Is withdrawing all my money from a bank and hiding it under my bed a good idea?

Gimme yr address

It's like the real-life It's A Wonderful Life.

Only if you convert it to bullion first. If the banking system collapses, then the monetary system isn't far behind.

You can invest it in my sock scheme if you want, you can choose the colour of the sock as well!!

does Britishes have a FDIC equivalent?

Invest it in something that will become very valuable in the future, like drinking water.

Does this now mean that resorting to the BoE as lender of last resort is commercial suicide? That's going to make things interesting if the crunch gets worse.

Also I love that our bank runs are mostly polite queues.

Only if you convert it to bullion first. If the banking system collapses, then the monetary system isn't far behind.

-- libcrypt, Sunday, September 16, 2007 5:18 PM (5 hours ago) Bookmark Link

the value of gold will collapse before the monetary system does

the value of gold will collapse before the monetary system does

Yes, but at some point, gold will become again valuable. Little pieces of paper will not.

Northern Rock looks fucked, frankly. It's less the fact they've been bailed out by the Bank of England, which should theoretically shore up their position, and more the £2bn in savings that's been withdrawn and the enormous amount of damage that's been done to their brand. Can you seriously see anyone in their right mind wanting to put money in there at any point to the future?

I'd say it's unlikely they'll go bust due to the bailout, but a sale of their decent assets and the disappearance of the Northern Rock name from the High Street looks likely.

Chances are a couple of other big High Street banks are in the situation, but the problem is, no one outside their headquarters (or even inside them) has the slightest clue whether or not their assets are worth millions or not.

The best thing for the UK economy is for the banks that are in the shit to come clean and say so as early as they possibly can - the thing we all need right now is a bit more transparency and that might not arrive any time soon.

Put it this way, I wouldn't worry too much about the state of your account, but I'm glad I haven't bought a house recently. And equally glad I'm not trying to buy one.

The other interesting thing is that this is only JUST starting to become a party political issue. I'm not sure the extent to which this is the government's fault, but surely the argument against lightly-regulated financial markets is unsustainable now?

Weird to think that, in order to make serious political capital, we could end up with a Tory opposition attacking a Labour government by arguing for tighter regulation.

You can't regulate for panic, though. I mean, this wasn't that huge a deal at first -- being the lender of last resort is what the Bank is supposed to do. The FT had the news on their front page for instance, but it wasn't the splash.

It's the run that's done for NR, not asking the bank for a credit line. I agree that the brand's done for, though. As to what they're worth ... hmm. Their loan book is apparently pretty good, and they have lower defaults than the average, but it looks like the cost of funding is going to be higher than they interest they earn on it for a while yet.

NR customers = numpties.

the tories attacking labour for freeing up lending... boggles.

Won't a rival buy Northern Rock for peanuts and increase their customer base? Survival of the fittest but the people who'll lose out are Northern Rock's shareholders and staff rather than the poor innocent investors/borrowers.

Not all tories - Ken Clarke was twisting the knife in Cameron's back yesterday (and pretty much saying that NR customers = numpties).

(x-p)

they probably are numpties but not as much as the collateralized fucks in the city.

Won't a rival buy Northern Rock for peanuts and increase their customer base?
Absolutely, the problem just now is working out what their mortgage book is actually worth.

Bullwinkle J. Moose did this, money in the mattress bit. IIRC he carried his mattress onto a plane with him once. Coulda just used this:

http://www.gasolinealleyantiques.com/cartoon/images/Bullwinkle/bullwinkle-wallet1.JPG