September 14, 2007

SPECIAL FLASH FROM THE UK: THERE HAVE BEEN LINES OUTSIDE NORTHERN ROCK BANKS ALL OVER THE COUNTRY, RUN ON BANKS IS AMAZING TO SEE IN PERSON

Never in my life did I think I'd witness a real run on the banks. But that's exactly what's happening here in England today and is still going on tonight. PANIC is in the air, the BBC is running non-stop coverage, the papers are ablaze, and it's like a virus has just gotten loose.

There are still people queuing outside of Northern Rock locations all around the country right now. The media is reporting that branches will stay open as long as queues are still forming. Panic is everywhere, all the papers leading headlines were about the panic, creating more panic, and a classic bank run is underway.

In England, savers are only protected for 100% of the first £2000 and 90% of the next £33000 - and that's it, after that, if an English bank fails, the saver loses EVERYTHING. Thus the queues and panic. And calls by people on TV right now to "remain calm" and "don't be irrational".

A Special HousingPANIC message to Northern Rock savers: Get your money out of there tonight if you still can. And for UK homedebtors - your housing Ponzi Scheme is over. The UK housing and credit bubble have burst. Get out now, get out fast, and thank us later.


Northern Rock customers queue for cash as crisis hits high street

The credit crisis spilled onto Britain's high streets today as worried Northern Rock customers queued up to withdraw their savings.

Their fears were prompted by the revelation this morning that Britain's fifth-biggest mortgage lender had to ask the Bank of England for emergency financial assistance.

65 comments:

Anonymous said...

WOW.

keith said...

The stupidity of people amazes me. In this article is a couple that have a million in Northern Rock savings account, totally unprotected and they could've lost everything.

Why do people make such bad decisions?

Tony Looch, a 65-year-old with savings of £135,000, queuing outside the bank's Moorgate branch in the heart of the Square Mile, said: "I'm prepared to wait as long as it takes. I'm taking the lot out, if they'll let me have it."

Others were less calm, however, with reports of fights in one queue and even a confrontation with staff where police had to intervene.

Officers were called to the Cheltenham branch after former hotelier Christopher Howard, 64, and wife Fiona, 48, refused to leave the bank until staff transferred their £1m savings, held in an online Northern Rock account.

A spokesman for the mortgage lender, which had £24 billion of savers' deposits at the start of this week, said they had anticipated a run on the bank when they approached the Bank of England.

http://tinyurl.com/2jjj5u

westwest888 said...

Great stuff. I'm sure the bank will have no problems. I mean, only 2% of customers are going to withdraw 50% of the banks deposits. Whatever.

Anonymous said...

The next phase beginneth.

Who would have thought the greed of a stripper turned member of the REIC in Las Vegas would years later result in a run on a British bank.

I guess its just the X rated version of the "Butterfly Effect"

Mark in San Diego/Zuri said...

Who would have thought all those stupid condos in SD, Miami, and all those stucco shitboxes in Phoenix would cause a run on the British Banks. . .what's next?? A run on the German Banks??. . . .oh, that was last month. . . .sorry.

The US market is up at the moment - why?? Those idiots think there will be big rates cuts next week. . .I think 1/4 and that is it! The USA market will have a hissy fit then.

devestment said...

Worthless treasuries anyone???

How about "risk free" stocks, hedge funds, or real estate that never goes down?

Mammoth said...

Shades of things to come here in the US?

Anonymous said...

It's 1929 all over again but on a bigger scale

Anonymous said...

Do those people seriously believe the bank has that much cash on hand? That one guy wants to withdraw the equivalent of about $350,000. Right, I'm sure they just have that sitting around. They sure don't in the USA.

keith said...

Well, technically Mervyn King at the Bank of England was right when he said on Wednesday:

"Bailing out commercial banks would “sow the seeds of a future financial crisis”"

So he bailed out Northern Rock this morning and what do ya know, we got ourselves a financial crisis.

Amazing.

Dont_Trust_a_Wanker said...

Wow, Keith, this is amazing.
I was in London during the Barings Bank disaster. I never thought I would live to see another Bnak run. Back then they use to say don't trust a Wanker.

I'm grateful for the FDIC here in the US.

I wonder if that's a preview of what is to come here in the US.

William said...

The Bank of England is covering Northern Rock.

Why try to panic their depositors when they don't stand to lose a farthing?

keith said...

The Bank of England is NOT covering Northern Wreck. Savers only have those low coverage protections I mentioned in the post.

The Bank may have loaned them some today to get by, but that surely had to be against collateral.

Even the Lender of Last Resort has limits. And worldwide, we're about to find out what those are

IF YOU HAVE MORE THAN THE PROTECTED AMOUNT AT ANY ONE BANK, MOVE IT OUT TODAY. DON'T WAIT. SPREAD YOUR RISK. PROTECT YOUR ASSETS. AND GET READY.

keith said...

Have to believe the Northern Rock ATMs are out of cash tonight

long termer said...

Dear folks across the pond.
I understand its hip to be anti USA (envy will do that sometimes)
Convert all your Pounds and Euros to the good ol’ reliable greenbacks / US Dollars before its to late.
Once the war begins it may to late.

Got popcorn?

Don't_Trust_a_Wanker said...

Keith,

I think Mervin was pressured by Gordon and the others to intervene. He was the lone central Banker with cojones.
He has lost them now.

Anonymous said...

Fights are breaking out in Britain over money?
What ever happened to Civility?
Can’t we resolve issues with ‘Dialogue’?

Ha ha ha ha

Downturn said...

Here's what it may have looked like:

http://www.youtube.com/watch?v=_Er69b4HMl8

Anonymous said...

" I am going to take out the lot, every penny," said one anxious saver to Bloomberg as he queued outside the bank's West End branch in central London .

Over in the Square Mile of the City, reports the Financial Times online, a queue formed at the Northern Rock branch just 100 yards from the Bank of England's very own front door.

"The website was down and no-one was answering the phone this morning," said one of Northern Rock's anxious depositors to the FT . "When the shares fell 20% [on Friday morning] I decided to come down and take my money out."

Bereft of both cash deposits and the short-term funds it's been unable to raise in the capital markets, Northern Rock called on the Old Lady to act in its capacity of "lender of last resort". The Bank of England hasn't done this since 1973, back when the collapse of Cedar Holdings – a pioneer of second-mortgage refinancing – threatened to spark a crisis in the country's banking industry.

Northern Rock has also been a true pioneer in UK mortgages. Its sudden trauma also gives the lie – if the lie were still needed – to any claim that America 's subprime crisis has been "contained".

http://www.marketoracle.co.uk/Article2131.html

g said...

Panic in the streets of London
Panic in the streets of Birmingham
I wonder to myself
Could life ever be sane again

Anonymous said...

For banks it's all about the balance sheet. They can lend, lend, lend but they need at a minimum a couple of pounds for liquidity. Apparantly, the pounds are not enough to keep afloat.

It is time to write-off those bad loans, take the loss and start hoarding cash for the next run.

Wow! This is not good!!!!

ukhousingbubble said...

"Northern Wreck" I like it.

Banking crises, in terms of lost GDP and fiscal costs, are the worst calamity that can face an economy. If there is a sustained run on the UK banking system, it will make the upcoming and inevitable UK housing crash look like a sunday dip on Brighton beach.

Once a run gets going, it is the payments system that falls apart. It is not just a matter of people losing money, it is more a question of businesses unable to transact.

Anonymous said...

Wall St. farts and birds all over Europe drop off the telephone wires...
How's that EU thing working out to make Europe the greatest economic power on earth????

Anonymous said...

We're seeing who was swimming naked when the tide went out

http://video.ft.com/ukdailyvideo/?clipid=1359_FT0408

Anonymous said...

Anyone know what the protection (FDIC-style) is for accounts in other European countries?

Anonymous said...

This is GREAT news for American banks and the dollar - soon vast amounts of money will be flowing into accounts here because this is the only place you can get FDIC style protection.

Anonymous said...

Anyone got a list of banks and banklets in places like the Caymans which don't have a credible central bank for bailouts?
What happens there?

Anonymous said...

Like a bank has never collapsed before. Yawn. This is why FDIC exists (and the British equivalent). Banks fail sometimes. It happens. Life goes on.

Seriously dude chillout you'll have a heart attack soon.

Roccman said...

"Why do people make such bad decisions?"

Because they trust their government.

Anonymous said...

1929 is back again as history repeats itself

black hole bank said...

Oh yeah, over here we're protected by the FDIC and SIPC. They keep about 5% as reserves in case of a problem. What, they might need more than that? Too bad, so sad, Congress will have to authorize the additional funds.

So when you line up on this side of the pond just remember:

1) U.S. Banks can limit daily cash withdrawals to a sum they consider "reasonable". They have 25 days to settle for the rest, and then they can issue a check to the depositor - no cash needed.

2) Yes, your $100k per account is "protected", but it might take six months to get all of it back if lots of banks close and Congress gets involved.

3) SIPC reserves? Don't even ask. The Fed controls all the strings on this puppet. Along with the DTC they will do what they want. The big boys will be taken care of. You piss ants will get paid too, but don't hold your breath.

Anonymous said...

no wonder the Brits did not see this coming, they're driving on the wrong side of the road.

Anonymous said...

do you suppose i will break even after all the years of being f^cked holding treasuries

Anonymous said...

I actually participated in a bank run back in the early 80s. Word got out that an S&L had a big loan go bad to some Vegas or Atlantic City developer, and that the bank might be in trouble. Went to the nearest branch with my mum bright and early, 30 minutes before they opened, figuring we'd have no problem getting our money. We were surprised to find a queue of about 30 people, which grew very quickly behind us as a huge number of people had thought they'd get their money out just after they opened. Ha! The beleagured staff ran out of cash for everyone, some people took traveller's cheques, I opted to take a cashier's check and crossed my fingers. In the end nothing happened, the bank stayed in business and everyone got their money. But it was funny being the only 20-something in a queue of geezers.

RiperDurian said...

YunYun looks twenty years into the future!

“Yun says, if you buy now you’ll be better off later. ‘It looks like over the long term, twenty years from now it looks like Naples will be commanding very high price in the country,’”

Please Larry tell me will I be pretty?? will I be rich??

Anonymous said...

refused to leave the bank until staff transferred their £1m savings.
-----------------------------------

Idiots. How the heck did they manage to accumulate $2M? Lottery winnings?

Samuel Adams said...

Panic in the streets of London
Panic in the streets of Birmingham
I wonder to myself
Could life ever be sane again

By g,

HAHA. Morrisey! I wonder who else will catch that. Perfect for the story, too.

People in Amerikwa are too stupid to follow the smart example of the Brits.

Anonymous said...

Mr Smart Samuel Adams.
Here is a little education for ya.
A Pound is sixteen Ounces..
One reason I prefer the Dollar.

Anonymous said...

People in Amerikwa are too stupid to follow the smart example of the Brits.
-----------------------------

Even better, we are buying CFC stock causing it to go up today because they went 12Billion deeper into debt (at who knows what interest rate)

Anonymous said...

I have occasionally wondered why there is such a limit on how much you can electronically transfer from one bank to another via the web. Always thought it was because of security reasons (my security) but now I am not so sure. Just imagine if all the N. Rock account holders could transfer their accounts in a few key strokes!

Anonymous said...

Samuel Adams said...
'People in Amerikwa are too stupid to follow the smart example of the Brits.'

When I grow up I want to be a commoner and servant to her highness the queen.
Oh, if only I can be as bright as the Brits, if only I can appreciate the delicacy of Fish and chips.
Maybe then I would understand how people earning way less then Amerikwans pay way more for Flats (apartments in british).

sweet potato said...

Real-estate prices are much more out of line with income in Britain then in the US

And the Housing crash will be much worse in Britain then in the US.

Redshoes said...

Anon said:"Do those people seriously believe the bank has that much cash on hand? That one guy wants to withdraw the equivalent of about $350,000. Right, I'm sure they just have that sitting around. They sure don't in the USA".

So true. A bank manager for Fremont bank couldnt even tell me what their reserves were...he said " I should know what the amount is, but I don't".

I thanked him and walked out.

Anonymous said...

Once again the EuroTards get fawked by J6P. USA USA USA

LauraV said...

Like a bank has never collapsed before. Yawn. This is why FDIC exists (and the British equivalent). Banks fail sometimes. It happens. Life goes on.

Seriously dude chillout you'll have a heart attack soon.

------

Banks fail sometimes? Get a grip. The last time we had bank failure was when the S&L's defaulted which threw us into a recession.

This time will be much worse.

borkafatty said...

Those are not lines those are Que's...

nuff said

Anonymous said...

Financial panics make me hot!

sk said...

==============================
re: Anon
Idiots. How the heck did they manage to accumulate $2M? Lottery winnings?

September 14, 2007 10:58 PM
==============================

Its called savings - a concept people in the USA and now in the UK too are unclear on.

He was 64 after all so 40 years of savings can easily deliver $2M - and his dollybird is 48 so one assumes hasn't been spending his thrift.


-K

Anonymous said...

there's got to be a truckload of current or one-time Smiths fans that would have caught those lyrics...

Anonymous said...

all mine money is out of bank today and soon
hope they stil havit

Anonymous said...

It would be funny to rob all of those blokes right after they cash out!!!

Anonymous said...

GOT GOLD??

Anonymous said...

F the FDIC! They can cancel that if they want to !

Anonymous said...

I am safe, with my vault of forever postage stamps.

At least the Brits have decent beer to console themselves after a long day in the bank que. Shades of Buenos Aires from a few years back, excpet the Londoners do not dance nearly as well.

Anonymous said...

Across the country a run on Britain's fifth largest lender after the Bank of England offers Northern Rock unlimited support.

It certainly looks like a bank run - the scenes in London today fulfilled the dictionary definition.

And heading north to Nottingham, and Middlesbrough, the same extraordinary scenes. savers forming long queues to drain their life savings from Northern Rock.

Banking -- an industry built on credibility, confidence and trust. But the Rock looks wrecked even in its home town of Newcastle.

Deposit guarantees should prevent this. But even after an extraordinary unlimited lending facility granted by the Bank of England and agreed by the Chancellor, customers preferred the sight of real cash.

http://www.channel4.com/news/articles/business_money/the+northern+rock+bank+run/802462

Anonymous said...

Its called savings - a concept people in the USA and now in the UK too are unclear on.

He was 64 after all so 40 years of savings can easily deliver $2M - and his dollybird is 48 so one assumes hasn't been spending his thrift.
----------------------------------

I will be a little clearer. how did a person who is so dumb as to have $2million in an account insured for only $66,0000 manage to earn enough over their lifetime to save $2Million?

Anonymous said...

I am safe, with my vault of forever postage stamps.
--------------------------------

don't get the ones that you have lick to stick. The government coats them with mind controlling drugs. If you do, don't lick them!

Anonymous said...

all your pound are belong to us!

Anonymous said...

Thousands close Northern Rock accounts

Brown's plea for calm as panic takes grip Bank of England steps to help crisis firm

Thousands of worried customers queued up for hours to pull their cash out of crisis-hit Northern Rock yesterday.

Branches across the country were packed as panicking account holders tried to get hold of savings after the firm was bailed out with an emergency loan by the Bank of England.

Gordon Brown pleaded with customers not to panic amid fears of a collapse in the banking system and Northern Rock insisted it was solvent, despite struggling to raise cash to finance lending.

But account holders, many of them pensioners, still demanded their money - and the bank's shares plunged 210p to 438p, with rumours of a takeover on the horizon.

Advertisement
The firm has left itself overexposed because it does not have a large savings base to offset its loans. That and its plummeting share price make it a target for predatory, larger buyers.

At one branch in Newcastle, where Northern Rock is based, customers burst out laughing when a staff member asked: "Does anyone want to pay money in?"

One customer, who did not wished to be named, said: "I'm taking out my savings, I'm worried."

Another said: "I want to spend my cash before someone else does." In London, customer Ann Henman said the bank was in trouble because it handed out loans "like confetti".

The 74-year-old retired Lloyds bank worker, from Wanstead, added: "They are lending too much, that's the trouble. They should have used more precautions."

Former actress Christina Barrett, of Putney, rushed to the same Central London branch with her husband Michael. She said: "We are pensioners and this is all the money we have in the world. If it goes, we won't survive."

Michael added: "Perhaps we should just stick it under the bed."

Alpha_Bear said...

Long Termer said:

"Dear folks across the pond.
I understand its hip to be anti USA (envy will do that sometimes)
Convert all your Pounds and Euros to the good ol’ reliable greenbacks / US Dollars before its to late.
Once the war begins it may to late.

Got popcorn?"


Are you for real?

You better have popcorn, because it holds more value than the US Dollar.

The Dollar is dead.

Anonymous said...

I foresee lockboxes and burgalaries as growth industries.

Anonymous said...

Anon said:
‘You better have popcorn, because it holds more value than the US Dollar.
The Dollar is dead.’
FYI === European currencies are deader!

Alpha_Bear said...

The Dollar is dead.

"FYI === European currencies are deader!"

What makes you say that?

The US is the largest debtor nation on the planet.

Anonymous said...

Alpha Bear, here is a brief explanation.
What’s behind the Dollar is something a lot bigger then tangible gold.
It is the drive and hunger of the American citizens to make the best of life and to be successful in every way not only financially.
And I’m sure people in Europe have the same desires.
But there is a major distinction between America and Europe.
Europeans have a deep almost at cellular level blind spot, which causes a fake social hierarchy, and is a major obstacle to true growth.
In Europe one thinks of him or herself special just by being born to a particular nationality.
In America on the other hand you are mostly measured by what you produce / deliver.
America is a place were everyone is King or can be King if they put effort into it.
No one is arguing that America is perfect but,
there will be soup queues before soup lines.

On the path to success individuals and Countries experience setbacks, for a short blip in history the currency that represents ‘individual struggle to evolve’ may appear shaky but it will ultimately succeed.

Had the Europeans united as an EU to create a better life for its inhabitants it may have worked, but the EU was created for only one reason = ‘To create a counter balance to the US’
In other words, had it not been for this annoying Hollywood across the Atlantic, constantly reminding the royalty that they’re no better then an illegal Mexican on the streets of LA.
European elites would have been very content to remain in their ivory towers claiming that they and their wines and their unique currencies are special, because hmmmm.


Nuff said.

FYI === European currencies are deader!

Alpha_Bear said...

Anonymous:

What matters is the way the Dollar and Euro (and other currencies like the Yuan or Ruble) are perceived by others. You obviously perceive that the Dollar is a better store of value than the Euro.

Holders of US Treasury debt outside the US might not agree with you. Their opinion matters.

Empires collapse. The American empire is dead, the dollar is dead.