Here's something you don't see every day

[Pliablemoose]

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A chart of Northern Rock's stock price (>50% hit) Text

Customers have pulled >4 billion $ out of their accounts since Friday

I've only seen black & white pics from the 30's about runs on banks

 

[intogamer]

 

[dbk]

http://news.bbc.co.uk/2/hi/business/6997765.stm

Northern Rock besieged by savers

Worried savers have continued to flock to Northern Rock bank branches to withdraw their savings, following similar scenes over the weekend.

Bank boss Adam Applegarth said people could withdraw money and that it was "business as usual", while Chancellor Alistair Darling appealed for calm.

About £2bn has been withdrawn since Thursday, when the bank applied to the Bank of England for emergency funds.

Just after midday on Monday shares in Northern Rock were down by 39%.

 

[intogamer]

Ouch.

 

[dug777]

Not overly bright, either of the patrons, or the bank in handling the online problems.

As has been pointed out, the bank is fundamentally fine...

 

[kranky]

Well, the UK equivalent of FDIC insurance protects depositors up to the equivalent of about $63,000. Anyone with more money in the bank than that is probably quite concerned.

 

[Pliablemoose]

Originally posted by: kranky
Well, the UK equivalent of FDIC insurance protects depositors up to the equivalent of about $63,000. Anyone with more money in the bank than that is probably quite concerned.

In one incident, police were called to the branch in Cheltenham, Gloucestershire when two joint accountholders barricaded the bank manager in her office after she refused to let them withdraw £1 million from their account. Their money was held in an internet only account, which became inaccessible after the Northern Rock website crashed due to the volume of customers trying to log on

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[dug777]

Originally posted by: kranky
Well, the UK equivalent of FDIC insurance protects depositors up to the equivalent of about $63,000. Anyone with more money in the bank than that is probably quite concerned.

The bank is solvent, so nobody's money is actually at risk.

 

[intogamer]

Originally posted by: Pliablemoose

Originally posted by: kranky
Well, the UK equivalent of FDIC insurance protects depositors up to the equivalent of about $63,000. Anyone with more money in the bank than that is probably quite concerned.

In one incident, police were called to the branch in Cheltenham, Gloucestershire when two joint accountholders barricaded the bank manager in her office after she refused to let them withdraw £1 million from their account. Their money was held in an internet only account, which became inaccessible after the Northern Rock website crashed due to the volume of customers trying to log on

Text

That is retarded. They will probably get robbed, just like people who bought iPhones at launch. Hopefully England isn't a bad of a place, that America can be.

 

[Pliablemoose]

Originally posted by: dug777

Originally posted by: kranky
Well, the UK equivalent of FDIC insurance protects depositors up to the equivalent of about $63,000. Anyone with more money in the bank than that is probably quite concerned.

The bank is solvent, so nobody's money is actually at risk.

Quiet, you damn Aussie, I'm shorting the market & playing this for all it's worth

 

[Mark R]

Originally posted by: dug777

Originally posted by: kranky
Well, the UK equivalent of FDIC insurance protects depositors up to the equivalent of about $63,000. Anyone with more money in the bank than that is probably quite concerned.

The bank is solvent, so nobody's money is actually at risk.

It's solvent in so far as its assets are currently valued more than its liabilities.

The problem is that its assets are 'toxic waste' mortgages and other sub-prime loans (e.g. 125% mortgages, or no-documentation loans). As NR has found in the last few days, the assets they'd normally be selling are, in fact, worthless because no one will buy them.

A significant change in sentiment in the housing market, or falling housing prices, would decimate the value of their assets.

 

[Mark R]

Now, here's an interesting update:

BBC radio and TV news are reporting that Northern Rock have suspended wire and online money transfers. NR are now recommending that transfers only be made by cheque.

 

[kranky]

Sounds like they are trying to put the brakes on until public confidence recovers.

 

[Pliablemoose]

Wonder who's next?

 

[dullard]

In case you don't go into P&N, there is a 3 day old thread on this subject. I don't think we have seen the last of this type of thing. I suspect there will be more bank runs in the future as people irrationally fear news and make the problems far more severe.

 

[maddogchen]

interesting how its US mortgage problems that are causing this.

 

[dullard]

Originally posted by: maddogchen
interesting how its US mortgage problems that are causing this.

It is an international problem. It is not at all limited to the US.

 

[ViviTheMage]

man, if I was a mugger over there I know where I would mug people...

 

[BoberFett]

It was that damn kid and his tuppence. Feed the birds? Bah.

 

[Pliablemoose]

Originally posted by: dullard
In case you don't go into P&N, there is a 3 day old thread on this subject. I don't think we have seen the last of this type of thing. I suspect there will be more bank runs in the future as people irrationally fear news and make the problems far more severe.

Yep, I posted here because it's sort of a pop culture moment. And a lot of OT folks have never seen or really thought about a bank run.

I agree that we'll see more of this, the financial sector's problems are being dismissed entirely too quickly, although I don't think a single NR customer will lose a penny, it reflects public sentiment in a mega message rather than a few numbers.

Frankly, I'm concerned that the Fed's actions tomorrow will make things worse. You don't cure a heroin addict by giving them more heroin. Unfortunately so close to the election I'm sure there is political pressure on the voting members of the fed to cut the prime rate.

 

[alkemyst]

There have been a few runs on banks that have been linked heavily to the mortgage market. Nothing this drastic though.

 

[Mark R]

The government has just announced a very unusal move. It has now announced it will be giving a government guarantee for every penny in every account.

The cynics will, I'm sure, take this as an admission that the bank was insolvent and that it is being bailed out for political reasons - even though that is probably not true.

What is interesting is that the financial regulator, the financial services association has announced investigations into 3 other banks, to reassess whether they are solvent or not.

 

[Pliablemoose]

Originally posted by: Mark R
The government has just announced a very unusal move. It has now announced it will be giving a government guarantee for every penny in every account.

The cynics will, I'm sure, take this as an admission that the bank was insolvent and that it is being bailed out for political reasons - even though that is probably not true.

What is interesting is that the financial regulator, the financial services association has announced investigations into 3 other banks, to reassess whether they are solvent or not.

It's fairly cheap to print money

Trade-Weighted value of the dollar

 

[FoBoT]

so this event is or is not directly linked to bad mortgages in the UK?


i think i need to get that shotgun and pallet of SPAM , ASAP

 

[Slew Foot]

Originally posted by: Pliablemoose

Frankly, I'm concerned that the Fed's actions tomorrow will make things worse. You don't cure a heroin addict by giving them more heroin. Unfortunately so close to the election I'm sure there is political pressure on the voting members of the fed to cut the prime rate.

Yup, a rate cut tomrrow may give some temporary salvation to a few idiots who took borrowed more than they could afford and some big banks, the the entire country will be paying for it with more inflation.

Though AG's interview on 60 min yesterday, he made some vague references to inflation being the main concern for the Fed and made some references to Volkner saving the dollar while being villified for high interest rates. Is BB trying to talk through AG before making his next move?