northern rock is an iceberg

It is emerging that the £27 billion shelled out so far in the Northern Rock bailout is just the tip of the iceberg: the total amount is more likely to be £57 Billion or more.

It seems that Northern Rock liabilities are virtually limitless - as no one really knows what they are.

This is partly because underneath Northern Rock lies a labyrinth of interconnected front companies, code named 'Granite'.

Through this network they raised billions of pounds on the international markets in all manner of alchemic methods, in an attempt to turn lead into gold, by lending loads of expensive money to poor people.

Now the government has realised it has to back those liabilities as well, or risk mass evictions of homeowners all over Britain.

The Guardian: "If Granite defaults on bond repayments, there is a fear that holders of the mortgage-backed securities will be forced to seek draconian redress. In the worst case, bondholders might try to seek repayment of their investment through a forced redemption of the individual mortgages used as collateral for the securitisation issues. The problem is that no one fully understands where, in such a complex structure, the liability in the event of a default rests. Granite has undertaken 23 separate mortgage securitisation issues since 1999 raising almost £70bn. It had more than £40bn of securitisation notes outstanding at the end of December 2006."

• But there may still be hope: Gordon Brown, said today that escalation of the Northern Rock problem has been prevented. So far the government has been doing everything possible, but that does not seem to include avoiding massive exposure, for months or years to come.

• 27 million Americans are so broke they will have to use credit cards to borrow as the only way they can cover heating bills this winter.