Northen Rock [Merged Threads]

PauliPauli

**Board Guide Note**

Please see the following updates regarding the Northen Rock situation:

MSE Northern Rock comment

Northern Rock Crisis Article URL="http://forums.moneysavingexpert.com/showthread.html?t=553388"]Article Discussion Thread[/URL

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What do people here think on risk of having more then the £33k saved with them in terms of latest stock market jitters and their exposure to risk?

Jonbvn

Other banks/BS's will not let them go under, since it could start a run on other banks/BS's, similar to the 1930's (IMHO).

bristolleedsfan

PauliPauli wrote: »

What do people here think on risk of having more then the £33k saved with them in terms of latest stock market jitters and their exposure to risk?

whilst northern rock share price did fall sharply after NR announced that its profit forcasts would be lower than previously announced due to it misjudging uk interest rates and therefore mispricing its morgage deals, it should be noted that shares and FTSE generally have been falling sharply. ( it happens as the saying goes what goes up must come down.)

http://business.guardian.co.uk/story/0,,2112568,00.html

http://business.guardian.co.uk/story/0,,2145995,00.html

i recall a previous occasion when banking shares inc NR fell steeply and then bounced back to hit new highs.

for those who hold the northern rock shares allocation initially given at flotation, at flotation the "free" 500 shares were worth around 2259, at NR highest share price these 500 shares were worth 6255.00

these 500 shares are currently worth 3802.50.

oldfella

unless they have been selling mortgages to sub prime in the US, or buying the debt, they should be OK

PauliPauli

I think the answer to their "risk to subprime" is somewhere in the link below..

Unfortunantly I think I need someone to translate it for me

http://search.ft.com/ftArticle?queryText=N+Rock+plans+sale+of+risky+MBS+reserves.&y=0&aje=true&x=0&id=051011000609

Moorepart

PauliPauli wrote: »

I think the answer to their "risk to subprime" is somewhere in the link below..

Unfortunantly I think I need someone to translate it for me

http://search.ft.com/ftArticle?queryText=N+Rock+plans+sale+of+risky+MBS+reserves.&y=0&aje=true&x=0&id=051011000609

NRK was one of the first companies I d heard of giving away IO mortgages to borrowers for huge sums of money a few years ago. I have no doubt they are going to implode.


I warned people on ADVFN - but did they believe me?

NRK is Gonna take a massive hit,:j

barak

There is a theory that one of the safest places for those larger deposits is a small Building Society, because the BS movement would simply not be prepared to lose face by allowing any member to fail. The Society in trouble would be merged with one of the larger ones.

The banks, on the other hand, would not worry about a rival plc falling by the wayside.

meanmachine_2

Unfortunately it was N Rock that stoked this latest property bubble, with their aggressive and irresponsible lending.

As rivals lost market share they too threw out the trad lending rules and began lending to anyone with a pulse.

Are Nrock at risk of meltdown? Not qualified to answer, but I do know that three mates have NR mortgages - and all are borrowed to the max.

Quite simply, they went with NR cos no one else would lend them enough cash.

Tells you all you need to know.

PauliPauli

hmmm... well currently earning 5.74% on their business reserve account, think I'll move funds above £33k to hsbc (business savings) via chaps monday morning at 5% until dust settles, just for peace of mind

bristolleedsfan

http://www.moneyobserver.com/?page=news&id=562 :eek:

[Deleted User]

we are expecting another profit warming from northern rock. Their shares have halved since feb. They had another massive fall yesterday and there are sell warnings all over the place. Personally I removed my cash from them yesterday and it is in transit to smile and from there to sainsbury savings