September 2007 Archives

Watched Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan the movie last night. Serioulsy, what was all the fuss about? I didn't laugh out loud once.

The Bank of England guarantee only applies to Northern Rock, not other financial institutions. Plus new accounts will not be guaranteed; only those customers who had an active account before midnight on 19th September. Furthermore, guarantee is not indefinite. When the financial markets become “more stable”, the guarantee will disappear.

With this in mind, if I had family members/friends who had money and other investments in Northern Rock, I would advise them to move funds elsewhere. Without a takeover by another bank, they are like a wounded animal that needs to be put out of its misery.

Is it just me, or does anyone also think that Leonardo DiCaprio is super hot? While watching Blood Diamond last evening, I marvelled at his development since the Growing Pains years.

America sneezes and the rest of the world catches a cold. Or at least, they start to sneeze too. Case in point, the dodgy mortgage deals that are wreaking havoc on the real estate market in the US are now putting the squeeze on financial markets across the globe.

Here in the UK, we almost had a major financial institution (Northern Rock) fail. But crisis was averted earlier this week when the Bank of England stepped in to say that they would now guarantee all investments. Thus, whereas before, people were guaranteed to get back 100% of the first £2,000 and then 90% of their next £33,000, now depositors will get 100% back irrespective of amount, if an institution goes belly up.

This is awfully nice of the government, but how does that hold banking fat cats accountable? The entire Northern Rock management team is still in place. Why has no one been fired? This was a clear case of mismanagement.

Also, what does this do for competition? With this blanket guarantee, UK banks now have further license to be more wreckless in their strategy for profits and it will then be the tax payers who have to pick up the bill should one go under. Somehow, this doesn’t feel right and it sets a dangerous precedent.

Now, I’m not saying that people who put their money in banks should not have some sort of guarantee that it will be safe. But as in life, everything comes with a risk. Thus, savvy investors know that you need to spread the risk around after carefully researching the options. This guarantee lets people off the hook should they now decide to put their savings into potentially higher earning riskier products at less stable banks.

Plus, irrespective of how much money you have (or don’t have for that matter), one should never have just one bank account. Put your money in a few places. Also, based on age and retirement goals, diversify the products you invest in.

Based on the stories of people waiting in those long lines, was surprised to learn that most had their entire savings wrapped up in one bank with little or no diversification in products. That my friends, is a fools strategy!

But hey, what do I know. It looks like I just purchased a house at the top of the property boom!

Well at least 10% anyway. The bank owns the rest. But hey, who'se keeping track. It's just lovely.

Finally. I am in possession of the keys for house I purchased in Bromley, Kent. Now the process begins to make it a home.

Provided there are no further hiccups, I get the keys to my new home next Monday, 10th September. Yeah me!