Comments on: The Bear and the Rock - 2 different styles of rescue http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/ Member of Parliament for Wokingham Sat, 17 May 2008 03:59:28 +0000 http://wordpress.org/?v=2.5.1 By: number 6 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18322 number 6 Wed, 19 Mar 2008 12:08:37 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18322 Well, at least there should be another 2,000 more people against the EU now. Doubt it though, as the mainstream media (particularly the BBC) will never let on to the real axe behind the job losses. Well, at least there should be another 2,000 more people against the EU now. Doubt it though, as the mainstream media (particularly the BBC) will never let on to the real axe behind the job losses.

]]> By: Neil Craig http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18285 Neil Craig Tue, 18 Mar 2008 13:22:30 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18285 Steven the problem with your solution would be the same as closing down the national grid to ensure all electricity is made locally. Being able to draw on other reserves provides a cushion - except when the rules aren't equitable. European Socialist the answer is no. To Britain & British MPs the governance of Britain should be of more importance than that of China. A midway point applies to killings in Kosovo which are also, under, our occupation agreement, our responsibility. You will note that the death of 10 Tibetan protestors has received infinitely more coverage than the killing of 210 unarmed civilians at Dragodan, close to the site of the British HQ in Kosovo so perhaps you should not be quite so sure of the moral high ground. Steven the problem with your solution would be the same as closing down the national grid to ensure all electricity is made locally. Being able to draw on other reserves provides a cushion - except when the rules aren’t equitable.

European Socialist the answer is no. To Britain & British MPs the governance of Britain should be of more importance than that of China. A midway point applies to killings in Kosovo which are also, under, our occupation agreement, our responsibility. You will note that the death of 10 Tibetan protestors has received infinitely more coverage than the killing of 210 unarmed civilians at Dragodan, close to the site of the British HQ in Kosovo so perhaps you should not be quite so sure of the moral high ground.

]]> By: Paul K http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18282 Paul K Tue, 18 Mar 2008 12:09:15 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18282 It used to happen that quickly here, as anyone who was around at the time of the Barings collapse will know. Barings went bust on Friday, the BoE worked all weekend, and a sale was negotiated by Monday. depositors never suffered. It used to happen that quickly here, as anyone who was around at the time of the Barings collapse will know.

Barings went bust on Friday, the BoE worked all weekend, and a sale was negotiated by Monday. depositors never suffered.

]]> By: Stuart Fairney http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18278 Stuart Fairney Tue, 18 Mar 2008 10:08:11 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18278 Amazingly, I heard the BBC complaining this morning that JP Morgan had engaged in a "smash and grab theft" of Bear Stearns and they will be making vast profits from this deal. Because, you know, we surely don't want banks making profits in times like these..... Amazingly, I heard the BBC complaining this morning that JP Morgan had engaged in a “smash and grab theft” of Bear Stearns and they will be making vast profits from this deal.

Because, you know, we surely don’t want banks making profits in times like these…..

]]> By: Matthew http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18277 Matthew Tue, 18 Mar 2008 09:37:34 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18277 Nothing about Northern Rock? The government seems to be handling it very well - much like a certain J.Redwood suggested, just without the legal fiction that it wasn't nationalised. http://www.ft.com/cms/s/0/085ba5e8-f472-11dc-aaad-0000779fd2ac.html By the way JP Morgan haven't bought Bear Stearns yet and it's not a done deal: the share price is currently way over their offer price. Nothing about Northern Rock? The government seems to be handling it very well - much like a certain J.Redwood suggested, just without the legal fiction that it wasn’t nationalised.

http://www.ft.com/cms/s/0/085ba5e8-f472-11dc-aaad-0000779fd2ac.html

By the way JP Morgan haven’t bought Bear Stearns yet and it’s not a done deal: the share price is currently way over their offer price.

]]> By: tapestry http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18272 tapestry Tue, 18 Mar 2008 03:21:36 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18272 The USA has a far bigger problem than the UK with 1 million homes foreclosed in 2007 and maybe 2 million in 2008. The UK's equivalent figure for 2007 was 27,000. They are really sh+++ing themselves over there, as house prices are more likely to fall and push more than half of all US homes into negative equity. That could lead to a total of 10,000,000 foreclosures. No excuse for Brown and Balls bumbling around with the Northern Rock, but hopefully the British equivalent problem will be chicken feed compared to that in the US. The USA has a far bigger problem than the UK with 1 million homes foreclosed in 2007 and maybe 2 million in 2008. The UK’s equivalent figure for 2007 was 27,000. They are really sh+++ing themselves over there, as house prices are more likely to fall and push more than half of all US homes into negative equity. That could lead to a total of 10,000,000 foreclosures.

No excuse for Brown and Balls bumbling around with the Northern Rock, but hopefully the British equivalent problem will be chicken feed compared to that in the US.

]]> By: Steven_L http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18270 Steven_L Tue, 18 Mar 2008 00:55:18 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18270 Well after a couple of bottles of beer I think I've cracked it - how about this for a novel solution:- Instead of not lending each other money, how about the big investment banks stop lending each others shares to short-sellers? There's probably a flaw somewhere. Well after a couple of bottles of beer I think I’ve cracked it - how about this for a novel solution:-

Instead of not lending each other money, how about the big investment banks stop lending each others shares to short-sellers?

There’s probably a flaw somewhere.

]]> By: David Hannah http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18267 David Hannah Mon, 17 Mar 2008 23:27:00 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18267 The Northern rock "rescue" looks set to fall foul of state aid regulations from our real government, the EU Commission. According to Anthony Woolich, competition partner at City law firm LG, "If the Government wants to remove Northern Rock from concerns about state aid it needs to make it uncompetitive". Of course the difference between the American and British responses to this crisis are profound; the former is a sovereign state, and the latter a vassal state. The Northern rock “rescue” looks set to fall foul of state aid regulations from our real government, the EU Commission. According to Anthony Woolich, competition partner at City law firm LG, “If the Government wants to remove Northern Rock from concerns about state aid it needs to make it uncompetitive”.

Of course the difference between the American and British responses to this crisis are profound; the former is a sovereign state, and the latter a vassal state.

]]> By: Matthew Reynolds http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18266 Matthew Reynolds Mon, 17 Mar 2008 19:47:08 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18266 It is amazing a troubled bank is brought & sold over a weekend , taxes are slashed as part of a stimulus package and interest rates take a tumble . Compared to a bank nationalisation , higher taxes and tepid base rate cuts in the UK you have to admire our friends over the pond . Do the Anti- American left of the Labour Party really have the nerve to say that the US are wrong & that the British situation is great ? The American response has been superb as it has dealt with the problems very effectively unlike in the UK where Gordon Brown's legacy to Alistair Darling means that the British response has been poor & that things could get still worse as a result . It is amazing a troubled bank is brought & sold over a weekend , taxes are slashed as part of a stimulus package and interest rates take a tumble . Compared to a bank nationalisation , higher taxes and tepid base rate cuts in the UK you have to admire our friends over the pond . Do the Anti- American left of the Labour Party really have the nerve to say that the US are wrong & that the British situation is great ? The American response has been superb as it has dealt with the problems very effectively unlike in the UK where Gordon Brown’s legacy to Alistair Darling means that the British response has been poor & that things could get still worse as a result .

]]> By: Neil Craig http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18265 Neil Craig Mon, 17 Mar 2008 18:54:51 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18265 Good post John. I see the BBC reporting on this is studiously failing to do the appropriate comparing & contrasting. Good post John. I see the BBC reporting on this is studiously failing to do the appropriate comparing & contrasting.

]]> By: mikestallard http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18263 mikestallard Mon, 17 Mar 2008 18:28:28 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18263 In Open Europe, to which I subscribe daily with enormous pleasure, it notes that the EU are now going to force AD to cut the staff back Northern Rock because the Danish Banks are complaining about unfair competition. If this is so, it means that the labour Voters in the North who are affected are going to be sacked anyway. Doesn't this make the entire operation electorally worthless for NuLab? You are so right about the flexibility and courage of a country that rules itself and makes its own decisions without all the paraphernalia of the ghastly EU. If only we were in the EFTA. In Open Europe, to which I subscribe daily with enormous pleasure, it notes that the EU are now going to force AD to cut the staff back Northern Rock because the Danish Banks are complaining about unfair competition. If this is so, it means that the labour Voters in the North who are affected are going to be sacked anyway. Doesn’t this make the entire operation electorally worthless for NuLab?
You are so right about the flexibility and courage of a country that rules itself and makes its own decisions without all the paraphernalia of the ghastly EU.
If only we were in the EFTA.

]]> By: dirty european socialist http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18258 dirty european socialist Mon, 17 Mar 2008 14:04:07 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18258 Why do you not talk about China? Surely that is more important than the Northner rock.. Why do you not talk about China? Surely that is more important than the Northner rock..

]]> By: The Bear and The Rock « Curly’s Corner Shop, the blog! http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18257 The Bear and The Rock « Curly’s Corner Shop, the blog! Mon, 17 Mar 2008 14:00:39 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18257 [...] the gulf of difference between the British and the American approaches to the bankin crises John Redwood in his post says: Since last August I have been commenting on how different the approach of the US authorities is to [...] [...] the gulf of difference between the British and the American approaches to the bankin crises John Redwood in his post says: Since last August I have been commenting on how different the approach of the US authorities is to [...]

]]> By: Curly http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18255 Curly Mon, 17 Mar 2008 13:21:02 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18255 I often feel that it might have been better, and far quicker, to have allowed Lloyds TSB to take on the Rock in the first place, even if it would have led to the wholesale shedding of jobs. We learn now that they will be lost in any case. Such a course would have found an immediate private solution to Northern Rock's problems, and the costs of economic regeneration for the North-East would have been far, far less than the sums tha tax payers will lose by the end of the day! I often feel that it might have been better, and far quicker, to have allowed Lloyds TSB to take on the Rock in the first place, even if it would have led to the wholesale shedding of jobs. We learn now that they will be lost in any case.
Such a course would have found an immediate private solution to Northern Rock’s problems, and the costs of economic regeneration for the North-East would have been far, far less than the sums tha tax payers will lose by the end of the day!

]]> By: APL http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18252 APL Mon, 17 Mar 2008 11:17:06 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18252 JR: "A quick haggle, a visit to the lawyers, and a bank is bought and rescued over a week-end in New York. That’s the way to do it." Unfortunately, even if that was the correct way to do it, we in the UK are unable to do it that way. I agree that the UK government has dithered over a decision that should have been dealt with last September, but even if the government had been decisive, its decision would still have been 'second guessed' and possibly overruled by the European commission. Next time you speak to Kenneth Clarke, ask him if 'sharing sovereignty' is such a good idea when an emergency is to hand. When he advocated 'shared sovereignty' did he think it meant the british government should be unable to make a decision about the british economy in the sterling area. JR: “A quick haggle, a visit to the lawyers, and a bank is bought and rescued over a week-end in New York. That’s the way to do it.”

Unfortunately, even if that was the correct way to do it, we in the UK are unable to do it that way. I agree that the UK government has dithered over a decision that should have been dealt with last September, but even if the government had been decisive, its decision would still have been ’second guessed’ and possibly overruled by the European commission.

Next time you speak to Kenneth Clarke, ask him if ’sharing sovereignty’ is such a good idea when an emergency is to hand.

When he advocated ’shared sovereignty’ did he think it meant the british government should be unable to make a decision about the british economy in the sterling area.

]]> By: Letters From A Tory http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18250 Letters From A Tory Mon, 17 Mar 2008 10:54:24 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18250 The sheer speed at which Bear Stearns has sunk and been bought up should heap shame on the Government. I'm surprised to see the Conservatives remaining fairly quiet on this issue because Bear Stearns is a very good example of why struggling private firms do not need any government intervention whatsoever. http://lettersfromatory.wordpress.com The sheer speed at which Bear Stearns has sunk and been bought up should heap shame on the Government. I’m surprised to see the Conservatives remaining fairly quiet on this issue because Bear Stearns is a very good example of why struggling private firms do not need any government intervention whatsoever.

http://lettersfromatory.wordpress.com

]]> By: Stuart Fairney http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18248 Stuart Fairney Mon, 17 Mar 2008 09:52:17 +0000 http://www.johnredwoodsdiary.com/2008/03/17/the-bear-and-the-rock-2-different-styles-of-rescue/#comment-18248 Like you, I was struck by how quickly and efficiently this was handled by the Americans. We don't here anyone saying that the JP Morgan deal was "never really on the table" unlike the excuses from the government about the Lloyds TSB/Northern Rock aborted take over. The Americans showed they can act decisively and do the deal. AD and the government, cannot and did not. If this was the private sector and AD had failed to do the deal, he might reasonably expect dismissal. He is fortunate indeed that ministerial responsibility has all but broken down in the UK. Like you, I was struck by how quickly and efficiently this was handled by the Americans. We don’t here anyone saying that the JP Morgan deal was “never really on the table” unlike the excuses from the government about the Lloyds TSB/Northern Rock aborted take over. The Americans showed they can act decisively and do the deal. AD and the government, cannot and did not.

If this was the private sector and AD had failed to do the deal, he might reasonably expect dismissal. He is fortunate indeed that ministerial responsibility has all but broken down in the UK.

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