Northern Rock - 23bn borrowed so far and rising...

[Deleted User]

Generali wrote: »

If you're interested (and still reading) the most likely place you'll be able to see any losses surface is a drop in dividend cover (IMO)- that is the cash and liquid assets that are available to cover dividends. I haven't got the figures to hand but if you want to make a few quid I'd recomend buying shares in A&L and B&B if the dividend cover is 2 or thereabouts. Each is predicted to pay a whopping yield. At least you can be pretty sure that those guys have been sellers and not buyers of MBSs etc.

So do you think that A+L and B+B will be able to keep their dividend cover? They have been shorted by 20%, if this is the case then the market would have killed the shorters surely? They would need to close their positions before they get screwed for teh divis. I did buy a load at 7.50 in a market rise and sold at 8.30 as the bounce slowed I though best to take profits since the market is unsure with what do do with it. Its all over the place.

Although in the long term 3+ years both I expect will be good bets as normality returns, and idiot lending is reduced until the next bright spark thinks of a algorithm that can make NINJAs look like they can afford more then their benefits.

I heard one person talking that, its actually the likes of barclays and RBS that will have the biggest profit hits and thus dropping their divis, not because of their mortgages but because of the yank packages they own. They are keeping it pretty secret, but the rumour mill is that barclays is borrowing lots from BOE as well.

aah

and if Branson takes it over I'm definitely taking my £90k mortgage - representing about 40% LTV - elsewhere. I am not having my house as one of Bransons assets.

Generali

Yant1 wrote: »

So do you think that A+L and B+B will be able to keep their dividend cover? They have been shorted by 20%, if this is the case then the market would have killed the shorters surely? They would need to close their positions before they get screwed for teh divis. I did buy a load at 7.50 in a market rise and sold at 8.30 as the bounce slowed I though best to take profits since the market is unsure with what do do with it. Its all over the place.

It's an interesting question. I'm a mere BOB (Back Office Bloke) so WTFDIK but I cite Lloyds TSB in my defence - the dividends have been flat or gently rising for years but the stock always seems to trade on big yields, or at least does when I take my occasional look in the FT.

My feeling is that the 2 will try to maintain the dividend at almost any cost. If they can maintain it then they should see a very big rise in the share price as the shorters scramble to cover their position. But as I say, WTFDIK.

From what I've heard, Barclays and Deutsche are big holders (off balance sheet) of the assorted [EMAIL="!!!!"]cr.ap[/EMAIL] that's out there. I've no idea if that's true or not.

My feeling (and that of FOBs that I've spoken to) is that the sensible person has a big fat put on the S&P and DAX right now. I've been thinking that I should buy something waaay out of the money (so it's cheap) as a form of unemployment insurance - I don't think Tiny Hedge Fund (my employers) would do so well if the market went Black Monday shaped. I'll probably not get around to it - I'm too busy working for a living these days.

Lomion

Generali wrote: »

http://news.bbc.co.uk/1/hi/business/6994099.stm

Ok, fair enough, total assets (lending) = £113,000,000,000.

Still, with very pessimistic numbers, max total loss would be £1,695,000,000. So far, total loss = £0.

Optimistic numbers......So far total profit = Interest on 23bn since September/October.

If it does all go pear shaped, a lot of people will be paying their mortgages to BoE for a while

lynzpower

fc123 wrote: »

Just a quicky on the impact of the whole thing (with all the debate and feelings of "something not quite right".
I own a large boutique in Brighton....this summers trading was up one minute and down the next, mainly due to the weather.....we expected Sept to be slow BUT the day after the NRK, our sales fell through the floor! A certain customer just vanished.
Our Sundays are cosy couples day", down from London for the w/end..probably city workers as a weekend in Hotel du Vin doesn't come cheap...they have vanished too.

The impact of this on tiny me is; busted cashflow for the past 2 mnths (just caught up thank goodness) as our budgets are based on predicted sales (and have been at this for 20 yrs so pretty much know the game) and a real feeling of caution................spending NOTHING at the moment on a personal level....how many others are in ouir situation??

Funnily enough, I have just been talking like this with my dad who works for and produce importing & sales company. Hes saying business is so bad, he doesnt remember a time like it, apart from the last recession. Dad sells to trade, so your hotels, resturaunts, & other hospitality. He says what with the crap summer business was poor, the credit crunch- people dont have the money now to waste on dinners out/ hotels etc- and the fluctuation in world food prices, topped off with the loss of output from British suppliers due to the flooding etc, the market is shot to bits. his co is not on its own in making heavy losses, his competitors are going to the wall as well.

He also said the housing market up thier way is flat as hell, the ony people moving up are building extensions instead of moving as its so much cheaper.

anecdotals, although rubbished by the number crunchers among us - but i think they are useful .

fc123

lynzpower wrote: »

Funnily enough, I have just been talking like this with my dad who works for and produce importing & sales company. Hes saying business is so bad, he doesnt remember a time like it, apart from the last recession. Dad sells to trade, so your hotels, resturaunts, & other hospitality. He says what with the crap summer business was poor, the credit crunch- people dont have the money now to waste on dinners out/ hotels etc- and the fluctuation in world food prices, topped off with the loss of output from British suppliers due to the flooding etc, the market is shot to bits. his co is not on its own in making heavy losses, his competitors are going to the wall as well.

He also said the housing market up thier way is flat as hell, the ony people moving up are building extensions instead of moving as its so much cheaper.

anecdotals, although rubbished by the number crunchers among us - but i think they are useful .

There's more as this Saturdays sales were truly AWFUL!!.
Anyhow, as I have been at this a long time I can face, head on, issues with "wrong stock" etc etc and not make "meaningless excuses"...

BUT at 2.30 pm...went outside and bumped into mngr of a retail chain (our neighbour) who said this Sat was the WORST ALL year so far! We discussed figures and I was down a similar percentage to him...anyway, he 'phoned other branches in Reading, Windsor etc who are on same turnover targets as he was really frtetting about HO and was wondering if it was a local problem.they all reported the same huge slump in T/O today............he also spoke to a mngr in the shopping centre who said the same.

The only store kicking was Primark (where a whole ouitfit costs £10 and STILL looks like it cost less....sorry! current fashion trade saying).

So, sub-prime lending, NRK, City fatcats, G.Browns time in power, people raking in fortunes from producing nothing tangible....I thought all of this was nothing to do with me me......I ACTUALLY MAKE some things (from scratch on a sewing machine) and stock Made in UK clothing at competitive prices!!

How wrong was I..................Seriously, tonight this forum, enabling me to type out my thoughts is saving me from collapsing asleep in a wine sodden heap.....have kept off the booze to keep head clear.

Next wk, I have some serious number crunching to do.........

pickles110564

lynzpower wrote: »

He also said the housing market up thier way is flat as hell, the ony people moving up are building extensions instead of moving as its so much cheaper.

Good old Lynz still talking up a crash!

ManAtHome

pickles110564 wrote: »

Good old Lynz still talking up a crash!

The rather large paragraph just above the bit you quoted was probably more relevent - amazing how far you can stretch an elastic band or blow up a balloon and all that...

[Deleted User]

Generali nows probably a good time to punt on alliance if your still interested. SP is at 7.12 and its just released a statement saying it doesnt normally release information to quel rumours but its secured all teh funding it needs from teh markets and its own business and thus unlike a lot of other banks wont need any BOE money, it will continue buying back shares so jokes on you shorters (I added the last bit myself lol)

Generali

It's on a PE of 8! Surely that means either:

1. They're going to be bought
2. They're eff'ed

It's a shame that my new job with Tiny Hedge Fund has left me utterly broke and so unable to take advantage. I suggested to Mrs Generali that we buy some of this. Mrs Generali asked where I was planning to sleep tonight instead of at home. I can afford the shares but not the divorce.