Britain to nationalize mortgage lender

[Ex-SD]

LONDON – Treasury chief Alistair Darling said Sunday that struggling bank Northern Rock PLC will be nationalized after the government rejected two private takeover bids.

Darling told a news conference that the ailing mortgage lender would be placed under temporary public ownership because both bids had failed to meet the government’s demands.

http://www.msnbc.msn.com/id/23210466/

[34f3f3f]

I’m not sure how you reconcile “temporary national ownership” and “nationalize”, but it would a pretty safe place to put your money if it’s government backed. My understanding is that Northern Rock was lending out three times what it had in reserves, which is just under three times the national average. Levels of debt in the UK are said to be higher than the US, incomes are usually lower, house prices are very high, and lending practices somewhat lax. The UK, Ireland and Spain are all in for a rude awakening.

[34f3f3f]

I’m not sure how you reconcile “temporary national ownership” and “nationalize”, but it would a pretty safe place to put your money if it’s government backed. My understanding is that Northern Rock was lending out three times what it had in reserves, which is just under three times the national average. Levels of debt in the UK are said to be higher than the US, incomes are usually lower, house prices are very high, and lending practices somewhat lax. The UK, Ireland and Spain are all in for a rude awakening.

[34f3f3f]

I’m not sure how you reconcile “temporary national ownership” and “nationalize”, but it would a pretty safe place to put your money if it’s government backed. My understanding is that Northern Rock was lending out three times what it had in reserves, which is just under three times the national average. Levels of debt in the UK are said to be higher than the US, incomes are usually lower, house prices are very high, and lending practices somewhat lax. The UK, Ireland and Spain are all in for a rude awakening.

[34f3f3f]

I’m not sure how you reconcile “temporary national ownership” and “nationalize”, but it would a pretty safe place to put your money if it’s government backed. My understanding is that Northern Rock was lending out three times what it had in reserves, which is just under three times the national average. Levels of debt in the UK are said to be higher than the US, incomes are usually lower, house prices are very high, and lending practices somewhat lax. The UK, Ireland and Spain are all in for a rude awakening.

[34f3f3f]

I’m not sure how you reconcile “temporary national ownership” and “nationalize”, but it would a pretty safe place to put your money if it’s government backed. My understanding is that Northern Rock was lending out three times what it had in reserves, which is just under three times the national average. Levels of debt in the UK are said to be higher than the US, incomes are usually lower, house prices are very high, and lending practices somewhat lax. The UK, Ireland and Spain are all in for a rude awakening.

[gdcox]

Graham

A few facts from across the pond for interest. Northern Rock depended on securitizing the bulk of the loans it made and funded most of its balance sheet form interbank deposits. Its stupid business model ensured it would become bankrupt through liquidity one day. Its net asset position is good.

Lending standards are far higher in the UK than in the US and especially SD from what I read on this fascinating site. There has been no Bush government here to stop the regulators keeping a close eye on the actions of brokers for example.It is far from perfect but an order of magnitude less bad than in SD I would say.

Our house price to incomes ratio is very high in the UK . However, unlike most of the US , there is a severe shortage of land due to incredibly tight out of town planning rules. So demand and supply are quite well matched and thus there is little price weakness and hence very little of what is perceptibly described on this site as ‘bubble foreclosures’. Foreclosures are rising due to higher interest rates caused by the credit crisis interacting with the excessive overall indebtedness of some people.

A mixed picture: eg http://www.bloomberg.com/apps/news?pid=20601087&sid=aTmi4vMk92U8&refer=home

[gdcox]

Graham

A few facts from across the pond for interest. Northern Rock depended on securitizing the bulk of the loans it made and funded most of its balance sheet form interbank deposits. Its stupid business model ensured it would become bankrupt through liquidity one day. Its net asset position is good.

Lending standards are far higher in the UK than in the US and especially SD from what I read on this fascinating site. There has been no Bush government here to stop the regulators keeping a close eye on the actions of brokers for example.It is far from perfect but an order of magnitude less bad than in SD I would say.

Our house price to incomes ratio is very high in the UK . However, unlike most of the US , there is a severe shortage of land due to incredibly tight out of town planning rules. So demand and supply are quite well matched and thus there is little price weakness and hence very little of what is perceptibly described on this site as ‘bubble foreclosures’. Foreclosures are rising due to higher interest rates caused by the credit crisis interacting with the excessive overall indebtedness of some people.

A mixed picture: eg http://www.bloomberg.com/apps/news?pid=20601087&sid=aTmi4vMk92U8&refer=home

[gdcox]

Graham

A few facts from across the pond for interest. Northern Rock depended on securitizing the bulk of the loans it made and funded most of its balance sheet form interbank deposits. Its stupid business model ensured it would become bankrupt through liquidity one day. Its net asset position is good.

Lending standards are far higher in the UK than in the US and especially SD from what I read on this fascinating site. There has been no Bush government here to stop the regulators keeping a close eye on the actions of brokers for example.It is far from perfect but an order of magnitude less bad than in SD I would say.

Our house price to incomes ratio is very high in the UK . However, unlike most of the US , there is a severe shortage of land due to incredibly tight out of town planning rules. So demand and supply are quite well matched and thus there is little price weakness and hence very little of what is perceptibly described on this site as ‘bubble foreclosures’. Foreclosures are rising due to higher interest rates caused by the credit crisis interacting with the excessive overall indebtedness of some people.

A mixed picture: eg http://www.bloomberg.com/apps/news?pid=20601087&sid=aTmi4vMk92U8&refer=home

[gdcox]

Graham

A few facts from across the pond for interest. Northern Rock depended on securitizing the bulk of the loans it made and funded most of its balance sheet form interbank deposits. Its stupid business model ensured it would become bankrupt through liquidity one day. Its net asset position is good.

Lending standards are far higher in the UK than in the US and especially SD from what I read on this fascinating site. There has been no Bush government here to stop the regulators keeping a close eye on the actions of brokers for example.It is far from perfect but an order of magnitude less bad than in SD I would say.

Our house price to incomes ratio is very high in the UK . However, unlike most of the US , there is a severe shortage of land due to incredibly tight out of town planning rules. So demand and supply are quite well matched and thus there is little price weakness and hence very little of what is perceptibly described on this site as ‘bubble foreclosures’. Foreclosures are rising due to higher interest rates caused by the credit crisis interacting with the excessive overall indebtedness of some people.

A mixed picture: eg http://www.bloomberg.com/apps/news?pid=20601087&sid=aTmi4vMk92U8&refer=home

[gdcox]

Graham

A few facts from across the pond for interest. Northern Rock depended on securitizing the bulk of the loans it made and funded most of its balance sheet form interbank deposits. Its stupid business model ensured it would become bankrupt through liquidity one day. Its net asset position is good.

Lending standards are far higher in the UK than in the US and especially SD from what I read on this fascinating site. There has been no Bush government here to stop the regulators keeping a close eye on the actions of brokers for example.It is far from perfect but an order of magnitude less bad than in SD I would say.

Our house price to incomes ratio is very high in the UK . However, unlike most of the US , there is a severe shortage of land due to incredibly tight out of town planning rules. So demand and supply are quite well matched and thus there is little price weakness and hence very little of what is perceptibly described on this site as ‘bubble foreclosures’. Foreclosures are rising due to higher interest rates caused by the credit crisis interacting with the excessive overall indebtedness of some people.

A mixed picture: eg http://www.bloomberg.com/apps/news?pid=20601087&sid=aTmi4vMk92U8&refer=home

[patientlywaiting]

I believe that ex-sd got it right “temporary national ownership” is just euphemism for “nationalize.”

How long is temporary? 1 year that could turn into 10 years.

gdcox, I’ve not followed the Northern Rock affair. But talking about moral hazard, why would the government nationalize it rather and paying-off the depositors and letting it fail. Who is the government trying to bail out here?

[patientlywaiting]

I believe that ex-sd got it right “temporary national ownership” is just euphemism for “nationalize.”

How long is temporary? 1 year that could turn into 10 years.

gdcox, I’ve not followed the Northern Rock affair. But talking about moral hazard, why would the government nationalize it rather and paying-off the depositors and letting it fail. Who is the government trying to bail out here?

[patientlywaiting]

I believe that ex-sd got it right “temporary national ownership” is just euphemism for “nationalize.”

How long is temporary? 1 year that could turn into 10 years.

gdcox, I’ve not followed the Northern Rock affair. But talking about moral hazard, why would the government nationalize it rather and paying-off the depositors and letting it fail. Who is the government trying to bail out here?

[patientlywaiting]

I believe that ex-sd got it right “temporary national ownership” is just euphemism for “nationalize.”

How long is temporary? 1 year that could turn into 10 years.

gdcox, I’ve not followed the Northern Rock affair. But talking about moral hazard, why would the government nationalize it rather and paying-off the depositors and letting it fail. Who is the government trying to bail out here?

[Author]

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