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milanbenes
16th September 2007, 08:10
Nick you dipstick, as we have all seen what has been happening in the US with the sub primes problems, WHY OH WHY is anybody in your opinion foolish to want to take their funds out of Norther Crock ?

Northern Crock was all over CNN last night, they showed the queues the bank staff explaining procedures/shall we say their rules to people in the queues

and

they explained nicely and clearly that it seems anybody with funds in Northern Crock, if Northern Crock goes down, their first 2k gbp is guaranteed, then they get 90% or the next 30k gbp and then nothing of the rest !!!! meaning as far as I understand however much anyone has in Northern Crock, if they go down, all the people will get is a maximum of 31700GBP.

CNN said 1billion had been withdrawn so far.


Experts, giving consideration to the maximum you can get back if the bank goes down, would it work to put a maximum of say 30k gbp into many accounts with many banks instead of all with one ?

Up the au.

Milan.

Paddy
16th September 2007, 08:42
Northern Rock are in DEEP POO. They are in deeper poo than portrayed in the news. They have been lending 120% of value mortgages (90% + 30% loan) at four to six times annual income. Interest rates have gone up, borrowers can’t afford to pay and the repossessions are not recovering costs.

I was working with the most ignorant Australian tw@t of a contractor who left Australia because of debts, after arriving in the UK and contracting for three months Northern Rock lent him £260,000 (120% mortgage). He was on £25 per hour.

wendigo100
16th September 2007, 09:00
It's different this time.
There will be a small correction.
We will have a soft landing.

(Have I forgotten anything?)

Paddy
16th September 2007, 09:35
It's different this time.
There will be a small correction.
We will have a soft landing.

(Have I forgotten anything?)

That’s what the mistress told me in the S&M dungeon. I’m still smarting.

TheFaQQer
16th September 2007, 09:43
They've just borrowed £31 billion from the BoE.

I don't think there's too much danger of them running out of cash.

sappatz
16th September 2007, 09:44
northern cock will pay 7% to the BOE for emergency funding
this is an awful refinancing rate for a bank !
it means no other bank will lend then money at any reasonable rate (libor, repo...)

Sysman
16th September 2007, 10:46
They've just borrowed £31 billion from the BoE.

I don't think there's too much danger of them running out of cash.

Predators circle as Northern Rock founders (http://business.scotsman.com/index.cfm?id=1480442007)

thunderlizard
16th September 2007, 11:38
There is a bit of "do as I say not as I do" from the world of high finance. How did Northern Rock get into trouble? Banks thought they were too risky to carry on putting their money into, so they stopped lending. Joe Saver Bloggs does the same, and they say he's overreacting.

NoddY
16th September 2007, 11:43
There is a bit of "do as I say not as I do" from the world of high finance. How did Northern Rock get into trouble? Banks thought they were too risky to carry on putting their money into, so they stopped lending. Joe Saver Bloggs does the same, and they say he's overreacting.

Exactly. The market has spoken. It says 'lend money to Northern Rock, and you might not get it back'. Why should savers unnecessarily add themselves to the list of creditors when they can get out now?

NotAllThere
16th September 2007, 11:54
I wonder how many of those people queueing actually have more than £2000 in their savings accounts.

Sockpuppet
16th September 2007, 12:41
I wonder how many of those people queueing actually have more than £2000 in their savings accounts.

I think you'd be surprised.

Sockpuppet
16th September 2007, 13:30
They reckon that the withdrawals are at £2billion. Monday will see some big hits as well. NR reckon that postal accounts will start to be emptied which contain over £10billion.

Certainly wouldn't buy shares in them at the moment. They were due to announce a takeover last week before the loan was needed. If the share price drops 31% you think that bank would pounce but not so...I think that is a bad sign.

thunderlizard
16th September 2007, 13:35
but opportunistic M&A always has been a weekend sport. Let's see what Monday brings.

sappatz
16th September 2007, 14:02
I don't think there's too much danger of them running out of cash.

they are out of cash since no other bank will lend them money. (its a strong signal methinks !)
the rate of 7% offered by the BOE is excessive and will eat margins

BTW the economic model of NR sucks big time in the current times : 73% of the financing comes from commercial paper in the credit derivatives market, wich has become pretty illiquid the last times.

bobhope
17th September 2007, 07:23
Northern rock were always the most likely candidate for this. 6x lending, 125% LTV, etc.

cojak
17th September 2007, 08:21
Lloyds, but the BoE stopped it...

NotAllThere
17th September 2007, 08:52
I've just worked it out - all those people in the queues will be wanting to apply for loans.

Churchill
17th September 2007, 08:54
I've just worked it out - all those people in the queues will be wanting to apply for loans.

Always remember, debt is a commodity too...

Hart-floot
17th September 2007, 09:05
Always remember, debt is a commodity too...

Thats good, the UK's personal indebtedness is 1.9 Trillions pounds Perhaps we can make some money on it ;) And then put the balance into the other "reputable" lenders like the Bradford&Bingley and the Alliance&Leicester :laugh so they can lend out some more:laugh

Churchill
17th September 2007, 09:13
Thats good, the UK's personal indebtedness is 1.9 Trillions pounds Perhaps we can make some money on it ;) And then put the balance into the other "reputable" lenders like the Bradford&Bingley and the Alliance&Leicester :laugh so they can lend out some more:laugh

Congratulations!!! You now understand how the UK economy works...

Churchill
17th September 2007, 09:17
Shouldn't "works" be in inverted commas?

Yup, thought about it but... I reckoned that we all know that "work" is meant in the loosest of terms...

Hart-floot
17th September 2007, 09:41
Congratulations!!! You now understand how the UK economy works...

Thanks - i'm under no illusions about how the UK & US economies work :laugh

At least we have Alistair "dont panic" Darling or should that be Alistair "Gordon's Patsy" Darling running things now:eek::eek:

milanbenes
17th September 2007, 09:43
Where's the mighty investment expert Nick Fritz this morning ?

Did he put it all on NRK ?

Milan.

Old Greg
17th September 2007, 09:48
Where's the mighty investment expert Nick Fritz this morning ?

Did he put it all on NRK ?

Milan.

I think I saw him queuing outside Northern Rock in Milton Keynes, trying to get his £200 out.

scooterscot
17th September 2007, 10:09
I think it time to buy buy buy! Looks shares a gaining in value!

http://uk.finance.yahoo.com/q/bc?s=NRK.L&t=1d