Northern Rock has hit rock bottom.

In the interested of tax payer, shares in Northern Rock have been suspended and plans are in place to propose nationalization.

However there is a major stumbling block will the Conservatives lend their support to nationalization.

Why should they, resistance or even a delay will no doubt harm Labour and may well result in the chancellor stepping down. Nothing like giving the opposition ammunition and there is very little chance they will lend their support just because the country needs them to.

Labour have effectively walked away from proposals from within the bank and from Richard Branson consortium therefore Labour has effectively burnt its bridges and given themselves very few options, none of which are ideal.

Should we bail out banks that are stupid enough to lend to those that can’t afford to pay their debts?

The only real option is to take on no more debt, factor off whatever debt they have and give back investors there money which no doubt the Government will have to borrow from another bank to pay for!

At that point five things happen.

The tax payer will gets shafted again as expected.

Banks will realize they actually have to lend responsibly.

Many people will lose their homes and end up renting to landlords that bought property for way below market value.

Property prices will crash and people in rented accommodation will be able to pay back some of their personal debt, thereby helping the economy as savings and buying increase with real money.

As people become more solvent, property prices will start climbing again so we can enjoy this madness for another cycle.