Saturday, November 24, 2007

Timing is everything

In years gone by, prior to the discovery of electricity and radio waves, transmission of information used to be a lengthy and unreliable process. It would sometimes take weeks, or even months, for news to travel from one end of The Land to another

But now, of course, we live in the Information Age when data can travel around the world at the press of a button and literally at the speed of light

Unless you work for The Guardian that is...

Revealed: massive hole in Northern Rock's assets

Ian Griffiths
The Guardian
Friday November 23 2007

Fresh (!!?) doubts emerged last night about Northern Rock's ability to repay the £23bn of taxpayers' money it has been lent by the Bank of England.

A Guardian examination of Northern Rock's books has found that £53bn of mortgages - over 70% of its mortgage portfolio - is not owned by the beleaguered bank, but by a separate offshore company...

The same investigation reveals just how vulnerable the bank is to a cooling property market and demonstrates the scale of Northern Rock's exposure to mortgages where customers have borrowed heavily against their homes.

The mortgages are now owned by a Jersey-based trust company and have been used to underpin a series of bond issues to raise cash for Northern Rock. It means the pool of assets available to provide collateral for Northern Rock's creditors, including the Bank of England, is dramatically reduced, calling into question government claims that taxpayers' money is safe...

No shit Sherlock

It's a bit late reporting this now though isn't it?

About two months too late

Still, it's faster than most of the other mainstream press which hasn't got round to tackling this issue at all

This isn't about newspapers acting responsibly and easing up on their coverage of crooked fuck-ups at banks like Northern Rock, RBS or Barclays to avoid creating a national panic. There's going to be bloodbath whatever they print. This is about the corporate media standing idly by whilst the whole rotten system is propped up with public cash for a few more weeks so that the Big Boys can slip their money out - and bollocks to the rest of us

So what's the explanation then? Are mainstream financial journalists terminally corrupt or are they just plain shit at their jobs?

And, with regards to the end result, does it really make any difference what the answer to that question is?


And it's always worth remembering one thing about the money our current financial system is so reliant on; it is whisked up out of thin air by a small number of privately controlled institutions.

And if our current financial system does suffer a catastrophic rupture because of a sudden shortage of that money it will be because that handful of privately controlled institutions will have willed it so


edit: and whilst on the subject of shite financial journalism how about this timely piece from the Newsnight blog...

The history of Newsnight's nightly markets update has not always been a happy one. On Thursday we reported that in New York the "Dow Jones was substantially down amidst more credit crunch fears". That's odd, many of you told us, as - being Thanksgiving - Wall Street's finest were on a day-off. Our economics editor Stephanie Flanders was mortified - "unforgivable and embarrassing" was her verdict.

Ace Newsnight financial journalist Stephanie Flanders

The key point about this cock-up is not that someone in the BBC mistook Wednesday's market data for Thursday's market data it's the fact that they made up a reason to account for it and reported that reason as fact

(I've made a comment to that effect on the Newsnight blog though it doesn't appear to have cleared moderation yet... edit: nope, still not there...)

Of course, we can all be sure that the Newsnight team only make stuff up on US National holidays...



Anonymous said...

Alas, the Salmon of Wisdom will never be fish of the month...

Wolfie said...

RBS is not substantially exposed, it is in fact offering relief to institutions who are.

Speculative rumour.

Greenwich Capital [an RBS US subsidiary] has limited exposure but itself is only a small proportion of [net] business.

Watch HSBC...

Stef said...

I only mentioned RBS because it went on record as seeking additional lines from the Fed at the same time as Barclays

RBS might very well be OK, I don't claim to have any insight either way

Barclays on the other hand is looking and smelling exceptionally toast-like

as it happens I am looking at HSBC very closely as the bulk of my own meagre savings are lodged with them - I haven't moved them on the assumption that if HSBC goes tits up, everything will go tits up and it wouldn't matter who is keeping tracking of your electronic credits

Anonymous said...

It's time to buy some gold I think...

Wolfie said...

"Barclays on the other hand is looking and smelling exceptionally toast-like"

So much like toast its breakfast.

If you need that money, I'd advise moving it.

Anonymous said...



Anonymous said...

"over 70% of its mortgage portfolio - is not owned by the beleaguered bank, but by a separate offshore company..."

OH DEAR, this element (foreign ownership of NR assetts) is what I've been looking for as the likely death wail of the NR. See

I hope I'm wrong and I didn't think it had already happened.

Thing is, does anything think the Govt would have lent £24bn without looking at the accounts. Not on your little nelly!

Serioulsy, we should start a campaign to get the UK populace to refuse to pay tax for one year if the NR doesn't repay that money.

Stef et al, buy Gold and silver - real gold, not this e-gold scam.

Ignore the $ price - it's bollocks. Gold maintains it value better than anything. The forthcoming crisis will take some time before G&S become useless as people shoot each other for some edible grass left over in some otherwise barren field.

Gold and silver is your man. Bite the bullet. Perhaps not all your savings but a healthy amount. And dont' keep it in a bank vault.

Don't keep all savings in a bank. It's dangerous (See Argentina last year - banks refused to give out money) and in paper (decorative toilet roll). Diversify. Go to Kitco for G&S (for example) their prices are reasonable.

I've bought some gold coins a few months ago oz coins then were about $650 now $820 but I'm not selling them, not only is the $ price irrelevant, its for emergency money.

I entirely agree - if (when) the collapse comes it will have been engineered.

Anonymous said...

HSBC problems from our pal Murphy.

Stef said...

HSBC being, by some measures, the largest financial services group in the world...


if things get that bad 'They' will simply confiscate individuals' gold holdings...

but your point about having a few coins on hand is taken

all those rednecks sitting in the middle of nowhere on top of caches of tinned food and shotgun ammunition might start looking a lot less insane in the months and years ahead

paul said...

all those rednecks sitting in the middle of nowhere on top of caches of tinned food and shotgun ammunition might start looking a lot less insane in the months and years ahead

Sure, they'll have few months of 'I told you so' satisfactions on the rest of us

Stef said...

I doubt if they'll have that much time