C
Cardano
Member
Well Adam,
What a mess you've got us into! I can remember the secondary banking crisis of 73-75, but I can't remember any queuing outside banks. Slater-Walker, Keyser-Ullman London and County and all the other fringe banks had no high street presence. My Granparents told me a lot about the depression, but they never mentioned anything about a run on the banks, because there wasn't one. (America and Germany had a protracted run on their banking system though). My Grandparents weren't even at school when the banking crisis of 1907 occcurred but that was confined to North America. So we need to go back to the 19th century for a British historical president to what I have seen over the past few days. 1893 and the Barings crisis that nearly brought the banking system down when it lent money recklessly to Argentina was probably the last time British people queued outside banks to remove all their savings.
Adam, I'm afraid we are definitely going to have a financial crisis and probably an economic one too. This is the end of a credit expansion which began in 1982 and has continued with varying degrees of euphoria since then.
Its not the Jarrow marchers or the Oklahoma farmers that come in to my mind at those darkest hours during my worst nightmares, it's the German people in Berlin in 1923. Get your wheel barrows ready because you are going to need them when you are paid.
Adam, I'm afraid you are going to prison.Your crime in my eyes is merely one of stupidity and lets face it there are plenty of stupid CEO's. Stupidity is however not what you will be prosecuted for.
On Thursday and Friday you blamed Northern Rock's fate on the credit crunch. Northern Rock's problems do not stem from this, although they have been exacerbated it. Northern Rock's problems stem from a deliberate mismatch of assets and liabilities- an amateurish mistake. If you borrow short and lend long then you are asking for trouble. However had you been conservative in your lending practices you would have got away with it. Lending 125% on a house at 5X earnings to people with poor credit histrories, is not however conservative in my book. I personally wonder just how much your assets (the loans you made) are really worth.
The unwinding of the credit bubble is going to take 5-10 years and its going to be very painful indeed. Northern Rock's savers may get there money back this week, but there will be considerable financial distress in years to come.
The people will be looking for scape goats, and you will be top of the list. Although I don't doubt your integrity I doubt your mortgage book stands up to scrutiny and that will give prosecutors enough ammunition.
Adam, don't worry though the cells will be full of bankers, particularly Investment bankers and you be will be able to have conversations about mortgaged backed securities and collateral debt obligations 23 hours a day.
Wishing you all the luck in future, because you are going to need it.
Yours faithfully
Cardano
What a mess you've got us into! I can remember the secondary banking crisis of 73-75, but I can't remember any queuing outside banks. Slater-Walker, Keyser-Ullman London and County and all the other fringe banks had no high street presence. My Granparents told me a lot about the depression, but they never mentioned anything about a run on the banks, because there wasn't one. (America and Germany had a protracted run on their banking system though). My Grandparents weren't even at school when the banking crisis of 1907 occcurred but that was confined to North America. So we need to go back to the 19th century for a British historical president to what I have seen over the past few days. 1893 and the Barings crisis that nearly brought the banking system down when it lent money recklessly to Argentina was probably the last time British people queued outside banks to remove all their savings.
Adam, I'm afraid we are definitely going to have a financial crisis and probably an economic one too. This is the end of a credit expansion which began in 1982 and has continued with varying degrees of euphoria since then.
Its not the Jarrow marchers or the Oklahoma farmers that come in to my mind at those darkest hours during my worst nightmares, it's the German people in Berlin in 1923. Get your wheel barrows ready because you are going to need them when you are paid.
Adam, I'm afraid you are going to prison.Your crime in my eyes is merely one of stupidity and lets face it there are plenty of stupid CEO's. Stupidity is however not what you will be prosecuted for.
On Thursday and Friday you blamed Northern Rock's fate on the credit crunch. Northern Rock's problems do not stem from this, although they have been exacerbated it. Northern Rock's problems stem from a deliberate mismatch of assets and liabilities- an amateurish mistake. If you borrow short and lend long then you are asking for trouble. However had you been conservative in your lending practices you would have got away with it. Lending 125% on a house at 5X earnings to people with poor credit histrories, is not however conservative in my book. I personally wonder just how much your assets (the loans you made) are really worth.
The unwinding of the credit bubble is going to take 5-10 years and its going to be very painful indeed. Northern Rock's savers may get there money back this week, but there will be considerable financial distress in years to come.
The people will be looking for scape goats, and you will be top of the list. Although I don't doubt your integrity I doubt your mortgage book stands up to scrutiny and that will give prosecutors enough ammunition.
Adam, don't worry though the cells will be full of bankers, particularly Investment bankers and you be will be able to have conversations about mortgaged backed securities and collateral debt obligations 23 hours a day.
Wishing you all the luck in future, because you are going to need it.
Yours faithfully
Cardano