Now is the time for mutuals..

How is it that building societies have become victims of the credit crunch?
It is simply because they are now banks having de-mutualised themselves in the rush to become financial houses able to borrow money. The traditional building society was owned by the depositors since their money was the only cash reserves that the society had. They could only lend out money that was on their books and were not allowed to borrow from banks - in fact they were not allowed to go into debt. Since the eighties, we have been cashing in our good old building societies and turning them into banks. The members have been only too keen to let go of thier assets in return for some good hard cash and really who can blame them?
Now the chickens are coming home to roost with the unthinkable happening - building societies having behaved like banks investing in the sub-prime market, going into debt and finally going bust. Rest assured if your money is in a mutual society it is as 'safe as houses' (pun intended).
Meanwhile, the UK government's own new bank, Northern Rock has proved so popular with investors (after all it can't go bust now it has been nationalised..) that it has been asked to withdraw some products as the other banks see it as unfair competition. More mess created by this crazy interventionalist action. Northern Rock is now seen as THE place to put your money at the expense of other banks simply because it has performed so badly that the government has seen fit to underwrite the whole business - pure madness!

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