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Guardian: Paragon, A & L And B & B Named

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http://business.guardian.co.uk/story/0,,2169729,00.html

Banking shares suffer amid fears of another Northern Rock
Investors take flight as lenders strive to allay mounting worries
Phillip "Phil" Inman and Miles "MiMi" Brignall
Saturday September 15, 2007
The Guardian
Fears that another bank would be forced to follow Northern Rock and reveal huge losses resulting from the credit crunch in global money markets sent shares in the sector tumbling yesterday.
Alliance & Leicester and Bradford & Bingley defended their lending strategies while the buy-to-let lender Paragon was forced to put out a statement to allay concerns that it was vulnerable to a combination of falling house prices and tighter rules on corporate borrowing.
.../
A&L was considered one of the more vulnerable to a fall in investor sentiment
. It has often been bracketed with Northern Rock as a mid-sized operation that must punch above its weight to compete.
Paragon Group, one of yesterdays biggest fallers, was forced to bring forward a funding announcement that had been due next week in a bid to calm City nerves.
The company, which is the UK's third-largest buy-to-let lender with £9bn of buy-to-let assets, saw its shares fall yesterday as dealers looked for other vulnerable lenders.

The problem these miracle economy lenders face is that the sheeple are in no mood to believe them anymore. They have been lied to about house prices only ever going up and they have seen what happens when a bank run occurs. No one wants to be caught in a Queue--better to quietly get out before the others.

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IMHO, I would say A&L have to be a bit worried right now, they do have to punch beyond their weight like Northern Rock, however having said that I have to conceed thepoint that their funding model is considerably different to that of NR...right?

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No one wants to be caught in a Queue--better to quietly get out before the others.

Done. I'm sorted. Now I can sit back and watch the mess from my bunker. :ph34r:

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IMHO, I would say A&L have to be a bit worried right now, they do have to punch beyond their weight like Northern Rock, however having said that I have to conceed thepoint that their funding model is considerably different to that of NR...right?

It's been less aggressive over the last 6 months.

I don't think A&L or B&B would need to go to the BoE for at least another 15-20 working days.

Excluding any sort of 'bank run' of course.

But they are all driving towards the wall, just at differing speeds.

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It's been less aggressive over the last 6 months.

I don't think A&L or B&B would need to go to the BoE for at least another 15-20 working days.

Excluding any sort of 'bank run' of course.

But they are all driving towards the wall, just at differing speeds.

Smell the fear?

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I cant see anyone going bust the BOE will bail out everyone until maybe a takeover can be sorted, but i have 31k in the B&B and monday morning its going straight to my nationwide account

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Guest Shedfish
IMHO, I would say A&L have to be a bit worried right now, they do have to punch beyond their weight like Northern Rock, however having said that I have to conceed thepoint that their funding model is considerably different to that of NR...right?

well, after the last couple of days, i have to say that one more degree of uncertainty about A&L and i'm there like a shot, and i'll empty my account in one.

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I would love to see Paragon go down. What happens to all the outstanding mortgages if one of these lenders goes under. Obviously they aren't all written off but will borrowers be able to get the same deal or would they be looking at a reset?

The borrower has a legal obligation to keep making repayments, his home is secure and whosoever rescues the beleagured lender takes on the mortgage.

If the borrower stops paying the monthlies, then sorry, he's in arrears and will now find it difficult to get out of the brown smelly stuff as that's sub-prime lending isn't it?

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Guest Bart of Darkness
Smell the fear?

Is that a comment on the state of the banking sector or our very own "born again bull", distinguished primarily by his incredible timing. After years of being a bear he chooses now to become a bull.

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I hope after these queues on the high street with policemen ready to step in NOBODY will have the guts anymore to say that American subprime problem will not land on British soil. Because it had really annoyed me to hear it again and again as if they were casting a spell.

Edited by refusnik

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You might be interested in this table published in todays telegraph. Doesn't looks like A+L are much more exposed than some of the really big banks. HSBC looks fairly safe.

cnstocks115.gif

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You might be interested in this table published in todays telegraph. Doesn't looks like A+L are much more exposed than some of the really big banks. HSBC looks fairly safe.

cnstocks115.gif

Yip, Northern Rock ahead by a country mile, but BB is not that far behind!

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well, after the last couple of days, i have to say that one more degree of uncertainty about A&L and i'm there like a shot, and i'll empty my account in one.

Whether AL can access the interbank wholesale market for borrowings is one issue.

A sepreate issue is that

AL has around 30% of its assets involved in toxic waste - the soup of CDOs CLOs SIVs etc... with SIVs a large amount of liability may also be off balance sheet.

Are you happy to fund that?

Edited by brainclamp

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Guest Shedfish
Whether AL can access the interbank wholesale market for borrowings is one issue.

A sepreate issue is that

AL has around 30% of its assets involved in toxic waste - the soup of CDOs CLOs SIVs etc... with SIVs a large amount of liability may also be off balance sheet.

Are you happy to fund that?

not at all happy - that loan to deposit chart above is a little worrying too. i think next week i'll just keep the drip feed account at A&L open and look for somewhere else.

damn, this is getting tricky...

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By a combination of sheer luck and my own spectacular incompetence, I managed to avoid transferring 6k into A&L from an internet transfer that I set up on Wednesday.

It turns out you can only make one transfer to each recipient on a given day, so my decision to increase the intitial 6k transfer to 7k meant that I overwrote the first transaction and only sent 1k to A&L.

And I phoned Lloyds to complain, just before I visited this thread :lol:

The 1k will be moved next week - I'll be setting up an account with Nationwide tomorrow.

Edited by Crash Gordon

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You might be interested in this table published in todays telegraph. Doesn't looks like A+L are much more exposed than some of the really big banks. HSBC looks fairly safe.

cnstocks115.gif

I am with RBS(NatWest)--they look safe............................................for now.

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It's been less aggressive over the last 6 months.

I don't think A&L or B&B would need to go to the BoE for at least another 15-20 working days.

Excluding any sort of 'bank run' of course.

But they are all driving towards the wall, just at differing speeds.

I think it is important when making statements like this that they really need to be fleshed out with some facts with the greatest respect any fool can make a statement like this which implies they have been montioring DTi returns and have inside knowledge about this rather complex business.

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...The 1k will be moved next week - I'll be setting up an account with Nationwide tomorrow.

Ironic, isn't it. After years of, on one hand, hating Nationwide for their VI-price-ramping-spin, we bears are now all in agreement that they are probably the safest place on the highstreet to put your money, and as we speak are writing massive cheques to them in our thousands.

Can one entity be both a nemesis and saviour at the same time? It's like the rebel alliance having a burst water-main at their secret Hoth snow-base, then discovering the only CORGI-registered plumber available in the area at weekends is Darth Vader.

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cnstocks115.gif

Are these percentages not just ridiculous.

Surely they should have shown deposit to loan ratio, or market funding to loan ratio.

I think NR have about 24% deposits and 76% market funding.

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cnstocks115.gif

Are these percentages not just ridiculous.

Surely they should have shown deposit to loan ratio, or market funding to loan ratio.

I think NR have about 24% deposits and 76% market funding.

Edited because I got it completely wrong first tiome...

So using your figures it makes NR 100/24 * 100 = 417% (so even worse)

This is the amount of money the have lent as a percentage of what they have on deposit. I believe there are rules regulating what level a mutual society is allowed to work at. (something like 50% market funding and 50% backed up with deposits). Banks are probably regulated differently.

Edited by Gurgle

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