Nationalized losses/private profit: Gov’t forgets to nationalize 40 billion pounds sterling of Northern Rock’s best assets

http://www.guardian.co.uk/business/2008/feb/21/northernrock.banking

Those who are suspicious of bank nationalization schemes have more to work with.  While sticking UK taxpayers with the bill for Northern Rock’s bad money management, the government cannot explain why an offshore group of the bank’s highest higher quality mortgages worth£40 billion was left out of the nationalization. “Yesterday, senior peers, including the former chancellor Lord Lawson, expressed astonishment that ministers were at a loss to explain at the outset of the Lords debate the contractual relationship between Granite and the Rock. In the Commons David Cameron accused Gordon Brown of showing “less openness than Fidel Castro.”  

Ron Sandler, new chairman of Northern Rock  nrock119.jpg        

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2 responses to “Nationalized losses/private profit: Gov’t forgets to nationalize 40 billion pounds sterling of Northern Rock’s best assets

  1. Here’s one of the latest postings from Bloomberg. No surprises that we are seeing some large redemptions from hedge funds – forcing closure. There has to be a lot more of this activity coming along …

    —————————————————–
    By Jenny Strasburg

    Feb. 22 (Bloomberg) — D.B. Zwirn & Co., the New York-based investment firm that was hobbled by disclosures of improper accounting, will liquidate the two largest hedge funds after clients asked to withdraw more than $2 billion.

    The firm will shut the domestic and offshore versions of the Special Opportunities Fund after its 2006 financial audit was delayed, leading to “a large number of investor redemptions,” according to a letter sent yesterday to clients. The funds have about $4 billion in assets, 80 percent of the firm’s total.

    [Rest of article in main news, Bloomberg, Feb 22, 2008]
    ———————————

  2. Further to last post.
    Looks like some unwinding of carry trades today (Feb 22), with precious metals lower and Japanese yen climbing. Could well be a direct result of the hedge funds deleveraging their positions as they close out (see above post).

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