Northern Rock Share Discussion Threads

[bryan2] 25/11/2008 10:26

Yesterdays mini budget.

Patrick Minford the Economist said on the radio this morning that the mini budget measures are an attempted cure for a problem with an incorrect diagnosis.
By using a very slack fiscal policy, to deal with a very rigid monetary problem (credit freeze), the remedy will not work and will result in the taxpayer forking out for the fake medicine.
He identified the BoE tight policy over the last year as the main cause of the British financial sectors woes.
The response of Mervyn King to the Northern Rock crisis was to give them a lecture on "moral hazard" and to tell them to get lost.
Interest rates were kept artificially high and the Banks denied credit on reasonable terms.
Over the 14 months since then the BoE policy has had to change several times, but always grudgingly and too little too late.
Even now the recapitalisation of the Banks has been carried out with penal terms attached.
Barclays were so underwhelmed, that they considered a 14% preference share offer from Middle East to be superior to the BoE/HMG offer.
How has Mervyn kept his job?
In Feb 2008 when his tenure was up for renewal and it was widely thought that he would not be reappointed, George Osbourne came out in full support of him.
Why did George Osbourne do that?
I think it was simple political opportunism to wrong foot Gordon Brown, who was very unpopular at the time.

[bryan2] 24/11/2008 08:53

Today Vince (chancer) Cable MP called on the Government to Nationalise all the British Banks because they are not lending as much money as Vince would like them to.
The Tories don't seem to have a clue and the Government (seeing no coherent political opposition) might just take Vince's advice.

[kpwuk] 20/11/2008 23:30

We have been appointed to freely judge this case on condition that we find the defendant guilty.

[bryan2] 20/11/2008 13:53

I wonder what the valuer Mr Caldwell will make of the fees that HMG passed on to Northern Rock for the advice HMG took from "experts".
Northern Rock did not ask for the advice however it seems that HMG had left them with the bill.
Its ironic that three bankrupt/nearly bankrupt American Banks Citigroup, Goldman Sachs and Merrill Lynch (heavily involved in setting up sub prime junk) were asked to supply advice to HMG.
The Banks must have had a good laugh at our expense and probably hoped that their real bankrupt position was not revealed until they had cashed the inflated expenses cheque.
John Redwood MP is one of only two MPs that have emerged from the Northern Rock crisis with any honour.
In Oct 2007 he said that the BoE should act like a firm but fair Banker and exchange gilts for good quality but illiquid mortgage assets.
He said that the BoE should charge a fair (but not penal) interest charge to reward the taxpayer.
This approach would help the Banks through the Liquidity Crisis that originated in America.
The fact that the BoE/HMG policy has had to be changed several time since Aug 2007 shows how stupid and counterproductive the original policy was.
Vince Cable and George Osbourne on the other hand outdid one another in whipping up hysteria that made the problem much worse.
They probably realise by now the damage they created but as politicians they will not admit it publicly.
Jim Cousins MP from the Labour party also deserves praise for reaching much the same conclusions as John Redwood.
Had the advice of these two MPs been listened to back in Aug 2007 the country and its banks would not be in the present sorry state.

[scribbler101] 20/11/2008 10:03

This government owned bank appears to be acting totally contrary to the way government wants banks to act!

[scribbler101] 20/11/2008 00:00

UK Shareholders Association Newsletter
Northern Rock Shareholders Action Group - Update No. 45A


Valuers Letter


Many shareholders have received a letter from the Valuer, Andrew Caldwell, appointed by the Government. A copy is present on our web site at www.uksa.org.uk/Valuers_Letter_Nov2008_B.pdf
(a pdf document). UKSA will be sending a response on behalf of shareholders and advising shareholders how they might respond themselves, in due course. PLEASE DO NOT CONTACT US WITH INDIVIDUAL QUESTIONS ON THIS MATTER AS WE CANNOT COPE WITH THE VOLUME OF INQUIRIES THAT IT IS GENERATING.

Roger Lawson
Chairman, Northern Rock Shareholders Action Group
Email: [e-mail]
Direct telephone: [phone]

[miata] 18/11/2008 16:29

Northern Rock expects to be responsible for 10% of all repossessions this year as it races to repay its loan from the taxpayer and tries to return to the private sector.

The bank's repossession rate of 0.56% of all loans is running at three times the industry average and is largely caused by its controversial Together loans, essentially mortgages of 125% of the value of a property.

While Together loans represent just under 30% of Northern Rock's mortgage book, they account for 50% of its arrears and around 75% of all repossessions.

Northern Rock had taken possession of 4,201 homes by the end of September, up from 3,710 at the end of June. Most of these homes were repossessed in the past 18 months, Hoffman said.

[coogar] 17/11/2008 16:48

bryanmuppet

It's called investigative journalism. Get over it.

Don't know about you but I prefer to read/hear facts from the media rather than just mere speculation.

Btw, it's not up to HM Treasury to accept or reject LLoyds TSB's offer for HBOS, it's up to the shareholders of the two banks and it's for the incumbent board of HBOS to decide which if any other third parties to open talks with or recommend to their shareholders. Suffice to say that we all know what we can expect if the deal doesn't go through: Lots more muppets thrust upon us.

[diydan] 17/11/2008 16:18

Well said Bryan2.
Not long till the court case now though and I hope we will see how Mr Peston reacts when he is under oath? I will assume he will not name mames and will hide behind his alledged role as a jounalist?
However that should at least see him lose his job on the BBC and he will very probably have to be given a seat in the lords like his daddy was by HMG?

[greycioud] 10/11/2008 15:08

Seemingly.

[kpwuk] 10/11/2008 10:52

Is there an echo in here?

[bluenose851] 09/11/2008 16:13

AND NO MONEY!

[k38] 09/11/2008 14:46

what happens here then...no news ?

[k38] 09/11/2008 04:39

Northern Rock says it will pay debt on time despite slump Nationalised bank admits £11.4bn left will be 'challenging'Phillip Inman The Guardian, Wednesday

October 15 2008

Article history
Northern Rock vowed yesterday to pay back its multibillion-pound loan on time despite sharply deteriorating house prices and a looming recession that has sent arrears and repossessions rocketing in recent months.

The lender, which was nationalised earlier this year, said former directors at the centre of the group's collapse last summer would escape legal action after a lengthy investigation was unable to detect sufficient evidence of wrongdoing.

The bank's chairman, Ron Sandler, said a report by the law firm Freshfields and the accountants KPMG into the previous regime, headed by the former chief executive Adam Applegarth, had found "insufficient grounds to proceed with any legal action for negligence".

He said the report, which was accepted by the bank's board, would allow directors to focus on the organisation's future, which remained "challenging" while the economy continued to slow down.

The bank said in a third-quarter trading statement that it was "well ahead" of its government loan repayment target, having paid back more than half of the £26bn it owed, to leave £11.4bn outstanding as at September 30.

Northern Rock hit the headlines a fortnight ago when it revealed that savers panicked by the financial meltdown had deluged the bank with demands to deposit cash. Savers saw the publicly owned operation, which still has 70 branches, as a safe haven during a period of turbulence in financial markets and uncertainty over the future of several high-street rivals.

The Newcastle-based bank withdrew several savings products and put a cap on others to comply with EU rules limiting it to 1.5% of the savings market so as not to distort competition.

In a trading statement, the bank said that while it had successfully built a strong deposit base, it was finding it difficult to making further repayments of the loan. Sandler said: "We have continued to repay the government loan well ahead of plan; our deposit base is growing; our restructuring programme has been completed successfully, and a new and stronger management team is now in place. These are encouraging developments.

"But I don't want to convey the impression that any of this is going to be easy or anything other than arduous. Dislocated financial markets and falling house prices mean that the pace of progress achieved to date will be significantly more challenging to maintain going forward," he said.

Arrears of more than three months jumped to 1.87% in September from 1.18% in June, while repossessions increased from 3,710 in June to 4,201 in September, the company said.

Sandler said the worsening outlook for the economy was likely to lead to a further rise in arrears and repossessions on its 600,000 mortgage accounts.

Most of the repossessions were for properties secured with a "Together" mortgage, which allowed buyers to borrow up to 125% of the property's value. Together mortgages account for 80% of loans triggering repossession orders.

Before running into funding problems last summer, Northern Rock was one of Britain's biggest and most aggressive mortgage providers.

It was forced to turn to the Bank of England for emergency support after the money markets froze, leaving the group facing a funding crisis. A run on the bank saw it haemorrhage billions of pounds of deposits before a government guarantee stabilised its business. Months of searching for a private-sector buyer failed and the bank was nationalised in February.

More than 1,500 staff lost their job, of which 800 came through compulsory redundancies.

The lender has been reducing the size of its mortgage book in order to pay back its government borrowing, and repaid £15.4bn during the nine months to September 30. Repayments have fallen dramatically in recent months, leading to concerns that the bank will struggle to pay back the government without becoming more aggressive in tackling arrears.

Some mortgage brokers and anti-poverty campaigners have already warned that Northern Rock has moved quickly to repossess homes after customers have fallen into arrears. The Consumer Credit Counselling Service, which handles thousands of calls each month from distressed bank customers in debt, has accused the bank of lacking any care or leniency in its dealings with customers.

Sandler rejected the charge, arguing that the company and its staff made efforts to keep people in their homes whenever possible.

[greycioud] 08/11/2008 11:28

bryan

You will join my list of filtered numpties unless you mend your ways!!

[ap29] 07/11/2008 23:09

the country is bankrupt but the next election decrees that our wonderful government bail out the debtors and save house prices from their much needed collapse

[motchjv] 07/11/2008 17:50

NRK just dropped their base rate by 1.5%. That has saved me 250 quid per month. Thank you Mr Brown!

[bryan2] 07/11/2008 13:47

GreycIoud

Can you read?
The main point of my posting 1191 was to show the stupidity of a Government that demands 12% from Banks for its loan and yet expects the same Banks to lend at near the base rate of 3%

Northern Rock is in a different category.
Since HMG confiscated our assets and also own the BoE why not let them lend at this rate for the general good of the taxpayers?

The BoE base rate is 3%
Who can borrow at this rate from the BoE
What are the terms and conditions attached to such a loan.

GreycIoud if you have difficulty reading this, show it to some adult who might be so good as to read it out for you!

[greycioud] 07/11/2008 13:16

LIBOR rate has now come down to 4.49% so I am told. So some savings will be passed on IMO.

[greycioud] 07/11/2008 11:52

It gives the muppets something to whinge about as they do not understand how banking works.

[rebess] 07/11/2008 11:28

Since LIBOR is the important rate for banks, I'm wondering what is the point of having a base-rate if it has no bearing on the banks loan strategy!

[greycioud] 07/11/2008 11:12

Bryan

Why are you so dim?? You cannot lend at 3% if that is the rate you can borrow at!! You would not make a profit. LIBOR is about 5.56%. That needs to come down so banks can lend at a lower rate. NRK would not be allowed to lend at low uncommercial rates thereby gaining an unfair advantage over its competitors. You & the other muppets & HMGov need to go back to school & do some basic lessons.