Loans and Finance

Loans and Finance

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News and information about loans, money, debt, finance and business issues.

Friday, November 30, 2007

Uncomfortable Times

Mervyn King, the Governor of the Bank of England, issued a warning in terms that only a seasoned Bank of England could, that the economy is heading for a very rough patch.

He was addressing the Treasury Select Committee and warned of "rather uncomfortable" times ahead, with a "big risk" that the credit squeeze could intensify.

Whilst these warnings if used by mere mortals may not seem to be that dire, to emanate from the mouth of the Governor they are very serious indeed.

As I have noted earlier, it is fear that is the key feature of this "crisis". King said that "sheer uncertainty", and fear of what lies ahead was driving wholesale interest rates back up to levels seen at the height of the summer credit crises.

Mr King said:

"In recent months, the near-term outlook for both inflation and growth has become less benign.

For the UK, the consequences of are difficult to assess and are likely to be evident first in the housing and commercial property markets
."

The Monetary Policy Committee (MPC) meets next Thursday. The question is will they lower interest rates?

There are many debt burdened consumers and mortgage holders who are hoping for an early Christmas present from the MPC.

Thursday, November 29, 2007

Crisis Has Further To Run

David Blanchflower, the Bank of England Monetary Policy Committee (MPC) member, has stated that credit crisis that is damaging the UK economy and housing market has further to run, and that banks' losses could be much greater than currently estimated.

Quote:

"There is still concern in the credit market."

In a less than cheery pre Christmas interview with the Birmingham Post, he indicated that worse is to come.

As such he is calling or an early interest rate cut, and is supported in that call by Sir John Gieve another member of the MPC. Given that the MPC consists of 9 members, it just requires 3 more to bring about a much needed reduction in rates.

The question is will they have the vision to do this?

Wednesday, November 28, 2007

War is Declared

Whilst Northern Rock has been all but destroyed, in terms of value and reputation by the ambitions of those who once sat on its board, the shareholders do not intend to be thrown into the dustbin of history without a struggle.

Northern Rock's largest single shareholder John Wood's SRM Global hedge fund has increased its stake in order to oppose the board backed bid for Rock by Virgin, which many shareholders believes undervalues the company.

Virgin has received the explicit backing of Rock's board, and the muted backing of Chancellor Alistair Darling. However, the two largest shareholders SRM and RAB Capital reportedly prefer a rival bid from Luqman Arnold's Olivant group.

What is rather strange in all of this is the fact that the board of Rock have not even given the rival bid any consideration.

Some are concerned that undue pressure is being applied by Darling to the board to make this problem go away as quickly as possible, thus reducing the government's exposure to the ongoing fallout.

In effect, Rock has been quasi nationalised.

SRM are having none of this and now control 8.5% of the Bank, together with RAB Capital the rebel alliance of shareholders now control north of 15%.

However, Sir Richard Branson is no shrinking violet. He has upped the ante by taking out full page adverts in national newspapers, signed by him defending the bid.

War has been declared!

Tuesday, November 27, 2007

Contact4

I wrote earlier this month about the plague of cold calls that I had been receiving from Contact4 who hide behind a variety of phone numbers (eg 08445560022, 08445560020 and 016131787000) in order to evade call blocking.

I had, at the time, raised a formal complaint with the Information Commissioner's Office (ICO).

I have now received a written response from the ICO. The ICO confirm that Cobntact4 has breached the requirements of the Privacy and Electronic Communications Regulations 2003.

So far so good!

The ICO then goes on to say that the Commissioner has no powers to punish an organisation for breach of the regulations, all that he can do is write to Contact4 reminding them of their obligations.

The ICO have written to Contact4.

Seemingly Contact4 have to continue to make a pain in the arse of themselves, before the ICO will pass on my complaint to the Regulatory Action Division.

Clearly this is not a system designed to help the individual complainant.

My question therefore is this:

What is the point of the regulations, the Commissioner and the ICO if they will not enforce the regulations?

I sent the ICO a link to this post today, together with the following questions:

"Thousands of people are being plagued on a daily basis by Contact4 (do a Google on them, or their phone numbers), why do you sit back and do nothing (ie merely write to them "reminding them of their obligations")?

What is the point of the regulations, the Commissioner and the ICO if they will not enforce the regulations?

Kind regards

Ken Frost
"

Monday, November 26, 2007

Northern Rock

Norther Rock shares initially fell by as much as 18% in early trading today. However, as at 9:15am they had risen by 53% on the back of the board's backing for the Virgin bid.

Northern Rock Chairman, Bryan Sanderson, said:

"A solution that firmly restores the company's prospects has been identified.

Furthermore our retail depositors can be fully reassured that the government has said it will ensure savers' money is safe whatever the outcome
."

Source Bloomberg

Clearly I as talking bollocks yesterday, when I said that the shares would drop like a stone.

Sunday, November 25, 2007

Rock Shares Set To Collapse

I don't think it requires any skills in finance, or clairvoyance, to predict that Rock shares will fall through the floor tomorrow morning.

"A consortium led by Virgin Group plans to launch a deeply discounted share placing for Northern Rock that would value the beleaguered bank’s shares at less than half the current price.

Under the Virgin plan, Northern Rock's shares would be valued at between 20p and 40p. Virgin would inject a total of £1 billion in cash as well as its Virgin Money operation, worth between £200m and £300m, into the bank and take a controlling stake.

On Friday, Northern Rock's shares closed at 86p, valuing the bank at £361m. But the revelation of the discounted placing will put further pressure on the company's share price this week.

However, the Virgin proposal, which has financial backing from Royal Bank of Scotland and Citi, appears to have won support from the Northern Rock board. Virgin and the private-equity group JC Flowers are now the two front-runners to take control of the stricken mortgage bank. A preferred bidder could be announced within days
."

Source The Times.

Saturday, November 24, 2007

HIP's

The government clearly has a desire to cripple the housing market, just at the point in time that it has already been dealt a severe blow by the credit crunch.

That can be the only explanation for the completely barmy idea announced this week of rolling out HIP's across all sizes and types of houses.

Utter folly!

Thursday, November 22, 2007

HMRC's Staggering Incompetence II

It seems that our Prime Minister and Chancellor are not only guilty of setting up and running an incompetent organisation, but are also guilty of trying to blame a junior for the worse breach in security ever when in fact it was senior civil servants who were responsible.

Any government with such a cavalier attitude to security and the truth most certainly should not be entrusted with running the country.

The full story from The Independent is reproduced below:

The head of the National Audit Office, Sir John Bourn, locked horns with Her Majesty's Revenue and Customs and the Chancellor last night when he said the decision to post two computer discs containing the bank details of 7 million families was taken by senior HMRC officials and not, as Alistair Darling claimed, by a junior employee.

A public row broke out between the HMRC and the NAO over who was to blame for the blunder after Sir John launched a scathing attack on the former, saying high-ranking civil servants at the HMRC ordered the data – which the NAO had not requested – to be sent to his department. His comments contradicted Mr Darling's explanation to MPs on Tuesday.

The entire child benefit database was sent via internal mail by a junior official from HMRC in Washington, Tyne and Wear, to the NAO in London via courier TNT on 18 October.

Mr Darling said the civil servant broke the rules by downloading the data to computer disc and sending it by unrecorded delivery.

Edward Leigh, the Tory chairman of the Commons public accounts committee, said the NAO had asked only for basic details about child benefit recipients, without information on personal bank accounts, but was told by "high level" at the HMRC that it would be "too burdensome" to separate this data. He said he had been given a copy of a briefing note written by Sir John for the Chancellor, which suggested that senior HMRC officials authorised the release of the sensitive information.

The note says that the NAO requested data on child benefit claimants in a "desensitised" form, with bank accounts and other personal data removed, in March but an email from a senior business manager at HMRC stated that the data would not be desensitised.

Mr Leigh said the reason given for turning down the NAO's request was that desensitising information would require an extra payment to the HMRC data services provider EDS.

The disclosures will add weight to Tory claims that systemic failures at HMRC led to the worst loss of data in British history and cast doubts on the assurances by both Mr Darling and the Prime Minister that government bodies can be trusted to keep records safe.

It also raises suspicions that an office junior at the HMRC is being made a scapegoat for failures by more senior managers. That worker, who remains unnamed, was in hiding last night as the police search for the missing discs continued and the HMRC confirmed he was facing the sack. The man, who is understood to work in the IT department of the Child Benefit Agency, has been put up in a hotel with a minder to protect his identity as the clamour for his name to be published intensifies.

A spokeswoman for HMRC said: "His future is part of the investigation that is taking place. When that is completed disciplinary proceedings will follow. One of the outcomes of those proceedings is dismissal."

Senior civil servants are concerned that there should be no repeat of the public scrutiny and humiliation faced by Dr David Kelly, the government scientist who took his own life after he was exposed as a BBC journalist's source in the row over the "dodgy dossier" produced in the run-up to the Iraq war.

Mr Leigh's committee is launching an investigation into the lax data handling systems at the HMRC. It will summon Paul Gray, the department's former chairman who quit over the scandal on Tuesday, to answer MPs' questions.

Scotland Yard said officers from its specialist economic crime unit were helping to co-ordinate the investigation on Tyneside.A spokesman said: "Our inquiries will continue for the rest of the week."

It emerged yesterday that an almost identical breach rules governing the transfer of sensitive data took place in March. The NAO received discs from the Child Benefit Agency containing its full set of data on three occasions – yet none of its officials queried the decision to send out the data in an unfiltered form.

Wednesday, November 21, 2007

HMRC's Staggering Incompetence

The HMRC and Treasury finds itself further in the mire today, as more details emerge about the colossal failures of security in respect of the loss of child benefit data.

Yesterday I wrote that 15 million people were affected, in fact the figure is a mind numbing 25 million.

The discs seemingly were only password protected, they should in fact have been encrypted. This means that the data will be very easy to access, and it is reasonable to assume that the underworld is now looking for these discs.

Security experts have lambasted HMRC for its incompetence.

Tom de Jongh, product manager at SafeBoot, said:

"Basic policies were ignored. It appears that the fundamental policies upon which the National Audit Office and HMRC operate are flawed and it is no wonder that this breach has occurred.

The Chancellor freely admits that NAO and HMRC broke clear procedures, but that will not reassure the millions of families that are praying their financial details don’t get into the wrong hands
."

Brian Spector, general manager for content protection group at Workshare, said:

"It is staggering that an organisation responsible for the data of over 25 million child benefit claimants is still copying data onto CDs and not ensuring its full protection through encryption techniques.

It has never been acceptable for businesses or government departments to lose data, but in today’s information society, the flagrant disregard for the protection and security of this type of data is not acceptable.

The money invested in IT by the UK government must now be prioritised on security to ensure that the data of those the government serve – the public - is secure and protected
."

Jamie Cowper, director of European marketing at PGP Corporation, said:

"These discs should never have been transported in the first place – information of this type should only be transmitted using the strongest security protocols available such as encrypted batch transfer – but more to the point, these details should not have been stored in this medium.

Discs are easy to lose, but difficult to protect. This type of information should only be stored on formats where the data can be encrypted transparently, so that it remains protected wherever it resides, and whether at rest or in motion
."

An ex member of the HMRC spoke anonymously to the BBC:

"I wasn't surprised in the least when I heard the news. The problems with Child Benefit are only the tip of the iceberg.

Morale is non-existent. Mistakes happen continuously. Rooms full of unopened post are not uncommon.

Arbitrary individual hourly targets meant that people cut corners. It doesn't matter if you make mistakes because you won't be held accountable.

There is no trust between management and staff.

You are like a number. It is utterly demoralising.

I've spoken to some of my former colleagues about the Child Benefit blunder, and they are utterly apathetic. It's just one thing on top of another.

People hate it, but after 20 years or whatever they feel they can't get a job in the private sector.

Something like this was going to happen sooner or later
."

The above is not only a damning indictment of HMRC but also an indictment that applies equally well to all other bodies in the public sector, and exposes the consequences of ten years of Brown's rule at the Treasury.

The damage he will do to the country as Prime Minister, were he to remain in office for that long, is mind boggling.

Tuesday, November 20, 2007

HMRC Lose Data

Congratulations to HMRC who have succeeded in losing data relating to the child benefit records of 15 million people.

That's quite an achievement, even by HMRC standards of incompetence.

Chancellor Alistair Darling, who is having less than a pleasant week (what with the Northern Rock debacle etc), is making a statement to MPs.

The confidential details were contained on a computer disc, and is understood to have been lost in transit.

HMRC's chairman, Paul Gray, has resigned.

Seemingly the Treasury and government have known of this for the past ten days. One might ask why it is only now that they have chosen to share this knowledge with the rest of us.

The answer is simple, the news leaked.

Revenue and Customs claims that it does not think that the records (names, addresses, date of birth and bank accounts) have fallen into the wrong hands.

This statement is of course complete nonsense, given that they don't know where the records are. Quite why they assume that the public are so naive and gullible as to believe their reassurances is beyond me, and adds insult to injury.

The Metropolitan Police have confirmed they are "making inquiries" into the discs.

This is the same government that would have you believe that data stored on their beloved id cards would be safe in their hands!

Northern Rock Suspened

Trading in Northern Rock shares was suspended for the fifth time in early session today, after the stock slumped more than 41%.

It has now resumed trading, and is currently down around 21% at around 82p.

Congratulations to the board of Northern Rock for destroying this once solid company with their high risk lending strategy. They have succeeded in consigning the company to the dustbin of history, in a similar manner to the board of Marconi.

The shares in Rock are now the plaything of the speculators and will see rises and falls over the coming days that will make some individuals very rich, but will be of no comfort to the long term shareholders who bought in when the stock was valued at over £12.

I trust and assume that those responsible for this will not be receiving golden handshakes when they depart.

Monday, November 19, 2007

Clock Ticking For Rock

The Chancellor of the Exchequer, Alistair Darling, is seeking guidance from the European Union authorities in Brussels about how the £20BN Bank of England loan to Northern Rock can be extended without breaching the rules.

Meanwhile, Northern Rock's board met over the weekend to discuss the proposals it has received so far.

One is from Luqman Arnold's Olivant Group, which proposes to install its own management team in the bank, and the other from Virgin Group.

Rock revealed today that the bids are less than its share price; needless to say the price this morning fell like a stone, and was trading barely above £1 in early morning trade.

Northern Rock said:

"The value to shareholders from any of the proposals (and indeed any of the other strategic options available to the company) remains highly uncertain."

Shareholders have called on the Government to call off the auction, and are far from happy with the price.

However, realistically, what can they expect?

The company is dead, and has been destroyed by the board in a similarly reckless manner as the board of Marconi destroyed that once solid company.

The shareholders should focus their ire on the ex (soon to be ex) members of the board who did this, rather than the government.

Saturday, November 17, 2007

Bloodbath at The Rock

After weeks of mounting pressure, following the destruction of Northern Rock, the CEO (Adam Applegarth) has finally been persuaded to fall on his sword and resign.

Applegarth will leave by the end of January.

His is not the only head to role in this debacle, that has seen not only a major brand/bank destroyed, but the first run on a British bank in 140 years (thus severely damaging the credibility of Britain's financial system and that of the regulatory authorities).

Matt Ridley, the much maligned and invisible chairman, resigned in October; the bank has now announced that four non-executive directors - Sir Derek Wanless, Nichola Pease, Adam Fenwick and Rosemary Radcliffe - will step down with immediate effect.

Applegarth earned £1.36M last year. Northern Rock refused to comment on whether Applegarth would receive a compensation package when he leaves the business. The more pertinent question is whether they actually would have the funds to be able to pay him.

Rock also stated that three further directors - David Baker, Keith Currie and Andy Kuipers - would step down from the board, although they would remain officers of the company.

A complete shambles, and a humiliation for Britain's financial services industry and regulatory regime.

What other horrors are lurking in the woodwork in other banks I wonder?

Friday, November 16, 2007

A Mere £1.3BN

Barclays sought to calm the markets yesterday by stating that its investment banking business could maintain its growth in spite of a write down of £1.3BN as a result of the credit crunch.

John Varley, the CEO, said that Barclays Capital and Barclays could weather storms in parts of their operations.

The bank wrote down £500m of credit, mortgage and leveraged finance assets for the third quarter of the year and an extra £800m for October.

Mr Varley said:

"We do feel confident about that [Barclays Capital's growth]. It is not unusual in an investment banking business to have some areas that are hot and some that are cold. The sub-prime area, which has not historically been a big area for us, is cold at the moment. We have other areas that are hot."

He added:

"Is the business model working well? Is the risk management working well? Is there diversification by geography and asset class? The answer is in the numbers."

Last week there had been rumours of a massive £4.9BN writedown and the resignations of Mr Varley and Bob Diamond, the head of investment banking.

Wednesday, November 14, 2007

The PPI Scandal

The British financial services industry seems to have a death wish as far as it reputation with the consumer is concerned. Not content with foisting underperforming and useless endowment products on the unsuspecting public in the 1980's, it managed in more recent years to do the very same thing with PPI (Payment Protection Insurance) products.

The payback from this wanton mis-selling is now coming back to bite them.

Brunel Franklin, a claims specialist, has written to the Financial Services Authority (FSA) highlighting a number of serious problems in the PPI mis-selling sector, including what it believes is a deliberate statistical manipulation of the mis-selling figures by the PPI vendors.

According toe Brunel Franklin, Lloyds TSB and Welcome are some of the worst offenders and are offering gestures of goodwill across the board.

Anthony M. Sultan, managing director of Brunel Franklin said:

"We believe that vendors are using gestures of goodwill to mask the true scale of PPI mis-selling from the regulator. If the significant percentage of complaints are being dealt with as gestures of goodwill, how do we know that these are being declared to the FSA as complaints and showing up as incidences of mis-selling?

Lloyds TSB are pretending that there has been no mis-sale and no formal complaint, and are hoping to sweep thousands of complaints under the carpet under the guise of gestures of goodwill.

Our suspicion is that they are not being declared to the regulator and never appear in any FSA statistics on PPI mis-selling.

This mis-selling crisis may be bigger than endowment mis-selling in terms of the numbers of people affected and the total amount of compensation due, so it is perhaps not surprising that the vendors want to play it down in the hope that it will go away.

It will not go away and we are determined to get people the compensation they are entitled to
."

As if endowments and PPI were not enough, the financial services industry also has "blood on its hands" wrt extortionate bank and credit card charges, credit refusals for people with good credit ratings, excess bonus payments to underperforming directors, excess management fees for underperforming investment funds and the destruction of Northern Rock.

Hardly a "stellar" performance so far!

Tuesday, November 13, 2007

Spend Spend Spend

Proving once again that they are immune to all forms of financial shocks, financial reality and the credit crunch; the British consumer intends to have a jolly good Christmas, and spend themselves out of recession.

That at least is the conclusion of a survey conducted by Deloitte.

In its annual Christmas retail survey, Deloitte found that the average person plans to spend a total of £706 on this year's festivities, up from £662 last year.

However, there is a caveat, the initial survey was carried out in September before the credit crunch started to bite. That being said, the question was reasked in November and the answer given was more or less the same.

Richard Lloyd-Owen, head of consumer business at Deloitte, said:

"Early indicators suggest concerns about bruised financial markets and consumer confidence are nothing more than concerns.

The impact of the credit squeeze could play out in coming weeks when events have had time to percolate through consumer mindsets, but we think it's unlikely
."

The largest portion of the increase in consumer's planned expenditure is on socialising, with the average spend expected to be £143 up 18% £121.

Quite whether people will be feeling so happy with their expenditure in January, when credit will be hard to come by, is another matter.

However, Christmas is for wants not needs.

That's the real meaning of Christmas!

The British consumer may just save the economy, let us see.

Monday, November 12, 2007

Fear

The ongoing, self inflicted credit crunch, is producing an atmosphere of fear in the City. Banks and financial institutions are seeing their share prices drop, as investors fret over which one will be next to announce profit write downs and liquidity problems arising from the credit crunch.

Barclays has decided to try to grab the bull by the horns by asking its auditor, PricewaterhouseCoopers (PwC), to help with a breakdown of Barclays' financial performance for a trading statement due on November 27.

On Friday Barclays shares were briefly suspended, as a result of rumours concerning a possible writedown of £5BN.

Barclays quickly denied the rumours, and John Varley (CEO) issued an internal memo to staff assuring them that the business was sound.

Varley, in his memo to staff, said:

"If there were any substance in the rumours that I have been hearing in recent days, we would not have been required to have made a stock market announcement. But we have not."

What we are now seeing is irrational and unsubstantiated fear undermining the stability of sound financial institutions. This needs to be stopped here and now.

As Roosevelt once warned:

"We have nothing to fear, but fear itself."

The financial services industry and the regulatory authorities need to get a grip on this, otherwise what people fear will take tangible form and the financial markets will totally freeze up.

Friday, November 09, 2007

Fiddling While Rome Burns

Thomas Huertas, acting managing director of wholesale and institutional markets at the Financial Services Authority (FSA), gave a less than ringing endorsement of the quality of staff at the FSA when speaking at the Reuters Finance Summit.

Quote:

"We are operating with the team that we have. It is a high quality team. It is in our view doing the job.

We can always use better quality people. We said we would like to have more quality people and any CVs you push in our direction would be most welcome
."

The FSA has come under heavy fire for it's "lightness of touch" in applying principles based regulation, rather than a rules driven approach. The Northern Rock debacle has hardly helped its reputation.

Huertas claims that the full lessons from the Northern Rock debacle will not be clear until next year. Far too long to wait for that, in my view.

Asked if the FSA was operating at full stretch, as a result of the liquidity crisis, Huertas said:

"Yes, it's fair to say that.

We have business as usual to regulate and supervise 20,000 firms here in the UK and there is a huge amount of work on liquidity and capital and large exposures that have dramatically increased and our staff are stretched
."

He believes that it is too early to talk about shaking up the tripartite system of regulating banks.

He is wrong.

The Northern Rock debacle provides clear evidence that the current tripartite system does not work, as does the aftermath where each member of the tripartite system (Bank of England, Treasury and FSA) sought to blame the other.

The fact remains that the board of Northern Rock were allowed to destroy the company, without any meaningful intervention from the regulatory authorities.

Make no mistake, Northern Rock in its current form is finished; the fact that the board (aside from the chairman) cling on to office and the FSA claim that no changes in the regulatory framework are needed is a disgrace.

The FSA is fiddling while Rome burns.

Thursday, November 08, 2007

Contact4

Whilst the Treasury, Bank of England, FSA and assorted financial experts argue amongst themselves as to the causes, cures and effects of the current credit crunch and debt crisis that is swamping the UK, they may care to consider the consequences of this to the people in the street.

There are finance companies and call centres that happily cold call thousands of people a day trying to foist unwanted, unnecessary and unwise financial products onto them. They use times of financial uncertainty to their advantage.

Whilst those of us who are financially literate can easily dismiss these calls/offers, as one would swat an annoying fly, there are many in the UK who are not financially literate and who are easy prey for these odious people.

Allow me to provide you with my own personal experience of the type of organisation that operates in this field.

Over the past four weeks or so I have been swamped with cold calls from one particular call centre operating in Scotland, called Contact4. They claim the following:

"Our team of Contact Service Consulting Specialists bring unparalleled experience and deliver the highest standards in both the Inbound - Outbound Industry.

Services provided by Contact4 are underpinned by 4 key principals: Passion, Decisiveness, High Standards and Respect
."

The cold calls that I have received from this group claim to be "courtesy calls" on behalf of two finance companies, one of them being Smarter Loans (oddly enough the owner of Contact4, Pearse Flynn, is also Chairman of Smarter Loans).

I have on numerous occasions said quite directly, at the beginning of the call, "no thanks" and put the phone down.

Does this stop them?

No!

The fact that I have been receiving the calls in the first place is rather troublesome:

1 I am ex directory

2 I have not in the last year applied for any credit, nor am I financially distressed, nor am I looking for a loan or extra credit.

3 I have, for a very long time, been registered with the telephone preference service. This means that cold callers are obliged not to call me. Quite why Contact4 have nee calling me is therefore a bit of a mystery.

Last week I formally complained in writing to the Information Commissioner's Office (ICO). The ICO has legal powers to ensure that organisations comply with the requirements of the Privacy and Electronic Communications Regulations.

I have heard nothing back from them, as yet.

However, still being plagued by Contact4 I blocked the number that they used (08445560022) using BT's "choose to refuse" service this week.

That worked until last night, when I received another call from them this time using 08445560020; it seems that their computer has been programmed to navigate around phone blocks.

Fortunately the BT service I use identified the "real" number behind the calls, as being 016131787000. I called this number, and got through to Contact4.

They say they got my number from maybe a data package that they bought.

The upshot being I have instructed them to remove my number immediately, and have also blocked their 0161 number.

Whilst I am well able to say no and to see through the fine print of financial products sold in this manner, there are many who can't and who are being pushed into taking on board products they don't/can't understand or indeed afford.

I would therefore strongly suggest to the Treasury, FSA, Bank of England and all other relevant regulatory authorities that if they want to bring some form of order to our over heated and over burdened credit market they need to address the issues on the front line, such as cold calling.

Those of you who have received calls from Contact4, and want to stop them them, here are their contact details:

Location

Glasgow HQ Address
Cirrus Building
Marchburn Drive
Glasgow Airport Business Park
Paisley
PA3 2SJ

Tel: +44 (0)141 305 2000
Fax: +44 (0)141 305 2001

Campbeltown Contact Centre
Kintyre House
Kintyre Business Park
Snipefield
Drumore
Campbeltown
PA28 6SY

Tel: +44 (0)1631 787 000
Fax: +44 (0)1631 787 001

Dingle Contact Centre
Milltown Business Park
Dingle
Co. Kerry
Ireland

Tel: +353 (0)66 915 3102
Fax: +353 (0)66 915 3101

Gweedore Contact Centre
Gweedore Business Park
Derrybeg
Letterkenny
Co. Donegal
Ireland

Tel: +353 (0)74 953 3300
Fax: +353 (0)74 953 3301

Contact4 Achill
One Stop Shop
Achill Sound
Achill
Co. Mayo

Tel: +353 86 58 6515

Here is their contact webpage Contact4

Gordon Hellyar
Business Development Manager
Contact4
Cirrus Building
Marchburn Drive
Glasgow Airport Business Park
Paisley
PA2 3SJ

Telephone: 01631 787000

gordonhellyar@contact4.com

Here are some of the numbers they use to call:

-08445560022
-08445560020
-016131787000

Wednesday, November 07, 2007

Deposit Protection

The government, during yesterday's Queen's speech, outlined its plans to bring in legislation to strengthen protection for bank depositors and institutions "in distress". This is in response to the Northern Rock debacle.

However, as with many political promises, no date has been set.

The Treasury issued a statement:

"The government is committed to extensive discussion and consultation before bringing forward legislation in the forthcoming session of parliament." Noting that the government would do nothing until is was "assured that the benefits of the proposed changes exceed the costs".

The reform would have to meet five preconditions set down by the government:

1 It must be clear and provide consumer confidence

2 Transparent on how it would work in the event of another crisis and credible within the wider market

3 Preserve "critical" retail banking services while customers find another provider

4 Maintain the UK's reputation as a financial services centre

5 Protect taxpayers' interests and ensure "appropriate cost sharing"

A consultation exercise will begin next year, therefore don't expect anything in the near future; unless of course there is another Northern Rock waiting in the wings.

Tuesday, November 06, 2007

The Silence of The Banks

Whilst the credit crunch has hit home on the other side of the Atlantic, with profit warnings issued (eg Citigroup) and the scalps of leading bankers being claimed, on this side of the Atlantic matters seem relatively sedate and calm (aside from the Northern Rock debacle).

However, there are those who believe that this calmness precedes the storm and that the silence of the banks about their exposure wrt bad debts and dubious debt bundles precedes a similar meltdown here.

Analysts are calling for British banks to give public statements about their precise exposure to the global credit crisis.

Credit Suisse warned, in a briefing note, that investors are being "spooked" by the banks' silence. The complexity of British accounting standards has allowed the banks to perform a "smoke and mirrors" act wrt disclosing their true exposure.

The Financial Services Authority (FSA) claim that banks are bound by the Stock Exchange listing rules, in the same way as other companies. However, the rules allow companies to keep information private if they are unable to quantify the size of the problem reasonably precisely.

Given the ever shifting nature of the credit crunch, that is quite an opt out clause.

Whilst the banks, the analysts and the regulatory authorities engage in theorising about the true nature and size of the crisis, the hapless British financial consumer is already feeling the effects. Banks and other financial institutions are already tightening their lending rules, and reducing the credit that they extend to consumers and potential house buyers.

It is clear that, for the consumer holding debt, matters will get a lot worse before they get better.

Monday, November 05, 2007

Sainsburys' Deal Off

Delta Two the Qatari investment group has cancelled its bid to take over Sainsburys' citing turmoil in the credit markets.

Delta Two claims that the cost of borrowing has risen significantly since it first made its 600p per share offer.

Sainsbury shares fell 18% to 454p in early trading on the news.

The credit crunch is now proving to be the convenient excuse of choice for those wishing to change their minds in respect of deals and business agreements.

Friday, November 02, 2007

Congratulations Northern Rock

My congratulations to the board of Northern Rock, or rather those members of the board who were responsible for the fiasco that has caused them to destabilise the UK financial markets and borrow emergency funds from the Bank of England.

Figures released by the BoE show that Northern Rock are now indebted to the BoE to the tune of £23BN. That is nearly £730 for every UK taxpayer.

It doesn't stop there, there is also another £20BN of retail deposits that has been indemnified by the Treasury. This brings Northern Rock's indebtedness to us (the taxpayer) to a whopping £40BN, roughly 3% of GDP.

By the way, it doesn't stop there, the BoE predict that by the end of the year Northern Rock will have borrowed £30BN.

Well done lads!

I hope that you are proud of yourselves?

Northern Rock's chairman, Matt Ridley, has resigned; when are the rest of you going?

Thursday, November 01, 2007

Bankers Discuss Northern Rock

The UK's leading banks will meet the Treasury, the Bank of England and the Financial Services Authority today to discuss whether a full inquiry is needed into the Northern Rock debacle.

The talks will be held at a meeting, hosted by the British Bankers Association, about the credit crunch.

The meeting will also focus on whether structural legislative changes are required in order to prevent this debacle happening again. In other words the tripartite system of regulation has failed, and changes need to be made.