Rolling UK Economy Into The Shitbin Thread

The other thing is..if NR were the dodgiest of the subprime lenders, this means they will surely have the highest repossession figures once they start really rising

Which means the government will be the ones repossessing peoples houses?

When NR initially got into difficulties we were repeatedly told that their "mortgage book" was one of the best about, i.e. they specifically weren't a dodgy subprime lender. The problem, we were told, was their method of raising the cash to fund these good mortgages (i.e. loan finance) which was going to the money markets, which had crunched up bigstyle.

Is that wrong?

No, Northern Rock got into shit because their business model was over-reliant on being able to access credit, which suddenly dried up. It wasn't because they were particularly dodgy subprime lenders themselves.

(xpost yes, Tim is correct)

They did source a larger amount of their finance from money markets than any of the others, correct

But NR were one of the ones that were lending out the very high salary multiples, and while its true that outfits like B&B are probably more active in subprime than NR, i think they all have been to some extent (read recently that Derbyshire Building Society have a high % of non-prime, and they're a mutual, with supposedly some sense!)

http://www.northernrock.co.uk/mortgages/together.asp

together is different to a normal mortgage. It works by combining your secured mortgage with an unsecured loan at a single interest rate with one monthly payment. This combination can be worth up to 125% of your home’s value.

I'm not really sure what your point is. If your point is that Northern Rock are worse/more mental mortgage lenders than any of the others, I don't really know but it seems doubtful and certainly wasn't the main reason for what went wrong.

If you mean the government will be the ones repossessing homes then yes, by extension, some, and there could be an enormous furore about this if Northern Rock repossessions do appear disproportionate to other banks later down the line. I've no idea whether they will. Presumably the government will look to get Northern Rock off its hands as quickly as possible?

My point is that NR were a subprime lender (even though, yes, the trigger for their collapse, was a model over-reliant on money markets for financing - which i'm not disputing. However the reasons they were reliant on that sourcing were partly because of how they leant out)

And that this therefore means a significant proportion of forthcoming repossessions will be by NR/govt

we were repeatedly told that their "mortgage book" was one of the best about

Yes, we were. But, considering no one has been persuaded to take on this profitable 'mortgage book', even with many incentives to do so, then...do we believe it?

Presumably the government will look to get Northern Rock off its hands as quickly as possible?

bang-up job so far!

re. NR's subprime exposure -- are we talking about subprime lending in the UK?

yes

oic.

repossessions are going up anyway -- faith in a "good mortgage book" is hard to come by even if the loans aren't strictly subprime. or at least that seems to explain why no-one would touch NR with yours.

Also, what is prime today can be subprime tomorrow

Also when your brand is a national byword for 'financial incompetence and failing economy' its going to be difficult to persuade people it's worth investing in.

Ugh apostrophes.

Ironically this means the government is now be responsible for the creation of money!

(other than coins and notes obviously)

On the other hand, Barclays seems to have done alright, considering.

yes, considering.

although of course those are the 2007 figures, including the benign first 7 months of last year.

Northern Rock has apparently put 2% on Labour's poll ratings.

Does anyone in this country actually have the slighest fucking clue who they're voting for next election?

Mentalist swings in poll ratings are kind of New Labour chickens coming home to roost. In the same way the Tories were undone in 1997 by the fact the voters they created had loyalty to no one, New Labour neutralisation of ideology means that people will grasp at anything that may swing their decision.

although of course those are the 2007 figures, including the benign first 7 months of last year.

Yes, it also depends on the extent to which Barclays' accountants have written off its exposure to subprime-based securities though. If they've taken the full hit now then they'll be able to move on, if there are worse revelations to come then they're kind of inaccurate.

They'd have been wise to write it off now IMO.

Since constituency-wise I now come under Hammersmith and Fulham (CON) I suspect I may have to vote tactically yet again.

Well presumably this is all still largely related to exposure to US based subprime. Its going to be difficult to even rate, never mind write off, homegrown subprime exposure until it actually goes bad.

Plus the US stuff is still early days, a lot of that is spreading into prime, auto, student debt

Setting up an ISA with the scarborough building society and came across this from august 2006

http://www.scarboroughbs.co.uk/publicrelations/pressreleases/2006/august14_ssm_announce.html

quote: "‘We have a great deal of experience in the sub-prime arena through our existing subsidiaries and we believe this will give us a head start in the non-conforming sector.’"

But I thought there was no subprime in the UK!?

There probably still was in August 2006.

Might explain why their ISA is a notice ISA.

http://www.theonion.com/content/files/images/Cartoon-Mortgage.article.jpg

http://www.bloomberg.com/apps/news?pid=20601102&sid=aEaHw4s_pqKg&refer=uk

BOE been reading the feds notes?

fuck you BOE, and fuck you the city.

My experience up here in the grim up north at the moment is of being in a recession. Would anybody like to buy a bike? I have plenty, and no takers at the moment.

I desperately need a bike actually. If I were up there Pash I'd know exactly who to buy it from! :/

If only you had a bike to get up to South Shields...

He does orders, if you know what you need.

That whole Bear deal reeks of pre panic

What is incredible to me is that Bear's employees accepted approx. 1/3 of their compensation as shares?? (I would hope that's an average, and that the top fund managers had more like 1/2 and the support and tech people had more like 1/10)

Oh, they should have a bit put away.

Oh no, wait! They don't have plump financial financial cushions!.

A plum cushion, yesterday...

http://www.shopdekko.com/products/630787m.jpg

Wow, it seems like it was only yesterday when they paid their CEO a
http://www.nytimes.com/2006/12/22/business/22bonus.html4.8 Million bonus. In fact it was a whole 15 months ago. Bet he's kicking himself he didn't get it in cash.

Ooops, fckd up...
http://www.nytimes.com/2006/12/22/business/22bonus.html

finding myself curiously indifferent as to the fate of bear employees :/

Well I'm not sure it's fair that they have to shoulder the burden of risky strategies undertaken by the whizmenschen managers at the top of the pyramid.

Ana amazing fact that I've not seen on any of these threads yet: on Thursday, the chairman of Bear Stearns was participating in the North American Bridge Championships in Detroit. He and his partner were fourth in a field of 130. By Friday, they'd fallen to 26th.

yeh, this is the same guy who took a lot of shit for being away playing golf during some previous crisis.

Is he some distant relation of the Bush family?

^ well wasnt Carlyle one ot the dominoes for bear?

The day Katrina hit New Orleans, Condoleeza Rice bought shoes at Ferragamo and saw a Broadway play.

As SoS Rice isn't that concerned with domestic shit. Not on her beat.

That's true.