Sunday, Sep 23, 2007
How fast things change.
BBC: Northern Rock 'can't find buyer'
This makes Northern Rock virtually worthless. What is amazing is that this bank went from being worth billions to possibly not being worth anything at all, all in the space of a few weeks. I never realised that the foundations of our banking system were so shaky. With even HSBC putting forward a profit warning, things must be far worse than they seem.
Posted by planning4acrash @ 10:46 AM (841 views) Add Comment
14 Comments
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1. paul said...
Ooh you pipped me to the post by about 10 seconds on this one!
I wonder if gap-toothed shiny suited sales oik Adam Applegarth is still proclaiming "Bloody hurrah!"?
2. david20040_0 said...
I was just about to post this.
This is unbelievable, the bank is god damn worthless and the BoE bailed them.
Taxpayers have to take the rap and bail this absolute worthless rubbish bank out.
Why wasn't it allowed to crash and burn and allow this stupid boom to end.
BoE STOP BAILING!!!!!!!!!!!!!!
3. david20040_0 said...
"Banks said to have turned their backs on a potential bid for Northern Rock are HSBC, Royal Bank of Scotland, Barclays and Lloyds TSB. ""
So pretty much every major bank in the country. Hmmmmmm wonder, why, because Northern Crock is a sack of .......
4. Scott said...
Governments can make any stupid mistakes but businesses go under if they do, so none of them will buy Northern Rock.
5. planning4acrash said...
Either that, or the banks that would buy or money markets in general are in a worse state and an aquisition is not feasible right now? That would truly be the worse case scenario, and possibly very likely given that Northern Rock, no matter how bad it is, will have a value that can be priced accordingly.
6. Bobsta said...
"What is amazing is that this bank went from being worth billions to possibly not being worth anything at all, all in the space of a few weeks"
We've seen it before (Enron, Worldcom, et al) and we'll see it again...
It's all down to how good your accountants are at presenting* the facts.
(* masking/modifying/hiding - delete as appropriate)
7. Scottow said...
Not the only company like this
8. david20040_0 said...
From the Times http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2512384.ece
Banks don't give a sh*t anymore because they know the BoE will bail them
Northern Rock still lending ‘recklessly’
Robert Winnett and Roger Waite
Northern Rock stands accused of “reckless” lending after it emerged this weekend that the beleaguered bank is still offering mortgages of six times salary to potential borrowers.
Despite provoking the worst banking crisis for decades, the bank last week offered a reporter posing as a first-time buyer a £180,000 mortgage even though he had a salary of only £30,000.
The loan was at least £30,000 more than other leading lenders were prepared to offer. Repayments for the loan would have accounted for more than 60% of the fictional buyer’s take-home salary.
The reporter, posing as another potential customer, was also offered a so-called “negative equity mortgage” worth 117% of the value of the property he claimed to be interested in buying. The mortgages offered by other banks to the same potential borrower were significantly lower.
Sunday, September 23, 2007 11:59AM
9. Bobsta said...
OP said: "What is amazing is that this bank went from being worth billions to possibly not being worth anything at all, all in the space of a few weeks"
We've seen it before (Enron, Worldcom, et al) and we'll see it again...
It's all down to how good your accountants are at presenting* the facts.
(* masking/modifying/hiding - delete as appropriate)
10. Monty032 said...
There is a good explanation of this by Bearbull in this week's Investors Chronicle. Northern Rock has £96.7bn worth of loans, and £1.95bn of ordinary share capital. So if distress buyers want to pay anything less than 98% of the face value of the loan book (and they surely will), this wipes out the shareholders.
11. Scott said...
I see my comments are not being posted again. One word; censorship! I may as well go and blog on the BBC site on the grounds of greater credibility.
12. N said...
Whats great about all of this is that, while reporting on the potential takeover of Northern Rock, as they probe into the loan book, the mainstream media will pluck out anecdotes illustrating the scandalous nature of NR lending practices. 'Clunk', the penny will drop as everyone discovers that subprime issue is a UK concern too. I wonder how Darling will try to polish up his statements that NR 'is a good institution' with 'good mortgages lent to borrowers' in the forthcoming awakening.
13. Bubblepopper said...
Its going to go this week!
14. david20040_0 said...
Scott to get your comments posted instantly e-mail the webmaster and they will send u a password, click the key symbol above and a new box will open, put the password in and your comments will appear instantly. :)