February 18, 2008

Ending one of the classic government clusterf*cks of all time, the boobs running the UK are humiliated, nationalize failed bank Northern Rock

No matter how they try to spin this one, Gordon Brown and the keystone cops running the UK just f*cked up big-time.

I hope this serves as a lesson to the US, UK and all other countries about to experience bank failures:


Because their government panicked, the UK taxpayers now own a bottomless pit in Northern Rock, already out over $100 billion in loans that likely won't get paid back. The Labor Party says all is fine, but it's not. Loans backed by falling real estate are turds and will become even bigger turds. Just ask the FHLB in a few months in the US.

The Northern Rock bank is to be nationalised, according to reports.

The taxpayer has leant the bank around £55bn in recent months since it first ran into trouble last year.


Anonymous said...

Neo- conservatism / liberalism/ capitalism at its finest. Funny how in much maligned socialist Venezuela they nationalize the profitable oil industry and spend the earnings feeding the poor and running free health clinics.

Here in the wonderful capitalist west we take money from the middle class and give it to war profiteers and scam corporations, then socialize all of their risk by continuously bailing them out. A sad situation all around.

Anonymous said...

Just wait for Fannie's and Freddie's turns. My guess: after the U.S. election, probably next year.

Anonymous said...

"Suzanne researched this!"
-Century 21 television commercial, 2006

"Our financial adviser Goldman Sachs has concluded"
-Alistair Maclean Darling, British Chancellor of the Exchequer, 2008

Anonymous said...

Where are now those pug-nosed people of the IMF and the World Bank? They used to hover for decades over poor countries' governments yelling at them and telling them "get your dirty hands off of the economy and let market forces play their way through." I don't see them anymore. They seem to have gone into hiding under their rocks, leaving Bush and Brown doing away with people's money to salvage their corporate benefactors.
Remember, it was nationalization that got Iran's PM Mosaddaq killed, and it was nationalization that got Egypt's Nasser into trouble with the West, and the same thing seems to be happening to Venezuela's Chavez. But, curiously, nothing is being done to stop Bush and Brown.
It's worth mentioning also that Chavez, Nasser and Mosaddaq were at least trying to recover their national assets from foreign dominance, whereas Bush and Brown are embezzling money from law-abiding taxpayers to fill the pockets of their corporate handlers.

Malcolm said...

And the US markets, being closed today, have 24 hours to stew over it.

Same thing happened when Europe tanked because of Evel Kerveil and his multi-billion dollar gamble.

It reminds me of how whenever there is a big news story, the White House sneaks out some signing statement or another where people won’t notice.

Paul E. Math said...

Bleak is right. And this fits in with the government as 'borrower of last resort'.

I fear the federal government in the US will get further into debt by bailing out these failed enterprises. They are likely to start by bailing out the GSEs, to acclimate people with the notion of government bailout, then they will bailout the failing banks.

Mark in San Diego said...

Don't worry - be happy, the government will bail us all out. . . ."WHAT . . .my box of Special K is $35!!!?

Anonymous said...

Lol. 'Free Markets'.
Profits are privatized.
Losses are dumped on the public.

That's 'capitalism'.

Anonymous said...

Let the market work, and inflation will disappear as well.

Anonymous said...

This isn't capitalism. This is what happens when two corrupt political parties have a stranglehold on the nation.

Anonymous said...

"That's 'capitalism'."

And the labour party is full of 'socialists' . :)

Anyone find it odd these RE problems are happening to socialists and crony capitalists.

Its all a big theft.

Lets see what the Torries do.

Anonymous said...

Bleak and Math argument is WRONG.

FIRST we will nationalize the bond insurance companies like MBIA and AMBAC. This will lead to the cream filled cookie Jimmy P is on about. THEN we will have the big bank collapse after Nov, and this will lead to Bank and GSE bailouts. Guys,
timing and ordering is important here.

Matt C

Anonymous said...

The main reason why the British government nationalised Northern Rock was because they initially thought the potential bidders will overpay for it thereby making the government come up smelling of roses. Unfortunately, like all politicians they did not understand that politics and profit margins are as different as the North and South pole. As such rather than eat their humble pie by taking the loss, they put it under the bed of nationalisation. However that is not the end of the story: The rats are coming.

Adam said...

We're right on track for Orwell's 1984, where politicians like Bush call themselves 'conservatives' with a straight face; citizens think referring to our system of economics as a "free market" makes it any less of a lie...

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