There has been a lot of speculation about Barclays Bank seeking
emergency funding from the Bank of England recently as a result of the
credit crunch (with banks unwilling to lend to each other due to
subprime mortgages of people with poor credit records, largely but not
just in the USA), which has led to big falls in its share price.
Whereas the Bank of England has so far been willing to bail out
Northern Rock after the run on that bank (with big queues outside its
branches of customers trying to withdraw all their savings), they
couldn't bail out a huge bank like Barclays and they would have to let
Northern Rock go bankrupt too, wasting the billions of pounds they
have already lent them. This is probably the reason why Northern Rock
shares fell another 4% yesterday, when other banks were recovering
slightly (maybe the Queen's Speech reassured some investors) after
losing a total of £5 billion on Monday triggered by the resignation of
the boss of Citigroup (the biggest bank in the world) due to credit
crunch losses.
On Saturday, an article appeared in the Herald (one of the two quality
Scottish daily newspapers, the other being the Scotsman), pointing out
that Barclays received two emergency loans from the Bank of England in
the summer, presumably before Northern Rock. The article said it was
for "technical reasons" but Barclays would obviously not resort to
such a drastic measure unless it had run out of funds.
The Herald article included the sentence "But the Bank of England said
it had not made any emergency loans through its penalty-rate, standing
facility on Thursday, a source which was tapped twice by Barclays
during the summer for technical reasons"; you can read the full Herald
article on the web at
http://www.theherald.co.uk/mostpopular.var.1807184.mostviewed.banking_...rs_prom
(this now works but didn't on Monday which I presume was due to
internet censorship).
On Monday I started distributing a document of mine I had just
written, entitled "Barclays Bank will go bankrupt!", in which I told
the world about the information the Herald leaked (providing proof via
the newspaperdirect service to view the full printed newspaper on the
screen since it wasn't properly on the internet). I sent it out more
widely yesterday, since I did not have much time on Monday.
That document is now indexed by Google, and can be found by searching
both the web and groups for suitable keywords - but not by Yahoo! or
MSN. Doing a normal Google search finds it on an anarchist forum
http://libcom.org/forums/news/barclays-bank-will-go-bankrupt-05112007,
from which I have been banned as a result (but my message has been
moved to a "bin" bulletin board rather than deleted). Doing a Google
Groups search finds it on a group for fans of the revolutionary singer
Sandi Thom (that I set up) at
http://groups.google.com/group/sandi-thom/browse_thread/thread/a858bf5...786dfd/
It can also be found on my website
www.socialiststeve.me.uk (with
colour coding to highlight important points and names of banks,
including several others that seem to be in financial difficulty).
Yesterday, an article appeared in the Guardian, stating that "Northern
Rock has borrowed only £18bn of the £23bn lent by the Bank of England
from its emergency loan fund, leading to speculation that other
British banks need £5bn of extra funds to cope with the global credit
crunch". You can find that article at
http://business.guardian.co.uk/banking/story/0,,2204473,00.html.
It therefore seems most likely that Barclays was lent the grand total
of £5 billion in the summer in two payments, but it is of course
possible that some of the £5 billion was lent to another bank -
perhaps the Royal Bank of Scotland, which like Barclays has been
having particular bad share price falls lately.
I included the Herald article's author, Business Editor Ian McConnell,
in a list of email addresses I sent the message to on Monday. I have
received an automatic reply, saying that he is out of the office until
Friday. It is therefore likely that full details of Barclays' problems
will appear in the Herald next Saturday (10 November) - and an
international run on that bank will start soon after that. Be warned
to get your savings out before the queues get too big...
I have created a hierarchy with an "Economics" bulletin board
(including sub-boards for stock markets, banks, building societies and
economic theories) in the "Ideas" category at my Revolutionary
Platform Network forum. I recommend using those boards to discuss
these issues further; I will post further messages about problems in
the economy there as well as interesting articles from the media. Go
to:
http://www.revolutionaryplatform.net/forum/index.php?board=156.0.
--
Steve Wallis (Glasgow, Scotland)
For important/urgent communications, please email:
warcrysteve.DeleteThis@yahoo.co.uk
Blogs:
http://groups.yahoo.com/group/steve-wallis-socialist-blog,
http://blog.myspace.com/galaxiasteve
My socialist website:
http://www.socialiststeve.me.uk
Founder, Ethical Capitalism Network:
http://www.ethicalcapitalism.org
Founder, Foundation for PR-based Socialism:
http://www.PRsocialism.org
Founder, Revolutionary Platform Network:
http://www.revolutionaryplatform.net
My socialist band, Galaxia/Red Day/Red Friday:
http://www.galaxiamusic.org,
http://www.myspace.com/galaxiamusic
Author, "Revolution Destroyed? Have I ensured that a world socialist
revolution will never happen?":
http://www.revolutiondestroyed.net
Free Priya Reddy (warcry):
http://www.warcryallies.net
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