Posted by: Kevin Davis | February 17, 2008

Northern Rock disaster

So. like those failed Governments of the seventies this one has now sunk to believing that it is better able to run a private company than shareholders are. Do not forget that much of the Northern Rock problem has been caused by this Government. They have allowed regulation of the sector and they have allowed the only viable proposition to buy the bank, an offer by Abbey last Summer, to be turned away without a second thought.

This is shambles and they should be thinking hard about whether Brown is in terminal decline.

Will this lead to another un on the bank? Who knows, but this Government has now presided over an economic sector that has more in common with a banana-republic than anything else. Which developed country, in recent times, has seen a run on the bank leading to queues of depositors trying to get their money back?

Only one other country has nationalised as many businesses as this one - the Soviet Union.

Wikipedia has a good history of nationalisation in the UK and you can see for yourself how disastrous the state has been at running things.

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Responses

Kevin, are you really comparing the United Kingdom to the Soviet Union? What laughable nonsense!

Northern Rock will be nationalised and about time too! It is about time this government started to ensure the interests of the tax-payer over that of the share-holder. And while Gordon Brown is at it, he could do us all a big favour and nationalise the railways too.

Northern Rock was flawed as it borrowed from the money markets and lent at too lower rate to its borrowers.When the full enormity of the debt crisis began to emerge it was exposed as in the Emperor who had no clothes.

Many tax payers are also shareholders via their pension schemes or insurance policies,unit trusts etc so in an ideal world everyone should be protected but this cannot happen either in a democracy or “Soviet” style state.Thank god Bransons bid was rejected as that would only have benefited one individual serial tax avoider.

Market forces are real no one,not even Putin can ignore them,the real tragedy is that the finest brains in our regulatory bodies failed to see how flawed the NRK model was,nor did they comprehend the disasters lurking in the ludicrous packaging of toxic loans into esoteric “financial instruments” that not even the Banks issuing and trading them understood.

Sadly its still happening!
Debt is embraced as if the new messiah,it will all end in tears and Mr Micawber is proved right again.

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