Credit crunches a Northern Rock
Borrowers unable to afford trailer park mortgages 4,000 miles away begin the butterfly effect that soon escalates into the first UK bank run in the modern-day credit collapse. As soon as confidence is lost in a financial institution you are witnessing first-hand how quickly customers can bring it to its knees. Billions have been withdrawn in days and the share price is tanking.
Despite the central bank pumping in endless cash supplies, hourly Government reassurances to prevent the panic spreading, and Northern Rock’s CEO acting like the former Iraqi information minister, nothing can stop the pandemonium in the high street today.
The FSA protects the first £31,700 but if you’re even a small customer, and you see the branch queues, your only thought will be, “fuck me I better get in that queue before the next guy”.
Northern Rock besieged by savers
Northern Rock shares plunge as customers flee
Hopes for bid dashed as Rock crashes
Expect a bargain hunting major bank to capitalise on the plummeting stock and asset strip the Rock.
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For all those running round the streets with a cashier’s cheque and not knowing what to do with it, why not open a Zopa account? All the people I’ve lent to so far have absolutely no exposure to the sub-prime market. Why? Because they’re just people and don’t get to gallavant over the world building risky debt-package portfolios to maximise corporate returns. They also pay more interest than Northern Rock ever could.
