Realistbear Posted September 15, 2007 Share Posted September 15, 2007 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. Quote Link to comment Share on other sites More sharing options...
?...! Posted September 15, 2007 Share Posted September 15, 2007 It's quickly becoming a financial quagmire... As some people predicted it would. Quote Link to comment Share on other sites More sharing options...
topliner Posted September 15, 2007 Share Posted September 15, 2007 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? Quote Link to comment Share on other sites More sharing options...
GCS15 Posted September 15, 2007 Share Posted September 15, 2007 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. Quote Link to comment Share on other sites More sharing options...
?...! Posted September 15, 2007 Share Posted September 15, 2007 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. Quote Link to comment Share on other sites More sharing options...
topliner Posted September 15, 2007 Share Posted September 15, 2007 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? Quote Link to comment Share on other sites More sharing options...
neil324 Posted September 15, 2007 Share Posted September 15, 2007 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 Quote Link to comment Share on other sites More sharing options...
Guest Shedfish Posted September 15, 2007 Share Posted September 15, 2007 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. Quote Link to comment Share on other sites More sharing options...
Charlie Don't Surf Posted September 15, 2007 Share Posted September 15, 2007 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? Quote Link to comment Share on other sites More sharing options...
topliner Posted September 15, 2007 Share Posted September 15, 2007 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? Quote Link to comment Share on other sites More sharing options...
Guest Bart of Darkness Posted September 15, 2007 Share Posted September 15, 2007 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. Quote Link to comment Share on other sites More sharing options...
refusnik Posted September 15, 2007 Share Posted September 15, 2007 (edited) 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 September 15, 2007 by refusnik Quote Link to comment Share on other sites More sharing options...
Gurgle Posted September 15, 2007 Share Posted September 15, 2007 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. Quote Link to comment Share on other sites More sharing options...
topliner Posted September 15, 2007 Share Posted September 15, 2007 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. Yip, Northern Rock ahead by a country mile, but BB is not that far behind! Quote Link to comment Share on other sites More sharing options...
brainclamp Posted September 15, 2007 Share Posted September 15, 2007 (edited) 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 September 15, 2007 by brainclamp Quote Link to comment Share on other sites More sharing options...
Guest Shedfish Posted September 15, 2007 Share Posted September 15, 2007 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... Quote Link to comment Share on other sites More sharing options...
Fully Detached Posted September 15, 2007 Share Posted September 15, 2007 (edited) 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 The 1k will be moved next week - I'll be setting up an account with Nationwide tomorrow. Edited September 15, 2007 by Crash Gordon Quote Link to comment Share on other sites More sharing options...
Realistbear Posted September 15, 2007 Author Share Posted September 15, 2007 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. I am with RBS(NatWest)--they look safe............................................for now. Quote Link to comment Share on other sites More sharing options...
numpty Posted September 15, 2007 Share Posted September 15, 2007 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. Quote Link to comment Share on other sites More sharing options...
RJG18 Posted September 15, 2007 Share Posted September 15, 2007 ...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. Quote Link to comment Share on other sites More sharing options...
Bearback Posted September 15, 2007 Share Posted September 15, 2007 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. Quote Link to comment Share on other sites More sharing options...
Gurgle Posted September 15, 2007 Share Posted September 15, 2007 (edited) 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 September 15, 2007 by Gurgle Quote Link to comment Share on other sites More sharing options...
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