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Thursday 29 November 2007

The state of the nation

It’s becoming clear that we are living in a CIA fronted, Mossad directed, Jewish conspiracy milked by canny Scottish friends of Dorothy hoping to retire on savings invested via Northern Rock in sub-prime mortgagees stupid enough to vote for them.
The last lot ran to a similar formula but with Arab money, arms and oil dealers, Essex girls, adulterers, philanderers and jobs in privatised companies.
I want to know who I can pay £25,000 to get a piece of the Olympic action, gain a few contracts for painting multi-coloured lines all over the roads, removing them, re-painting them, and doing the same with bumps, speed cushions, cycle paths, paving etc. There is money there and I am not getting it. If I put money in the Rock will they give me a couple of landing slots on the new third runway?

NatWest 3 to keep £1m each?

The NatWest 3 have agreed to pay the $7.325 million they earned from the Enron deal back to RBS, the new owners of NatWest. But all things considered, they have come out of it pretty well. Assuming that they converted their dollars to sterling at the market rate at the time (0.6672) they would have converted it to £4.887 million. Reinvested it at 5% for seven years it would have grown to £6.876 million. To pay back the $7.325 million they only have to pay £3.539 million (converted at 0.4831), which means they keep £3.338 million.

Of course they would have been entitled to a higher bonus from Nat West for the extra income they produced for 1990, so it's a shame they quit before bonuses were paid. Of course they don't have to pay the $7.325 million to RBS; they could just do the time, so they have a bit of leverage over RBS. Sounds like they should be able to cut a deal. These guys need a broker.

Monday 26 November 2007

NatWest 3 to change their plea to slightly guilty?

HOUSTON (Reuters) - A U.S. judge has scheduled a hearing next week to take new pleas from three former British bankers accused of fraud in an Enron-related case, court records showed on Saturday.
David Bermingham, Giles Darby and Gary Mulgrew, known as the "NatWest Three," are scheduled to appear before U.S. District Judge Ewing Werlein at 4 p.m. CST (2200 GMT) Wednesday for a proceeding called re-arraignment.
The three were indicted in 2002 and pleaded not guilty to charges they conspired with rogue Enron Corp executives in 2000 to defraud National Westminster Bank (NWB_pa.L)of $19 million, dividing $7 million among themselves.
Free on bond since being extradited to Texas in 2006, they are scheduled for trial January 7, 2008.
Lawyers involved either declined comment or could not be reached to explain the new development, but re-arraignment sometimes means a plea bargain has been made for lesser charges or an agreed sentence, ending a criminal case.
Enron, a Houston-based energy giant, collapsed in a tangle of accounting fraud in 2001, costing employees and retirees their pensions and losing investors billions of dollars. Top executives were prosecuted and sent to prison.
(Reporting by Bruce Nichols)

Monday 19 November 2007

A brief explanation ...

of why the government is supporting Northern Rock with subordinated loans. The story about the sub debt comes from Robert Peston of the BBC. Nothing from the Treasury on this yet.

Northern Rock reassures it's customers


Moody's: NORTHERN ROCK'S BFSR, subordinated debt, and Tier-1 securities fall to D+, Baa1, Baa3 on delay finding corporate solution to expected lower profits.

Actually that's not so bad. BFSR ratings go all the way to E.

Friday 16 November 2007

Terrorism: Detainees

David Davis: To ask the Secretary of State for the Home Department how many people have been detained without charge on suspicion of terrorist offences for 28 days; and how many of these were (a) charged and (b) released without charge. [164065]

Jacqui Smith [holding answer 13 November 2007]: The maximum period of detention pre-charge was extended to 28 days with effect from 25 July 2006. Statistics compiled from police records show that to date six people have been held for 27 to 28 days. Of these, three individuals were charged and three were released without charge.

David Davis: To ask the Secretary of State for the Home Department whether any suspects detained without charge on suspicion of terrorist offences for 28 days and then released without charge have been subsequently re-arrested and charged with a terrorist offence. [164066]

Jacqui Smith [holding answer 13 November 2007]: The maximum period of detention pre-charge was extended to 28 days with effect from 25 July 2006. Statistics compiled from police records show that to date six people have been held for 27 to 28 days. Of these three individuals were released without charge. We do not keep figures on re-arrests.

 

Saturday 3 November 2007

The difference between Citigroup and Northern Rock

Some revealing differences between Citigroup and Northern Rock.

Citigroup is the world's largest financial institution. Being American it is hardly surprising that they have some exposure to the sub-prime loan market and to CDO's. Their Chairman promised shareholders that there would be no surprises, but it looks as though Halloween brought Citi more tricks than treats and by the time I publish this post, the Chairman may be gone, forced to resign by shareholders. Citi is a big bank, and the one trick pony in Newcastle it is a major player in many partkets and many sectors. It also hires more talent in a week than Northern Rock hires in a lifetime, so it will not fail.

Contrast that with Northern Rock, where the board did little to address the problems and the Chairman is still there and the MD was there far too long. Equally reprehensible is the performance of the UK regulators, who between them couldn't decide what to do and in the end left it to the tax payer to pick up the tab. The Federal Reserve would never let it go so far. The blame for this problem probably rests with Gordon Brown who passed responsibility for bank supervision to the FSA. For all its staidness, the Bank of England knew what it took to run a bank, whereas the FSA palpably did not.

The FSA may know how to administer a regulatory system, but that is not what is required to understand whether a bank is well run and whether the management is making the right decisions. Hence all the wrong decisions have been made and we have to listen to politicians telling us how throuwing £23 billion of tax payers money at a problem is nothing to worry about.