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Thread: Northern Rock in the UK

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    Veteran Member StuartL's Avatar
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    Default Northern Rock in the UK

    Did the news of the Northern Rock make it over to the US?

    Essentially they are a mortgage lender who do some investment products too. They lend at the higher risk end of the high street. They do high loan to value deals and higher than average income multiple lending too.

    Well if you haven't seen:

    http://news.bbc.co.uk/1/hi/business/7010020.stm

    http://news.bbc.co.uk/1/hi/business/7004710.stm

    http://news.bbc.co.uk/1/hi/business/7007835.stm

    http://news.bbc.co.uk/1/hi/business/7005557.stm

    It has been an amazing few days of finance news. From pictures of people waiting for hours at NR branches to withdraw their savings, to pronouncments in Parliament and action from the Bank of England Governor.

    Who said the market is always right eh?????????

    Best wishes,

    Stuart

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    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    I forgot to ask... Melonie, how much of a bank account is protected in the US should this happen elsewhere? Any idea?

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    God/dess Deogol's Avatar
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    Default Re: Northern Rock in the UK

    Heck yea it did!

    But it is considered "not our problem."

    I think it got about 15 seconds of air time. It is the bloggers and internet that is getting the news around on this.

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    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    The funny thing is that in the UK - it is considered to be the fault of the US sub-prime collapse. In other words, it was 'not our problem' too!

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    Banned Melonie's Avatar
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    Default Re: Northern Rock in the UK

    The US FDIC insurance is US $100,000. Compared to the UK's L35,000 insurance, it's perhaps 50% higher ... although I don't know enough about UK regs to even be sure that all accounts get L35,000 coverage.

    Yes Northern Rock made the business news big time but mainstream news barely touched on it. About the same situation as the Countrywide 'bailout'. This isn't unexpected in today's Orwellian 'Ministry of Truth' news environment. After all, if most ordinary bank customers / small time investors actually knew how much 'toxic' paper their bank / mutual funds / retirement funds were holding, and knew the potential losses these institutions are facing if they are ever forced to 'mark to market', there would be a revolution !!!

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    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    I have seen an article about this yesterday and the continuing saga... I don't have a link I'm afraid - I'd be too ashamed to link to the paper I saw the article in!!

    However, it seems that since the govt has guaranteed savers money, the consumer run on the Northern Rock has essentially ended. There are still more people withdrawing than depositing - by some distance - but the panic has ended.

    The professionals though are killing the bank. It seems that NR borrowed much of it's money to be leant on short - ish terms. Mostly the money was over 1-3 years and as these funds come up for renewal, the lenders are refusing to continue lending and demanding repayment.

    The govt is apparently footing the bill each time a loan comes along. The figure is apparently over £20 billion now and will likely reach £40 billion. It seems that this would equate to roughly 20p in the pound in tax rises!!!! Obviously, I don't know the exact ins and outs of this, but the implications are pretty scary. Northern Rock has sold many of it's loans around the world in the same manner that the US sub-primes have. In fact, I'd imagine that they copied the model...

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    Banned Melonie's Avatar
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    Default Re: Northern Rock in the UK

    ^^^ well, ultimately, US taxpayers will get stuck paying for the SIV Superfund bailout of the big financial houses in exactly the same way they'll get stuck covering the hundreds of billions of dollars that the US Fed has pumped into the markets since last August in exactly the same way that they'll get stuck covering the belly-up low mortgage loans guaranteed by Fannie Mae and Freddie Mac in exactly the same way that they'll get stuck picking up the tab for FDIC insurance paying off depositors of bankrupt US banks. As usual, the US gov't has managed to fragment and compartmentalize the costs involved to the point where there's no way to determine the likely tax increase necessary to cover these new expenses, which is a far different picture than the Bank of England's costs re Northern Rock.

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    Banned Katrine's Avatar
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    Default Re: Northern Rock in the UK

    Honestly, I'm seeing this too. For all of my clients with HUGE positions in one individual stock (ISO, RSU, etc) we're coming to the point where we are recommending some of them bite the bullet and get rid of as much as possible in the next 2 years while taxes are still relatively low. Its not going to get much better, but who am I to time the market?

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    I have given up trying to lower the exposure of my clients. I have suggested it time and again to them over the past 18 months ... in person, on the phone, in my newsletter and by email. Now, at least my files have lots of messages of me saying 'sell some stuff' and them saying 'no thanks'. My 'Get out of jail free' cards...

    For a long while, I have been a believer in the Puplava 'perfect financial storm' theory. But even by my expectations, this is looking worse than I imagined.

    It is worrying me so much that I am even looking for normal employment so that I have a real job and employer as well as my part-time endeavours. Things must be bad...

    On a related point - did you see the price of gold???

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    Banned Melonie's Avatar
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    Default Re: Northern Rock in the UK

    For a long while, I have been a believer in the Puplava 'perfect financial storm' theory. But even by my expectations, this is looking worse than I imagined.
    You gotta love Jim Puplava ... he's an eternal skeptic. But given the absurdity of official inflation / unemployment / money supply expansion / bank CDO risk statistics, it's very difficult to fault his analysis.

    On a related point - did you see the price of gold???
    *** wink wink *** I've been watching and smiling as gold has now crossed $800 an ounce. I actually sold off a few of my gold bars for a three-bagger about a month ago (I bought them several years back at around $275 an ounce), and invested the proceeds in stocks of gold mining companies which will provide much more potential for appreciation when gold keeps marching to $1000 an ounce and beyond.


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    Banned Katrine's Avatar
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    Default Re: Northern Rock in the UK

    Quote Originally Posted by StuartL View Post

    It is worrying me so much that I am even looking for normal employment so that I have a real job and employer as well as my part-time endeavours. Things must be bad...
    You do not work for/sponsered by a firm? Are you completely independant? Are you still licensed?

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    Good for you Melonie. Three bagger with money in the bank is a result. It isn't a profit until it is taken!

    katrine - self employed. No wages - commission only. I write a monthly column for a newspaper and do some internet marketing consulting one day each week too. For me, being a full time adviser is just too unpredictable. This is partly because of the way Brussels is. The expats disappear for long parts of the year through July / August and December and everytime the European Parliament meets in Strasbourg, my clients vanish = 10 more weeks per year. A couple of years ago, I had 9 weeks of holiday and it didn't really impact my earnings. That sounds nice, but I'd rather be earning more and have a few weeks less of holiday.

    I have been thinking I might move too. I need to go somewhere where the clients stick around. Or leave finance...

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    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    Forgot to add, as you know, I am in silver not gold. All mine was bought at under US$10 per oz. Mostly under US$9 ;-)

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    Banned Melonie's Avatar
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    Default Re: Northern Rock in the UK

    ^^^ you might consider the same speculation with silver mining companies ...



    as to moving, did you ever consider moving to the Isle of Jersey and let your clients come to you ???

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    Banned Katrine's Avatar
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    Default Re: Northern Rock in the UK

    I want to move to the Isle of Jersey. UK citizens, or individuals with parents having UK citizenship receive residency priority it appears. (thanks Wiki!)

    I also read that despite not having a VAT for years, they have recently passed one, set to implement in 2008. Aside from that, its a 20% flat tax.

    So pretty:

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    I do actually have a job application in with a finance firm in Jersey as we speak!! And a firm in Dublin, one in Barcelona and about 10 in the UK...

    Oddly, I have never been to Jersey. I say oddly, because I have been to Guernsey (twice), Herm and Sark. I would love to go. If I get it Katrine, I promise to try and smuggle you in. Do you fit into hand luggage?

    Years ago, I helped a girl that was from the same area as me, but lived in Guernsey to get a mortgage. She described the most idylic lifestyle ... she would finish work at 3, go for a walk on the beach until 5, eat her evening meal on a patio and read a book into the evening. And this was most of the year round from what I gathered. Me = very jealous.

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    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    Re ^^^ it turns out that I have a telephone interview being arranged for Jersey over the next couple of days. I will be studying Melonie's link carefully...

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    Banned Melonie's Avatar
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    Default Re: Northern Rock in the UK

    ^^^ best of luck !

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    Banned Katrine's Avatar
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    Default Re: Northern Rock in the UK

    Good luck! Take me with you!!!!!!! I'm very good at what I do and am ready to get the hell out of dodge....

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    ^^^ Sorry katrine - that'll be tough. Aren't you Ukrainian? I have no clue how you'd get a job there ... I'd have to marry you and I think that would be a step too far for me. But if I get in myself, I'll be happy to investigate recruitment options for you.

    I guess it all depends on how desparate you are to move ;-)

    I had the first phone interview today and that seemed positive - apparently a second will be next week. If that goes well, then there will be a visit with interview!

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    Banned Katrine's Avatar
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    Default Re: Northern Rock in the UK

    Quote Originally Posted by StuartL View Post
    ^^^ Sorry katrine - that'll be tough. Aren't you Ukrainian? I have no clue how you'd get a job there ... I'd have to marry you and I think that would be a step too far for me. But if I get in myself, I'll be happy to investigate recruitment options for you.
    I'm a US citizen, been here since I was a kid. No worries!

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

  22. #22
    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    An American? Excellent. I'll buy bigger hand luggage for you to fit in...

  23. #23
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    Default Re: Northern Rock in the UK

    Quote Originally Posted by StuartL View Post
    An American? Excellent. I'll buy bigger hand luggage for you to fit in...
    The thing is...my business is going extremely well for me right now. Also, my boss told me he'd kill me if I left him. After all, he's done MANY, MANY things to keep me at this position despite my propensity to self-sabotage.

    Perhaps just a visit next summer....

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

  24. #24
    Veteran Member StuartL's Avatar
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    Default Re: Northern Rock in the UK

    Stuart's update:

    The telephone interview went fairly well, as did a follow up = 3 so far. I am trying to sort out the travel so that I can go to an interview next Friday. They are looking for internet marketing people and I think I'd be pretty well suited to what they are looking for. They are a very major global bank. Fingers crossed...

    If nothing else, it means another pin in the map.

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    Banned Melonie's Avatar
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    Default Re: Northern Rock in the UK

    persistence persistence !

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