General comment about mortgage arrears

[Guest]

Re: General comment about mortgage arrears

Firstly (just to get it out of the way) you keep posting about the banks getting bailed out. Will you please explain who you are talking about? Northern Rock did not get bailed out - its shareholders have lost effectively all of their money thus far. If you'll explain which bank has been bailed out it will stop me having to repeat the question.

Taxpayers are liable for £100bn secured only against the increasingly uncertain Northern Rock loan book - so whichever way you look at it, they got bailed out.

Have the shareholders lost? Yes, most of them have, but this Government allowed the possibility of compensation by undertaking to appoint an independent valuer. Taxpayers are also at risk from Northern Rock's two biggest shareholders. SRM Global and RAB Capital, who told Northern Rock's extraordinary shareholder meeting earlier this year that their legal advisers said the Government would break European Union human rights law if it took control of the bank for less than its true worth.

Northern Rock will not be able to survive without its taxpayer guarantee - and the Chancellor has extended the taxpayers' guarantee to virtually all Northern Rock's borrowings: retail deposits, wholesale deposits, unsecured borrowing, secured borrowing where the security actually turns out to be insufficient, collateralised and uncollaterised derivatives, onshore and offshore. Theoretically this excludes the £40-£50bn still borrowed through the offshore securitised Granite programme- but only so long as Granite can carry on rolling over its borrowings... which it will only do with that taxpayer backed Government guarantee.

Taxpayers are now formally guaranteeing a bank that remains fully owned by shareholders. We have the worst of both worlds- we bear all the downside but any upside goes elsewhere.

It really does not matter that you do not own a plasma TV or that you drive a cheap car, or how young you were when you bought your first house - if you cannot understand the simple premise that Northern Rock were bailed out then why do you keep arguing?

As for your other comments, there are a huge variety of ways that people can find themselves in debt and a great many of those people are not irresponsible at all. Circumstances change, employment status, marital status, illness, accidents, bereavements the list goes on.

Lenders relentlessly target those in trouble, offering solutions in the form of "consolidation" loans; they actively promote the flawed premise that you can borrow your way out of debt.

Sure, some borrowers are irresponsible, but the vast majority are simply trying to stay still in the ever-increasingly expensive mess that this country has become under our present Government.

[argentarius]

Re: General comment about mortgage arrears

In an Ideal world, we all will live within our means, but if the financial enities in this country will manufacture easy credit products, and advertise these products mainly to the vunarable or lower classes, then surely this comes with a responsibility to lend resposibly?
Why offer Mr Jones a new credit limit or a new loan when prevoius records show mr Jones has a problem with his finances?
The truth is finance companies are profit driven (like all businesses), so what happened to Due diligance?
Why manufacture more products for the financially unworthy and slap an extra 3.5% over base rate (on mortgages)?
Why when a debitor gets into trouble, and the finance company file for a CCJ, send the debitor offers of extra finance under different companies of the same umbrella?
I am sorry ARG, but you views seem byast, and I cannot help but wonder if you work for G.E Money or the likes, get a grip, if you offer a life line to the financially destitute, what are they going to do?
You know the answer, I know the answer, and so do the financial institutes of this country.

Lenders *do* lend responsibly, to the extent that they lend to people they expect to pay them back. The concept that lenders deliberately lend to people they expect to default is ridiculous - that isn't profit-making.

Obviously lenders charge higher rates to those who have a higher propensity to default. That's fair enough.

I don't work for any of the scuzzy consolidation-loan type companies at all. But I don't accept that individuals are not responsible for their own actions. If the financially destitute take an offer of a loan they personally feel they cannot repay, that's not the lender's fault but their own. Individuals should have a better idea of their own financial circumstances than the edited highlights a lender sees.

Argen why are you saying I'm missing the point? I'm referring to the constant press reports when I mention plasma TV's being a favourite item with which to pillory the so called feckless debtor.

I'm also aware we did it different 'when we wus younger' & of course we can all cite cases of irresponsible lending. What I'm saying is irresponsible lending is & has not been as prevalent as the media would have us believe. It was easier to borrow yes but that isn't the same as 'irresponsible' lending most people borrowed simply to live

As for the comments "we or our parents managed when they were young" simply adds fuel to the misconception that people cannot manage their income AND that's why they find themselves in debt - not that their expenditure is so high because of rising living costs, fuel, council tax etc but simply because they can't manage - or that their outgoings exceed their incomings because they no longer have the same level of incomings for various reasons including redundancy sickness etc

As I state most debtors that I know find themselves unable to pay their debts because of their change in circumstances NOT because of irresponsible lending or irresponsible borrowing for that matter & to suggest otherwise is rather strange coming from a site such as this where the evidence to support otherwise is all around us

I don't accept that it's impossible for anyone to live on their income in this country as long as they have always managed their life such that they can live on their income. Even if you lose your job, or split up from your partner, or whatever, you should still be able to meet your outgoings unless those outgoings include things which you shouldn't have bought in the first place.

Borrowing "simply to live" isn't responsible borrowing - forget about responsible lending. If people need to borrow "simply to live", they need to reassess their spending.

Taxpayers are liable for £100bn secured only against the increasingly uncertain Northern Rock loan book - so whichever way you look at it, they got bailed out.

I'm going to stop your quote right there because you are still missing the point. A bail-out would involve the government giving an excessive amount of money, in some way shape or form, to Northern Rock's shareholders. That hasn't happened. And the amount of any compensation is going to be set at the fair value of the business in administration - i.e. next to nothing.

The fact is that the government will have acquired all of Northern Rock's assets, at their fair value as independently assessed. That is not a bail-out - it's simply a nationalisation.

Taxpayers are also at risk from Northern Rock's two biggest shareholders. SRM Global and RAB Capital, who told Northern Rock's extraordinary shareholder meeting earlier this year that their legal advisers said the Government would break European Union human rights law if it took control of the bank for less than its true worth.

Again, "less than its true worth". The large shareholders will only sue if the government attempts to buy NR on the cheap. Merely getting "its true worth" isn't a bail-out - it's their entitlement. The government blocked a private sector rescue of NR on more than one occasion - LTSB and Virgin both - and caused the nationalisation situation when it was avoidable.

Northern Rock will not be able to survive without its taxpayer guarantee - and the Chancellor has extended the taxpayers' guarantee to virtually all Northern Rock's borrowings: retail deposits, wholesale deposits, unsecured borrowing, secured borrowing where the security actually turns out to be insufficient, collateralised and uncollaterised derivatives, onshore and offshore. Theoretically this excludes the £40-£50bn still borrowed through the offshore securitised Granite programme- but only so long as Granite can carry on rolling over its borrowings... which it will only do with that taxpayer backed Government guarantee.

Taxpayers are now formally guaranteeing a bank that remains fully owned by shareholders. We have the worst of both worlds- we bear all the downside but any upside goes elsewhere.

Eh? NR has been nationalised. It is 100% owned by the government. It is not a publicly-guaranteed, privately-owned, company as you strangely seem to believe - it is a nationalised bank. Any downside goes to the government; any upside goes to the government.

It really does not matter that you do not own a plasma TV or that you drive a cheap car, or how young you were when you bought your first house - if you cannot understand the simple premise that Northern Rock were bailed out then why do you keep arguing?

Because they haven't been bailed out.

As for your other comments, there are a huge variety of ways that people can find themselves in debt and a great many of those people are not irresponsible at all. Circumstances change, employment status, marital status, illness, accidents, bereavements the list goes on.

I agree that a huge proportion of individual debt crises arise because of individual circumstances changing in the ways you suggest. But most of those people were already in debt before the crisis - they simply believed that the debt was manageable. And I would dispute your argument that the debt was responsibly incurred in the first place, in many circumstances.

Lenders relentlessly target those in trouble, offering solutions in the form of "consolidation" loans; they actively promote the flawed premise that you can borrow your way out of debt.

I agree. Any advertising that you can borrow your way out of debt (typically by extending the term and increasing the total amount payable) is horrible and shouldn't be allowed.

Sure, some borrowers are irresponsible, but the vast majority are simply trying to stay still in the ever-increasingly expensive mess that this country has become under our present Government.

I don't disagree with you about the present government. But maybe people need to recognise that they can't necessarily "stay still". If their costs increase because of the government increasing direct and indirect taxation, and because of rising utility and transport costs, and everything else - not least rising interest rates due to the credit crunch - then other things need to be cut back. The belief that once you've achieved a certain standard of living (or, worse, your neighbours have) you are entitled to maintain that forever is a fallacy and a dangerous one.


I know that you don't seem to care about my personal circumstances. I am undoubtedly not badly off. But I have never been outside Europe on holiday; I have never spent more than £12k on a car; I don't have a plasma TV (as I've previously mentioned); I don't have Sky TV with all the channels.

But other people who earn infinitely less than me seem to believe it's a human right to have all of the above - all funded by debt.

IMHO it's the cultural acceptance of high levels of debt for unnecessary expenditure which has led to the present horrific levels of personal defaults and so forth. Sure, increased availability of credit has played a huge part, but it's the individuals' decisions that they have to have all these things they can't really afford which is the root cause.

[righty]

Re: General comment about mortgage arrears

Argen

Are really saying that if you bought goods during the good times then you only have yourself to blame when you can't pay back because you have since either become ill or lost your job unexpectedly etc

Are you really saying that consumers should plan their spending on the assumption they are going to lose their income..................how so very very odd.

If that was the case nothing would get sold......except maybe the odd bit of food

Cetelco

I agree entirely with you comments & as far as the bailing out of banks we should not forget the BoE repeated rate cut - this has not benefited consumers in anyway, nor was it intended too although that was the spin......The only beneficiaries of this largess by the BoE has been the banks....It is in affect a hidden subsidy which the banks asked for only a few weeks ago during their meetings with the Governor of the bank

[argentarius]

Re: General comment about mortgage arrears

Argen

Are really saying that if you bought goods during the good times then you only have yourself to blame when you can't pay back because you have since either become ill or lost your job unexpectedly etc

Are you really saying that consumers should plan their spending on the assumption they are going to lose their income..................how so very very odd.

If that was the case nothing would get sold......except maybe the odd bit of food

I don't understand how you think that. Most people have enough income to buy the basics of life, and to save up and buy the more luxurious things they crave like holidays and (I dare say) plasma screen TVs. There's no need for most people to get into debt to buy essentials.

IIRC an earlier poster referred to second-hand furniture. Why have people lost the ability to make do until they can afford what they really want?

Cetelco

I agree entirely with you comments & as far as the bailing out of banks we should not forget the BoE repeated rate cut - this has not benefited consumers in anyway, nor was it intended too although that was the spin......The only beneficiaries of this largess by the BoE has been the banks....It is in affect a hidden subsidy which the banks asked for only a few weeks ago during their meetings with the Governor of the bank

Banks don't, in general, borrow from the BoE at BoE base rate. They borrow from each other at LIBOR rates.

The base rate cut has no relevance to banks' funding costs, so reducing base rate isn't a subsidy or a bail out to the banks.

Indeed, it does represent a genuine reduction in mortgage costs for all those borrowers with BoE linked mortgages - quite a large proportion - and for those with lenders' SVR linked mortgages - another large proportion - as most lenders have followed the BoE cut with their SVRs.

The only people who are not getting the benefit of BoE rate cuts, with regard to mortgages, are those on fixed rates - probably half of the mortgage market (and who chose a fixed rate, so that's nothing to worry about) and those seeking to remortgage.

Those seeking to remortgage are not the majority of the mortgage market by any means. Even if everyone had (foolishly) bought 2 year discounted/fixed/tracker products (and, once again, that would have been their personal choice and by doing so they were implicitly accepting the risk of getting a worse rate 2 years down the line), only half of the mortgage market would re-price in any one year.

I think you've been reading the papers too much and believing what they say. Let me repeat - every single borrower with an existing variable rate mortgage, throughout the credit crunch, has benefited from the BoE's base rate cuts. And everyone else with an existing fixed rate mortgage during that period, chose to be in that position.

Only those reaching the end of a short-term rate are suffering the higher market rates which are partly due to the credit crunch and partly due to a retreat to realistic pricing from stupidly cheap (loss-making) rates a few years ago.

[theGobbyOne]

Re: General comment about mortgage arrears

Argen do you just come in here to slate people in debt or do you have a point???? As i fail to see anything positive in your gibberish ranting.........Think yourself lucky your a self righteous person with no debt..........Which makes me ask what the hell are you doing in here???

[Guest]

Re: General comment about mortgage arrears

I'm going to stop your quote right there because you are still missing the point. A bail-out would involve the government giving an excessive amount of money, in some way shape or form, to Northern Rock's shareholders. That hasn't happened. And the amount of any compensation is going to be set at the fair value of the business in administration - i.e. next to nothing.

I'd be grateful to know how you can predict this with such glib certainty, given that SRM Global and RAB Capital have valued the bank at around £4 per share and are hardly likely to be happy with much less.

The fact is that the government will have acquired all of Northern Rock's assets, at their fair value as independently assessed. That is not a bail-out - it's simply a nationalisation.

If this were true, why have they installed Ron Sandler at the helm with a salary of £90,000 per month and his deputy Ann Godbehere, earning £75,000 per month? Where else in the public sector do salaries like this exist? In addition, if Northern Rock were truly nationalised, why do they have FOI exemption? They are a private bank with public backing - any fiddling around at the edges by Darling and Brown is no more than a charade.

Again, "less than its true worth". The large shareholders will only sue if the government attempts to buy NR on the cheap. Merely getting "its true worth" isn't a bail-out - it's their entitlement. The government blocked a private sector rescue of NR on more than one occasion - LTSB and Virgin both - and caused the nationalisation situation when it was avoidable.

Eh? NR has been nationalised. It is 100% owned by the government. It is not a publicly-guaranteed, privately-owned, company as you strangely seem to believe - it is a nationalised bank. Any downside goes to the government; any upside goes to the government.

A bust bank should be liquidated and shareholders should lose everything. It might then be reconstructed or sold or run-off over a period of time by the authorities. Taxpayers should be the last in the queue to foot the bill. This has not happened but instead, taxpayers are in for a very large bill, probably very soon after the next election.

I agree that a huge proportion of individual debt crises arise because of individual circumstances changing in the ways you suggest. But most of those people were already in debt before the crisis - they simply believed that the debt was manageable. And I would dispute your argument that the debt was responsibly incurred in the first place, in many circumstances.

Most people are in debt most of the time and I am not sure what you are attempting to show with this, that people must never borrow, ever?

I don't disagree with you about the present government. But maybe people need to recognise that they can't necessarily "stay still". If their costs increase because of the government increasing direct and indirect taxation, and because of rising utility and transport costs, and everything else - not least rising interest rates due to the credit crunch - then other things need to be cut back. The belief that once you've achieved a certain standard of living (or, worse, your neighbours have) you are entitled to maintain that forever is a fallacy and a dangerous one.

I would agree entirely - for far too many people their financial stability is akin to a house of cards, the slightest breeze and it all falls down.

I know that you don't seem to care about my personal circumstances. I am undoubtedly not badly off. But I have never been outside Europe on holiday; I have never spent more than £12k on a car; I don't have a plasma TV (as I've previously mentioned); I don't have Sky TV with all the channels.

But other people who earn infinitely less than me seem to believe it's a human right to have all of the above - all funded by debt.

IMHO it's the cultural acceptance of high levels of debt for unnecessary expenditure which has led to the present horrific levels of personal defaults and so forth. Sure, increased availability of credit has played a huge part, but it's the individuals' decisions that they have to have all these things they can't really afford which is the root cause.

Again, I would agree with most of this and in particular your final paragraph.

[argentarius]

Re: General comment about mortgage arrears

Argen do you just come in here to slate people in debt or do you have a point???? As i fail to see anything positive in your gibberish ranting.........Think yourself lucky your a self righteous person with no debt..........Which makes me ask what the hell are you doing in here???

What a productive post. :S

There's nothing positive in simply agreeing with things people say which are incorrect. If people are going to put forward misleading comments, I'll point that out, thanks.

I'm not being self righteous or ranting. If you genuinely disagree that anyone in debt could have done anything to avoid it, then speak on.

I'd be grateful to know how you can predict this with such glib certainty, given that SRM Global and RAB Capital have valued the bank at around £4 per share and are hardly likely to be happy with much less.

I think you're going round in circles. If SRM/RAB prove that £4 is fair value, then £4 is what they should be paid, and it still won't represent a bail out. It's only a bail out if they get paid more than NR was actually worth. And that's not going to happen.

If this were true, why have they installed Ron Sandler at the helm with a salary of £90,000 per month and his deputy Ann Godbehere, earning £75,000 per month? Where else in the public sector do salaries like this exist? In addition, if Northern Rock were truly nationalised, why do they have FOI exemption? They are a private bank with public backing - any fiddling around at the edges by Darling and Brown is no more than a charade.

That's cobblers. The strings are all being pulled by the government. Obviously they have to pay sensible private sector salaries to get people with the necessary skills to do a complex job like this.

A bust bank should be liquidated and shareholders should lose everything. It might then be reconstructed or sold or run-off over a period of time by the authorities. Taxpayers should be the last in the queue to foot the bill. This has not happened but instead, taxpayers are in for a very large bill, probably very soon after the next election.

NR's assets exceed its liabilities. It isn't "bust". At 31/12/07 it had net assets of £1.7bn (compared to £2.2bn at 31/12/06). Liquidating NR by selling off its assets as a "fire sale" would definitely not have realised a sensible value for them. The sensible choice was between selling the business as a going concern, or nationalising it.

I'm still not sure what you see as the source of this large bill. Do you mean future NR losses, or do you mean the fair value payment? The fair value payment isn't a bill - it's exchange of like for like and would take account of future losses.

Most people are in debt most of the time and I am not sure what you are attempting to show with this, that people must never borrow, ever?

I'm not attempting to tell people how to live. I'm just talking about personal responsibility whereas others in this thread have sought to lay all the blame for personal debt on the lenders. Most people are not significantly in debt, other than their mortgages - and obviously nobody has to have one of them either - and it's not a necessary part of life.

I would agree entirely - for far too many people their financial stability is akin to a house of cards, the slightest breeze and it all falls down.

Again, I would agree with most of this and in particular your final paragraph.

Thanks. I'm glad we have some common ground.

I think that society has allowed individuals' approach to money management and debt to get seriously out of control over the past 20 or so years. Before that, people genuinely did live within their means as much as they could and there was a real social stigma against "debt" however that was defined.

But as credit became easier to obtain, society became IMHO over-tolerant of it and nobody bothered to ensure that young people had a clue how to manage money by the time they left school.

[Guest]

Re: General comment about mortgage arrears

NR's assets exceed its liabilities. It isn't "bust". At 31/12/07 it had net assets of £1.7bn (compared to £2.2bn at 31/12/06).

I'm curious, where did you get these numbers from?

[EXC]

Re: General comment about mortgage arrears

What a productive post. :S

Do posts have to be productive?

Or did this come from the same forum manual that gave us 'smiley faces denote a joke' and 'it's perfectly acceptable to belittle someone for a minor spelling error'?

[theGobbyOne]

Re: General comment about mortgage arrears

Like i said Argen think yourself lucky you dont have any debt...........Life isnt always black and white...........Be adventurous and look outside the box!!!!!!!!!

[argentarius]

Re: General comment about mortgage arrears

I'm curious, where did you get these numbers from?

Northern Rock's 2007 accounts which are on their website.

Do posts have to be productive?

Or did this come from the same forum manual that gave us 'smiley faces denote a joke' and 'it's perfectly acceptable to belittle someone for a minor spelling error'?

It wasn't belitting, it was a joke. As I've already pointed out.

Gobby's post wasn't productive because all it did was misinterpret my comments as a personal attack on those who are in debt. Nothing I've said is intended to be interpreted in that way at all.

Nor is banging on and on about some supposed past transgression which is a matter of opinion in any case.

Like i said Argen think yourself lucky you dont have any debt...........Life isnt always black and white...........Be adventurous and look outside the box!!!!!!!!!

I have never said anything is just black and white. The whole point of what I was posting on here is that to suggest that debt is entirely the lenders' fault is a misleading, black and white, view.

Sure, lenders encourage people to borrow, because that's their business. But they generally lend to people they expect to pay them back because otherwise they don't make money. To suggest lenders deliberately drive people into unrepayable debt is not true, outside the baseball-bat-wielding community at least.

IMHO, high street lenders want low bad debts because that's the business sector they've chosen to be in; the nastier lenders (the satellite TV advertising ones) tolerate a higher level of bad debt but their ideal is to have customers who keep repaying, but for their whole lives, because they keep rescheduling their debt.

[EXC]

Re: General comment about mortgage arrears

It wasn't belitting, it was a joke. As I've already pointed out.
Gobby's post wasn't productive because....
Nor is banging on and on about some supposed past transgression which is a matter of opinion in any case.

Jeeez. Read my post again and tell me if I asked why Gobby's post wasn't productive, or if posts have to be productive.

And while you're at it, how productive - or indeed funny - is a 'joke' about a spelling error?

[Guest]

Re: General comment about mortgage arrears

Northern Rock's 2007 accounts which are on their website.

Yes I know, I have read them as obviously have you.

I am puzzled therefore, how you can interpret what has happened as anything other than a bail out.

It really does not get much simpler than this. Here we have a private company, with assets of less than £2 billion bailed out by our Government with taxpayers money for over fifty times that what it is worth.

The company could not exist, much less keep trading, without that taxpayer backed Government guarantee, which means, whichever way you look at it, the fact that Northern Rock are still trading must be because they were bailed out. Otherwise, they would have gone bust.

Ron Sandler's job is to run down Northern Rock and sell off anything that might be worth any money but even assuming he gets a good price for most of it somebody is going to be left with the bits that nobody else wants. The assets that turn out to be worthless.

Guess who that will be.

Closing it down would have been cheaper, but nationalising it (née bailing it out) was the option this Government chose.

[argentarius]

Re: General comment about mortgage arrears

EXC Your posts, at least those targeted at me, are always pointless so I shall no longer respond. Save the wear on your fingers - bullying isn't appropriate.

Cetelco I think you are confused (or acting confused for the purpose of argument) between "net assets" and "assets". NR's gross assets are less than the money they've been lent by the government. They have the £1.6bn of net assets after taking account of all of the government debt. In other words, if everything was sold at its accounting value, they would have £1.6bn of money left.

The poorer quality assets are reflected at a value which reflects their poor quality - NR carries impairment provisions against them. And, in fact, NR doesn't have very many poor quality assets in any case - they didn't do true sub-prime lending. There will never be any assets that nobody else wants. Someone will buy debt in any form, at some price. Most of NR's assets will be realised at face value, by people redeeming their mortgages when they remortgage to another lender - just as would have happened if a third party had bought the business as a going concern.

Whilst NR was a private entity, you could argue that they were being bailed out by the government lending them money. But since they've ceased to be a private entity, that argument doesn't make sense. The government has exchanged £xbn of loans for £xbn of NR's assets - they've (supposedly) improved their position by gaining control.

"Closing it down" i.e. a fire sale of NR's assets would not have been cheaper unless the government had simply said "no" when NR first asked for assistance. At that stage, you are right - the government could have avoided any exposure. But they'd have lost thousands of jobs in Labour constituencies ... I wonder why they didn't take that route? I don't accept that they did it to bail out NR's shareholders - they self evidently haven't been bailed out.

I am interested that you think that 6,000 people losing their jobs would have been the best outcome.

Whilst the government's actions have been a shambles, the idea of managing NR through a period to a sale as a going concern was not, in principle, bad - it might have led to the most jobs being saved, and no loss of public money. But the government got cold feet about any potential for a third party buyer to make anything out of the deal - even though that would have effectively been a reward for making NR work - and went for the wind-down option.

[Guest]

Re: General comment about mortgage arrears

Cetelco I think you are confused (or acting confused for the purpose of argument) between "net assets" and "assets". NR's gross assets are less than the money they've been lent by the government. They have the £1.6bn of net assets after taking account of all of the government debt. In other words, if everything was sold at its accounting value, they would have £1.6bn of money left.

The poorer quality assets are reflected at a value which reflects their poor quality - NR carries impairment provisions against them. And, in fact, NR doesn't have very many poor quality assets in any case - they didn't do true sub-prime lending. There will never be any assets that nobody else wants. Someone will buy debt in any form, at some price. Most of NR's assets will be realised at face value, by people redeeming their mortgages when they remortgage to another lender - just as would have happened if a third party had bought the business as a going concern.

Whilst NR was a private entity, you could argue that they were being bailed out by the government lending them money. But since they've ceased to be a private entity, that argument doesn't make sense. The government has exchanged £xbn of loans for £xbn of NR's assets - they've (supposedly) improved their position by gaining control.

"Closing it down" i.e. a fire sale of NR's assets would not have been cheaper unless the government had simply said "no" when NR first asked for assistance. At that stage, you are right - the government could have avoided any exposure. But they'd have lost thousands of jobs in Labour constituencies ... I wonder why they didn't take that route? I don't accept that they did it to bail out NR's shareholders - they self evidently haven't been bailed out.

I am interested that you think that 6,000 people losing their jobs would have been the best outcome.

Whilst the government's actions have been a shambles, the idea of managing NR through a period to a sale as a going concern was not, in principle, bad - it might have led to the most jobs being saved, and no loss of public money. But the government got cold feet about any potential for a third party buyer to make anything out of the deal - even though that would have effectively been a reward for making NR work - and went for the wind-down option.

I'm not confused about anything and I assure you I know how to read a set of accounts. The only reason Northern Rock are still in business is because they were bailed out. The fact that the Government have now purchased them (after six months of expensive dithering) does not alter that fact.