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Old September 18th 07, 04:37 AM posted to uk.finance
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Default Northern Rock CEO - how to win friends and influence people :)

I caught a brief snippet this mornign of an interview he recently gave, and
he made the comment

"It would be irrational of Nothern Rock depositors to withdraw their money
now that their savings have been guaranteed"

Doh! Not exactly the smartest move in such a delicate situaion to make a
statement that could rub your depositors up the wrong way.

Isn't PR tuition mandatory at CEO level?

BTW, any thoughts from the group about purchasing NR shares? Apparently
loads of people jumped in last Friday in the expectation that shares would
rebound strongly yesterday. These speculators may be a tad worried now
though Darling's desperation measure may improve things.

BTW - A classic bit of dark humour (I think!) from the BBC "have your say
forum yesterday". Someone claming to be a NR Employee wrote ..."and the
Chancellor is backing us 110 percent!" LOL! ROFL!

--
Peter <X-Files fan


--
Peter <X-Files fan



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Old September 18th 07, 10:34 AM posted to uk.finance
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Default Northern Rock CEO - how to win friends and influence people :)

Trust No One

BTW, any thoughts from the group about purchasing NR shares? Apparently
loads of people jumped in last Friday in the expectation that shares would
rebound strongly yesterday. These speculators may be a tad worried now
though Darling's desperation measure may improve things.


It shows that Darling as fallen into panic and fluffed his first crisis.
The numbers said that NR could pay all its depositors and if NR went
down, it wouldn't threaten the banking system. Mervyn King had given a
lecture that people had to look to risks and that he wouldn't bail out
the foolhardy. At that point NR going down would have been excellent
pour encourager les autres.

Then Darling gives a lecture on how both borrowers and lenders must be
careful and immediately U-turns and offers a guarantee of all deposits.

That's his Biggest Gun. It's a stupid waste of that kind of ammo to use
it where he didn't need to.

Sadly I must conclude that Britain is headed into the first ever
bursting of a global credit bubble with someone at the helm who's prone
to panic. This is an exceedingly bad omen.

FoFP

--
"On Thursday, Darling gave the City a stern lecture on how it wasn't the
government's job to bail out banks which had indulged in irresponsible
lending and borrowing. It was time to get back, he said, to "good
old-fashioned banking". The very next day, Darling bailed out Northern Rock"

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Old September 18th 07, 02:00 PM posted to uk.finance
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Default Northern Rock CEO - how to win friends and influence people :)

"Trust No One®" wrote in message
...
I caught a brief snippet this mornign of an interview he recently gave, and
he made the comment

"It would be irrational of Nothern Rock depositors to withdraw their money
now that their savings have been guaranteed"


It's entirely rational, I'd withdraw my money not simply on the grounds of
safety but to get it as far away as possible from the bunch of criminally
incompetent muppets that 'run' NR. They don't deserve the respect or the
trust of the public, we've gone way beyond that, there's no second chances
when it comes to basic credibility.

How the CEO still remains is amazing, the board must also be a bunch of
culpable bonus grabbing muppets. NR will be a textbook case in how to run a
company into a ditch then insult and patronise what little remains of the
customer base.


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Old September 18th 07, 02:02 PM posted to uk.finance
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Default Northern Rock CEO - how to win friends and influence people :)

"Trust No One®" wrote in message
<
BTW - A classic bit of dark humour (I think!) from the BBC "have your say
forum yesterday". Someone claming to be a NR Employee wrote ..."and the
Chancellor is backing us 110 percent!" LOL! ROFL!


No surprises there, what's their loan to deposit ratio, 328%?


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Old September 20th 07, 11:56 AM posted to uk.finance
Tim Tim is offline
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Default Northern Rock CEO - how to win friends and influence people :)

"Virgils Ghost" wrote
No surprises there, what's their loan to deposit ratio, 328%?


It was actually a good job that the ratio was that high when
the "run" happened around the weekend -- with around a
tenth of all deposits being withdrawn, if the ratio had been
closer to 100% (with the same level of loans) then a
lot more than £2billion would have been withdrawn!!




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Old September 20th 07, 03:09 PM posted to uk.finance
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Default Northern Rock CEO - how to win friends and influence people :)


"Tim" wrote in message ...
"Virgils Ghost" wrote
No surprises there, what's their loan to deposit ratio, 328%?


It was actually a good job that the ratio was that high when
the "run" happened around the weekend -- with around a
tenth of all deposits being withdrawn, if the ratio had been
closer to 100% (with the same level of loans) then a
lot more than £2billion would have been withdrawn!!


Err, if their capital adequacy ratios were 100% then they wouldn't have
needed any external funding, hence no crisis and no resulting run on the
bank.


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Old September 20th 07, 03:27 PM posted to uk.finance
Tim Tim is offline
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Default Northern Rock CEO - how to win friends and influence people :)

"Virgils Ghost" wrote
No surprises there, what's their loan to deposit ratio, 328%?


"Tim" wrote
It was actually a good job that the ratio was that high when
the "run" happened around the weekend -- with around a
tenth of all deposits being withdrawn, if the ratio had been
closer to 100% (with the same level of loans) then a
lot more than £2billion would have been withdrawn!!


"Virgils Ghost" wrote
Err, if their capital adequacy ratios were 100% then
they wouldn't have needed any external funding,
hence no crisis and no resulting run on the bank.


Yes, I know. But that doesn't stop it helping after the run started!

With the general public having now shown that their actions
can be quite irrational, creating a run on a bank even when
their deposits were still safe, it appears that any solvent bank
might be affected by this irrationality of the general public.
Who knows what might cause them to do it next time?

Hence, as the public have shown that even safe banks risk having a
run on them, surely it's better for the bank to be in a position where
the effects of any run would be reduced somewhat? This means
that the larger the loan to deposit ratio of any bank, the better!!

;-)


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Old September 20th 07, 04:29 PM posted to uk.finance
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Default Northern Rock CEO - how to win friends and influence people :)

"Tim" wrote in message
...
"Virgils Ghost" wrote
No surprises there, what's their loan to deposit ratio, 328%?

"Tim" wrote
It was actually a good job that the ratio was that high when
the "run" happened around the weekend -- with around a
tenth of all deposits being withdrawn, if the ratio had been
closer to 100% (with the same level of loans) then a
lot more than £2billion would have been withdrawn!!


"Virgils Ghost" wrote
Err, if their capital adequacy ratios were 100% then
they wouldn't have needed any external funding,
hence no crisis and no resulting run on the bank.


Yes, I know. But that doesn't stop it helping after the run started!


I don't follow your logic, if they were fully funded by deposits then there
would be no need for any form of external funding, whether it be the
interbank markets or panic inducing BoE credit lines.


With the general public having now shown that their actions
can be quite irrational, creating a run on a bank even when
their deposits were still safe, it appears that any solvent bank
might be affected by this irrationality of the general public.
Who knows what might cause them to do it next time?


Not at all, we've gone over this before, the public were entirely rational
in asking for their money back, their savings were not 'safe' until the
taxpayer stepped in as a full guarantor, especially once the run had
started, the FSA scheme only fully guarantees the first £2k then only 90% of
the next £33k, and nothing beyond that point. Furthermore, in the case
insolvency it takes months for the FSA to pay out.

Take the examples cited in the press, one lady with £750k deposited, a
couple holding £1m with them and countless others in the six digit range,
the old FSA deposit guarantee meant nothing to them. The depositors had
nothing to gain by staying with NR, but many potentially nasty downsides to
worry about, no matter how remote a complete may seem why gamble with
upwards of 10% of your savings when you can simply move to another bank?
The commercial paper, mortgage backed securities and interbank markets would
not lend to NR at any price, why the hell should retail customers trust them
when all of the largest banks in the country wouldn't touch them with a
barge pole? The public were acting no more 'irrationally' than the City.

Many people have decided to desert NR simply because they disapprove of
their mupperty, can you really trust an organisation that gets itself into
such a reckless mess in the first place? Can you believe in the assurances
of an FSA with such lax oversight of basic capital adequacy?

It's a ****ing mess from start to finish, and it's not over yet, HM Treasury
announced this morning that *new* depositors are not 100% guaranteed by the
government, so we're back to the old FSA scheme that precipitated this mess.


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Old September 20th 07, 06:48 PM posted to uk.finance
Tim Tim is offline
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First recorded activity by FinanceBanter: Jul 2004
Posts: 4,199
Default Northern Rock CEO - how to win friends and influence people :)

"Virgils Ghost" wrote
No surprises there, what's their loan to deposit ratio, 328%?

"Tim" wrote
It was actually a good job that the ratio was that high when
the "run" happened around the weekend -- with around a
tenth of all deposits being withdrawn, if the ratio had been
closer to 100% (with the same level of loans) then a
lot more than £2billion would have been withdrawn!!

"Virgils Ghost" wrote
Err, if their capital adequacy ratios were 100% then
they wouldn't have needed any external funding,
hence no crisis and no resulting run on the bank.


"Tim" wrote
Yes, I know. But that doesn't stop it helping after the run started!


"Virgils Ghost" wrote
I don't follow your logic, if they were fully funded
by deposits then there would be no need for any
form of external funding, whether it be the interbank
markets or panic inducing BoE credit lines.


Yes, but that might not stop the irrational public creating
a "run" for *another* reason. For instance, a malicious
false rumour that is spread by a disgruntled customer,
but is believed by all the other irrational muppets...

"Tim" wrote
With the general public having now shown that their actions
can be quite irrational, creating a run on a bank even when
their deposits were still safe, it appears that any solvent bank
might be affected by this irrationality of the general public.
Who knows what might cause them to do it next time?


"Virgils Ghost" wrote
Not at all, we've gone over this before, the public were
entirely rational in asking for their money back, their savings
were not 'safe' until the taxpayer stepped in as a full guarantor...


*No* bank was fully safe before anyway; so what?
That new promise gave an even better guarantee than any
bank had previously. If it was rational for depositors to
withdraw all their money without a guarantee that strong,
then everyone should have withdrawn *all* money from *all*
banks beforehand. But that's just silly, so your argument fails.

"Virgils Ghost" wrote
... especially once the run had started, the FSA scheme
only fully guarantees the first £2k then only 90% of the next
£33k, and nothing beyond that point. Furthermore, in the
case insolvency it takes months for the FSA to pay out.


That's all irrelevant - the BoE was already providing NR
with the "facility" required, *before* the run occurred,
so FSCS compensation and insolvency are red herrings.

"Virgils Ghost" wrote
Take the examples cited in the press, one lady with £750k deposited,
a couple holding £1m with them and countless others in the six digit
range, the old FSA deposit guarantee meant nothing to them...


That applied *equally* to all of the banks!
Those muppets shouldn't have kept all that money in just one
bank (be it NR or HSBC or RBS or LloydsTSB or RBS),
if they were worried about the FSCS compensation rules.

"Virgils Ghost" wrote
... The depositors had nothing to gain by staying with NR, but
many potentially nasty downsides to worry about, no matter how
remote a complete may seem why gamble with upwards of 10%
of your savings when you can simply move to another bank?


Exactly. They should have had those large sums split across
multiple banks in the first place, ideally each below £35K, then
the FSCS limit wouldn't have been such an issue. But those
irrational muppets had put all their money in *one* bank!

"Virgils Ghost" wrote
The commercial paper, mortgage backed securities and
interbank markets would not lend to NR at any price, ...


Ah, but the BoE *would*!

"Virgils Ghost" wrote
... why the hell should retail customers trust them when all of the
largest banks in the country wouldn't touch them with a barge
pole? The public were acting no more 'irrationally' than the City.


Yes, they were *both* acting irrationally.

"Virgils Ghost" wrote
Many people have decided to desert NR simply
because they disapprove of their mupperty, ...


You mean, they are deserting because they are ignorant!

"Virgils Ghost" wrote
... can you really trust an organisation that gets itself
into such a reckless mess in the first place? ...


There was no mess. They are solvent,
with good quality loans on their books.

"Virgils Ghost" wrote
... Can you believe in the assurances of an FSA
with such lax oversight of basic capital adequacy?


What do you mean?

"Virgils Ghost" wrote
It's a ****ing mess from start to finish, and it's not over
yet, HM Treasury announced this morning that *new*
depositors are not 100% guaranteed by the government, so
we're back to the old FSA scheme that precipitated this mess.


Hehehe. All those muppets that withdrew their money from
NR, and are now becoming "new depositors" at another bank,
will be less 'safe' than depositors who stayed at NR! :-))


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Old September 20th 07, 07:43 PM posted to uk.finance
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Posts: 205
Default Northern Rock CEO - how to win friends and influence people :)

Virgils Ghost wrote:
"Tim" wrote in message
...
"Virgils Ghost" wrote
No surprises there, what's their loan to deposit ratio, 328%?
"Tim" wrote
It was actually a good job that the ratio was that high when
the "run" happened around the weekend -- with around a
tenth of all deposits being withdrawn, if the ratio had been
closer to 100% (with the same level of loans) then a
lot more than £2billion would have been withdrawn!!

"Virgils Ghost" wrote
Err, if their capital adequacy ratios were 100% then
they wouldn't have needed any external funding,
hence no crisis and no resulting run on the bank.

Yes, I know. But that doesn't stop it helping after the run started!


I don't follow your logic, if they were fully funded by deposits then there
would be no need for any form of external funding, whether it be the
interbank markets or panic inducing BoE credit lines.


With the general public having now shown that their actions
can be quite irrational, creating a run on a bank even when
their deposits were still safe, it appears that any solvent bank
might be affected by this irrationality of the general public.
Who knows what might cause them to do it next time?


Not at all, we've gone over this before, the public were entirely rational
in asking for their money back, their savings were not 'safe' until the
taxpayer stepped in as a full guarantor, especially once the run had
started, the FSA scheme only fully guarantees the first £2k then only 90% of
the next £33k, and nothing beyond that point. Furthermore, in the case
insolvency it takes months for the FSA to pay out.

Take the examples cited in the press, one lady with £750k deposited, a
couple holding £1m with them and countless others in the six digit range,
the old FSA deposit guarantee meant nothing to them. The depositors had
nothing to gain by staying with NR, but many potentially nasty downsides to
worry about, no matter how remote a complete may seem why gamble with
upwards of 10% of your savings when you can simply move to another bank?
The commercial paper, mortgage backed securities and interbank markets would
not lend to NR at any price, why the hell should retail customers trust them
when all of the largest banks in the country wouldn't touch them with a
barge pole? The public were acting no more 'irrationally' than the City.

Many people have decided to desert NR simply because they disapprove of
their mupperty, can you really trust an organisation that gets itself into
such a reckless mess in the first place? Can you believe in the assurances
of an FSA with such lax oversight of basic capital adequacy?

It's a ****ing mess from start to finish, and it's not over yet, HM Treasury
announced this morning that *new* depositors are not 100% guaranteed by the
government, so we're back to the old FSA scheme that precipitated this mess.


The FSA scheme didn't precipitate anything, it's been in force for a
great many years.

--
Moving things in still pictures!


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