Northern Rock - Shares [Merged Threads]

jamesd

I hope that everyone with shares already knows that Granite is the way Northern Rock has been doing the securitisation on the debt markets that's a big part of why it is having trouble. For anyone who doesn't already know about this stuff, you can read the Granite securitisation financial reports.

An interesting bit in the September report is this:

Series 2007-1, issue name, interest rate
1A1 5.53%
1A3 6.42%
2A1 5.66%
3A1 5.69%
3A2 4.83%
4A1 5.70%
5A1 6.50%
6A1 5.60%
1B1 5.66%
2B1 5.71%
3B1 4.90%
3B2 6.56%
1M1 5.74%
2M1 5.84%
3M1 5.00%
3M2 6.66%
1C1 5.89%
2C1 6.02%
2C2 5.18%
3C1 5.23%
3C2 6.89%

Series 2007-2, similar rates, NONE issued - presumably no takers at those rates.

Series 2007-3, issue name, interest rate:

Series 07-3 1A 7.07%
Series 07-3 1B 7.42%
Series 07-3 1M 7.92%
Series 07-3 2A 7.17%
Series 07-3 2B 7.67%
Series 07-3 2M 8.27%
Series 07-3 2C 8.92%

Note the big increase in rates. Paying those market rates for money may make the Bank of England funding at a "punitive" rate that's rumoured to be a bit under 7% look cheap. Looking at the low amounts issued/borrowed is also interesting (still in billions, but not so high). Credit crunch in action...

The reports also include details of the arrears on the loans handled by Granite, whether they are repayment or interes tonly, regional breakdown and various other details.

OverlandLandy

baby_boomer wrote: »

I agree that it is not wise for someone who clearly doesn't understand shares to buy £25K in a single company.

Why on earth did you do that, or who on earth persuaded you to do that? Or do you have spread of shares across a £500K portfolio - which would make more sense and minimise your % loss?

You may well ask....It seemed like a good idea at the time - I have never lost a penny in 20 years of investing. (until this deal) I even spent my student grant cheque on shares one time (M&S @ £1.30....and sold for £3.60). My past dealings allowed me (with careful spending) to pay off my mortgage when I was 38 (now got another due to personal circumstances...but hay ho...thats life). You just need to put what you do into perspective...I can still eat, have roof over my head and a 1/2 decent job...all in all more than many folks have) Other than my Mortgage I have no debt. If I choose to gamble on the stock market - and I loose, as I did this time, I just cut back (so no foreign holidays in 2008 for me). I drive a car that depreciates less in 3 years than my peers cars do in 1 year. I run my Land-rover on Veg oil @53p/L....so being frugal is in my nature..as is a philosophical outlook to life....no matter how much money you have it does not guarantee your happiness and you can't take it with you.

bristolleedsfan

jamesd wrote: »

I For anyone who doesn't already know about this stuff, you can read the Granite securitisation financial reports.

The reports also include details of the arrears on the loans handled by Granite, whether they are repayment or interes tonly, regional breakdown and various other details.

apart from the interest rates, what other conclusions did u draw from your reading.

NR still operating as if nothing has happened. :rolleyes:

http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=154689

melbury

Sorry to sound so thick, but what is Granite? Is it some kind of financial lending institution?

Somebody please tell me, in very simple terms - an idiots guide please!

bristolleedsfan

interesting story for those who still hold NR shares.

http://www.ft.com/cms/s/0/8cec7712-9a02-11dc-ad70-0000779fd2ac.html

convict90210

Just a quick update since I first posted on this thread...
Originally bought £750 back in September which I sold out for this week at just over £1 per share resulting in a £500 loss. Has been rather painful to watch but have learnt a few lessons least of all about catching falling knives! Despite this I will still be watching the events very closer the coming weeks and months...

ManAtHome

bristolleedsfan wrote: »

NR still operating as if nothing has happened. :rolleyes:

http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=154689

Blimey, they missed out "as seen on TV" and "as safe as National Savings"...

bristolleedsfan

convict90210 wrote: »

Just a quick update since I first posted on this thread...
Originally bought £750 back in September which I sold out for this week at just over £1 per share resulting in a £500 loss. Has been rather painful to watch but have learnt a few lessons least of all about catching falling knives! Despite this I will still be watching the events very closer the coming weeks and months...

i got 500 shares from conversion, im staying on for the whole ride. :eek:

jamesd

melbury, Granite is a subsidiary of Northern Rock that packages up its outstanding mortgages and uses them in chunks as security (effectively a mortgage) for a loan on the money markets. Northern Rock sells mortgages to it and buys them back as required (for things like further advances or change of mortgage type).

The inability of the Granite part to raise money for Northern Rock by selling the packaged mortgage rights is part of what prompted its crisis: part of its collection of mortgages were sold on short terms that required regular refinancing, a bit like using a 0% credit card to put money in an offset mortgage account. No problem as long as the 0% offers keep coming so you can pay off the old card when its deal runs out, but when they stop offering more 0% deals you either have to repay the money or pay higher interest rates. All of the banks stopped offering deals to each other because they were worried about who might not be able to repay. Oops: now NR had to find the money in some other way. So it went to the Bank of England when it couldn't get the short term money from other banks.

Then people made it even worse by taking out their savings with no notice, and it had to find the money to pay them back as well. And longer term to borrow the extra money that savers had been lending to it via their savings accounts.

bristolleedsfan, nothing except idle curiosity about turnover of loans (45% a year go out of Granite back to Northern Rock), loan types and such.

convict90210

bristolleedsfan wrote: »

i got 500 shares from conversion, im staying on for the whole ride. :eek:

Then you have bigger balls than me! Just couldn't watch them go any lower after seeing them hit 60p this week. Rather walk away with something in the end than sweet fa...