Alistair and Northern Rock

While I think that the chancellor Alistair Darling is still potentially in serious trouble over Northern Rock (ignoring the lost computer discs with their 25 million names for the moment) I think that unless the housing market goes completely belly up (and if so, God help all of us) he should be okay. I have only met him once, about 20 years ago in Edinburgh, when he was my local MP and a completely revolting manager was trying to sack me (story of my life - I was a T&G steward at the time).

Surprise, surprise for a successful Scottish Labour MP, he was in my experience, as tough as old boots, while being committed and focused. A cross between the Morningside advocate that he is and a Leith docker. No wonder he has done so well.

Tom P has posted some really sensible stuff about Northern Rock on this blog in response to a rather silly Tory city boy who has been making daft comments on various stuff in recent weeks (which he is perfectly entitled to do so).

So before we fall into the trap that the media and the Tories want us all to fall into over the Northern Rock debacle lets remember for a minute who is really to “blame” (if this is the right word to use in a capitalist society)

Tom P (edited by me) comment

“Personally and somewhat controversially I think the run on Northern Rock was the fault of.... wait for it.... the directors. They developed a strategy that was always going to fail in the credit markets seized up. I don't see what anyone - the Govt, the BoE - could have done to end this one any differently.

In all the commentary I have read about Northern Rock no-one seems to have come up with a good alternative strategy. There are suggestions about timing - the BoE could have stepped in earlier, Darling could have offered the guarantee earlier - but notably both these would have involved MORE state intervention....

Equally should Darling simply have not stepped in - and let thousands of savers lose their money?......

It's clearly not just Northern Rock. Major Wall Street players like Citi and Merrills have got billions in bad debt on their books now. I read somewhere the other day that for financial institutions as a whole it might hit 1 trillion USD.

And you reckon the Govt is incompetent.

Of course in the case of Citi and Merrill’s it's the usual case of rewards for failure. Despite the spectacular losses, the CEOs of both are going with huge pay-offs. Chuck Prince gets only about $95m, but Stan O’Neal should get about $150m.

It wouldn’t be so bad but it was only a few years ago that the geniuses in the City last showed their competence - p***ing pension funds' money away on TMT garbage, or cheering on Marconi as it destroyed itself”.

Well said Tom. come on Alistair - sort out these city rejects and make sure they pay their fair wack in taxes for their failure.