It’s also the Trumpo Blog’s 4th Birthday, no coincidence-born out of despair.

Firstly may I apologise for the length of time since my last blog, a lot’s been going on.

I started writing this Blog in September 2007 just as Northern Rock was hitting the wall, and I can tell you now that the last 4 years have been challenging to say the least. I think it’s worthwhile we take a look at 4 years ago (I know it’s scary how quick time has gone by) and nearly to the day since the proverbial hit the fan, and consider what I was saying then, and we can open comments then thereafter.

In September 2007, my Blog headline and feelings at the time;

Are Northern Rock, Alliance & Leicester and Bradford & Bingley finished?

Finished? No. Finished as independent commercially viable businesses? Yes.

The Bank of England stepping in as they have to underwrite the Rock or as the newsreader on the 10 O’clock news last night referred to them “Northern Wreck” we have seen the UK government follow in the footsteps of George Dubya and underwrite the current financial crisis and take some form of responsibility for it.

Trumpo thinks that the Bank of England and the UK Government have woken up six weeks too late and thought oops, this isn’t going away, what the hell do we do?

Government response…

“I know, the UK population trust us so we will go on telly and tell them that their money is safe”

Public response…

“Let’s definitely withdraw our money, and fast…”

First of all, the savings are safe, and as Trumpo has a mortgage with Northern Rock, I hope that Northern Rock and the other troubled lenders mortgage rates aren’t going to go up too much to balance the books.

Unfortunately the banks that rely on 3rd parties for their funding are now “at risk” and as such are damaged goods, safe – but damaged, and their only hope of recovery is a quick and orderly acquisition by one of the big true asset backed clearing banks.

This whole situation is about poor handling of a well known problem that has been brewing for months and a head-in-the-sand mentality by the Regulator, the Government and the spin doctors.

Trumpo’s opinion is that when the dust has settled, heads will roll in Government Offices and FSA HQ for the poor handling of a situation that nobody wanted to take responsibility for. Their lack of action has resulted in terrible and preventable expense to the consumer and the mortgage advice community as a whole, many whom have to bear the brunt of it all – clients homes being lost, jobs being lost and an industry turned on its head!

What’s happened in the last 4 years to bring us to the banking reforms we have today?

The Vickers report came out this morning with the expected new banking reform proposals, which is basically a common sense approach to traditional banking. The prime objective is to put everybody at ease and give the world and the tax paying population confidence that we won’t have a run on a UK bank again.

In simple terms, it is proposed that a fence be put up between the risky side of a banks operations and the less risky. i.e. The 21 year old trader in ABC Bank’s securities trading desk, can’t dip into Granny’s savings account and go and play with it on the stock market.

The proposal by Vickers today is that if the risky side of the business fails, as inevitably some will, then Granny’s and just as important the tax payer won’t be panicking and asking where’s all the money gone.

I think the objective of the report has been acheived, however the Bank’s have until 2019 to get all their ducks lined up in a row. Between now and then anything can happen, so I won’t be putting the financial bunting out just yet.

The one thing we really have to watch out for is what happens in the eurozone. This will have far more impact on the finances of each and everyone of us in the UK, so we will be watching what happens with the situation in Greece.

I have been tweeting @themoneybrain today and it looks like Greece will be running out of money by October. It’s now pretty much a forgone conclusion that they will be defaulting on their debts, I just hope this doesn’t push other weak countries over the edge and they have a run on their Banks. There’s a good chance this may happen.

You never know, in 4 years time Greece might be prospering under the Drachma and be completely debt free having written off their debt’s as a result of a cracking new TV advert;

“country struggling with debts ? Call us now to take advantage of a new european approved debt solution, write off 100% of your debts and be stress fee with a new eurozone CVA – The Country Involuntary Arrangement”

Stranger things have happened.

Keep smiling.

You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.