Yvette Copper lies, King prepared his defence and the exact nature of the assets we now own (especially Granite) are amazingly no clearer

It is impossible to fully grasp the complexities of the legislation for the rushed nationalisation of Northern Wreck (although who would argue with AK see earpiece here) but Famous for 15 Megapixels points us all to the remarks made by the fragrant, elfinesque, and frightfully beautiful Yvette Cooper who regularly exchanges bodily fluids with her well endowed Balls who no doubt populates the intimiacies of the longeurs of post coital triste with wise and witty enecdotes about life in Gordon's Treasury. ... and little good it has done her pretty little head.

Therefore it is worth noting what Hansard records the ignorant haughty bitch saying yesterday....

"Banks stopped lending to each other in the normal way and Northern Rock, owing to its business model, could not get the money that it needed to keep going. The action that we took last autumn was widely supported at the time. The Government stepped in and effectively saved Northern Rock."

Up to a point Lord (Cooper)Copper... the way the shares dropped £1 on the day the NR interims were produced July 26th when the Directors had voted a 33% rise in the divvy, on the back of profits rising less than 1% on nett lending up by 47.3% a suggests that prudent bankers may well have had other and very specific reasons for not lending to Northern Wreck other than "Banks stopp(ing)ed lending to each other in the normal way" - inter bank lending was continuing but at punitive (and temporarily excessively high LIBOR rates).

Northern Wreck had in fact telegraphed their problems well before September 9th when the BOE intervened and had approached Lord King as early as August 11th/12th (BBC Radio 4 Today repeat of File on 4 Interview interview) for the odd £30Bn.well before LIBOR rates had taken off. (BBC4 Today Interview 6th November which you can hear here) which you will find is curiously truncated from the transcript here to make the timetable of events less clear.

SANTS (CEO of FSA) : " ....we immediately identified that there was a potential possible risk here to Northern Rock, and proactively engaged with them as part of our group of firms that we were moving to a crisis management mode."

PESTON: So did you contact them, as it were?

SANTS: We contacted them.
...

KING (BOE) ...bit by bit the funding, the wholesale funding to Northern Rock started to ebb away. [Note it did not STOP]

PESTON: So how much did you estimate at that stage Northern Rock was likely to have to find let’s say by the end of the year, as it were, in terms of the borrowings that they’d made from the money markets that were simply not being replaced?

KING: Well, we thought that it was of the order of about £30 billion was the amount that they would have to find. It became clear quite quickly that the bulk of that funding – say £20 billion to £25 billion or £30 billion would have to come from the Bank of England. So it became clear that Northern Rock required a very very large sum of money.
.....

KING: On the weekend ( 25/26 Aug) before we granted the facility to Northern Rock, I was asked whether, if a certain retail high street bank were to make an offer or a bid for Northern Rock, whether we would be prepared to lend that bank £30 billion at bank rate for about two years. And I think what that did was to demonstrate that our original view, that it was not possible to save Northern Rock without a large injection of money on that scale was clearly right ......

On the other point that Vince Cable raises about Granite - this was addressed by ex Treasury Minister Ken Clarke just as the clock chimed midnight last night and ended discussion in the quaint way these things are done in the Palace of Varieties Westminster. On the Division the Ayes =293 and the Noes and Malcontents = 167 and off it goes to the other place.

This was what the slim, lissom, nubile renaissance woman Yvette Cooper said ...
...and this is what the Cty savvy gent who evidently understands these things said

..and for these members of the opublic who cannot understand how Granite appears on the Balance Sheet as an asset but is a Trust whose beneficiaris the NE Downs Syndrome Group is beyond us ... but I smell a large roomful of lawyers (see Times beloe) getting ready to Hoover up very substabntial sums of dosh over many years, ready to make Jarndyce v Jarndyce look like a Sunday School PicNic. (But see newer post Saturday, February 23, 2008 Granite and the masters of the Master Trusts - exploiting loopholes with the City lawyers )

One wonders what Fitch and Co are doing to put a credit rating on Granite today ? See their report on Covered Bonds yesterday.

Late Breaking News
Public left with only 'rubbish' of Northern debts claims MP Scotsman (Edinburgh Evening News)

"However, during the Commons debate Mr Cable said Treasury Chief Secretary Yvette Cooper appeared not to know what was happening to the bank's best mortgages.He said: "What we are now being told is that in some way this has now been hived off to the benefit of a person or persons unknown, apparently, to the minister."What is going on here appears to be not public ownership of Northern Rock but an asset-stripping operation designed to benefit whoever, we don't know."This is a very serious development."

"A Treasury spokeswoman today said it was "simply wrong" to say that all the high quality mortgages are in Granite. She said: "Northern Rock does not sell all its high quality mortgages to Granite; it retains a substantial volume of high quality mortgages on its own balance sheet.Speaking outside the Commons, Labour's John McDonnell, said he had written to Chancellor Alistair Darling asking for an immediate statement."

See also BBC Online ..."Chancellor Alistair Darling has moved to calm fears about the nationalisation of Northern Rock after it emerged the bank's best assets would stay private.
Mr Darling said taxpayers would not benefit from the nationalisation of a firm holding £45bn of Northern Rock's most profitable mortgages. "

The Times Northern Rock advisers facing fees showdown -" Merrill Lynch, Citigroup and Blackstone – are holding out for their full share of £75 million in agreed fees, despite the fact that the Government did not follow their advice to sell the bank. “The reality of it is that they all had letters that had a base amount and a ‘success’ amount,” one source said.
The base amount = £50 million, with £25 million “success” fee."

"The Government is already on the hook to pay a fee of between £15 million and £20 million to its own advisers, Goldman Sachs and the legal firm Slaughter and May." ..."The Treasury has also agreed to pay £5 million to each bidding team to cover the costs of their banking advisers, lawyers and accountants."

If you understand who own Granite, NEDSA, the BOE/taxpayers/ or someone else .. please let us know.

UPDATE : 23rd September If arrived from links elsewhere please also go to see newer post Saturday, February 23, 2008 Granite and the masters of the Master Trusts - exploiting loopholes with the City lawyers )