Between Northern Rock and a hard place
If I were Gordon Brown, sitting down this morning with my Chancellor to pick over the bones of the Northern Rock debacle, the immediate problem of the run on the bank would be a little way down the agenda.
Rather, I’d be more concerned about the collapse of trust in government and other institutions that the queues of savers trying to get at their money embody. Maybe, by a statistical fluke, Northern Rock customers are a uniquely and homogeneously suspicious and distrustful bunch. Or maybe they offer an insight into how much trust people really put in the Prime Minister, the Chancellor of the Exchequer and the likes of Northern Rock boss Adam Applegarth.
All three have given multiple assurances over the weekend that there is no cause for alarm but still the people continue to queue. The public couldn’t have been more disbelieving if Gordon had gone on live television and promised that the Government had a rescue package that could be launched within 45 minutes.
Of course, people are emotional when it comes to money, especially when it’s their money. Get a right-wing libertarian revved up over tax-credits, for example. But people are emotional about other things as well, their children and families for instance. This lack of trust could prove corrosive in all kinds of new and interesting ways away from crappy turnouts at elections. What if another bank starts to flounder? What if a wolf really does arrive amongst the flock? How might people react if the next big piece of advice from the Government were to be, ‘the public are advised to stay in their homes’?
To avoid being too negative, it’s incumbent on me to come up with a solution or two. How to solve this potentially disastrous collapse of trust? Personally, I have no idea but then I wasn’t the one who squirted huge reservoirs of public faith and a massive parliamentary majority up the wall in a shower of media manipulation, power without purpose, personal vanity and dead Iraqis.
In the short term, maybe the Government and Northern Rock could draft in some public figures in who the man in the street (queuing outside his bank) does seem willing to place his time, cultural wellbeing and trust. Davina McCall, maybe? Chris Moyles, perhaps? Justin Lee Collins? Almost certainly. Natasha Kaplinsky? Get her on the streets with a megaphone right now.
Voiceover: This is an appeal from Vernon Kay on behalf of the Northern Rock bank.
Vernon: Ee, alreet? Leev t’money in t’bank, eh?
Yes, that would do it.
Posted on September 17th, 2007 at 10:29am under UK politics
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• 7 Comments |
As we speak NRK shares trade at around £3 which capitalises them at £1.26 Bn. They hold mortgages said to be worth £104 Bn.
And nobody wants to buy them.!
EPS was just under £1.00 last year giving you a return of 33%!
And nobody wants to buy them.!
So the bigger boys must know how much poisonous shit there is in there – and darling and Applegarth, blandly say “Bizniz as usual.”
Now watch the Q’s form at A&L nearly 15% down since Friday morning.
Alliance and Leicester? I better get down there and cash in my overdraft.
Lack of trust?
Surely they are suffering from false consciousness? They don’t know where their own best interests lie! They should be voting with their feet for their capitalist class interests by putting more money in the bank not taking it out.
I blame those lickspittle lefty’s who have pulled the wool over their eyes and filled their heads with nonsense about political rather than economic democracy; or the false dictums about co-operation being better than competition.
Oh! and would anyone like to buy a copy of “Capitalist Bastard”?
Darling’s media appearances to reassure the public have been awful. I suspect previously calm savers have been rushing out to the bank immediately after seeing him repeating his mantras over and over and over…
And Cameron’s decision to play party politics with this at this particular moment is extraordinary. His comments will only further undermine confidence in the economic situation and exacerbate the problem. It’s almost as if he wants to see economic meltdown.
Darling’s line seems to be that things aren’t so bad when David Cameron was making Norman Lamont’s tea 15 years ago. Don’t worry about the economy now, just look how shit it was in 1992. Cameron-Lamont, Cameron-Lamont, CAMERON-LAMONT!
Cameron’s problem is, I suspect, that he doesn’t understand this business where people have to borrow money in order to buy things they need. Can’t they ask Daddy to put his hand in his pocket?
This part of the GURANTEE that Darling was peddling in shock announcement – it can be found it ful at the Treasury website
I want to put the matter beyond doubt. In the current market circumstances, and because of the importance I place on maintaining a stable banking system and public confidence in it, I can announce today that following discussions with the Governor and the Chairman of the FSA, should it be necessary, we, with the Bank of England, would put in place arrangements that would guarantee all the existing deposits in Northern Rock during the current instability in the financial markets.
Now does that sound like a 100% gurantee, A1 at Lloyds – should it be necessary, WTF ?
“Cash in my overdraft” LOL Wouldn’t that be great.