Northern Rock

[greenlex]

WTf. The government sell it to Branson for tens of millions less than the tax payer basically paid for it and tell us it's a good deal. How so? ****ing raging. What was the hurray? Coud we not have held onto it and sold it after when there is less turmoil in the money markets.
We are all in this together my arse. Tories looking after the rich. Not happy.

[Phil D. Rolls]

WTf. The government sell it to Branson for tens of millions less than the tax payer basically paid for it and tell us it's a good deal. How so? ****ing raging. What was the hurray? Coud we not have held onto it and sold it after when there is less turmoil in the money markets.
We are all in this together my arse. Tories looking after the rich. Not happy.

As we're all in this together, it's only right that someone or other gets a wee thank you for sticking in there.

[greenlex]

A 400 million pound loss FFS.

[Beefster]

The price is fair in the current circumstances. The issue for the government is, if they had rejected this offer and held on in the hope that conditions improve, who is to say that they would have gotten any offers (or a better offer)? As it is, the investors will struggle to make any money if they decide to sell any time soon.

[Speedy]

The price is fair in the current circumstances. The issue for the government is, if they had rejected this offer and held on in the hope that conditions improve, who is to say that they would have gotten any offers (or a better offer)? As it is, the investors will struggle to make any money if they decide to sell any time soon.

Yes.

And I am pretty sure the 'good' part of the bank was losing money while the 'bad' part was making a profit.

[Mibbes Aye]

The price is fair in the current circumstances. The issue for the government is, if they had rejected this offer and held on in the hope that conditions improve, who is to say that they would have gotten any offers (or a better offer)? As it is, the investors will struggle to make any money if they decide to sell any time soon.

What utter rubbish, sorry Beefster.

Why would they need to "hope" conditions improve? After all, Osborne and Cameron were telling us last year they had 'secured the recovery'. How utterly hollow and vacuous their words sound now, wouldn't you agree?

At a time when billions are being taken out the health service and out of benefits for the weakest in our society, the Tories give away half a billion of our money, to two billionaires.

There was no need to sell it just now, especially when it meant giving away hundreds of millions of pounds of taxpayers' money.

[steakbake]

As we're all in this together, it's only right that someone or other gets a wee thank you for sticking in there.

This is the thing. We're saddled with the debt but I cannot ever see us being repaid.

The "we're all in this together" thing is just a way of saying "you're all going to have to pay for our mistakes and there is no other way".

Don't expect that we'll ever get any dividend from bailing out Northern Rock and the others because we won't. I think a tax cut is also very unlikely.

[Future17]

Was Northern Rock operating at a profit under Government control - or was it losing money?

There's also the consideration of whether the amount we might have received for NR's sale in the future would have compensated us for the interest paid out to our nation's creditors on £747m between now and any future sale date.

Having said that, I think the long-term losses will be A LOT higher than the £400m being quoted. My understanding is that the £400m figure is a "best case" scenario and depends on future revenue payments into the Treasury. Although NR has been streamlined while nationalised, I would expect VM to invest further in what it will claim to be cost-cutting measures, thereby reducing its liability to the Treasury.

I also haven't seen any clarification on the "toxic debt" that was ring-fenced by the Government upon nationalisation of NR. Estimates of liabilities to the Treasury in relation to that section of the previous NR entity range from approximately £15bn to £23bn. Are we expecting VM to inherit these liabilities? I would very much doubt it but I expect the Government will wait until a prevailing news story takes hold of everyone's attention before clarifying that.

[Betty Boop]

We are the 99% ! :rolleyes:

[Leicester Fan]

This is the thing. We're saddled with the debt but I cannot ever see us being repaid.

The "we're all in this together" thing is just a way of saying "you're all going to have to pay for our mistakes and there is no other way".

Don't expect that we'll ever get any dividend from bailing out Northern Rock and the others because we won't. I think a tax cut is also very unlikely.

Sorry? Whose mistakes?

[Beefster]

What utter rubbish, sorry Beefster.

Why would they need to "hope" conditions improve? After all, Osborne and Cameron were telling us last year they had 'secured the recovery'. How utterly hollow and vacuous their words sound now, wouldn't you agree?

At a time when billions are being taken out the health service and out of benefits for the weakest in our society, the Tories give away half a billion of our money, to two billionaires.

There was no need to sell it just now, especially when it meant giving away hundreds of millions of pounds of taxpayers' money.

I'll ignore the rest because it has no relevance to the discussion. I'm starting to think that you are Ed Balls though. Either that or you just parrot his lines.

You have no way of knowing about the bit in bold and it would appear that the general consensus amongst analysts (I.e. no political pointscoring) is that, while it's a loss, it's a good price and there is no certainty of getting a better deal by waiting indefinitely. You're the expert though.

[Betty Boop]

Nice to see the millionaires looking out for one another, selling public assets off to their cronies. Did anybody expect anything else from the Tories ?

[Mibbes Aye]

I'll ignore the rest because it has no relevance to the discussion. I'm starting to think that you are Ed Balls though. Either that or you just parrot his lines.

You have no way of knowing about the bit in bold and it would appear that the general consensus amongst analysts (I.e. no political pointscoring) is that, while it's a loss, it's a good price and there is no certainty of getting a better deal by waiting indefinitely. You're the expert though.

You talk about me being an 'expert'. You don't need to be an expert to see the Tories giving away half a billion pounds of our money to a couple of billionaires. We can all see that, can't we?

There was no need to sell now, and throw away hundreds of millions of pounds of our money -unless you know better. Do you?

[HKhibby]

like Blair/Brown and "New Labour"!, the ones that got you into this mess! incidentally what is Saint Teflon Blair doing now? yes! still making millions and millions! doing nothing!, oh and saying that....Branson was one of the biggest supporters of "New Labour" wasnt he?....so talk about old friends act!

[Future17]

You talk about me being an 'expert'. You don't need to be an expert to see the Tories giving away half a billion pounds of our money to a couple of billionaires. We can all see that, can't we?

There was no need to sell now, and throw away hundreds of millions of pounds of our money -unless you know better. Do you?

I'm no fan of the Tories, but out of interest how long would you have waited to see whether you could have raised more from the sale of NR? :confused:

[Future17]

like Blair/Brown and "New Labour"!, the ones that got you into this mess! incidentally what is Saint Teflon Blair doing now? yes! still making millions and millions! doing nothing!, oh and saying that....Branson was one of the biggest supporters of "New Labour" wasnt he?....so talk about old friends act!

So wait a minute - Branson was New Labour but a Conservative/Lib Dem coalition has sold NR to VM - where does the "old friends act" come in?

You have actually developed a special niche for posting while mudering the English language and associated grammar/punctuation, while talking incoherent nonsense.

Are you perhaps Boris Johnson?

[greenlex]

To sell NR when the money markets are in turmoil is lunacy. It may well be a good price at the moment but no one can tell me it won't be worth far more when there is more stability or dare I say growth? Politics aside this smacks of thr rich looking after each other. Disgraceful.

[Beefster]

There was no need to sell now, and throw away hundreds of millions of pounds of our money -unless you know better. Do you?

Given your endless defence of Brown's gold giveaway, you'll forgive me for listening to the opinion of people who get paid to know about this stuff over you.

Incidentally, it was Brown who threw away our money on Northern Rock.

[Beefster]

To sell NR when the money markets are in turmoil is lunacy. It may well be a good price at the moment but no one can tell me it won't be worth far more when there is more stability or dare I say growth? Politics aside this smacks of thr rich looking after each other. Disgraceful.

Plenty of experts seem to be saying exactly that.

I know we all like to think we're very knowledgable amateurs on here but we're not.

[lapsedhibee]

The treasury spokesman interviewed on Channel 4 News the other night was asked several times what the expert advice actually was, and especially whether it included a prediction that the price would go down if NR was not sold now. He conspicuously failed to answer, several times, until the newshound eventually gave up. Not quite on the heroic Howard v Paxman scale of slippery, but not that far off it.

[greenlex]

Plenty of experts seem to be saying exactly that.

I know we all like to think we're very knowledgable amateurs on here but we're not.

So when playing the stock market the experts sell when low and buy when high? Aye right. Shambles.
I know we bailed them out but surely it's a longer term "investment" than three years or so? Yes we paid over the odds at the time of helping them but I do not believe for one minute selling them now for a 400 million loss is the correct thing to do.Telling me it will increase high street competition and that that will be better is croc of ****. They are already there competing. WTF is that all about?
All this deal does (apart from shafting you and me) is give Virgin a high street presence and a foothold in the mortgage market it didn't have. Also IIRC What's more they (or Branson if you like) has got his hands on northern rock at a knock down price he was gona pay in 2008. He was prepared to pay 1 billion I think.
The bank has lost money since " we " bought it. It is projected to start asking money in 2012. To sell it now when the hard work has been done at our expense is absolutely ****ing bonkers and the wrong thing to do.

[PeeJay]

Seems Branson has only bought the so-called "good" part of Northern Rock - the British tax payer is still lumbered with the "bad bank" part of Northern Rock (i.e the bit with the tremendous debt burden) and the good old tax payer will be linked with NB and its exposure until roughly 2040 or thereabouts apparently: it's much worse than you all think it is I fear.

Branson is literally laughing all the way to the bank - he now has what he wanted a while back - Northern Rock, BUT the UK tax payer gets to keep all the bank's debt - Branson would have been lumbered with it himself years ago, but not now...

Seems to be a good deal for Branson and bad for the UK tax payer, unless I've misunderstood something?

[Beefster]

So when playing the stock market the experts sell when low and buy when high? Aye right. Shambles.
I know we bailed them out but surely it's a longer term "investment" than three years or so? Yes we paid over the odds at the time of helping them but I do not believe for one minute selling them now for a 400 million loss is the correct thing to do.Telling me it will increase high street competition and that that will be better is croc of ****. They are already there competing. WTF is that all about?
All this deal does (apart from shafting you and me) is give Virgin a high street presence and a foothold in the mortgage market it didn't have. Also IIRC What's more they (or Branson if you like) has got his hands on northern rock at a knock down price he was gona pay in 2008. He was prepared to pay 1 billion I think.
The bank has lost money since " we " bought it. It is projected to start asking money in 2012. To sell it now when the hard work has been done at our expense is absolutely ****ing bonkers and the wrong thing to do.

I don't think that there is a single fact in there to refute. It sounds like you've heard '£400m less' and just gone off on one. And yes, if you think the state should own banks then they should hold into it indefinitely until they can make money because there's no chance of making money on it any time in the next few years. NR moving from loss to profit isn't some magic wand that bumps the price up by 50%.

I think you need to blame Darling for not selling at the time too. He was the one who claimed that we'd only need to hold onto NR for a temporary period and then sell them when the economy improved and NR value rose. Maybe he considers over a decade to be temporary though.

And if you think a few hundred million is a huge loss, wait until you hear about the state haircut that will happen on the bad bits of NR...

Edit: Peston's opinion: http://www.bbc.co.uk/news/business-15778909

[greenlex]

I don't think that there is a single fact in there to refute. It sounds like you've heard '£400m less' and just gone off on one. And yes, if you think the state should own banks then they should hold into it indefinitely until they can make money because there's no chance of making money on it any time in the next few years. NR moving from loss to profit isn't some magic wand that bumps the price up by 50%.I think you need to blame Darling for not selling at the time too. He was the one who claimed that we'd only need to hold onto NR for a temporary period and then sell them when the economy improved and NR value rose. Maybe he considers over a decade to be temporary though.And if you think a few hundred million is a huge loss, wait until you hear about the state haircut that will happen on the bad bits of NR... Nothing wrong with the state owning a bank. We just need to be doing it in tbe good times when they return not giving it away at the first opportunist to roll their eyes at them. Something is so wrong with this deal. When Datling was ssying short term I doubt even the Tories believed we would still be in financial turmoil nearly four years later. Turmoil that appears to be worseing under their " leadership" rather than stabalising never mind getting better.

[heretoday]

Selling it for such a loss seems like daft economics.

Unless the government reckons there are such bad times around the corner that they'd never be able to sell it!

[Mibbes Aye]

Plenty of experts seem to be saying exactly that.

I know we all like to think we're very knowledgable amateurs on here but we're not.

Who exactly are these experts Beefster?

Are they the same ones who got us into the credit crunch and the banking crisis?

Are they the same ones who said Osborne's cuts would lead to jobs and growth?

They don't sound very 'expert at all, do they?

I'll ask you again, your opinion - why did we need to sell now and lose half a billion of our money, our taxes?

Or let's put it another way Beefster - what if I said I had half a billion pounds for you - and then said you can either lose it all now, or wait a while and you can have it all.

What would you choose? (Top tip - you don't need to be an 'expert') :wink:

[Beefster]

I'll ask you again, your opinion - why did we need to sell now and lose half a billion of our money, our taxes?


Considering that the economy is about to take another massive dip with no-one having a clue when it will recover and that any loss or profit made on the good bit of NR is immaterial next to the £21bn that we're in for with the bad bit, I honestly don't think it makes any difference whether we sold it three years ago, last year, now, next year, in five years or whenever.

[Dashing Bob S]

It's only fair that we give away as much public money as possible to billionaires, as they've had a particularly rough over the last few years, and through no fault of their own. I'm wondering what else we can do to help out the super-rich in those difficult times?

[Mibbes Aye]

Considering that the economy is about to take another massive dip with no-one having a clue when it will recover and that any loss or profit made on the good bit of NR is immaterial next to the £21bn that we're in for with the bad bit, I honestly don't think it makes any difference whether we sold it three years ago, last year, now, next year, in five years or whenever.

Half a billion pounds of our money isn't immaterial Beefster, is it? Is that how far the Tories are removed from reality?

Why was it a better idea to gift hundreds of millions of pounds of taxpayers' money to two billionaires, rather than just holding on?

If our economy is about to take another massive dip, whose fault would that be? Osborne and Cameron told us they had 'secured the recovery', but we can all see they clearly haven't. You've said as much, above. So they lied to us.

Their 'plan' to fix the economy isn't working and isn't going to work. If it was going to work then surely we would have held on to NR and made sure we got our money back. Unless you can tell us why not?

[Tyler Durden]

Half a billion pounds of our money isn't immaterial Beefster, is it? Is that how far the Tories are removed from reality?

Why was it a better idea to gift hundreds of millions of pounds of taxpayers' money to two billionaires, rather than just holding on?

If our economy is about to take another massive dip, whose fault would that be? Osborne and Cameron told us they had 'secured the recovery', but we can all see they clearly haven't. You've said as much, above. So they lied to us.

Their 'plan' to fix the economy isn't working and isn't going to work. If it was going to work then surely we would have held on to NR and made sure we got our money back. Unless you can tell us why not?

This doesn't make much sense to me.

If we're accepting that "the plan" is not working, why exactly would it be best to keep hold of NR? And how exactly can we make sure we get our money back? The whole point is that the market/economy is entirely uncertain.

I can accept and agree with plenty of Tory/Cameron/Osbourne bashing but not sure this decision really merits it.

[Beefster]

Half a billion pounds of our money isn't immaterial Beefster, is it? Is that how far the Tories are removed from reality?

I didn't say that half a billion pounds was immaterial. Maybe you need to read my posts rather than just jump on a word.

The second bit is just juvenile.

[HKhibby]

virgin money is part of the Branson empire! and for your info Branson would do a deal with anyone or anybody, if the price was right and he got what he wanted!...its Buisness!, and yes as others gave said, doesnt matter when you sell NR its been in public ownership,which makes it unattractive to most investers!, so yes it will be sold of at a loss, again called buisness!...cutting your loses and getting shot of it!..sell it to someone who wants to buy it,they may or may not make it work! .
Oh if i was Boris Johnson, do you really think i would have the time or the lack of intelligence to talk to socialists etc..?, id be busy like he actually is trying against the odds of certain individuals and people that will stop at nothing in opposing anything he or anyone else tries to do to actually help them!...and i used to live in London, and myself and other friends voted for him, and thankfully got "Mr Livingstone"! out!, and incidentally have met Boris and know others that have met him more than once, and he is one of the most astute and clued on people you could come accross!, so one question....do you hate the guy or just dont like him because he is: English, Conservative, looks a little different, Privatly Educated, has the guts to stand up to union bullies, introduce new things, help local and small buisness, try and tackle anti-social behaviour? well the list could go on!, not too mention and be the first one to actually stand against his own party in Government! in building a new Thames Estuary Airport with 4-6 runways! another financial hub not only for London but the U.K.!
So before you go on the offensive and shout the odds to someone that either disagrees with you or contradicts the typical view, just think there is always someone that has the knowledge and can stand up to people and the typical it seems, Scottish viewpoint!.

[Beefster]

This doesn't make much sense to me.

Welcome to the world of Mibbes Aye. He can justify gold sell-offs that cost us £7bn but get all righteous over less than £500m.

[Mibbes Aye]

This doesn't make much sense to me.

If we're accepting that "the plan" is not working, why exactly would it be best to keep hold of NR? And how exactly can we make sure we get our money back? The whole point is that the market/economy is entirely uncertain.

I can accept and agree with plenty of Tory/Cameron/Osbourne bashing but not sure this decision really merits it.

If you're in a fix then why would you choose to give away half a billion pounds?

I suppose my point is that there's an incongruence between the Government's policy and the reality that signifies incompetence on a majestic scale or lies of alost unbelievable arrogance, all to mask an ideological crusade at the expense of the taxpayer, and to the benefit of the already mega-wealthy.

If they had 'secured the recovery' and their policies were going to secure economic growth, why would you undersell NR when you could hold on a bit and give us, the taxpayer, our money back?

If they haven't 'secured the recovery' and your policies were wrecking this country's prospects then why would you insist on sticking to your 'austerity plan' (and why would you give half a billion pounds of your assets to a couple of billionaires)?

There's a problem either way. And unfortunately it's us who are paying for it, either way.

[Mibbes Aye]

I didn't say that half a billion pounds was immaterial. Maybe you need to read my posts rather than just jump on a word.

The second bit is just juvenile.


Welcome to the world of Mibbes Aye. He can justify gold sell-offs that cost us £7bn but get all righteous over less than £500m.

I've read your posts Beefster and still don't see you answering. I'll ask again :wink:

Why was it a better idea to gift hundreds of millions of pounds of taxpayers' money to two billionaires, rather than just holding on?

[Future17]

like Blair/Brown and "New Labour"!, the ones that got you into this mess! incidentally what is Saint Teflon Blair doing now? yes! still making millions and millions! doing nothing!, oh and saying that....Branson was one of the biggest supporters of "New Labour" wasnt he?....so talk about old friends act!


virgin money is part of the Branson empire! and for your info Branson would do a deal with anyone or anybody, if the price was right and he got what he wanted!...its Buisness!, and yes as others gave said, doesnt matter when you sell NR its been in public ownership,which makes it unattractive to most investers!, so yes it will be sold of at a loss, again called buisness!...cutting your loses and getting shot of it!..sell it to someone who wants to buy it,they may or may not make it work! .

I'm still none the wiser as to what "old friends act" you're referring to?



Oh if i was Boris Johnson, do you really think i would have the time or the lack of intelligence to talk to socialists etc..?, id be busy like he actually is trying against the odds of certain individuals and people that will stop at nothing in opposing anything he or anyone else tries to do to actually help them!...and i used to live in London, and myself and other friends voted for him, and thankfully got "Mr Livingstone"! out!, and incidentally have met Boris and know others that have met him more than once, and he is one of the most astute and clued on people you could come accross!, so one question....do you hate the guy or just dont like him because he is: English, Conservative, looks a little different, Privatly Educated, has the guts to stand up to union bullies, introduce new things, help local and small buisness, try and tackle anti-social behaviour? well the list could go on!, not too mention and be the first one to actually stand against his own party in Government! in building a new Thames Estuary Airport with 4-6 runways! another financial hub not only for London but the U.K.!

I've don't particularly have an opinion on Boris Johnson other than finding him mildly amusing in the right circumstances, however he does have a tendency to communicate poorly, while attempting to explain his viewpoint - hence the comparison with you.

Incidentally, I see this proposed Thames Estuary Airport is expected to cost £40-50bn to build. Sounds like a great idea in the present financial climate with massive benefits to the UK outside of London......or not.


So before you go on the offensive and shout the odds to someone that either disagrees with you or contradicts the typical view, just think there is always someone that has the knowledge and can stand up to people and the typical it seems, Scottish viewpoint!.

It's interesting to see that the first reason you suggest for my perceived dislike of Boris is that he's English, given the recurring anti-Scottish theme of your posts.

For the record, I'm not a racist and don't judge people based on where they are from. Can you say the same?

[Future17]

If you're in a fix then why would you choose to give away half a billion pounds?

I suppose my point is that there's an incongruence between the Government's policy and the reality that signifies incompetence on a majestic scale or lies of alost unbelievable arrogance, all to mask an ideological crusade at the expense of the taxpayer, and to the benefit of the already mega-wealthy.

If they had 'secured the recovery' and their policies were going to secure economic growth, why would you undersell NR when you could hold on a bit and give us, the taxpayer, our money back?

If they haven't 'secured the recovery' and your policies were wrecking this country's prospects then why would you insist on sticking to your 'austerity plan' (and why would you give half a billion pounds of your assets to a couple of billionaires)?

There's a problem either way. And unfortunately it's us who are paying for it, either way.

It's my turn to be confused by your posts now. :greengrin

Nobody has given half a billion pounds of Our assets away to a couple of billionaires. We've received a few hundred million for an asset. We'd only have given something away if we were receiving less than the market value and the market value is what someone is willing to pay for it.

As an analogy (with reference to your "in a fix" comment), if you had to pay a fine by Friday or there would be serious repercussions, but you could only pay the fine if you sold your collection of vintage Panini sticker albums, would you refuse to sell (and suffer the repercussions) because you weren't being offered enough and might get more in the future?


I've read your posts Beefster and still don't see you answering. I'll ask again :wink:

Why was it a better idea to gift hundreds of millions of pounds of taxpayers' money to two billionaires, rather than just holding on?

Out of interest, how long would you be prepared for the Government, or successive governments, to wait for a suitable offer - bearing in mind the potential long-term drain on the Treasury?

[lucky]

virgin money is part of the Branson empire! and for your info Branson would do a deal with anyone or anybody, if the price was right and he got what he wanted!...its Buisness!, and yes as others gave said, doesnt matter when you sell NR its been in public ownership,which makes it unattractive to most investers!, so yes it will be sold of at a loss, again called buisness!...cutting your loses and getting shot of it!..sell it to someone who wants to buy it,they may or may not make it work! .
Oh if i was Boris Johnson, do you really think i would have the time or the lack of intelligence to talk to socialists etc..?, id be busy like he actually is trying against the odds of certain individuals and people that will stop at nothing in opposing anything he or anyone else tries to do to actually help them!...and i used to live in London, and myself and other friends voted for him, and thankfully got "Mr Livingstone"! out!, and incidentally have met Boris and know others that have met him more than once, and he is one of the most astute and clued on people you could come accross!, so one question....do you hate the guy or just dont like him because he is: English, Conservative, looks a little different, Privatly Educated, has the guts to stand up to union bullies, introduce new things, help local and small buisness, try and tackle anti-social behaviour? well the list could go on!, not too mention and be the first one to actually stand against his own party in Government! in building a new Thames Estuary Airport with 4-6 runways! another financial hub not only for London but the U.K.!
So before you go on the offensive and shout the odds to someone that either disagrees with you or contradicts the typical view, just think there is always someone that has the knowledge and can stand up to people and the typical it seems, Scottish viewpoint!.

Boris is a clown who continues to embarrass himself and his party with stupid comments. But I don't get that he stands up to union bullies? What are union bullies? Or do you mean union officials who stand up for their members against attacks on their terms and conditions from the Tories and people like Branson. Surely defending workers is the business of unions. Very blinkered views you have.

[Mibbes Aye]

It's my turn to be confused by your posts now. :greengrin

Nobody has given half a billion pounds of Our assets away to a couple of billionaires. We've received a few hundred million for an asset. We'd only have given something away if we were receiving less than the market value and the market value is what someone is willing to pay for it.

As an analogy (with reference to your "in a fix" comment), if you had to pay a fine by Friday or there would be serious repercussions, but you could only pay the fine if you sold your collection of vintage Panini sticker albums, would you refuse to sell (and suffer the repercussions) because you weren't being offered enough and might get more in the future?



Out of interest, how long would you be prepared for the Government, or successive governments, to wait for a suitable offer - bearing in mind the potential long-term drain on the Treasury?

What potential long-term drain is that? I take it that it doesn't exist, otherwise you wouldn't describe it as 'potential' :greengrin.

I would have to argue that it is a giveaway I'm afraid, because we paid anything up to £670 million more for it than we sold it for. It shouldn't have been sold for anything less than what it cost us, plus interest.

As for your analogy, we didn't have to sell 'by Friday'. We didn't have to sell until anytime it suited us and if that meant holding on until we had recouped all our money back then why wouldn't we?

Given the fact that two very rich people paid a large sum of money to get hold of NR, I think everyone's assuming that they'll make money out of it in the not-too-distant future. It's scandalous that it's taxpayers' money though.

[Future17]

What potential long-term drain is that? I take it that it doesn't exist, otherwise you wouldn't describe it as 'potential' :greengrin.

:greengrin

I'm talking about the long-term operating cost of running NR. Don't forget that the longer NR remained in Government control, the less valuable it became in terms of the volume of business it operated (rather than the value of the business it operated).

The truth is I don't know if it existed, because I haven't seen it publicised. However, the fact that I haven't seen it publicised probably indicates that it does exist. :greengrin

There's also the fact that we would be continuing to make interest repayments on £747m of our debt for a longer period - that being the period from now until whatever date we received the type of offer you want to hold out for.


I would have to argue that it is a giveaway I'm afraid, because we paid anything up to £670 million more for it than we sold it for. It shouldn't have been sold for anything less than what it cost us, plus interest.

Well you can argue that but you'd be wrong. :greengrin

By definition, giving something away means you don't receive anything in return. We have received something - the approximate market value of NR.

If you're contention is that something that is bought should only ever be sold for a profit (or breakeven) then you shouldn't be discussing economics, you should be studying it.

Sorry to deal in analogies again, but do you apply the same principal to the ownership of your car (assuming you drive)? Would you only ever sell it for the amount you paid for it or more? :confused:


As for your analogy, we didn't have to sell 'by Friday'. We didn't have to sell until anytime it suited us and if that meant holding on until we had recouped all our money back then why wouldn't we?

My analogy was in reply to your question - "If you're in a fix then why would you choose to give away half a billion pounds?"

However, I think i've answered your question at the start of this post. For the sake of clarity - why wouldn't we wait til we received all our money back?

a) Because we might never receive the sort of offer you're talking about. In fact, it's arguable that the longer we owned NR, the less likely we'd be to receive that sort of offer.

b) Because the longer the period NR remained in Government control, the more money we would lose. Therefore, the offer required to meet your terms increases exponentially each year.


Given the fact that two very rich people paid a large sum of money to get hold of NR, I think everyone's assuming that they'll make money out of it in the not-too-distant future. It's scandalous that it's taxpayers' money though.

I don't really understand what you mean by insinuating that the profit that they may make will be taxpayers' money. In the general sense, every profit made by every company in the UK market is taxpayers' money. They're not getting it directly from the Government. Indeed, they'll only get it by providing a service to customers.

They may well make a profit from it in the not-too-distant future, but it's how they do that that is likely to be the issue. The chances are VM will conduct a form of asset stripping on NR and merge operations within the UK. They may well get rid of many branches altogether, along with the staff who work in them.

Many people will feel that is a bigger issue in relation to the Government's decision to sell and they may well be right, but that's a different argument.

[Leicester Fan]

What potential long-term drain is that? I take it that it doesn't exist, otherwise you wouldn't describe it as 'potential' :greengrin.

I would have to argue that it is a giveaway I'm afraid, because we paid anything up to £670 million more for it than we sold it for. It shouldn't have been sold for anything less than what it cost us, plus interest.

.

We didn't have to buy it at all. The Labour govt could have let NR fold and just protect the depositors, if it had been the Chelsea building society instead of a labour heartland bank in the run up to an election, that is what probably would have happened.

[Big Ed]

We didn't have to buy it at all. The Labour govt could have let NR fold and just protect the depositors, if it had been the Chelsea building society instead of a labour heartland bank in the run up to an election, that is what probably would have happened.

This is nonsense: Northern Rock was the fifth largest mortgage lender in the UK at the time of its collapse. A rescue was required, but it became clear no reputable buyer would touch it.
What do you think would have happened to public confidence in our banking system if an institution that size was allowed to disappear?
My recollection of the political mood at the time was broad, but reluctant acceptance by the Conservatives and Lib Dems.
Incidentally, whilst we are on the subject of political geography, the Chelsea Building Society is not based in Chelsea.

[Beefster]

I think everyone's assuming that they'll make money out of it in the not-too-distant future.

As I've already told you, most folk who know what they are talking about seem to think that it is unlikely that they'll make money out of it in the not-too-distant future.

[greenlex]

As I've already told you, most folk who know what they are talking about seem to think that it is unlikely that they'll make money out of it in the not-too-distant future.

The bad bit of NR is actually in profit. It consists of the 125% mortgages and loans given to clients with high risk of defaulting. In other words bad risk.
The good bit hasn't actually made any money but is due to start making profit next year after big losses the year previous to last and those losses halved this year.
Again I ask what was the hurry to sell? when playing the stock market its better to be in for the long haul than a few years to try and make a quick buck. It's bonkers I tell you. We as taxpayers have not got a good deal.

[Mibbes Aye]

:greengrin

I'm talking about the long-term operating cost of running NR. Don't forget that the longer NR remained in Government control, the less valuable it became in terms of the volume of business it operated (rather than the value of the business it operated).

The truth is I don't know if it existed, because I haven't seen it publicised. However, the fact that I haven't seen it publicised probably indicates that it does exist. :greengrin

There's also the fact that we would be continuing to make interest repayments on £747m of our debt for a longer period - that being the period from now until whatever date we received the type of offer you want to hold out for.



Well you can argue that but you'd be wrong. :greengrin

By definition, giving something away means you don't receive anything in return. We have received something - the approximate market value of NR.

If you're contention is that something that is bought should only ever be sold for a profit (or breakeven) then you shouldn't be discussing economics, you should be studying it.

Sorry to deal in analogies again, but do you apply the same principal to the ownership of your car (assuming you drive)? Would you only ever sell it for the amount you paid for it or more? :confused:



My analogy was in reply to your question - "If you're in a fix then why would you choose to give away half a billion pounds?"

However, I think i've answered your question at the start of this post. For the sake of clarity - why wouldn't we wait til we received all our money back?

a) Because we might never receive the sort of offer you're talking about. In fact, it's arguable that the longer we owned NR, the less likely we'd be to receive that sort of offer.

b) Because the longer the period NR remained in Government control, the more money we would lose. Therefore, the offer required to meet your terms increases exponentially each year.



I don't really understand what you mean by insinuating that the profit that they may make will be taxpayers' money. In the general sense, every profit made by every company in the UK market is taxpayers' money. They're not getting it directly from the Government. Indeed, they'll only get it by providing a service to customers.

They may well make a profit from it in the not-too-distant future, but it's how they do that that is likely to be the issue. The chances are VM will conduct a form of asset stripping on NR and merge operations within the UK. They may well get rid of many branches altogether, along with the staff who work in them.

Many people will feel that is a bigger issue in relation to the Government's decision to sell and they may well be right, but that's a different argument.

So that's clear then - keeping NR wouldn't have been a long-term drain, as you've said, you have no evidence to suggest it would.

And why are you suggesting it should be sold for a profit? All anyone was wanting was that the money put in by the taxpayer was paid back, that's our money, in full. Are you saying that wouldn't have happened?

Incidentally, most cars tend to depreciate in value from the moment they move off the forecourt and that's that - if you're suggesting NR is similar then maybe you should join me in studying economics :greengrin

[Mibbes Aye]

As I've already told you, most folk who know what they are talking about seem to think that it is unlikely that they'll make money out of it in the not-too-distant future.

You didn't tell me anything of the sort Beefster - you mentioned some 'experts' but didn't say who they were.

I asked you if they were the same 'experts' who got us into this mess in the first place but no answer from you.

I've also asked you this a couple of times now but no answer - why was it a better idea to gift hundreds of millions of pounds of taxpayers' money to two billionaires, rather than just holding on?

[Mibbes Aye]

We didn't have to buy it at all. The Labour govt could have let NR fold and just protect the depositors, if it had been the Chelsea building society instead of a labour heartland bank in the run up to an election, that is what probably would have happened.

If we lived in a genuinely free-market society then I can understand the argument for letting it fold - a sort of rather brutal, but at least honest, 'survival of the fittest'. I think Osborne was alluding to that at the time.

As has been said above however, the consensus seemed to be that the impact on the rest of the banking sector and the economy would be so great that it compelled the government to step in.

I think that illustrates an aspect that annoys people the most (and the subsequent sell-off of NR reinforces it) - the privatisation of profit and the socialisation of losses. Essentially banks and the suchlike are free to make and keep money but when it goes wrong the state has to pick up the tab. Then the money starts flowing again, all into private hands.

That's not what capitalism was meant to be though, that's a set-up, with the taxpayers as the marks.

[Beefster]

You didn't tell me anything of the sort Beefster - you mentioned some 'experts' but didn't say who they were.

I asked you if they were the same 'experts' who got us into this mess in the first place but no answer from you.

I've also asked you this a couple of times now but no answer - why was it a better idea to gift hundreds of millions of pounds of taxpayers' money to two billionaires, rather than just holding on?

Try and get hold of the FT on Friday and make your own mind up about the experts. One of them was a City minister under Brown so they may well be to blame for the mess we're in now.

Your phrasing of questions may change when you don't like the answer but I did the answer the original question (see below). I'm not daft enough (I hope) to answer nonsense questions like the one about gifting billionaires. You seem to be incapable of understanding that they paid the current market value of NR. It's a bit like me selling my house now and claiming that I've gifted the buyers £200k because that's how much more I reckon it will be worth in 5 years in my fantasy world, whilst ignoring that values go down too. Maybe folk should never sell anything that appreciates in value (like gold perhaps)?


Considering that the economy is about to take another massive dip with no-one having a clue when it will recover and that any loss or profit made on the good bit of NR is immaterial next to the £21bn that we're in for with the bad bit, I honestly don't think it makes any difference whether we sold it three years ago, last year, now, next year, in five years or whenever.

[Mibbes Aye]

Try and get hold of the FT on Friday and make your own mind up about the experts. One of them was a City minister under Brown so they may well be to blame for the mess we're in now.

Your phrasing of questions may change when you don't like the answer but I did the answer the original question (see below). I'm not daft enough (I hope) to answer nonsense questions like the one about gifting billionaires. You seem to be incapable of understanding that they paid the current market value of NR. It's a bit like me selling my house now and claiming that I've gifted the buyers £200k because that's how much more I reckon it will be worth in 5 years in my fantasy world, whilst ignoring that values go down too. Maybe folk should never sell anything that appreciates in value (like gold perhaps)?

It's nothing to do with current market value or your house Beefster, as well you know. Northern Rock was due to pay back what it got from the taxpayer. We've now written off half a billion of that and you can't give a decent reason why, other than Osborne might have so damaged the economy that we would have to wait a decade for it. In which case he should admit he's not up to the job and let someone else change course.

If Virgin Group wasn't prepared to pay what it took to recoup our money then why didn't we just keep NR and let it repay us itself?

[IndieHibby]

All anyone was wanting was that the money put in by the taxpayer was paid back, that's our money, in full.

I appreciate, and share, the sentiment you seem to be expressing - that taxpayers have paid £X and therefore should receive the same when sold.

However, that is not the reality of the nature of the purchase - HMRC was not buying to make some kind of investment or profit. It bought in order to prevent 'the cash machines drying up' (etc.) - i.e. preventing serious disorder to society.

Just because Branson sees a deal to be done, does not mean HMRC can just say "Dick, this is what we paid for it, so that is the price - now take it or leave it as I have some taxes to collect"

Otherwsie, Branson would have bought it in 2007-8.

HMRC (i.e. us) took a hit in 2007 to prevent catastrophe. The value of that hit now appears to be £400,000,000. Which is a lot of money.

But to say that it is Tory cronyism is a little shallow and beneath your usual standards.

There is an argument to be had about the socialisation of losses, however. A pretty ****ing big one, in my opinion. But I think that argument starts with regulation, which in turn, starts with Labour and GB.

Edit: In the meantime, you have also made the last point :greengrin

[Future17]

So that's clear then - keeping NR wouldn't have been a long-term drain, as you've said, you have no evidence to suggest it would.

Wow. Your entire reply is quite strange and leads me to believe you didn't actually read what I had written. For my sanity, I'll try again.

For starters, it is impossible to have evidence of what will happen in the future. The future is indeterminate. All we can do is make projections based on historical evidence. In this regard, I've offered the the running costs of NR, the lack of reported profit while under Government control and the effect of having to continue to make interest repayments on debts of £747m.

If it's "clear", as you claim, that keeping NR under Government control wouldn't have been a long-term drain, what evidence do you have to support this?


And why are you suggesting it should be sold for a profit? All anyone was wanting was that the money put in by the taxpayer was paid back, that's our money, in full. Are you saying that wouldn't have happened?

You obviously didn't read my post. I didn't suggest NR should be sold for a profit.

As I have stated above, you can't predict the future with 100% certainty, but my personal opinion is that it we would never have received an offer which would equate to getting back what we have put in - because by definition, such an offer would require to be above market value (or at least asset value) at the time of sale.


Incidentally, most cars tend to depreciate in value from the moment they move off the forecourt and that's that - if you're suggesting NR is similar then maybe you should join me in studying economics :greengrin

It is similar in that the question of pre-ownership is one of the factors which effects the sale price of NR.

To try and advance the discussion - what makes you think that we would ever received back what we paid for NR? What are you basing this presumption on? :confused:

[Holmesdale Hibs]

It was a good deal for the tax payers in the sense that Branson agreed not to make any redundancies and keep all the Virgin Money branches open. Branson can generally be considered trustworthy and if his bank can become competitive than that is good for the wider ecconomy. I agree the timing of it seems strange though.

[Mibbes Aye]

I appreciate, and share, the sentiment you seem to be expressing - that taxpayers have paid £X and therefore should receive the same when sold.

However, that is not the reality of the nature of the purchase - HMRC was not buying to make some kind of investment or profit. It bought in order to prevent 'the cash machines drying up' (etc.) - i.e. preventing serious disorder to society.

Just because Branson sees a deal to be done, does not mean HMRC can just say "Dick, this is what we paid for it, so that is the price - now take it or leave it as I have some taxes to collect"

Otherwsie, Branson would have bought it in 2007-8.

HMRC (i.e. us) took a hit in 2007 to prevent catastrophe. The value of that hit now appears to be £400,000,000. Which is a lot of money.

But to say that it is Tory cronyism is a little shallow and beneath your usual standards.

There is an argument to be had about the socialisation of losses, however. A pretty ****ing big one, in my opinion. But I think that argument starts with regulation, which in turn, starts with Labour and GB.

Edit: In the meantime, you have also made the last point :greengrin

:agree:

To be honest, the one thing I don't think it is, is cronyism as such. I've never thought of Branson as receiving dodgy favours from the Tories, though he certainly seems to have benefitted from policies brought in from Thatcher onwards. Apologies if I gave that impression.

[Betty Boop]

It was a good deal for the tax payers in the sense that Branson agreed not to make any redundancies and keep all the Virgin Money branches open. Branson can generally be considered trustworthy and if his bank can become competitive than that is good for the wider ecconomy. I agree the timing of it seems strange though.

Really ? He has a conviction for tax fraud !

[IndieHibby]

:agree:

To be honest, the one thing I don't think it is, is cronyism as such. I've never thought of Branson as receiving dodgy favours from the Tories, though he certainly seems to have benefitted from policies brought in from Thatcher onwards. Apologies if I gave that impression.

None required, but fair do's.

Re: bit in bold - that wouldn't be you giving Thatcher credit for creating growth by encouraging entrepeneurship, would it? :wink:

[Mibbes Aye]

Wow. Your entire reply is quite strange and leads me to believe you didn't actually read what I had written. For my sanity, I'll try again.

For starters, it is impossible to have evidence of what will happen in the future. The future is indeterminate. All we can do is make projections based on historical evidence. In this regard, I've offered the the running costs of NR, the lack of reported profit while under Government control and the effect of having to continue to make interest repayments on debts of £747m.

If it's "clear", as you claim, that keeping NR under Government control wouldn't have been a long-term drain, what evidence do you have to support this?



You obviously didn't read my post. I didn't suggest NR should be sold for a profit.

As I have stated above, you can't predict the future with 100% certainty, but my personal opinion is that it we would never have received an offer which would equate to getting back what we have put in - because by definition, such an offer would require to be above market value (or at least asset value) at the time of sale.



It is similar in that the question of pre-ownership is one of the factors which effects the sale price of NR.

To try and advance the discussion - what makes you think that we would ever received back what we paid for NR? What are you basing this presumption on? :confused:

I have to say, you give the impression you're easily confused. I'm sure that's sincere and not faux.

Why would NR's value not increase? As I think greenlex pointed out, it's moving from making losses to making profit. That's profit which could pay back the public money. Why throw that away?

[Mibbes Aye]

None required, but fair do's.

Re: bit in bold - that wouldn't be you giving Thatcher credit for creating growth by encouraging entrepeneurship, would it? :wink:

:greengrin

There's no disputing she made it possible for some people to become very rich.

And I confss it's true, sometimes, very rich people create jobs for other people, to make themselves richer.

And given she had neary four million on the dole, there wasn't a lack of resources :greengrin

[Beefster]

It's nothing to do with current market value or your house Beefster, as well you know. Northern Rock was due to pay back what it got from the taxpayer. We've now written off half a billion of that and you can't give a decent reason why, other than Osborne might have so damaged the economy that we would have to wait a decade for it. In which case he should admit he's not up to the job and let someone else change course.

If Virgin Group wasn't prepared to pay what it took to recoup our money then why didn't we just keep NR and let it repay us itself?

Because the Labour government put deadlines on when it had to be sold by. Who'da thunk it?

You (and Ed Balls) would be forgiven for feeling a bit of a chump right now.

http://www.bbc.co.uk/news/business-15812234

[greenlex]

Because the Labour government put deadlines on when it had to be sold by. Who'da thunk it?

You (and Ed Balls) would be forgiven for feeling a bit of a chump right now.

http://www.bbc.co.uk/news/business-15812234

So we sell the "good "bit 2years early and have no plans to sell the "bad" bit.

If they feel the good bit won't make money in the next couple of years then possibly fair play but what about the other bit. The bit that is more risky but actually making profit now I will say again it stinks of something.

[Speedy]

I have to say, you give the impression you're easily confused. I'm sure that's sincere and not faux.

Why would NR's value not increase? As I think greenlex pointed out, it's moving from making losses to making profit. That's profit which could pay back the public money. Why throw that away?

It has went from making large losses to 'less large' losses.

As always the future is uncertain and the current situation with Europe's finances increases this uncertainty.

[lapsedhibee]

the privatisation of profit and the socialisation of losses
Not seen the full details yet, but this appears to be the gist of today's announcement of taxpayer help for housebuilders (who got very fat indeed during the last boom).

[Beefster]

So we sell the "good "bit 2years early and have no plans to sell the "bad" bit.

If they feel the good bit won't make money in the next couple of years then possibly fair play but what about the other bit. The bit that is more risky but actually making profit now I will say again it stinks of something.

Who is going to buy £21bn worth of liabilities? Unless I'm misunderstanding you...

[bighairyfaeleith]

Not sure why the tories have been so quick to sell, pretty much from day one osbourne has made noises about selling NR quickly and I genuinely don't know why as none of the reasons he has given make any sense to me.

Time will tell I suppose but I would think the best time to sell is when the bank is profitable and making money and there other bigger players in the market looking to buy. No offence to branson but he isn't a big player in the banking industry.

[greenlex]

Who is going to buy £21bn worth of liabilities? Unless I'm misunderstanding you... Everything is a liability. Just differing levels. Whoever took on the good bit should have been made take on part if not all the liabilities. It's like buying a lottery ticket and only wanting a winner. Can I say again the bad part is actually making money as the high probability defaulters aren't actually defaulting.

[Hibs Class]

The article below gives a brief explanation of the distinction between the good bank and the bad bank as it isn't as obvious as the names suggest. I know two or three folk who have their mortgages with NR and who were quite offended at being lumped into the bad bank, but there are various criteria which were used to allocate loans to either the good or bad bank. As pointed out earlier in the thread the bad bank is performing pretty well.

http://www.bbc.co.uk/news/business-15771370

[Mibbes Aye]

Because the Labour government put deadlines on when it had to be sold by. Who'da thunk it?

You (and Ed Balls) would be forgiven for feeling a bit of a chump right now.

http://www.bbc.co.uk/news/business-15812234

Oh please Beefster, is that the best you've got?

Last week Osborne was telling us this was a good deal for the taxpayer. Until people started questioning how could it be?

So he does a u-turn and says it's not that good a deal at all and it's actually someone else's fault :rolleyes:

Did you know the word 'gullible' doesn't appear in any dictionary?

I'm glad you posted that link. As it says, why didn't Osborne negotiate an extension, based on a change in circumstances?

(Incidentally, I'm loving the name-calling, first 'juvenile', now 'chump'. Grace under pressure and all that, eh? :greengrin)

[Mibbes Aye]

Not seen the full details yet, but this appears to be the gist of today's announcement of taxpayer help for housebuilders (who got very fat indeed during the last boom).

:agree: That's my sense. Of course some of those housebuilders bankrolled the Tories in the Thatcher/Major years IIRC.

It's mildly amusing to see the government trying to bring about a reduction in the amount of deposits that lenders are asking for. Essentially it means people having to borrow more. Now I thought they said we shoudn't be borrowing more? :confused:

[Hibs Class]

:agree: That's my sense. Of course some of those housebuilders bankrolled the Tories in the Thatcher/Major years IIRC.

It's mildly amusing to see the government trying to bring about a reduction in the amount of deposits that lenders are asking for. Essentially it means people having to borrow more. Now I thought they said we shoudn't be borrowing more? :confused:

I'm not sure that's what it means. People will generally take out a mortgage for as much as they think they can reasonably afford to repay each month and I don't think that will change. The difference will be that people who can afford a mortgage of e.g. £100K will now be able to buy a house for c.£105k if a 5% deposit is all that they need to save rather than waiting until they have a deposit of e.g. £20k and then buying a house for £120k with the same £100k mortgage.

In essence it means people can buy a less expensive house using a lower deposit and with a higher loan to value ratio and they will also then be more exposed to the risk of negative equity.

[Beefster]

Oh please Beefster, is that the best you've got?

Last week Osborne was telling us this was a good deal for the taxpayer. Until people started questioning how could it be?

So he does a u-turn and says it's not that good a deal at all and it's actually someone else's fault :rolleyes:

Did you know the word 'gullible' doesn't appear in any dictionary?

I'm glad you posted that link. As it says, why didn't Osborne negotiate an extension, based on a change in circumstances?

(Incidentally, I'm loving the name-calling, first 'juvenile', now 'chump'. Grace under pressure and all that, eh? :greengrin)

Sorry for the name-calling. I hope you don't mind if I paraphrase your post.....

Bluster, bluster, bluster.

...I heard Balls try the same trick on Five Live this morning. Are you sure that you're not him?!

PS The article doesn't say that. It's a Labour MP saying that (i.e. parroting the party line). If they want to negotiate an extension now, why bother agreeing the tight deadlines in the first place?

[Beefster]

I'm not sure that's what it means. People will generally take out a mortgage for as much as they think they can reasonably afford to repay each month and I don't think that will change. The difference will be that people who can afford a mortgage of e.g. £100K will now be able to buy a house for c.£105k if a 5% deposit is all that they need to save rather than waiting until they have a deposit of e.g. £20k and then buying a house for £120k with the same £100k mortgage.

In essence it means people can buy a less expensive house using a lower deposit and with a higher loan to value ratio and they will also then be more exposed to the risk of negative equity.

In this case, in a roundabout way I agree with Mibbes Aye. It's not the job of the state to be providing security so that banks will provide higher LTV ratios.

[Mibbes Aye]

Sorry for the name-calling. I hope you don't mind if I paraphrase your post.....

Bluster, bluster, bluster.



Probably guilty as charged:thumbsup:

[One Day Soon]

Sorry for the name-calling. I hope you don't mind if I paraphrase your post.....<br>
<br>
<em>Bluster, bluster, bluster.</em><br>
<br>
...I heard Balls try the same trick on Five Live this morning. Are you sure that you're not him?!<br>
<br>
PS The article doesn't say that. It's a Labour MP saying that (i.e. parroting the party line). <strong> If they want to negotiate an extension now, why bother agreeing the tight deadlines in the first place?</strong>

That's a bit like saying to a house buyer "You can negotiate a mortgage with a 1 year, 3 year, 5 year deal or whatever but once the initial period is up you have to stick to the terms that the mortgage reeverts to rather than seeking to renegotiate a deal with your mortgage provider or indeed look for an alternative funder."

Presumably the tight deadlines were agreed to because that was a precondition set to allow the deal to save Northern Rock to go ahead. Did the Tories and Lib Dems stick to Labour's proposed deficit reduction plan when they came to office? No, because they took a different view. The notion that these things cannot be renegotiated is laughable. Look at the constantly changing position on the terms and scope of proposed bailouts for Ireland, Greece and Italy.

[RyeSloan]

Interesting one this.

My first question would be that although the tax payer injected £1.4bn in NR 2010 what this was for? I'm pretty sure it was already nationalised at this point and as far as I can remember NR shareholders received zero compensation. So although £1.4bn was put into the bank does this in anyway represent the value of the bank as a business...I suspect the two are dinstinctly different.

Second is timing. I hear the arguments saying 'why now' but looking at the state of retail banking in the UK I think there is a general consensus that profits will be hard to come by any time soon so the prospect of getting out of a loss making retail bank now, capping the loss and being able to use the money received to paydown (or at least offset against) the debt incurred when 'rescuing' the bank doesn't seem too outrageous to me. Add in the 2013 EU deadline and there would appear to be little to be gained in waiting a few more months.

The deal also seems to leave the 'bad bank' in the hands of the treasury and according to recent data at least that may well prove to be no bad thing (i.e the loan book is performing better than expected) however I don't think it is in any way realistic to expect that portion of the bank to be sold into the market...there is essentailly no market for it to be sold into.

Finally to paint this as giving £400m to the rich is an interesting angle....is there any evidence that the assets just purchased are worth £400m more than they have been sold for?

[Holmesdale Hibs]

Really ? He has a conviction for tax fraud !

Fair point, never realised he had been done for tax fraud. Change 'trustworthy' to 'established' and the point still stands :wink: