Credit Crunch to get first UK victim ?

[ships-cat]

There has been a run on a UK Building Society (bank) towards the end of last week, with customers queing at the doors to withdraw over £2 billion (around $4 billion) in cash. The Northern Rock Building Society is the 5th largest mortgage lender in the UK, but has seen it's stock value crash by over 30% in the last few days. Customers are still panic-withdrawing their savings.

Full story from the BeeeeBeeeeCeeeee

[Roj47]

Passing through Birtley this morning 815am a queue of 40+ had formed…. Trying to get come perspective… £2bn is only 8% of the deposit fund, so only 8p in every £ has been withdrawn.

Shares temporarily ceased trading this morning….

Shares tumbled 31% on Friday and then a further 34% Monday as of 11am.

Is there a takeover (aggressive) being planned?

I live 3 miles from the HQ in Newcastle, and having it end would place 6,000 people out of work.

Not good for the area.

[Mekorig]

Some people are worried to see a similar case to Argentina in 2001.....

[Roj47]

Some people are worried to see a similar case to Argentina in 2001.....

Do you have a link?

cheers

[Mekorig]

In spanish in today´s Clarin newspaper. When in home i will look for the article and translate it.

[Roj47]

In spanish in today´s Clarin newspaper. When in home i will look for the article and translate it.

Thank you. Much appreciated.

Given the status of credit, I am fixing my mortgage on Wednesday with HSBC.

[rhyknow]

The thing is they're telling a lot of people not to worry. Apparently, all the people trying to withdraw their money at the same time is really putting a dent into Northern Rock. Yikes.

[ships-cat]

Apparantly, Northern Rock's share value fell another 35% today ALONE

With Friday's loss of 35-40% of value, this means that the stocks are only worth about 40% of what they where last Thursday

This can't go on.... the NR claims it doesn't have a liquidity problem: that it has enough money for people to keep on taking their savings out. However, if the share price falls any further, then SOMEONE is going to be tempted to buy the organisation. After all, the NR hasn't actually LOST any money in the last 4 days (other than the £2 billion or so that private individuals have withdrawn), so it would become (has become) a VERY tempting target.

Bizzarely, this might actually be a good time to BUY shares in NR... assuming it can weather the storm. Once people settle down, I would expect a rush of people re-depositing their money.

It's been a long time since a high-street bank went under in the UK, discounting wierd ethno-centric banks like Credit and Commerce International. I don't think we've had this in living memory.

Meow Purr.

[rhyknow]

It's been a long time since a high-street bank went under in the UK, discounting wierd ethno-centric banks like Credit and Commerce International. I don't think we've had this in living memory.

Meow Purr.

You said it, Cat. It's one for the books, certainly. The book being "How not to run a bank".

I doubt they'll last the month, if things keep going as they are.

[questionmark]

There are several banks that will go the way of Northern Rock unless a miracle happens. Most of them catered to a normal mom and pop clientèle and wanted to turn a big wheel this time.

[ships-cat]

In a highly unusual move, the Chancelor of the Exchequer intervend yesterday, and promised that the Bank of England and - effectively - the British Taxpayer would intervene to gaurentee account-holders money in Northern Rock. This happend as two other big Building Societies: The Alliance and Leicester, and also Bradford & Bingley both took hits on the stock exchange, but are now recovering.

It seems the government took something of a gamble in order to prevent a pointless panic spreading. So far, it seems to have paid off.

Some erudite analysis from the Imperial Wireless and Telegraphy Corporation

Meow Purr.

[Mekorig]

Great Britain: THE COLLAPSE OF BANK BRITANICO NORTHERN ROCK

Seemed but different from the Argentine corralito of 2001

Pablo Maas

pmaas@clarin.com

The collapse of the Northern Rock, the British bank that had to be solid as a rock but whose deposits has been liquefied like the sand in the sea, it marks a point of flexion in the financial crisis that has been shaking for a month to the world-wide economy.

The irony is that the bullfights of the depositors to retire the money of the banks no longer it happens, like in the past, in some remote capital like Moscow or Buenos Aires, but in London, that for some years has been transformed into the heart of international the financial system, surpassing to New York.

The scene of thousands of small investors struggling to retire its pounds sterling of the Northern Rock and other organizations is looked like the crisis of the corralito of Argentina of 2001 in the measurement in which it emphasizes to what extent the banks are fragile creatures, who depend on the confidence of the public for their survival.

But there is a great difference between a crisis and another one. The financial bullfights in the periphery usually finish in the bankruptcy of the state finances and the expropriation of the money of the ahorristas, as it happened in Argentina. However, the capacity of answer of the governments of the industrialized countries to provide bottoms to the banking system is incomparably greater. In 2001, Argentina was one of the indebted countries more of the world. Great Britain was and is one of the greater world-wide creditors.

Nevertheless, the panic of the ahorristas has forced the Bank of England (Central) to make an exception in its policy of guarantee limited of the deposits and to run to the massive aid of all the banking system. The banking crisis could take to the country to a spiral of loss of confidence in the solidity of the economy and in the government of prime minister Gordon yesterday Brown, it indicated the press British.

To Brown it will be to him difficult to escape to the critics: it cannot blame to anybody by the crisis, because he was the minister of Economy of Tony Blair. Both impelled the process of financial globalización that benefitted during many years to its country.

Now they notice that the financial globalización also can operate in reversa. The mechanisms that allowed that the banks the risks created by the new ones and falsified financial instruments of the decade of the 90 would desintermediaran became a lethal weapon. The banks less undid of hypothecating loans of doubtful cobrabilidad , transferring the risk to other financial intermediaries described to administer the risks. "Now the main danger for the world-wide economy is a deflacionaria spiral in the price of the assets", concludes a report of The Economist Intelligence Unit.

Original Source - Translated by Babelfish

[Roj47]

In spanish in today´s Clarin newspaper. When in home i will look for the article and translate it.

Many thanks for the translation. Very much appreciated

[Atheist God]

There has been a run on a UK Building Society (bank) towards the end of last week, with customers queing at the doors to withdraw over £2 billion (around $4 billion) in cash. The Northern Rock Building Society is the 5th largest mortgage lender in the UK, but has seen it's stock value crash by over 30% in the last few days. Customers are still panic-withdrawing their savings.

Full story from the BeeeeBeeeeCeeeee

Wow am I glad I don't have any investment in Northern Rock!

Seems like the UK market isn't doing so well either.