your share of the profit back to the Treasury.

Bob the Black Country Brummie said...

Bob, I’m not sure I fully understand your beef. I don’t believe Northern Rock should not have been nationalised and at the moment it is not a good investment and I don’t believe it ever will be. I agree that new legislation was required to protect savings invested in banks. My real concern is that there is a double standard at work here. Chancellor steps in to save depositors money in a bank and guarantees in full are made. Nothing wrong with that. The point is that pension funds were not given the same degree of protection both the PPF and FAS fall very short of that and because of rising inflation this gap is getting wider for 10000s of pensioners affected. This is another of those taboo issues along with the war, the leadership and Northern Rock. Surely you can see the injustice that is being perpetrated here.
Ps I still want my 100 quid back.