I've got a Northern Rock mortgage, I'm in the shite. My business is/will go down the tubes. I've generated and paid more money to the treasury than I could ever hope to aquire myself.

In 2008 I will probably go bust, made bankrupt, be a bad man. Social outcast nodoubt.

Will I play by the rules again.........

Will I say fcuk it.........

Will I, Still be proud of this country that my forefathers have made.

Will I be ready for tomorrow?

Have I just named the new king, WV?

I have a NR mortgage, I don't believe I'm in the sh1te, if they go bust another company will buy their 'Mortgage book' and I just end up with my mortgage with another company no?
As for all the money the Gubment put in being 'lost' how is this possible?
NR cant be worth less than the value of the properties it holds mortgages on surely?
Am I missing some thing? or is my well developed habit of not panicking blinding me to something?
I'm also tired of some of these Radio types insinuating that people who'd got mortgages with NR were doing it because they were a bad risk and could not get one elsewhere. What a load of sphericals! I had one with them because it was the best offer at the time, Its the 3rd Mortgage I've had so far, but my 1st with NR.

If they suddenly decided they wanted their money back, I just re-mortgage with someone else!
Sorry if I'm missing something, but I just can't see any cause to run around screaming just yet.

The government dare not allow Northern Rock to go bust.
Gorden Browns 'Rep' is based on his 'Public' performance as Chancellor.
I considered Brown to have been a 'Lucky Man' in that he was in charge during a World wide Era of low inflation and apart from, 9/11 Enron, a stable world economy.
Bush's Mid East war has driven oil prices silly, the world is/was set for a massive rise in inflation. Now Major Banks are doing everything to avoid this return to High Inflation.
I can't remember anyone saying that these 'Cheap Loans' to the US 'Poor' would eventually unwind and cause a world wide Credit Crunch.
Still that has happened and the 'Managers' of NR, who used a 'Novel' method of raising funds have left their company in troubled waters.
Brown has too much political capital tied up and will never permit Northern Rock to go to the Wall.
john

Look at all the info around you, there will be a recession. we've been in it about 3 months now.

I do not know just what the "Legal' definition of a recession is but UK has suffered a downturn and I do beleive it will continue for some time.
Brown failed to use the 'Good' Times to bulster the UK tresury and following his first coupleof years as Chancellor he reverted to normal Labour policy of Spend Spend Spend.
Recruitment of Labour sympathizers via the Guardian to Non Jobs, exspansion of the civil service, NGO's anything that does not generate Money for the Exchequre.

john

Originally Posted by Von1Papen

Is Brown like King james in the 1600s? good in scotland but as soon as he comes to power in england hes a sack of shiite? does that mean hes a raging nonce too :o

Maybe.... :D

However, as much as James I wrote complete tosh about the "Divine Right" of Kings he had the sense to keep the cash cow that was England out of European adventures. Unlike every single country in Europe Great Britain did not enjoy the attentions of unpaid mass armies roaming freely. Unlike his complete f**kwit of a second son.........

Originally Posted by Goldfishfart

I have a NR mortgage, I don't believe I'm in the sh1te, if they go bust another company will buy their 'Mortgage book' and I just end up with my mortgage with another company no?
As for all the money the Gubment put in being 'lost' how is this possible?
NR cant be worth less than the value of the properties it holds mortgages on surely?
Am I missing some thing? or is my well developed habit of not panicking blinding me to something?
I'm also tired of some of these Radio types insinuating that people who'd got mortgages with NR were doing it because they were a bad risk and could not get one elsewhere. What a load of sphericals! I had one with them because it was the best offer at the time, Its the 3rd Mortgage I've had so far, but my 1st with NR.

If they suddenly decided they wanted their money back, I just re-mortgage with someone else!
Sorry if I'm missing something, but I just can't see any cause to run around screaming just yet.

Oh I don't know. NR goes tits up who do you pay your mortage too? There's, very old, grounds to go f**k off, Not My Problem.....
However...GET YOUR DEEDS BACK.

Originally Posted by jonwilly

I do not know just what the "Legal' definition of a recession is but UK has suffered a downturn and I do beleive it will continue for some time.
Brown failed to use the 'Good' Times to bulster the UK tresury and following his first coupleof years as Chancellor he reverted to normal Labour policy of Spend Spend Spend.
Recruitment of Labour sympathizers via the Guardian to Non Jobs, exspansion of the civil service, NGO's anything that does not generate Money for the Exchequre.

john

That's an easy one, Jon!

A recession is classed as a fall in Gross Domestic Product (GDP) that lasts for more than 2 quarters. The UK is not in recession at the moment, and has not been since 1992, IIRC. This was all due to the Thatcher Gov't shadowing the Deutschemark and raising interest rates time and time again in order to keep the £ at around 3DM. The plan failed in Sep 1992, we were ejected from the ERM, and things have much improved since then (caveats abound but not for the moment). GDP is measured by the Office of National Statistics (ONS) and you can find more on their website.

I agree with the sentiment of the rest of your post!

Litotes

Originally Posted by Goldfishfart

I have a NR mortgage, I don't believe I'm in the sh1te, if they go bust another company will buy their 'Mortgage book' and I just end up with my mortgage with another company no?
As for all the money the Gubment put in being 'lost' how is this possible?
NR cant be worth less than the value of the properties it holds mortgages on surely?
Am I missing some thing? or is my well developed habit of not panicking blinding me to something?
I'm also tired of some of these Radio types insinuating that people who'd got mortgages with NR were doing it because they were a bad risk and could not get one elsewhere. What a load of sphericals! I had one with them because it was the best offer at the time, Its the 3rd Mortgage I've had so far, but my 1st with NR.

If they suddenly decided they wanted their money back, I just re-mortgage with someone else!
Sorry if I'm missing something, but I just can't see any cause to run around screaming just yet.

I'll try and answer your questions, Goldfish.

1. If NR goes bust, you carry on paying your mortgage to whoever picks up the package containing your mortgage. That may be the Bank of England or, more likely, one of the Big Four banks. If they charge you too high a rate of interest, or fail to give you a good service, you can move to another lender. No problems whatever.

2. I could argue that the money so far spent by the Government on NR is completely covered by the assets, and the Government will eventually receive back all that it has ploughed in. I could but I don't believe it! I think the Government and we taxpayers will end up paying heavily to keep NR afloat.

3. You still own the property - not NR - and certainly not the Bank of England. You approached NR for the money to buy the property (say £95k for a £100k house - keep it simple...). You agreed to pay a £1000 fee and then 10% pa on that mortgage of £95k. NR went into the short term money market and borrowed £95k at 9%. It tucked away the £1k fee you paid, gave your solicitor the £95k (which goes to the seller), and set up a direct debit for you to hand over one twelfth of £9500 (let's say £800/month) for the next 25 years. As it is an interest only mortgage, you should have also taken out a life assurance policy (offered by NR on really good terms, no doubt) that will pay off the same mortgage in 25 year's time.... yes! The considerable upfront fees go straight through to NR's bottom line!

Are you with me so far?

You are now a Class 1 debtor (you haven't yet missd any repayments) so NR can now sell the promise that you will continue paying £800/month for 25 years to someone else for say, £100k. That £100k pays off the £95k borrowed from the short term money market when it falls due, and the £5k left over goes straight to the bottom line.

NR has now made £6k from you, with more to come, and you have only paid £1000 upfront and made one £800 monthly payment. NR no longer holds the mortgage but handles your queries and your payments.

All is now well until you miss your second monthly payment. It now turns out that you are a NINJA - no income, no job or assets (other than the house). It will take time to pursue you through the courts, during which time, NR is paying for legal expertise but isn't receiving any of your money - but they aren't passing on any money to the holder of your mortgage (who wants the £800/mth that NR promised that you would make... And during the time that it takes for your case to wend its way through the courts, your house and only asset, is falling in value. Suddenly, it is the company expecting the income (your £800/mth) which is in trouble. (Not NR - and I will return to them).

The holding company now finds that it has £100k tied up in a loan that should be producing £800/mth but isn't. It tries to sell the loan but everyone takes one look at it and backs away; your missed repayments are a warning sign. The value of the loan plummets. How far? That's guesswork, which is where the global economy is at the moment.

Back to NR, which although profitable last month, has suddenly come unstuck because their business model depended on lots of people and companies lending money to them, either over the counter, or via the money markets, time and time again. The money coming in dried up, so they couldn't lend on mortgages and, more importantly, they couldn't borrow enough to repay the short term loans that were falling due...now, next week and next month. Disaster in a matter of weeks and long queues as people sought to retrieve their savings - which just made matters worse. The Bank of England then stepped in as "the lender of last resort".

Reportedly, NR has given the BoE the quality loans that it still holds; so, the BoE is receiving the money paid in by your mate (who is still a Class 1 debtor and whose loan is still worth £100k). However, sooner or later, NR will run out of good quality loans....

In the meantime, NR has cost the BoE some £30bn; and that is real money. The BoE has funded that from the tax paid by you and me and has had to borrow some of that money from the market - which, in itself, has pushed up interest rates - and made it less easy for companies to borrow the money that they need to finance things like holding stock for Christmas! Hence the sales!

Did that make sense?

I need a beer!

Litotes

cheers....i bought a 'few' shares in NRK mid-crash, sold them 2 weeks ago at around +46%....

...needless to say the family goon had a spanking xmas......cheers Gord!

Goon's top tip for 2008....get into metal, best through ETFs, you've prob missed the boat with Gold (will def hit $900 this yr), but Silver can still be gotten at <$15 per tr/oz