Northern Rock Shares

bristolleedsfan

cloud_dog wrote: »

Excellent post , lots os 'suppose' in there.

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

"Suppose", NR had been a Spanish Bank in Spain.

"
These Spanish banks have in many respects the same business model as Northern Rock; in autumn 2007 they faced the same difficulty in financing their assets. But they have not been punished by the Spanish authorities as Northern Rock has been punished by the UK authorities and the government. The Spanish government has not threatened to nationalise them, in spite of the huge advances they have received from the ECB. "

" But central banks exist for the purpose of preventing runs or, at any rate, ensuring that runs are met by ­lender-of-last-resort loans so the hurried liquidation of assets can be avoided. That is what is meant by the proposition, repeated in hundreds of textbooks, that “the central bank is lender of last resort to the banking system”.



NR Shareholders were willing to put capital into NR via a rights issue as long as Virgin wasnt the private solution.

cloud_dog

bristolleedsfan wrote: »

"But central banks exist for the purpose of preventing runs or, at any rate, ensuring that runs are met by ­lender-of-last-resort loans so the hurried liquidation of assets can be avoided. That is what is meant by the proposition, repeated in hundreds of textbooks, that “the central bank is lender of last resort to the banking system”.

Which the Government / BoE did. Not sure what your argument is now.

NR Shareholders were willing to put capital into NR via a rights issue as long as Virgin wasnt the private solution.

Stupid them - they should have accepted a smaller slice and got something.

bristolleedsfan

cloud_dog wrote: »

Which the Government / BoE did. Not sure what your argument is now.


" >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
These Spanish banks have in many respects the same business model as Northern Rock; in autumn 2007 they faced the same difficulty in financing their assets. But they have not been punished by the Spanish authorities as Northern Rock has been punished by the UK authorities and the government. The Spanish government has not threatened to nationalise them, in spite of the huge advances they have received from the ECB. "

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Stupid them - they should have accepted a smaller slice and got something.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Your question gets answered and all u can do is call a substantial no of people including institutions none of whom u know " stupid" :wall:

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

masonic

Accusing someone of doing something stupid and being stupid are very different things.

bargains83

brightonman123 wrote: »

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?

Oh UK tax payers will get there share, unfortunately we will never see it. Our share will be seeing gorden brown stood in a press conference saying:

"The money made from Northern Rock has been pumped into our continued aid to afghanistan, and to help assist further immigrants in their claim of benefits so that they can have a free ride in this country we are so proud to call Great Britain"

What was that on the news this evening?, a terrorist working for the Taliban living in the UK claimed £20k a year in benefits whilst they were living here?. HOW THE HELL does that work when there are people who are born here earning much less a year and in employment, contributing to the economy effectively and legitimately by raising children etc!.

I love living in this country knowing our taxes are put to such good use.

bargains83

cloud_dog wrote: »

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

Why would anyone buy it?, all it has now is a tarnished name. The name is tarnished thanks to the media and the government. Nobody else is to blame, certainly not the shareholders or the directors. Had there not been the run on the bank the problem wouldnt have been anything like what its become. Shareholders have had no say in anything with regards to the loans from the BoE, they weren't even given any options with regards to the sale of the bank. In addition they haven't even asked the tax payer if they wanted to invest/own a falling bank but gone ahead and done it anyway.

The government have glorifiedly stolen the bank from the shareholders and money from the tax-payer!.

Going back to Barclays, its share price has suffered but its name isn't tarnished and there was no run on the bank. Whilst it didn't lend as aggressively as Northern Rock. The amount of media attention it received was completely unproportional to that of Northern Rock.

The mortgage book and other assests it has are valuable, though not at the moment because credit isn't available easily and nobody will want to buy it right now because there is complete uncertainty about the way things are going in the financial markets and confidence is extremely low.

The government should have acted more appropriately. Lent to Northern Rock on the basis I mentioned before, that they altered their business plan and made it clear from the beginning that they would guarantee the deposits with the bank. Not nearly a week after the run on the bank had started.

The government are guilty of dithering and dordaling in this case. Decisions have been made both wrongly and too late.

bristolleedsfan

bargains83 wrote: »

The government have glorifiedly stolen the bank from the shareholders and money from the tax-payer!.

.

Some People have done/will do very nicely out of the situation irrespective of outcomes. :mad:


http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3393253.ece

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3393372.ece

bargains83

Sir Richard Branson’s consortium and a management team that also bid for the bank will each receive £5 million from the Treasury to cover part of their costs. There was also the prospect of further legal bills for the public purse.

Yes because Branson hasn't already got enough money owning an airline and the rest. This effectively amounts to compensation on a failed bid. Why should they get ANYTHING back, they knew what they were bidding on which was a falling bank which they hoped to turn around and make a killing on.

Yet shareholders, the majority of whom probably invested in the bank in good faith and as an investment for the future are being told they'll get nothing.

It really does get worse. The shareholders should be suing the people responsibles backside off, they should have an extremely good case.

bargains83

SRM wants the Government to offer at least 400p per share in compensation for the loss of its investment in Northern Rock when the bank went into public hands.

SRM have sought legal advice regarding this, and I hope they are successful. The government are very accountable for their actions regarding the banks failings.

I have no confidence in the government when they say they want the tax-payer to get value. They have never got value and never will. Tax is a penalty, a vast majority of which is wasted and is never used to benefit the people.

The salaries for the people the government have drafted in are beyond a joke. Instead of paying those amounts out why not give that money to the public?.

bristolleedsfan

bargains83 wrote: »

Why should they get ANYTHING back, they knew what they were bidding on which was a falling bank which they hoped to turn around and make a killing on.

.

The reason why Virgin was named as a preferred bidder was because up until that time deposits were still flowing out at an alarming rate.

When Virgin was named preferred bidder it was guaranteed at that time that NR would pay for its newspaper ads and associated bidding costs.

The Government was unable to hand NR to Virgin because Virgin stated that it would be unwilling to accept any restrictions that Europe might impose, it wanted a handshake deal with the Treasury to be the final deal, something The Government was unable to agree to.