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In the free market place the Government likes to ram down our throats at every available opportunity as the be and end all of fiscal proprietry, the Northern Rock was heavily dependent on income from US Subprime loans.

Subprime loans were loans made to people who were already in a default situation with one mortgage, those loans were then sold off to companies outside of the US and for a short time made big profits.

It was essentially nothing more than a grand pyramid scheme - the warning bells were first sounded before last Christmas - it still didn't stop the likes of Northern Rock continuing to invest in them.

Would you loan large amounts of money to people who had already defaulted on thier loans - were already in large amounts of debt ?

or would it be better to help those people out of their financial problems ?

Unfortunately there is no profit in the latter.

So the get rich quick money merchants in the US developed "subprime" - then they sold them on to equally greedy middlemen in places like the UK

Northern Rock bought into it big time, in what has now been described as an "extreme financial model" - in other words they took serious risks and now the Bank Of England is bailing them out with taxpayer money.

I will wager the Northern Rock shareholders still get their yearly dividend

According to its own rules the Bank Of England is not allowed to loan monies to financially unviable institutions - in a free market the Northern Rocks customers withdrawing of their money at the rate they were would have made Northern Rock economically unviable in 4 days - the shareholders would then have been in default

So the "free market economy" was intefered with - against the BoE's own rules, but with the connivance of the Chancellor of the Exchequer and using public money they shored up a stock held company.

Northern Rock played the stock options market, and the warning "value of shares can go down as well as up" - clearly no longer applies to shareholders in companies such as Nortern Rock - as they will be bailed out with "my" money, even though it is the company managers who are at fault

If I play the markets I get no such promise of being bailed out if I mess up

What happens when the next bank or building society is in trouble ?

Does the Bank Of England bail that one out ?

What about the one after that and so on and so on ?

If not why not ?

Surely if you bail out one bank that was using a dodgy business model to generate income you must bail out all of the others..

Does the bank of england bankrupt itself whilst the shareholders of affected companies still get their annual dividends ?

Why did the bank Of England not bail out BCCI when it was in a very similar situation to Northern Rock 4 months before it went bust ?

If we live in a free market economy, as the Government insists we do, the Northern Rock should have been left to find its own place - instead the free market economy was intefered with for purely political reasons.

There is a fall coming - and the Bank Of England and our Government should not be re-writing its own rules to seek short term political stability and playing fast and loose with "my" money.

What if my bank goes the same way ?

Will I be unhappy ?

Yes

but as the small print says

"can go down as well as up"