Gordon Brown launches 100% cynicism to save one job

Yep the most expensive man in UK history is at it again. He's banning a type of mortgage ( or rather remember this is New Labour - announcing he's thinking about it - this usually results in nothing other than the same announcement in 6 months and a demand for more deadlines from the BBC etc ) that no one is issuing any more.

Having ordered Northern Rock to run down its mortgage business ( ie get rid of its good risks ) its now going to reverse - to hoover up more bad risks no one else wants ( aka expand its businesses ). Maybe this is a way of creating the "bad bank" on the quiet.

Anyway the concern is that there are to many smart young people who are waiting for the bottom of the housing market before jumping in to tale out massive mortgages which will soon put them in negative equity ( they sub consciously acknowledge this with the 100% mortgage spin announcement ).

That's really cynical.

And of course the bail out of Gordon's career will continue to be funded by all of us as we have to pay the debts of this Labour government for the rest of our lives.

Further: Guido has the details of how the government ( ie Gordon Brown ) was itself issuing 100% mortgages till very recently.

Darlings risks GBP 182 million (of your money) per job(aka vote) in Northern Rocks Labour heartlands.

The number of North East Northern Rock employees 5,500.

The amount of tax payers money risked by Labour for reasons of political expediency GBP 100 Billion.

The amount per vote job is therefore 100,000,000,000/5500 = GBP 182 million at risk per job.

It would have been cheaper to have given each employee GBP 1 million to go home.

Surely Darling and Brown must now resign ? They are starting to make Denis Healey look talented.

What are Brown and Branson doing in China ?

Flogging Northern Rock apparently - whilst loading it up with sweeteners for the Chinese.

See this quote from the Press Association (my comments highlighted):

Virgin boss Sir Richard Branson said he believed he had a "winnable package" to see his bid for the ailing Northern Rock bank succeed.

Sir Richard, speaking in Shanghai where he is accompanying Prime Minister Gordon Brown as part of Britain's delegation, said some Chinese money could be involved in his package right there's a surprise- but stressed it was essentially "British-backed" like British Jobs for British workers perhaps ? and under his deal the bank would be "very much a British bank". You can just feel the New Labourness oozing out of that statement

Asked if he had had any talks with Mr Brown about a possible deal, Sir Richard said: "We haven't had any detailed discussions with the Prime Minister.detailed the old Blair trick of redefining the question before you answer it - aka to everyone else as not answering the question but spinning.

Last time Gordon Brown went to China begging for money for Rover before the election the Chinese screwed the Brits into the ground, then stripped our assets. They can see the weakness of his negotiating position. We should perhaps also be concerned that given the political difficulties Brown is in over Northern Rock the involvement of Chinese money could be more political than just business.

How do we know that the next time Gordon Brown has to represent British interests in the world, when they run up against China, that he isn't compromised by all this ? Whether its true or not - there will always be doubt.

Frankly it is astonishing to see this international begging going on - shades of Dennis Healey begging the IMF. But that's what you get - in the end - when you leave Labour in power.

It may seem I'm doing down Richard Branson - I'm not. He's a near genius for his business, its my money* that Gordon Brown is hosing around trying to save his job that worries me.

* NB Lets not forget government money is tax payers money is our money.

House prices to drop by 10% ?

We are slowly working through the period of denial as clever people who work in the property business run out of excuses for why prices for property should stay so high when people can't afford to buy at the bottom of the market.

I've posted on how the last months UK figures would allow for a 7% drop ( but the media prefers time averaged data of a +6% annual rise - which is only valid if nothing has changed - why do they do that ? ) Now in the Daily Mail we hearthat Morgan Stanley's chief economist is considering a record breaking 10% drop as likely.

Now the cracks are opening below and the drop looks big.

Lets be clear. This will destroy Labour and Gordon Brown and I think they know it. They may even have started planning for opposition - perhaps why they are willing to be a bit more flexible on party funding knowing that a partisan settlement won't stick and will be followed by a far less advantageous law on party funding.

It will also turn Northern Rock into the perfect storm for government incompetence as every bidder insists only only buying the sound mortgages business and leaving Alistair Darling and the rest of us with the stuff that's going to default. ( When you hear the BBC cheerily reporting that Branson and co will bay back £10billion or whatever straight away - remember he's buying the good stuff that's actually worth the money and leaving us with the dodgy stuff Labour have used our money to buy. - Don't get me wrong Branson and co are behaving quite properly they aren't charities or suckers - unlike HMG ).

Update: The FSA has apparently just issued a warning about business conditions to mortgage providers in the UK (FSA = Financial Services Authority). Ominously warning about some 'business models no longer being economic'. Well I think that stable door shutting is definitely post equine departure on that one ... Its more likely they're covering there behinds and of course the Dour One's behind whose complicated scheme has been failing so spectacularly with bank oversight.

Which way will bank shares head tomorrow.

By the way on the way to Woking's Homebase today I passed one of the many infill flat developments that New Labour have forced on the south east and there are piles upon piles of for sale and rent signs on the ground. I mean loads of them - perhaps they have got to a point that they are creating panic and dropping all the prices so have agreed to remove them all ?

Support for Northern Rock has to stop

We are now told that £30billion of our money is being put at risk to save the reputations of Alistair Darling and Gordon Brown over the Northern Rock disaster.

It would be a lot cheaper to have a general election and give these two men their P45s.

Surely it is time to stop sinking more public money ? And where is that money coming from anyway ?

What the hell is going on in this government ?

We have just been told that 15million child support records have gone missing. That means about 30 million adults are affected. Given we can expect at least 23 million children it only leaves 7 million who are too old or haven't started families yet.

In other words they may have lost all of the records !

They are spinning that they think the records haven't got into the wrong hands - but they may never know.

Were the records encrypted ? If so how long will it take a criminal organisation to break that - 28 days ? Should we all change our bank account details ? What were the government guidelines that were ignored ?

Its another disaster than minister have known about ( this time they claim for 10 days - though we know that New Labour denials are calibrated to limit damage and see what they can get away with rather than any old fashioned constraints such as honesty. ).

Ms Smith knew about illegal immigrants working in the security industry for months ! ( And the Pm refuses to tell us when he learnt of it as no doubt the answer would be too damaging to him personally.)

Alistair Darling keeps changing the terms he uses to describe the support for Labour's favourite bank - that gives money to Labour party leaning think tanks - with the tax payers position getting worse every time he stands up to speak. Iain Dale reports that Northern Rock isn't even getting on the agenda at Cabinet ! (Its only £21 billion and rising of tax payers money of course.)

What on earth is going on ? What else are they hiding ?

Update: They are now saying 25 Million child benefit recipients details lost, including bank details of 7 million families. But although the records went missing they still don't think they're in the wrong hands - well that's okay then,....

Not sure who to credit for the graphic - but I grabbed in from Iain Dale's blog. Hold - I can see the small print - just JamieD - well done and hope you don't mind.

If king's job is under threat then is the Bank of England independent ?

The Telegraph reports that Melvyn King's job may be under threat over a spat with Alistair 'yet another Scotsman' Darling on who's to blame for the first run on a British bank in over a century.

If so then the Bank of England isn't independent is it ?

Take your money out of Northern Rock whilst you can

I'm amazed northern Rock still has any savers.

Remember the Government is rearranging the guarantee scheme so if you have over £100k you should be alarmed. They will tell you the schemes have changed - after they've done it. So the only time to act is now.

As for the guarantee - if they are 90% of the money - why risk losing 10% when you could earn over 5% else where ?

In short saving with Northern Rock just doesn't make sense. Maybe an accountant can create a balance sheet that says its solvent, but the loss of good will could be terminal.

The government is already plotting how to con the grannies again ( like Railtrack) by killing of the small shareholders.

You have possibly until election day and maybe not even that.

Other peoples money

just placed the following comment on Ben Brogan's blog here ( if he cares to let it through the moderation process ).

I would still move any money out of Northern Rock, but I wouldn't queue 10 hours to do it - or sit at a computer screen till 3 am. But I would get it done by the end of the week.

The problem is now for us stake holders in UK plc, which has underwritten Northern Rocks business ( if not its share holders - sounds like Railtrack again, except this time the government's not trying to undermine a public limited company ).

What if house prices crash ? How will the government finance all these guarantees ? By taxing an economy heading to recession - or by borrowing on the open market - but hold on isn't that where the problem is. If the markets start to think like this we can expect to see the pound head south quickly (which will curtail holiday airtravel faster than Zac Goldsmith could manage ).

How big a risk with our future is Gordon Brown taking to secure his own ? ( Lets face it Alistair Darling is Gordon's sock puppet on this. )

We are all savers at Northern Rock now ! Thanks Darling

There was a crushing interview with the chief secretary to the Treasury on radio 4's PM at about 17:20 today.

He was asked the question we have all been asking - if Northern Rock is so safe why don't you nip down and put all your savings in it minister ?

For once the R4 interviewer was having none of the usual evasion and restatement of the party line that New Labour robots ministers usually produce. The failure of the first serctetary to reply was crushing. It is one of the most complete destructions of a Labour party minister I have heard on the radio. I wonder if it didn't trigger what comes next.

Now Alistair Darling has just announced a novel answer to that question - we will all potentially be investors in Northern Rock through our taxes paid to the government ( which as Guido posted earlier has some strong links with the Labour party/government ).

This is an incredible precedent to set. Won't every future financial organisation in trouble ask for the same ? It must be a real and very deep crisis for this sort of last ditch defence. Does the chancellor even have the power to enforce this ?

Its too early to say if that was a change motivated by saving Labours political skin or from fear of the contagion spreading. But let us be clear it is 180 degrees away from the line the Bank of England was taking at the start of last week.

The spin and attempts to deflect blame by Labour minister continue. Appeals to every international organisation, G7,G8,EU, US are being made for better regulation - but this is not a US subprime loan scandal - it is a scandal of how the FSA and Bank of England as over seen by the Labour government and conceived by Gordon Brown have been run.

They squirm, they divert, they try to point at other people, they tell half truths about what David Cameron used to do for Norman Lamont. This is who they are.

And where is Gordon Brown? It only takes a cow with a sniffle for it to be made know that the PM is cancelling his holiday and being the man in charge of COBRA, but when its a national crisis that he has created we can't see him.

Just remember, this is who New Labour really are.... incompetent and shirkers of responsibility.

A serious political allegation

Man in a Shed must do far more work this week and far less blogging (the story of his brush with public transport this weekend may be a latter exception).

However this post deserves attention from Guido Fawkes - it is the basis for a devastating line of attack on the Gordon Brown debt culture and spin government.

You can tell how good it is by the fast reaction of the Labour trolls in the comments.

Well done Guido !
(Picture from that post).