British government will nationalize the banks!!

[spice756]

Very intresting the British government is doing this different than the US:lol:.

Anyone from the UK here that can tell me what is going on there? It seems the UK is in debt and the economy not doing well.

How could there be a mortgage problem there too? That sounds so strange


http://www.iht.com/articles/2008/09/28/business/ukecon.php (http://www.iht.com/articles/2008/09/28/business/ukecon.php)

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LONDON (http://www.iht.com/articles/2008/09/28/business/ukecon.php#): The British government will nationalize the troubled mortgage lender Bradford & Bingley and is discussing the sale of its accounts and branches, people in the banking industry said Sunday.

The Treasury is leading talks on the rescue of the bank and said that discussions were continuing and a decision would be announced before financial markets opened Monday.

The Treasury would have preferred a private sector rescue for the large mortgage provider but the bank's rivals appear unwilling to come to the rescue amid a global credit crisis and a weakening British housing market.
The BBC reported that Bradford & Bingley would be nationalized and its mortgage business merged with Northern Rock, the lender taken under state ownership in February. This month, the government also brokered the takeover of HBOS, Britain's biggest home lender, by a rival, Lloyds TSB.

Bradford & Bingley is the latest bank to be hit by a global financial crisis, which has claimed a number of high-profile victims in the United States and Europe.



Its £24 billion, or $44 billion, of savings deposits and its 200 branches could be sold to a rival or rivals. But potential buyers are reluctant to take ownership of the company's £41 billion of residential loans - representing 3.4 percent of British mortgages - as many of them are in the higher risk category and the British market is weakening, raising the prospect of rising bad debts.

The government could nationalize Bradford & Bingley using legislation adopted to deal with the Northern Rock crisis.
A spokesman for Bradford & Bingley said, "We can confirm we are working with regulatory authorities to bring clarity to the bank's future." He said news that customers' savings were safe.

Bradford & Bingley shares tumbled to a record low on Friday and the cost of insuring its debt jumped, prompting regulators to step up efforts.
Britain's top five banks - HSBC, Royal Bank of Scotland, Barclays, Lloyds TSB and HBOS - and Santander already own about 30 percent of Bradford & Bingley among them after they stepped in to help save a rights issue in June.

Talks were also being held in Amsterdam and Brussels on the fate of another European bank, the Belgian-Dutch financial group Fortis, and one report said it might sell itself or the ABN AMRO Dutch banking business it acquired last year.

British banks are also proposing that the government help bail them out of losses from the credit crunch so they can resume lending, according to four people with knowledge of the discussions, but Prime Minister Gordon Brown suggested Friday that he would not go along.

Brown was in Washington for a meeting with President George W. Bush. He told BBC television that the best way to deal with the British crisis was to increase liquidity.

"The American plan is designed for a large number of banks and institutions across America," Brown said. "We have a smaller banking system."
The four people with knowledge of the discussions declined to be identified because the negotiations were confidential.

They said industry executives had held talks during the week about different options, including the establishment of a bank, run by the government, that would take over low-value assets including mortgage-backed securities that declined in value with the collapse of the U.S. subprime home-loan market.

"The mortgage industry is pretty much dead. The government does have to do something," George Magnus, senior economic adviser to UBS in London, told Bloomberg Television.

Brown said that the Bank of England, had made more than £100 billion available to lenders and that the government was prepared to do more to tackle instability in its financial markets.

Brown said the Bush administration's proposed $700 billion banking rescue was something "quite unique." The chancellor of the Exchequer, Alistair Darling, and the governor of the Bank of England, Mervyn King, have indicated their opposition to using taxpayer money to support bank lending.

Government officials from the Treasury, the central bank and the Financial Services Authority are talking daily with commercial banks about how to preserve the stability of the financial system. None of those authorities would give details of the discussions.

[Yehuda Stern]

Clearly, the American and British governments have decided to join the irresistible socialist movement of Chavez and Morales.

[Hit The North]

Clearly, the American and British governments have decided to join the irresistible socialist movement of Chavez and Morales.

:laugh:

[redarmyfaction38]

:laugh:
there is no socialist intent in these "nationalisations", they are supposed to be temporary, the govts intentention is to secure the banking system, it has offered guarantees up to £15,000 for individual investors but has promised £billions to secure the future of the capitalist bankers that screwed it up in the first place.
"nationalisation" is not necessarily a "socialist" solution to economic problems in a capitalist society.

[spice756]

there is no socialist intent in these "nationalisations", they are supposed to be temporary, the govts intentention is to secure the banking system, it has offered guarantees up to £15,000 for individual investors but has promised £billions to secure the future of the capitalist bankers that screwed it up in the first place.
"nationalisation" is not necessarily a "socialist" solution to economic problems in a capitalist society.


Yap alot of countries have things like banks,hydro and gas/oil ,telecommunication,roads ,trains,construction nationalize so on .Does not make it true socialism .

The funny thing is in the UK they nationalize things they are more social democrats but in US they just give money.

[Yehuda Stern]

Did people here have their humor surgically removed? I was exactly trying to say that it is ridiculous that the left labels Chavez and others socialist because they nationalize this and that.

[Herman]

Did people here have their humor surgically removed? I was exactly trying to say that it is ridiculous that the left labels Chavez and others socialist because they nationalize this and that.

It's not the same.

[Yehuda Stern]

It's not the same.

Well, that sure convinced me.

[Herman]

Well, that sure convinced me.

The same way you did when you mentioned...
Clearly, the American and British governments have decided to join the irresistible socialist movement of Chavez and Morales.

[Pia Fidelis]

I see this as a possible step in the right direction. I personally have seen the last few weeks to be quite exciting: I will have to wait this out a bit longer before I take any firm position on it though.

[spice756]

My friend was saying Britain and France the economy most people work in banks and office buildings is this true?

[ashaman1324]

I see this as a possible step in the right direction.
i agree. everywhere you look you see people pushing for socialism without even realizing it. in america theres a big push for universal health care, and most people i talk to who are for this, have no idea this is a socialist idea. when i notify them of this, they dont know how to react.:confused:

[spice756]

i agree. everywhere you look you see people pushing for socialism without even realizing it. in america theres a big push for universal health care, and most people i talk to who are for this, have no idea this is a socialist idea. when i notify them of this, they dont know how to react.:confused:

So funny:D From what I get from the media and people in American any thing that is private is not socialism :lol:and is the best moral way.No matter how rich CEO or capitalist is or how bad it is run.They still love it over state own .

They even think tax money is a socialist idea.The American people have fear of the government but not rich CEO or capitalist who exploit people and run thinks in a bad way.

Yap Americans love price over their body.Got love the rich medical insurance companies:laugh:

[ashaman1324]

So funny:D From what I get from the media and people in American any thing that is private is not socialism :lol:
that about sums it up. :(

They even think tax money is a socialist idea.The American people have fear of the government but not rich CEO or capitalist who exploit people and run thinks in a bad way.
not quite. most of us are critical of both, either for ineffiency or lack of morals.

Yap Americans love price over their body.Got love the rich medical insurance companies:laugh:
i certainly dont love them, im surea few low-income workers in the hospitals agree with me.:(

[spice756]

not quite. most of us are critical of both, either for ineffiency or lack of morals.


What I'm trying to say is they would like a rich CEO or capitalist running things in a bad way than the government.They are more critical of the government.

[spice756]

U.S. Markets Plunge Despite Hint of Rate Cut

Some thing is not right with the market


http://www.nytimes.com/2008/10/08/business/08markets.html?pagewanted=1&_r=1&em

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WASHINGTON — The promise of lower interest rates and new federal efforts to stem the financial crisis (http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/index.html?inline=nyt-classifier) failed to dispel the fear gripping Wall Street on Tuesday.


Stocks rose at the session’s opening but soon began to fall, and the selling intensified during the afternoon, even after Ben S. Bernanke (http://topics.nytimes.com/top/reference/timestopics/people/b/ben_s_bernanke/index.html?inline=nyt-per), the chairman of the Federal Reserve (http://topics.nytimes.com/top/reference/timestopics/organizations/f/federal_reserve_system/index.html?inline=nyt-org), all but pledged to cut interest rates by the end of the month. The Dow Jones industrial average plunged 508 points, or 5.1 percent, extending a slide of months that has erased a third of its value in a year. In the last five trading days alone, the Dow has lost 1,400 points.

With the flow of credit still tight, investors have fixated on the threat of a serious recession despite the increasingly urgent attempts by policy makers to buttress the markets. Deepening problems in the European banking industry have compounded fears of a worldwide downturn.

“The Fed is just plugging holes in the dam and the water keeps rushing over,” said Michael T. Darda, chief economist at the research firm MKM Partners.

In a somber speech, Mr. Bernanke acknowledged that the financial turmoil of the last several weeks had forced the Fed to downgrade its already gloomy economic forecast for the remainder of this year and reconsider holding its benchmark rate steady.

“Over all, the combination of the incoming data and recent financial developments suggests that the outlook for economic growth has worsened and that the downside risks to growth have increased,” Mr. Bernanke told members of the National Association for Business Economics.

“In light of these developments, the Federal Reserve will need to consider whether the current stance of policy remains appropriate,” he added — his strongest indication to date that the Fed will cut rates.

Fed policy makers are scheduled to meet on Oct. 28 and 29, and investors had already been betting that the central bank would reduce the overnight federal funds rate by as much as one-half of a percent, to 1.5 percent. But many analysts predict the Fed may act before the next meeting, given the sprawling nature of the credit crisis.

In its latest tactic, the Fed announced on Tuesday morning a new program to buy up parts of the short-term financing market to unlock the flow of credit to businesses. The program, which is expected to begin soon, was the latest and potentially biggest in a series of unprecedented efforts by the Fed to combat the worst turmoil that financial markets in the United States have endured since the Great Depression (http://topics.nytimes.com/top/reference/timestopics/subjects/g/great_depression_1930s/index.html?inline=nyt-classifier).

“These are momentous steps,” Mr. Bernanke said, “but they are being taken to address a problem of historic dimensions.”

Only a few weeks ago, the Fed’s official posture was that the risk of rising inflation was almost as big a concern as the risk of slowing growth and rising unemployment.

But on Tuesday, Mr. Bernanke said the outlook for inflation had “improved somewhat” and made it clear that worries about a recession had now trumped worries about rising prices.

While he noted that energy and commodity prices, a significant burden on American consumers, had declined from their recent peaks, he painted a bleak picture of an economy stalling on multiple fronts. The housing collapse has yet to abate, and the slowdown has now spread to other parts of the economy. Unemployment has been rising, household purchasing power has been eroded by inflation and consumer spending, adjusted for inflation, has been falling since May.

Mr. Bernanke made it clear that the latest round of market turmoil would depress growth for the rest of the year. He said he hoped for a gradual recovery in 2009.

President Bush, trying to sound a note of reassurance, said on Tuesday that the $700 billion financial rescue passed by Congress last week was “bold and necessary” and would eventually work to ease the credit crunch. But he warned that the plan would “take time.”

“We’ll work through this,” Mr. Bush said. “We’re taking aggressive steps. And it’s not an easy problem, no question about it. But I am — I am confident in the long term for this country. I’m confident that the steps we’ve taken are bold and necessary.”

Earlier in the day, Mr. Bush spoke by phone with European leaders, including Chancellor Angela Merkel (http://topics.nytimes.com/top/reference/timestopics/people/m/angela_merkel/index.html?inline=nyt-per) of Germany and President Nicolas Sarkozy (http://topics.nytimes.com/top/reference/timestopics/people/s/nicolas_sarkozy/index.html?inline=nyt-per) of France, who has proposed an emergency meeting of the so-called Group of 8 (http://topics.nytimes.com/top/reference/timestopics/organizations/g/group_of_eight/index.html?inline=nyt-org) leaders of industrialized nations. The White House said Mr. Bush was open to Mr. Sarkozy’s idea.

But the question for Wall Street is why none of these extraordinary, precedent-shattering efforts have stanched the selling that has infected the market for five straight days.

“You are getting all the things that you would think the equity markets would respond very favorably to,” said Steve Sachs, director of trading at Rydex Investments. “But at this point it just doesn’t seem to be doing it. It’s the attitude of ‘sell’ — regardless of what the news is.”

Although investors fled stocks, there were signs on Tuesday that the Fed’s latest plan did have a positive impact on the troubles in the credit market. The cost to borrow commercial paper (http://topics.nytimes.com/top/reference/timestopics/subjects/c/commercial_paper/index.html?inline=nyt-classifier) overnight fell significantly, and yields on Treasury bills rose, a sign that investors were more willing to leave the safe haven of government notes.

But the Dow, which had lumbered downward from early in the session, accelerated its losses in the final hour and ended down 508.39 points, breaking below the 9,500 mark to close at 9,447.11. The broader Standard & Poor’s 500-stock index fell by 5.7 percent, ending below 1,000 for the first time in five years.

The benchmark 10-year Treasury bill fell 14/32, to 104 3/32, and the yield, which moves in the opposite direction from the price, rose to 3.50 percent, up from 3.45 percent late Monday.

Shares of banks and financial firms shouldered the biggest losses by far, with Bank of America (http://topics.nytimes.com/top/news/business/companies/bank_of_america_corporation/index.html?inline=nyt-org), Merrill Lynch (http://topics.nytimes.com/top/news/business/companies/merrill_lynch_and_company/index.html?inline=nyt-org) and Morgan Stanley (http://topics.nytimes.com/top/news/business/companies/morgan_stanley/index.html?inline=nyt-org) all losing about 25 percent.

Fears about the health of the banking industry were stoked by a disappointing earnings report from Bank of America, which had been perceived as one of the few winners in the current crisis. The bank cut its dividend on Monday and said profits fell sharply.

Late in the afternoon, rumors flew across trading desks that a financing deal between Morgan Stanley and a Japanese bank had fallen through. Shares of Morgan fell more than 30 percent before officials at the bank reassured investors that the deal was, in fact, still on track.

In a sign of how the credit crisis is affecting ordinary Americans, the amount of credit provided to consumers in August dropped for the first time since 1998. Consumer credit declined by $7.9 billion, the biggest monthly drop in more than half a century, according to the Fed.
“Nobody trusts anybody right now,” said Ryan Detrick, an analyst at Schaeffer’s Investment Research.

Others said the market could start to recover when credit starts to flow again. But as long as businesses are forced to scramble for cash — and even states like California and Massachusetts have approached the federal government for billions in loans — the economy will only worsen. That brings the prospect of a deep recession.

“There’s a realization that this problem is much bigger than anyone had thought,” said T. J. Marta, a strategist at Royal Bank of Canada (http://topics.nytimes.com/top/news/business/companies/royal-bank-of-canada/index.html?inline=nyt-org). “There’s a fear that the Fed can’t get its arms around it.”

Asian stock markets were moving sharply lower in early trading on Wednesday in response to Wall Street’s losses. The Nikkei 225 index fell in Tokyo soon after the opening of trading, after the Bank of Japan added nearly $15 billion to the financial system.

The Standard and Poor’s/Australian Stock Exchange 200 Index dropped 4.3 percent in early trading on Wednesday morning, more than erasing a gain of 1.7 percent on Tuesday, when Australia’s central bank unexpectedly cut interest rates by a full percentage point.

James Chirnside, who manages $65 million at Asia Pacific Asset Management in Sydney, said that investors feared corporate profits would fall and many companies would fail if banks did not resume lending soon. He recommended a coordinated round of interest rate cuts by central banks to unfreeze interbank lending markets.

“Without that sort of global coordination, we’ll still be hostage to these violent moves in the market,” Mr. Chirnside said.

Following are the results of Tuesday’s Treasury auction of 79-day cash management bills and 4-week bills:

[peaccenicked]

This is not nationalization , it is simply fraud (http://inthesenewtimes.com/2008/10/08/massive-bailout-for-british-banks-fraudulently-presented-as-nationalisation/). The banks are passing on bad debt to taxpayers. We are the mugs, that the financiers have sought to bailout from their flights of fantasy in "creative accountancy". Hedge funds have basically conned the banks into taking valueless stock and now the banks want to sell it to the public.
I have came across little opposition as yet, but here is a link to John McConnell MP's immediate reaction (http://inthesenewtimes.com/2008/10/08/immediate-reaction-to-government-bans-bail-out-proposals-john-mcdonnell-mp/).

[Hit The North]

My friend was saying Britain and France the economy most people work in banks and office buildings is this true?

In the case of Britain in 2004, just under 20% of the total working population was employed in financial and business services. This compares with just under 25% in public administration, health and education services and a mere 12% in all sectors of manufacturing.

Source: International Socialist Journal Issue 106
http://www.isj.org.uk/index.php4?id=92&issue=106

[Hit The North]

This is not nationalization , it is simply fraud (http://inthesenewtimes.com/2008/10/08/massive-bailout-for-british-banks-fraudulently-presented-as-nationalisation/). The banks are passing on bad debt to taxpayers. We are the mugs, that the financiers have sought to bailout from their flights of fantasy in "creative accountancy". Hedge funds have basically conned the banks into taking valueless stock and now the banks want to sell it to the public.
I have came across little opposition as yet, but here is a link to John McConnell MP's immediate reaction (http://inthesenewtimes.com/2008/10/08/immediate-reaction-to-government-bans-bail-out-proposals-john-mcdonnell-mp/).

Spot on.