Ladies and Gents, we have a credit crunch

[FlyingPig]

Did you hear on the news about the couple who wanted to withdraw 1 million quid from their account. I bet the bank manager sh1t a brick when they heard that today.

Of course the NR declined and the old dears had a sit in at the branch, the police where called and removed them. The old dears did have a good and valid reason though, they had tried to access the account over tinterweb but couldn't and they couldn't get in touch via phone, and it is their life savings.

[The_duke]

Quote from NR employee

"As a staff member of Northern Rock I would just like to say that there is no need to panic - the Bank of England and all other authorities back Northern Rock 110%"

With that sort of maths is this the reason they are in trouble  >:?

[lazaroonie]

what interests me, and maybe mr End has an opinion on this (which he might even want to share) is where the NR share price is going to end up ?

I have a buy position locked up in my system at anything below 2 quid, but to be honest, I dont expect it to go that low - there are all sorts of rumours of takeover  bids being around the 2 quid mark, but will it really go as low as this ? closing price today of 257, against a high of 335 yesterday.

its the takeover rumours that are keeping it low. I am happy to buy around the 2 quid, I know that the company is really worth a lot more than £2 per share.

[totalise]

what interests me, and maybe mr End has an opinion on this (which he might even want to share) is where the NR share price is going to end up ?

I have a buy position locked up in my system at anything below 2 quid, but to be honest, I dont expect it to go that low - there are all sorts of rumours of takeover  bids being around the 2 quid mark, but will it really go as low as this ? closing price today of 257, against a high of 335 yesterday.

its the takeover rumours that are keeping it low. I am happy to buy around the 2 quid, I know that the company is really worth a lot more than £2 per share.

forget about all this, when are you gonna upgrade your existance and get a BMW

intrinsic price of the share with the gov g'tee is around £2.30 or so imo

[lazaroonie]

what interests me, and maybe mr End has an opinion on this (which he might even want to share) is where the NR share price is going to end up ?

I have a buy position locked up in my system at anything below 2 quid, but to be honest, I dont expect it to go that low - there are all sorts of rumours of takeover  bids being around the 2 quid mark, but will it really go as low as this ? closing price today of 257, against a high of 335 yesterday.

its the takeover rumours that are keeping it low. I am happy to buy around the 2 quid, I know that the company is really worth a lot more than £2 per share.

forget about all this, when are you gonna upgrade your existance and get a BMW

intrinsic price of the share with the gov g'tee is around £2.30 or so imo

 

that must be where I have been going wrong all this time...


seriously, 230p per share ? you do know that before the "crunch" started (and it was a few months ago) they were trading around 11 quid per share ?

[totalise]

what interests me, and maybe mr End has an opinion on this (which he might even want to share) is where the NR share price is going to end up ?

I have a buy position locked up in my system at anything below 2 quid, but to be honest, I dont expect it to go that low - there are all sorts of rumours of takeover  bids being around the 2 quid mark, but will it really go as low as this ? closing price today of 257, against a high of 335 yesterday.

its the takeover rumours that are keeping it low. I am happy to buy around the 2 quid, I know that the company is really worth a lot more than £2 per share.

forget about all this, when are you gonna upgrade your existance and get a BMW

intrinsic price of the share with the gov g'tee is around £2.30 or so imo

 

that must be where I have been going wrong all this time...


seriously, 230p per share ? you do know that before the "crunch" started (and it was a few months ago) they were trading around 11 quid per share ?

yes, but the flow of money going out the bank is collosal, obviously assuming more money goes back in the future the price is gonna rise, but based on various factors I dont think its worth much more at this juncture, and you have to risk that confidence in the bank will rise again... and people/bank relationships have historically been pretty flimsy. Theres just too many alternatives these days.

[lazaroonie]

what interests me, and maybe mr End has an opinion on this (which he might even want to share) is where the NR share price is going to end up ?

I have a buy position locked up in my system at anything below 2 quid, but to be honest, I dont expect it to go that low - there are all sorts of rumours of takeover  bids being around the 2 quid mark, but will it really go as low as this ? closing price today of 257, against a high of 335 yesterday.

its the takeover rumours that are keeping it low. I am happy to buy around the 2 quid, I know that the company is really worth a lot more than £2 per share.

forget about all this, when are you gonna upgrade your existance and get a BMW

intrinsic price of the share with the gov g'tee is around £2.30 or so imo

 

that must be where I have been going wrong all this time...


seriously, 230p per share ? you do know that before the "crunch" started (and it was a few months ago) they were trading around 11 quid per share ?

yes, but the flow of money going out the bank is collosal, obviously assuming more money goes back in the future the price is gonna rise, but based on various factors I dont think its worth much more at this juncture, and you have to risk that confidence in the bank will rise again... and people/bank relationships have historically been pretty flimsy. Theres just too many alternatives these days.

206p now, getting close to a "must buy" imho...

[TightEnd]

Little story for you now....

Going back a few years I was in the City employed as a fund manager.

Equitable Life had just "blown up" causing all those problems for its customers and my bosses, in their wisdom, put the company I was working for forward to the BOE as a potential buyer of the company.

Muggins here was told to do the "due diligence" on the investment assets of Equitable Life, as part of a team of 5 who had two weeks to do the report and make a recommendation to the Chief Exec

So off I trotted to a "data room" in a lawyer's office in the City where I had to conduct an inventory and value each single investment in the portfolio. This took all of the two weeks, about 16 hours a day and then kipping in a nearby hotel.

Compiled the report, stood up in front of the board and made the recommendation and found that the liabilities side (not the side I was looking at) was completely out of control and the business was basically unsaleable.

My point is at this precise moment all across the City teams from the likes of HBOS/Lloyds/HSBC etc will be doing the same

a) because its a one off opportunity to look inside the books at a competitor

b) because there is a one-off opportunity to acquire market share at a discount

The only thing that will stop this happening is whether these potential acquirers will have trouble raising the finance to buy NRK

Assuming this isn't a problem the business is a sitting duck, opportunities to acquire that many affluent customers are rare,and in corporate finance speak the "synergies" of combining two mortgage books are high...back offices can be closed, computer systems combined etc such that the cost savings can reduce the effective "in" price to the buyer

Depending on how serious the NRK funding problem really is will determine whether the business is sold at a premium to today's price or not

[Bongo]

It's not just the finance to buy NRK they need but they'll need to be able to finance it's £110bn of loans long term too...

[TightEnd]

yes, but far less of a problem to a big global business such as those I mentioned

Funding the acquisition debt and then refinancing the NRK mortgage book off the very short term wholesale market funding that NRK's business model relied upon is the key here

[Colchester Kev]

thank fk im a pauper, i never have to worry about the post office going tits up

[HOLDorFOLD]

The ppl who should be worried are NR mortgage holders.  If NR has to borrow from the BoE for a prolonged period, the higher cost will have to be passed on to borrowers.

Surely this would only apply if you are not on a fixed rate mortgage?  And even then you would have the option of taking your mortgage elsewhere no?    My mortgage is with NR, I have one year left on a very very low fixed interest rate, I am assuming after that time the rate will jump up whether it be offered by NR or whoever possibly takes it over.  I'm also assuming (I know, there's an ASS in assume) that if anything happens then it could take at least a year for it all to go through etc so by that time I will most probably ship around and look for another mortgage anyway.

At this stage I'm not concerned about the issues with NR - wisely or unwisey, who knows.  Cross that bridge when I come to it.    As an aside, I have received nothing at all from NR ... usually when something like this hits the press you get one of those "you have nothing to worry about, business as usual" kind of letters lol 

[kinboshi]

I thought the fixed rate mortgages were affected by different market factors?  Not that I know a great deal about it.

[HOLDorFOLD]

I thought the fixed rate mortgages were affected by different market factors?  Not that I know a great deal about it.

Same here, but I read through our paper work and I cannot see anything that says that the rate 'can' be changed at any stage throughout the 3 year term. The only thing I could see was a penalty if we move/change the mortgage (or pay in full lol) BEFORE the fixed term was up.

Maybe there's something there in 2pt size that I have missed altogether lol

hmmmmmmm maybe that letter will drop on my doormat any day now!

[TheChipPrince]

Little story for you now....

Going back a few years I was in the City employed as a fund manager.

Equitable Life had just "blown up" causing all those problems for its customers and my bosses, in their wisdom, put the company I was working for forward to the BOE as a potential buyer of the company.

Muggins here was told to do the "due diligence" on the investment assets of Equitable Life, as part of a team of 5 who had two weeks to do the report and make a recommendation to the Chief Exec

So off I trotted to a "data room" in a lawyer's office in the City where I had to conduct an inventory and value each single investment in the portfolio. This took all of the two weeks, about 16 hours a day and then kipping in a nearby hotel.

Compiled the report, stood up in front of the board and made the recommendation and found that the liabilities side (not the side I was looking at) was completely out of control and the business was basically unsaleable.

My point is at this precise moment all across the City teams from the likes of HBOS/Lloyds/HSBC etc will be doing the same

a) because its a one off opportunity to look inside the books at a competitor

b) because there is a one-off opportunity to acquire market share at a discount

The only thing that will stop this happening is whether these potential acquirers will have trouble raising the finance to buy NRK

Assuming this isn't a problem the business is a sitting duck, opportunities to acquire that many affluent customers are rare,and in corporate finance speak the "synergies" of combining two mortgage books are high...back offices can be closed, computer systems combined etc such that the cost savings can reduce the effective "in" price to the buyer

Depending on how serious the NRK funding problem really is will determine whether the business is sold at a premium to today's price or not

English only please...