“The Northern Rock debacle has become a major headache for Brown and his Chancellor Alistair Darling, tarnishing the government's popularity and denting the prime minister's reputation for being a guardian of financial stability.
“The move to temporarily nationalize the bank could be a blow to Britain's efforts to establish London as the global capital of finance and politically costly to Prime Minister Gordon Brown, who has staked his career on his stewardship of Britain's economic boom.
LA Times, USA
“The four month old crisis of the bank has seriously damaged the reputation of Prime Minister Gordon Brown. The temporary nationalisation of Northern Rock continues the fiasco for the British Government.
Frankfurter Allgemeine Zeitung (FAZ), Germany
“With a national election due by May 2010 at the latest, the debacle is a lingering headache for Brown and Darling and has tarnished both the Labour government's popularity and the prime minister's reputation as a guardian of financial stability.
“It was the first nationalization of a bank in more than a decade and a huge blow for the administration of Prime Minister Gordon Brown.
New York Times, USA
“The government faced a barrage of criticism on Monday over its decision to nationalise the Northern Rock bank, amid questions over its reputation for economic competence.
Agence France Presse (AFP), France
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Monday, February 18, 2008
How the World is Viewing Northern Rock
From the way Labour spinners have gone into overdrive you'd think the nationalisation of Northern Rock was nothing more than "a little local difficulty". The world's media seem to have formed a different view...
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Good little selection there. Reuters, of course, is wildly lefty and sleazy so can be ignored. The fragrant Inayat Banglawangla seems to have some connection with them.
Yes, the news is going around the world. I had one anxious friend here in Bangkok contact me and ask if I had any money deposited in Northern Rock.
Of course there was no shortage of wonky banks in Thailand during the Asian financial crisis in 1997 but only those who had money in the finance companies lost it.
Why should Gordon Brown and Alistair Darling be worried about the view of assorted news channels that nobody listens to?
They've got a group of intellectual heavyweights like Paddy Briggs, David Boothroyd, Chris Paul and Bob Piper to back them up.
So, there's nothing to worry about then.
Gordon is a moron. How on Earth did Britain get so bad that we got the Gordon we deserved?
Can some one actually lay out why it's bad to nationalise a bank in trouble? (Other than it's like the 70's, which is a crap answer)
"the first nationalisation of a bank in more than a decade" (NY Times).
Did I miss another one?
As a statement of fact, I suppose it's true (in the sense that 150 years is more than a decade).
most of these would have been written by their "London correspondent". The NYTimes displayed their usual deep understanding of matters outside Manhattan. Presumably someone had written "first bank nationalisation in more than 100 years" but the editor decided it was a typo and changed that to "10 years".
re Tory description of the Chancellor as a "Dead Man Walking" - was this a hat-tip to the support of the LA LA Times?
Absolutely spot on, anonymous at 3.56pm. Because, intellectual heavyweights or not, we have a vote... unlike the assorted news channels no-one listens to.
As for manfarang's friend in Bangkok (didn't Gary Glitter have one of those too?) he (or she) should hardly be anxiously contacting anyone about their savings in NR... now shares, that's a different matter.
NR's nationalisation will last just long enough for a Scottish bidder to buy it. This might have happened with the Virgin bid which was backed largely by the Royal Bank of Scotland. How did a puny Scottish bank like RBS become one of the largest European banks?
The United Kingdom will last just long enough for Edinburgh to become a major financial centre in Europe while London and the rest of England are run down. Then Scotland will opt for independence. The Conservative and Unionist Party will do nothing to stop this though. Not while David (I've got lots of Scottish blood in my veins) Cameron keeps telling the English "an imperfect Union is worth keeping"
But seriously, what would the Tories have done differently? I am interested at people's guess work...
cod historians and opposition spokesmen rely on counterfactuals as much as 20:20 hindsight - the point is: is this the right decision to make right here - right now?
Stephen Gash - and then Scotland will take over the world and we will all end up eating haggis and severely mispronouncing our short vowels. Actually it already happened once - in a place called New Zealand. Welcome to Middle Earth.
Some facts, which shouldn’t need saying but, apparently, do:
• The problems that Northern Rock got into were entirely of their own making and in no way attributable in any way to Government.
• Government didn’t have to step in. They could have just let events take their course.
• That Government didn’t let events take their course means that they cared about:
1. A million savers
2. 800,000 Mortgage holders
3. 180,000 shareholders
4. 6000 staff
• Government considered all the various options – it took time, it is a complex matter.
• The nationalisation is temporary.
• Thank goodness we have a caring Government which doesn’t just abandon people. Stop playing politics with people Mr Cameron – people about whom you know nothing. They don’t have accounts at Coutts! Look at the numbers above and for heavens sake care!
From my bit of the world - East London - it looks like the taxpayer is being asked to keep afloat a badly-managed Labour-supporting Bank positioned in the Labour heartlands, so pure politics then, not economics.
It's got sod-all to do with the US sub-prime problems, other than that the Bank followed their palpably-bad example, but that was OK because they were bunging donations to Labour.
And if Gordon Brown hadn't meddled with an excellent BoE warning system in 97, this stupidity would not have risen and bitten him on the a**e.
And I'm not interested in historical comparisons - Black Wednesday ruined my business, and now Gordon Brown is ruining my retirement.
what about something about Kosovo Iain. Sure that would get your response rate up. And a bit of relief from todays top story about Northern rock.
Anonymous @ 5:35 PM:
Now, listen carefully: I will say this just once.
The Tories were in favour of nationalisation. After all, Britain's fifth-largest bank couldn't go to the wall without consequences. Ooooh, no.
Now they're not. After all, Britain's fifth-largest bank collapsing wouldn't have any consequences. Ooooh, no.
Now they believe that Northern Rock should be made a subsidiary of the Bank of England (prop: UK plc). But that's not nationalisation. Ooooh, no.
They also believe (as far as I can determine) that NR should be run down and its assets dispersed in a fire-sale. Not, of course, that the hedge-funds (who finance the Tory Party) would agree with that. Ooooh, no.
So the Tories (patron: the Grand Old Duke of York) will oppose the bill to be presented tomorrow. This will be done with all kinds of flannel and such original metaphors as "dead man walking" (only 1,620,000 previous Goggle hits: but one needs an Eton and Oxford eddikayshun for such inventive wit).
Of course the kind of international reportage exemplified here happens: it's taking its marker from sources like the totally-unbiased BBC news broadcasts this morning. Ooooh, yes.
Paddy - to take you points up backwards one by one
1. A million savers -
guranteed by the govt.
2. 800,000 Mortgage holders
irrelevant to this discussion - it's an asset not a liability
3. 180,000 shareholders
bad luck - that's risk v reward.
4. 6000 staff
a bit sad but with the (apparent) exodus of Polish workers from England there will be many job vacancies to be filled filleting fish, in more likelihood they will sign up and sponge off the south as they always have.
To: Paddy Briggs
Er... the savers are/were always going to be protected; the mortgage holders were never going to lose their homes; 180,000 shareholders in LIMITED LIABILITY companies knew (or should have understood) the risks of investing;6000 staff - well shit happens (as it happened to me).
The only reason this happened is that (a) Northern Rock is in the North East (b) The North East is the bedrock of the Labour Party (c) Brown/Darling miscalculated when they thought there would be a general election.
So, please, no more straw men.
A small ironic point - but where Norther Rock forms the Reference Entity in a Credit Default Swap - there is no Nationalisation Credit Event defined by the International Swap Dealers Association.
So what does this mean for holders of a CDS with the Northern Rock in it? Who knows, but some companies must have used a CDS to hedge against the share price of NR. I doesn't look like they will be getting a penny now - some insurance the CDS turned out to be.
But what does this mean? It may mean that the price of some CD Swaps may be worthless - because the Reference Entities close to bankruptcy (a real credit event) in the UK - never go bankrupt and hence the CDSwap holder does not get compensated. It may mean that people are less willing to hold UK company shares because they can't hedge against them with a CDS.
Can you spot the common factor with Labour apologists Bob Piper, Paddy Briggs and Fairdeal Phil?
They're all fat lardbuckets.
This is no doubt due to their council estate upbringing where they compensated for their envy and despair through eating comforting junk food to excess.
a very interesting point I was thinking about myself earlier. Presumably it comes under a "restructuring" credit event? The difference between "Modified retructuring" and "modified modified restructuring" relate to the bonds that one can deliver into this cds not the cds itself. I have looked at the ISDA definition of restructuring. Actually I think this is "repudiation/moratorium"? Something we usually tell people doesnt happen in first world countrys. Any thoughts?
If I ever doubted my assessment of Paddy Briggs and Bob Piper as intellectual pipsqueaks, they have kindly re-enforced my viewpoint with their pathetic postings here.
You like to talk about "staff" - as in people who are employed.
Remind me, please, just how many "staff" have either of you directly employed in your lifetime?
Not the binmen, not the paperboy or milkman, or a member of staff who worked for the company you worked for - but someone who you personally employed and paid employers' NI on?
I think we know the answer.
You're this blog's equivalent of Jordan's tits.
Bizarre, amusing and hard to believe, but of little use in the real world.
Glitter was in Cambodia and Vietnam.Didn't you visit Vietnam recently?
i spy strangers
NYT is more cosmopolitan than you think.The Bangkok Bank of Commerce
was taken over by the Thai government over a decade ago.It was merged with a state bank.
The Long-Term Credit Bank of Japan was nationalised in 1998.I think that was the one the NYT had in mind.It was sold in 2000 to become the Shinsei Bank.
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