Credit crunch Pt 2

[Bazeye]

As were all aware were going through a credit crunch at the moment. But what I want to know is, when did it start? I know that it cant of just happened overnight. Obviously peope working in the city,bankers etc would have had an inkling before the man in the street but when did you first hear of it and when was it first mentioned in the newspapers or on the news? Anybody know?

[teenybash]

I don't know when it first started but, the pundits must have known it was going to happen long before the public were made aware.
Bankers knew they were taking extremely high risks that boiled down to gambling with investors money and were bound to know if their risky dealing went sour [as they have] it would lead to disaster. I don't think they realised the depth the problems, they created would be as catastrophic as they are.
The news has just revealed many properties, particularly in England will fall into negative equity at the end of the year........

[Bad Manners]

When Nick Leeson brought down Barrings bank by reckless speculation it was a warning as to what was going on. he was charged and sent to prison for his efforts. think is we now have all these other bankers that have recklessly gambled with peoples money have paid themselves large bonuses and they are allowed to get away with it.
the credit crunch was caused bu greedy bankers wanting to make more and more money for themselves if they did not have this insane bonus scheme we would all be a lot better off.

[JAWS]

The first real sign here was Northern Rock which was handled very badly right at the beginning.

[brokencross]

The first real sign here was Northern Rock which was handled very badly right at the beginning.
In a perverse sort of way Northern Rock did us a "favour" in bringing to the fore all the shenanigans within banking and the finance sector. Goodness knows how deep in the doo-doo we would all be in by now if it had not happened.

This is a timeline from the BBC which might be of interest..http://news.bbc.co.uk/1/hi/business/7521250.stm

[JAWS]

The only reason I say Northern Rock was badly handled is that the fact it had gone to the Bank of England, in banking terms the equivalent of sending out an SOS, was leaked and made public too early. All that did was create a panic amongst the small people because it created the impression that any money they has saved there was going to vanish in a puff of smoke,

When that happens it creates a self-fullfilling prophesy because everybody turns up at their branch wanting cash in their hand. No bank carries that much cash on the premises at any one time, it wouldn't make sense to. In effect it is like all the utility companies etc turning up at your house at midnight and demanding cash for payment of their bills. Very few people would have that kind of cash just lying round the house.

The queues outside the branches meant the Government and the authorities having to make panic announcements to reassure people which, accurate though they were, just made people panic more.

Yes, Northern Rock needed sorting out and did signal there were problems in the banking system which needed drastic action and even for heads to roll.
What would have been better was if the necessary action had been taken before the information was announced so that the average saver could have been reassured about their savings being safe instead of allowing them to be unnecessarily frightened to death.