Northern Rock Shares

rainbowtrout

Barclay's is in a bad situation, but nowhere near as bad as Northern Rock! They would have taken a steep tumble in terms of profits but they are not actually insolvent. Blaming the media is not the sole solution either; people have to realise there are pros and cons of having 24hr news coverage and easily available information. Northern Rock has suffered, however, from being the FIRST to fall, when people had no precedent to guide them as to what the government will offer them.

bargains83

rainbowtrout wrote: »

Barclay's is in a bad situation, but nowhere near as bad as Northern Rock! They would have taken a steep tumble in terms of profits but they are not actually insolvent. Blaming the media is not the sole solution either; people have to realise there are pros and cons of having 24hr news coverage and easily available information. Northern Rock has suffered, however, from being the FIRST to fall, when people had no precedent to guide them as to what the government will offer them.

But this is the point, I know the media aren't entirely to blame for what happened to Northern Rock as a business but it was heavily publisised that Northern Rock had borrowed from the BoE. It was only made public regarding Barclays borrowings well after the run on Northern Rock had advanced and on nothing like the scale Northern Rock was. A run on a bank should never happened and it is ONLY the media/government that are to blame for that run, it was absolutely disgusting.

I really don't think that its fair that Barclays shareholders still have a firm in their hands while Northern Rock shareholders have had theirs taken away from them. The government have effectively acted as a board of directors ever since september on Northern Rock and shut out the shareholders. They definately deserve some form of compensation out of all this.

I think Labour under brown is well and truly finished, the current government is incompetent and slow to act. Tony Blair got out at the right time, thats for sure!.

cloud_dog

I think you might find that there was a subtle difference between the amounts involved between Barclays and NR - only a few billion, plus NR market cap was a lot less than BARC.

Need to keep things in perspective.

Rafter

What would seem fair would be that if in 3 years time the Rock is sold back to the private sector that any premium the government gets over and above its loans at commercial rates and reasonable costs of managing the business in the interim should be returned to shareholders.

What is unfair is the shareholders getting anything if there is nothing left after winding it up.

This should be treated like any other company administration with the administrator (in this case the government) trying to get the best possible value for the assets for the creditors (including the government) before any surplus gets paid to the shareholders.

The problem seems to be that the government have a conflict of interest here as the biggest creditor, as not wanting to upset millions of labour voters in the north east and create job losses and as partly responsible for the mess in the first place by not having the balls to stand up to the EU and let Lloyds take it when the offer was on the table.

R.

Jonbvn

Just watching Jeff Randal on Sky News (sorry). He was said that shareholders were likely to get little or no money. He mentioned 5p per share?

payless

current equity holders generally get little when there's a debt 4 equity swap

rainbowtrout

The shareholders deserve 0p. Especially the hedge funds who actually BOUGHT MORE SHARES after the bank run had ended (doubtlessly at what they thought was a rock bottom price) hoping to make a huge killing from the confusion and the taxpayer's money. The 4pound 'book price' just sounds like more twaddle to me, it's like saying railtrack shareholders should have got money for company assets such as stations, tracks and rolling stock etc.
I have no doubt there are tragedies out there but the stock market is just glamorized gambling. You live with the consequences.
I think the best thing would have been to leave Northern Rock alone, no emergency loan from BoE, no government guarantees (apart from the savers). It would have died a quiet death of its own accord (like Marconi) and we wouldn't have this ridiculous situation where people are accusing the government of stealing something they have a 100billion pound interest in--if the shareholders are so keen to assert their rights they should pay the taxpayers back first!

bristolleedsfan

cloud_dog wrote: »

I think you might find that there was a subtle difference between the amounts involved between Barclays and NR - only a few billion, plus NR market cap was a lot less than BARC.

Need to keep things in perspective.

" I think you might find that this linked article sums things up "

http://www.ft.com/cms/s/0/66aea6ca-de44-11dc-9de3-0000779fd2ac.html?nclick_check=1

Taxpayers who are not NR Shareholders who appear to be gloating at NR Shareholders should be reminded that March 12th is Government National Pick Pocket Day. :cheesy:

Bear in mind that Yvette Cooper has just been on Channel 4 stating that atm the Taxpayer has not paid 1 penny into NR and that she doesnt expect any of the guarantees to be used.


Does anybody know how NR will continue to get funding in the short term bearing in mind that both the public solution offers contained proposals to put capital into NR ?

After 17th March if NR were to offer table topping savings rates, might fall foul of european state aid laws and it appears nobody will be putting capital into NR.

Will NR be funded by further BOE loans ?

brightonman123

so, who profits when/if NR gets back on its feet, and off the taxpayers back?

as i see it, the Govt now have a trading bank, with £??(billions) of 'assets' (loans secured on property), though a with a high proportion of these with high risk borrowers..

as UK tax payers money is effectively propping it up, 'tis only fair we get a cut, when it turns around?

cloud_dog

bristolleedsfan wrote: »

" I think you might find that this linked article sums things up "

http://www.ft.com/cms/s/0/66aea6ca-de44-11dc-9de3-0000779fd2ac.html?nclick_check=1

Excellent post , lots os 'suppose' in there.

Surely if NR is such a golden egg then some institution somewhere would be knocking on the Treasury's door saying 'ummmm, Id like to bail out that little financial institution of yours - whats its name??'

I'm just fed up of people having a go at the governent; they did what they did to support it and no one has come forward with a serious offer. If the government hadn't stepped forward where would NR / NR SP be??

A question, knowing what you know about NR situation and taking in to considertion the fact that there isn't a market for sub-prime paper, thereby making the valuation of the same virtually impossible, would you lend NR your money?

cloud_dog