The confirmation by the Bank of England to support Northern Rock PLC, 12 September 2007 is the first major sign of the international precipitation since the collapse the U.S. subprime lending market. In the U.S., lenders like New Century Financial Corporation, the second largest lender of subprime mortgages in California, have gone bankrupt. In the UK, Northern Rock is classified as a bank, the authorities intervened to prevent market panic. There have been persistent Rumors that several major UK banks such as Barclays, have liquidity problems and the Bank of England wanted to send a clear signal that no bank important will be allowed to fail.

The irony is that Northern Rock is generally considered that a successful company. The share price was GBP12.58 in February but on 14 September 2007, had dropped to GBP4.33.

Northern Rock achieved sales growth of 100% mortgages offer home valuations, plus an extra 25%. Its projected growth rate was 20% per year, however, market growth was only around 10%. In order to achieve this turnover, they need very attractive mortgage products and also to adopt a flexible approach to consumers with credit histories mixed.

They were so successful winning market share of 22% of all mortgages new measures in the first 6 months of 2007. Growth in the number of mortgages are financed mainly through the wholesale market, as opposed to individual savers' deposits. It is estimated that about 75% of the funds from this source. The near collapse of interbank lending in August hungry Northern Rock funds effectively and caused a liquidity crisis.

Compared to the scene U.S. high risk, Northern Rock, seems almost conservative. New Century of California had a vision so severe on the ratings of credit customers of the poor who allegedly make advances to a person who emerged from bankruptcy yesterday. Northern Rock, on the other hand, has not been accused of failures of diligence in their lending policies and risk assessment methods of the mortgage. Northern Rock has not been affected by mortgage defaults, but by a lack of funding needed to finance its ambitious expansion.

The housing market in the United Kingdom and is ready to continue the downward trend in the U.S.. Prices have fallen more than 10% in some places like Stockton, California, where the recovery rate is running at 3.7% of households.

Despite the differences between Northern Rock and the U.S. bankrupt mortgage lenders, the cause remains the same. This is the continued growth of consumer debt.

In the United Kingdom, the average level of household debt, excluding mortgages, is GBP8, 856. Average household debt is GBP56, 000 if you include mortgages. It noted that these are average figures and include a large number of households without mortgages or credit card balances.

Some 11.8m UK households have mortgages and the average amount outstanding is GBP96, 560. Also, if the mortgage debt is not limited to households with unsecured loans, mainly credit cards, then the debt figure rises to 20 GBP, 600. Therefore, the average total debt of households with mortgages and credit card loans is a staggering GBP117, 160.

Although U.S. figures are calculated in different ways, credit card debt and car loan average is U.S. $ 18,700 per household and mortgage debt is U.S. $ 74,000.

In both countries, but especially in the UK, rising consumer debt is based on the expectation of rising house prices, full employment and low interest rates. If any of these conditions change, then the results will be serious if not catastrophic.

The growth of the economy the UK in the last 20 years has been driven by the steady increase in housing prices and backed by the North Sea oil. During this time, manufacturing products in the UK has continued its secular decline and the number of British-owned companies in manufacturing and the service sector. The sector fastest growing economy has been financial services and the city of London, which has eclipsed Wall Street.

In both countries, the damping inflationary pressures, due to cheap imports, is unlikely to continue indefinitely. The globalization process is almost complete. Wages and costs material will increase in China and other Far Eastern manufacturers, and this imported inflation is to end the period of consumer-driven growth in both the U.S. and the United Kingdom. This will inevitably lead to a period of readjustment, in which time interest rates could well rise to double digits.

In As Therefore, the uncertainty surrounding financial institutions continue to unnerve both housing and stock markets of western economies. Investors looking for income serious need to look further away, and borrowers need to reconsider their ability to repay loans in the event of a significant increase in interest rates.

Leslie Hardy has written extensively on North Cyprus Property and is Chairman of Wellington Estates Ltd, a North Cyprus company.

Follow this link for more information on Northern Rock

China Driving the Global Auto Sales

All Sales Manufacturing All Sales GMC Emblem $28.94 All Sales Manufacturing All Sales GMC Emblem

All Sales Manufacturing All Sales Hinge Cover $42.76 All Sales Manufacturing All Sales Hinge Cover

All Sales Manufacturing All Sales Step Plate $68.21 All Sales Manufacturing All Sales Step Plate

Garmin nuvi 1300 Automobile Navigator 0100078240 $128.24 Garmin nuvi 1300 Automobile Navigator 0100078240

Garmin nuvi 465T Automobile Navigator 0100078600 $291.37 Garmin nuvi 465T Automobile Navigator 0100078600

Garmin nuvi 3750 Automobile Portable Navigator 0100085840 $326.65 Garmin nuvi 3750 Automobile Portable Navigator 0100085840

Be A Sales Superstar $15.95 21 Great Ways to Sell More, Faster, Easier in Tough Markets Brian Tracy shares principles for sales success he has discovered in 30 years of training more than a half million sales professionals in 23 countries.

Global Grilling $4.98 Global Grilling

Automobile – Michael Bugler – Greeting Card $2.89 “The classic automobile on this masculine card is set on a maturely colored and artistic background. Send a nice greeting, guy to guy, with this very unique card. 4.75″” x 4.75″” Folded Card”

All Sales Manufacturing All Sales Headlight Switch Knob $11 All Sales Manufacturing All Sales Headlight Switch Knob

All Sales Manufacturing All Sales Dash Knob Kit $16.52 All Sales Manufacturing All Sales Dash Knob Kit

All Sales Manufacturing All Sales Chevy Bow Tie Emblem $18.3 All Sales Manufacturing All Sales Chevy Bow Tie Emblem

All Sales Manufacturing All Sales OE Replacement Grab Handle $50.03 All Sales Manufacturing All Sales OE Replacement Grab Handle

All Sales Manufacturing All Sales OE Replacement Heater Knob $16.52 All Sales Manufacturing All Sales OE Replacement Heater Knob

---