Northern Rock

[tigersaw]

What is probably nothing to worry about has become a consumer panic fuelled by the media. People queuing to take their money out FFS.
Reminds me of the sugar shortage in the 70's. There never was a shortage of sugar, but suddenly shelves were bare across the country as people raced to stock their larders - sort of a self fulfilling prophecy.

Originally Posted by tigersaw

What is probably nothing to worry about has become a consumer panic fuelled by the media. People queuing to take their money out FFS.
(...)
sort of a self fulfilling prophecy.

My thoughts exactly.

I am totally with Tigersaw on this. Thousands of people proving they are not the most sophisticated of investors anyway if all they rely on are time bond B.S. saving accounts or the like. Plus they knee jerk react as opposed to drawing from "educated" opinion from those in the know.The problem is a world wide thing, it is just unfortunate that NR have been caught in the spotlight.

So those smart people who queuede for hours to withdraw their cash in the past days,where are they going to deposit it now?

I think their will be many a house burglar rubbing their hands with glee knowing that record amounts of cash are presently stashed under mattresses, in drawers and behind photographs in homes throughout the UK..

Cynic? Yes sirree.

Isn't Northern Rock a Building Society which is guaranteed to be backed by the government, therefore protected from going bust?

Nope, it's a bank. It de-mutualised in 1997.

But the Bank of England have agreed to lend them as much money as they need if the need arises.

Originally Posted by Daimo

Maybe the next few days its "MAY" be a good idea to buy some stock in NR and hope the shares go up again?

I wondered about that too, but there share price has been in freefall since the spring. Even when the stock market was going to an all-time high in July/August, their share price was still dropping. If this was just a temporary drop, I'd buy once the price starts to recover, but not if they're in long-term decline.

I'm not a stock market expert, so feel free to ignore my advice.

[Luckypants]

Originally Posted by sarah

But the Bank of England have agreed to lend them as much money as they need if the need arises.

Well that ain't all that likely..... The Bank of England does not have unlimited supplies of cash. And in the case of bailing a bank out, it needs to be hard currency - cash, gold etc. Borrowed money only makes the spiral worse.

If they really start running short of cash, they'll be calling in mortgages and loans to raise the money required. Then the fun starts.

I'm amazed at all these people standing in line to get their money out. What are they going to do with it, put it under the mattress?

With the BofE loan - whose money is this - is it taxpayers' money, and when is the loan repaid?

I am amazed how easy that people get the panic. Acting as if in a Banana Republic...read somewhere that the MD of NR got a mill and a half last year.

Nice work if ya can geddit. He should be paying it back though if it was performance related.