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Northern Rock....part deux
Rover
Posts: 323 Forumite
Further to fellow members views on NR and the continuing calamity, I was interested to read http://news.bbc.co.uk/1/hi/business/7009041.stm
I had thought someone like HSBC would absorb NR for it's debt assets but it appears the odds on this are shortening. This is significant because I doubt the Government can let NR wither on the vine with all the bad PR this would create.
But if a true valuation of NR's £105bn mortgage book was to enter the public arena, people like Bradford and Bingley / Alliance and Leceister would be history also!
Interesting times ahead and alot of dodgy deals in smokey corners.
I had thought someone like HSBC would absorb NR for it's debt assets but it appears the odds on this are shortening. This is significant because I doubt the Government can let NR wither on the vine with all the bad PR this would create.
But if a true valuation of NR's £105bn mortgage book was to enter the public arena, people like Bradford and Bingley / Alliance and Leceister would be history also!
Interesting times ahead and alot of dodgy deals in smokey corners.
anger, denial, acceptance 
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Just thinking that when I saw the OP. More puts and selling tomorrow then.Watch it plunge again tomorrow.A house isn't a home without a cat.
Those are my principles. If you don't like them, I have others.
I have writer's block - I can't begin to tell you about it.
You told me again you preferred handsome men but for me you would make an exception.
It's a recession when your neighbour loses his job; it's a depression when you lose yours.0 -
True, but I bet Merv King and the boys are allowed the odd cigar and cognac to calm the nerves. Gordon will of course be sticking with a good malt while he prepares for the election..........some time soon.Doozergirl wrote: »You'd be hard pressed to find a smoky corner anywhere these days!anger, denial, acceptance0 -
Down 10% on opening.........anger, denial, acceptance0
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I think their only hope of a resuce is a rights issue. By recapitalising the firm they will be able to carry on independantly.
On paper they look highly profitable and appear to have a high quality loan book. Whether that is just smoke and mirrors I don't know as they have been agressively lending and rumour has it that some of their practises have been a bit sharp, but if the majority of their loan book is sound residential mortgages they'll be able to weather the storm.0 -
NRK'll be bought. It's just about the market setting a price.
The shareholders can't hold out for more money as the BoE can bankrupt NRK whenever they want.
My guess is they'll be bought out for about 80-100p/share. UBS reckons that the mortgage book is worth 180p. 90p a share or thereabouts builds in a nice risk premium for the purchaser.
The interesting bit is what the shorters do next.
Now, who'll buy some lovely A&L and B&B stock off me? Low mileage. One careful owner.0 -
I think their only hope of a resuce is a rights issue. By recapitalising the firm they will be able to carry on independantly.
On paper they look highly profitable and appear to have a high quality loan book. Whether that is just smoke and mirrors I don't know as they have been agressively lending and rumour has it that some of their practises have been a bit sharp, but if the majority of their loan book is sound residential mortgages they'll be able to weather the storm.
The problem with that is that they'll be forced to actually put a price on the mortgage debt obligations - something which none of the big players want to happen is it means that the worth of their own mortgage debt will be brought into question.
B&B and A&L would be particularly vulnerable if it turned out that their principle 'assets' weren't worth as much in the real market as the book value.
The name of the game right now is to keep anything mortgage or debt backed off of the market until some favourable pricing mechanism emerges. Hence the Bank of England agreeing to take mortgage backed securities as assets for loans even though absolutely no financial institution wants to touch them with a bargepole right now.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
The problem will be if they do then everyone else in the game will get revalued on the basis used for NR. That might make some players look very exposed and a number of them will see their share price take a tumble. I wonder if the industry in general or the government are trying to avoid the value being given. The consequence will be that everyone will then guess instead and draw their own conclusions.The problem with that is that they'll be forced to actually put a price on the mortgage debt obligations - something which none of the big players want to happen is it means that the worth of their own mortgage debt will be brought into question.....
It's a bit like a 700 player poker game, NR is now being called and forced to show their hand. Not only will their hand be poor but everyone else will be wondering on what basis a lot of the other players have been betting.A house isn't a home without a cat.
Those are my principles. If you don't like them, I have others.
I have writer's block - I can't begin to tell you about it.
You told me again you preferred handsome men but for me you would make an exception.
It's a recession when your neighbour loses his job; it's a depression when you lose yours.0 -
I was walking to work with a friend this morning who works at HSBC, we were having this very discussion. He said that the mortgage book was actually pretty good at NR.
Personally, I don't know NR's true financial situation, but there seems to be a lot of people on here who like to pretend they do. Does anyone know the default rate on NR mortgages?Errors of opinion may be tolerated where reason is left free to combat it. - Jefferson0 -
less than 0.5% of NR mortgages are 3 months in arrears or more. this is half the industry average
Have done a bt of research as was thinking of buying some. Told my dad to wait last week as I felt they had further to go but he piled in at £3 a share.
They are paying a divi of 14.2p in october. ex divi date is 26/90
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