Northern Rock - BOE Borrowings now exceed £25 Bn. and rising - Is there an alternative to calling in the administrators ?

The funding of Northern Rock becomes even more bizarre as Simon Ward, of New Star Asset Management in London,has examined the Bank Book at the BOE and concluded that borrowings by Northern Wreck W/E October 24th exceed 21 Bn. Pounds... and the rate of borrowing is accelerating ..£4.7 BN this last week compared with £3 Bn. last week. (You can probably add another £4 Bn at least this week so the ttal today is probably £25 Mn.!!!)

The shares mystically stay supported at 180-odd pence (ish) as bottom feeders JC Flowers claim they are nearer a buyout claiming a line up of heavyweights - Richard Pym 58,former head of Alliance & Leicester Plc, and Chairman of Halfords plc, as prospective CEO (see pic) , Paul Myners 59 , a former chairman of Marks & Spencer Group Plc, as chairman -he was voted public company non-executive director of the year by readers of Sunday Times in 2006. Hugh Scott-Barrett, former CFO of ABN Amro Holding NV, to take the same position . Bob Bennett, the former CFO of Northern Rock, Peter Birch, former CEO of Abbey National Plc, and Martin Jacomb, former chairman of Prudential Plc, have also been asked to advise the buyout firm, J.C. Flowers said yesterday.

Northern Rock plc is also being advised by the Credit Suisse Group and JP Morgan Cazenove.

The problem is that the retail lenders have fled and are continuing to flee, (a City guesstimate £5bn outflow of savings is probably underestimate says Simon Ward) borrowers cannot be forced to pay more yet borrowing costs (not to mention the horrendous legal / advisory fees the City will be milking) now exceed potential income.

Surely there can be no other route than administration and an effective nationalisation and run-off of the mortgage book. Continued support by the Government of the Board is absurd if not criminal.

Speaking earlier this week to MPs at a hearing of the Treasury Select Committee, Alastair Darling said there were lessons to be learned from the banking fiasco. He added that Northern Rock could have handled the situation better. "There are certainly great lessons to be learned from the interface of the Bank of England and FSA," he said. "There needs to be clarification between the two bodies about their roles. Clearly there is some overlap between the two."

...and this is the clever structure that the twat who is now Minister of Education, Mr Ed Balls constructed. It failed at the first jump.

The first lesson to learn is to sack the whole Board, call in the Administrators, refund the retail lenders immediately and face the folks who funded Granite and all the other specious SIV's with their criminal schemes which all hung on a slemder leagl thread that the structure was determined to benefit a charity - the The Down's Syndrome North east who were unaware of their part in this whole fraud.

PS : Richard Pym when at the A & L shared the dubious distinction of (with surprisingly) Northern Rock of having the highest "redemption fee" of £295 for moving your mortgage... so he is not unused to chiselling the customer.

Is there an alternative to calling in the administrators ?

In one word - Absolutely fucking not.

PS Sir John Gieve (happily refreshed from his holidays whilst the ordure hit the air conditioning) has ben unaccountably silent as the Director responsible for Market Stability.Sir John readers will recall left the Home Office accounts in such a state that the Government Auditor refused to pass them.... he also let Sir Ian Blair spend a weekend fending off the IPCC collecting evidence of the nurder of Charles de Menezes.