Northern Wreck

Shares in Northern Rock have plunged to an all time low today to 54p (they traded less than a year ago at £12), on the not unexpected news that the government is close to nationalising the Wreck.

The previous board members of Northern Wreck must be feeling really proud of themselves for destroying this bank!

Quite why the fall in price should come as a surprise to shareholders baffles me. Had they bothered to read this column they would have seen that I have been warning for sometime now that the shares are nothing more than the plaything of the speculators, and will end up in the rubbish bin in the same way as Marconi.

Virgin and Olivant, two companies trying to arrange a deal, are struggling to arrange funding.

Yesterday's extraordinary general meeting, was a damp squib and a waste of time. The board only lost one minor resolution brought by rebel shareholders.

Brown meanwhile kicked any remaining support from under the share price by saying:

"There are a number of companies in the financial private sector that have expressed an interest but public ownership - later to move it back into the private sector - is one of the options. The reason we've got to look at everything ... is that the stability of the British economy is the issue."

Meaning that he will do whatever is necessary to ensure this mess is sorted out ASAP; ie he will nationalise it within weeks.

It is unclear how much would be paid to shareholders in the event of nationalisation. However, the lower the share price the less they will be paid; it will be pennies not pounds.

This is a slow motion car crash that the shareholders could see, yet refused to acknowledge.