Northern Rock

...is based on the recent Northern Rock fiasco (sept 2007)

Crisis!! What crisis? - It's just remarkable that it was a week ago that Northern Rock was apparently in melt-down. All sorted now - Perfic! - At the time it was strange to see the savers amongst us were the elders, coach loads of them. It was obvious that they were concerned needlessly and at the time feared for there financial freedom. What seemed to highlight the crisis for ...
...few odd co-incidences. No doubt Northern Rock was doing everything to keep afloat. Selfish? Well of course, they are a financial institution nevertheless.

Now that the crisis has subsided for now, thanks to the governments' intervention. It is business as usual at Northern Rock branches- all perfic! But I wonder what would happen if more financial institutes fell down the same cash hole?

However that depends on what ... more

- 'Darling buds of dismay' -
Note : > This review is based on the recent Northern Rock fiasco (sept 2007)

Crisis!! What crisis? - It's just remarkable that it was a week ago that Northern Rock was apparently in melt-down. All sorted now - Perfic! - At the time it was strange to see the savers amongst us were the elders, coach loads of them. It was obvious that they were concerned needlessly and at the time feared for there financial freedom. What seemed to highlight the crisis for me was that no-one for over 24 hours could log-in to their accounts online and use their financial freedom. They claim it to be excessive traffic to their site, but for the 5th biggest financial company in UK it is hard to believe. A server outage was miraculously well-timed, one of a few odd co-incidences. No doubt Northern Rock was doing everything to keep afloat. Selfish? Well of course, they are a financial institution nevertheless.

Now that the crisis has subsided for now, thanks to the governments' intervention. It is business as usual at Northern Rock branches- all perfic! But I wonder what would happen if more financial institutes fell down the same cash hole?

However that depends on what or who are the savers of course. For now the Northern Rock savers have been reassured that their deposits at Northern Rock are safe for the present. Is the carpet big enough to hide this crazy-world of the financial management blunder? Of course not, the knives will be sharpened and yet another report will be drafted up and thrown at Mr. Adam Applegarth, Northern Rock's chief executive. The investigation will take months and just when Mr. Adam Applegarth's name, becomes a 'household name' in the land of 'blue rinses, werthington's and humbugs'. The realisation of mass blunder, followed by an apology and then followed by a resignation will ultimately happen. Is all this a smokescreen though.

There is also something else happening that begins on October 1st 2007; that ties in with the elders and savings and health. Yep, the government has introduced new laws on 'the power of attorney'. From October 1st 2007; the government will be able to ask for a 100.00 GBP fee per 'power of attorney' application. Was it a co-incidence that Northern Rock's very wealthy client base had a hiccup around about the time when the elders would have been sorting out their own 'power of attorney' paperwork? The reason why I'm suspicious is due to Gordon Brown's banking track record on pension smoke-screens and his strong Bank of England contacts; could there be more to it than meets the eye. Yes, Darling appeared to have saved the savers of Northern Rock of their hard earned savings, by stepping in. Why now? Was it to secure a vote from the elder generation's high turn-out voting public? It certainly asks questions on why they did not step in to secure other financial establishments such as Barings Bank and Nick Leeson being their fall-guy, and the 125,000 people lost pension plans at Farepak, just a thought. On a crazy note, there could be a phone-in on who to save and who goes; 'you decide' in years to come.

Furthermore, many experts are pointing the finger at the Bank of England and the Financial Services Authority (FSA) for failing to rein in Northern Rock's aggressive expansion in the mortgage market. The US financial market has played a big part in all of this as well so we the UK public are led to believe. It certainly is a viable reason. Others are blaming Prime Minister Gordon Brown for presiding over a decade of cheap credit and soaring personal debt while he was Tony Blair's Chancellor; creating a remarkable number of boom borrowers during the last 10 years and in return not so many savers.

Regardless of where the blame lies, the fact remains that -- the government has given an exceptional guarantee to support customers of a struggling financial institution that could just grow and grow, other organisations could see it as a safety net on all financial establishments, if this was to proceed - even more UK businesses could collapse. Although that promise provides welcome relief to Northern Rock savers, it places the cost of support firmly on British taxpayers, which is worrying as the balance of the number of pensioners compared to the number of taxpayers is getting even more imbalanced. This will cause many problems in the future and in the long term is not going to work.

In fact only last week the government has promised 250 Million to corporate pension victims that have gone bust. Work and Pensions minister Mr. Hain is to add the new cash incentive to the 8 Billion already earmarked to the scheme. The timing is incredible still as Mr. Hain and the government have felt it a very necessary scheme to introduce the cash due to many people losing out on nest-eggs. Personally, I would of welcomed it a year ago, or anytime but now. However, my sceptical mind keeps seeing a bandwagon and yet more opportunism to gain the elder generation vote - it all looks a load of propaganda that is cleverly polished, it's all a little too 'perfic' in my sceptical mind.

I go on; … - Why also bail out Northern Rock savers when 'New Labour' allowed life insurance and pensions provider Equitable Life to fail? The incredible near-collapse of Equitable Life in 2000 left over three million prudent savers and pensioners out of pocket to the tune of billions of pounds. I feel the reason is, it wasn't near a potential election, or had the wealthy customer client saver base that Northern Rock has.

Last October 2006, 150,000 low-income families lost their hard-earned Christmas following the collapse of disgraced hamper/voucher firm Farepak. This left some of the country's poorest people nursing a loss of £45 million just two months before Xmas. Most of these people can't invest any money into a high-class lawyer so you can see why these are the forgotten people. The more you knock on the door of claiming the more likely to will be heard. Sadly, lawyer's fees play a massive part in getting eventual individual compensation, if payment upfront is not guaranteed, so is the lethargic practice that the law system induces onto the poor.

All in all, I'm sure that this government has seen more than its fair share of financial scandals as there will be a natural domino reaction to this Northern Rock fiasco! Indeed, by offering help to Northern Rock savers, in my view the government stands accused of applying breathtaking double standards. Northern Rock in my eyes are 'Darling's buds of dismay' - I truly think the whole fiasco is politically charged with a few hidden under currents such as the new law concerning the 'power of attorney' application fees, this is why the government intervened; Is it a co-incidence - Well it appears the 'smoke-screen' is 'Perfic!' - We'll soon see Darling. 

...less