Northern Rock

Karma

War Hero
Third day in a row with massive withdrawals from Northern Rock.

It was probably stable at the end of last week, I'd say a lot less so now. But probably ripe for a takeover if anyone can get the funds at reasonable rates.

Glad my mortgage is no longer with them though.......
 
Are the queues outside Northern Rock premises a subtle hint to our Political masters that very few of us, if any, believe a single word that the Politicians tell us, and that it is they that are bankrupt?

Jerry
 
Jerry_Hatrick said:
Are the queues outside Northern Rock premises a subtle hint to our Political masters that very few of us, if any, believe a single word that the Politicians tell us, and that it is they that are bankrupt?

Jerry
I think it is simply down to the fact that when it is your money the acceptable level of risk is different to when it is some one elses money.
 

OSLO

War Hero
The gutsy call is to place a spread bet "buy" on this for 3 months' time.

The NR Press Office must be working overtime to try to fix this. There doesn't seem to be anything that they can say to mollify investors. I guess you have to take a long hard look at the company's balance sheet to see what it's exposure is. Any financially aware RRers fancy a recommendation?
 
notafourknotfudgepacker said:
I have a personal loan (car purchase) with Northern Rock. Do you think I should "twist the knife" by cancelling my repayment direct debit :thumright: ?
In the present climate I suspect the debt collectors would be at your door pretty smart.
 
OSLO said:
The gutsy call is to place a spread bet "buy" on this for 3 months' time.

The NR Press Office must be working overtime to try to fix this. There doesn't seem to be anything that they can say to mollify investors. I guess you have to take a long hard look at the company's balance sheet to see what it's exposure is. Any financially aware RRers fancy a recommendation?
The real problem is once the lemmings have started to go over the cliff there is little to that can be done to stop the rest following. Not that I am suggesting they are wrong, it's their money and how much risk is any one of us going to take especially as there is no bonus for hanging in with them. If they offered a bonus for savers who did not cash in over the next 6 months say then there is at least a reason to take the risk.

As for buying shares the real answer is are they so popular their will be a bidding war, or is it going to be a case of the others waiting till the price falls to the point they really cant refuse, and as the price is still falling it looks like the latter.
 

sgtpepperband

War Hero
Book Reviewer
I cannot understand the unnecessary mass hysteria caused by this news. ALL banks borrow from the BoE all the time - it is more common than people realise. They do it to invest on the open financial markets in order to make profits for its customers.

If the BoE thought that Northern Rock was in jeopardy then it would not have lent the money in the first place! So as a result, customers have been withdrawing their money from Northern Rock accounts, which causes even more problems for the bank.

A financial analyst made an interesting analogy on Sky News today. She said it was similar to someone lighting a match in a cinema and shouting "Fire!", causing hysteria. The risk of danger to the audience from the flame of the match was negligible. But many people would be unnecessarily harmed as a result of the subsequent stampede.

Northern Rock's position was never in jeopardy when it borrowed the BoE's money, but it certainly is now, following the actions of its customers. :roll:
 
I also cannot understand why some of said lemmings have so much money with one particular financial institution. I'm no financial expert but have these people not heard of spreading risk or do they just have a somewhat laid back attitude towards it - until of course it goes a bit "pear- shaped"
 
I suspect that some with large ammounts have done so because they were offered a good deal and they went for the return rather than taking a little less and spreading the risk, others and probably the bulk opened an account and just kept pushing the money in.

As for the panic, if that is your retirement etc nest egg, just what level of risk will you accept, there was the case of the bank that did go bust a few years back and quite a few people lost money even though the smaller investers got all their money back.
 

janner

MIA
Book Reviewer
I think that your money is safe up to about £31.000, some sort of guarentee from FSA/Bank of England. If anything goes wrong you get the lot back, its different over that amount..The other thing to think about is how long would it take to get your money back if they went to the wall. It won't be to long before one of the big Banks takes NR over, at the right price
 
They have compared this to the film 'Its a Wonderful Life' staring James Stewart aparently.
Similar sort of plot but it all ends well so thats nice.
 

WarMonger

War Hero
sgtpepperband said:
I cannot understand the unnecessary mass hysteria caused by this news. ALL banks borrow from the BoE all the time - it is more common than people realise. They do it to invest on the open financial markets in order to make profits for its customers.

If the BoE thought that Northern Rock was in jeopardy then it would not have lent the money in the first place! So as a result, customers have been withdrawing their money from Northern Rock accounts, which causes even more problems for the bank.

A financial analyst made an interesting analogy on Sky News today. She said it was similar to someone lighting a match in a cinema and shouting "Fire!", causing hysteria. The risk of danger to the audience from the flame of the match was negligible. But many people would be unnecessarily harmed as a result of the subsequent stampede.

Northern Rock's position was never in jeopardy when it borrowed the BoE's money, but it certainly is now, following the actions of its customers. :roll:
Spot on SPB, Northern Rock were fine until the media got their hands on it and blew it up in their usual 100% accurate and forthwright manner. Northern Rock has a fantatsic record on bad debts, arrears and default with the one of the lowest rates of any UK bank, Pretax profit of £540 million with little or no bad debt provision required, hardly the balance sheet of a company about to go under. However now that a large portion of their capital base has been withdrawn they are in trouble and all that comes with job losses etc etc etc....good old British press.. dont you just love em!!
 

Topstop

War Hero
notafourknotfudgepacker said:
I have a personal loan (car purchase) with Northern Rock. Do you think I should "twist the knife" by cancelling my repayment direct debit :thumright: ?
Don`t even think about it , I had a cheap credit card with a middle eastern bank which went bust .The creditors/recievers upped the interst rate to what was normal at the time. The poor buggers saving with them got very little back and it took ages to sort. British banks are different they are garanteed up to 30/35K per saver so if you`ve more than that spread it around.
 

PINCH

War Hero
OSLO said:
The gutsy call is to place a spread bet "buy" on this for 3 months' time.

The NR Press Office must be working overtime to try to fix this. There doesn't seem to be anything that they can say to mollify investors. I guess you have to take a long hard look at the company's balance sheet to see what it's exposure is. Any financially aware RRers fancy a recommendation?
My Man in the Know told me to sell 6 weeks ago. I owe him much beer, recommends buy in Nov prior to sell off. They knew this was going to happen ages ago. :thumright: :thumright: :thumright:

R.O.B are sniffing :thanks: :thanks:
 
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