B & B Is Now "worthless" According To City

[Realistbear]

http://www.telegraph.co.uk/money/main.jhtm...8/cnbrad108.xml

Bradford & Bingley shares crash

By Philip Aldrick and Katherine Griffiths

Last Updated: 1:59am BST 08/07/2008

Bradford & Bingley shares crashed 16pc to 42p yesterday, dropping further below the 55p-a-share price of its £400m rights issue, as the City speculated that the

buy-to-let lender is worthless

.

Pali International, a stockbroker, cut its target price for the bank to "zero" and calculated B&B's "net present value" to be -14p. In a separate note, banking specialist Fox-Pitt, Kelton said: "We cannot rule out the possibility of an effective failure with shareholders receiving little or nothing for their shares."

This came in the wake of last week's Moody's downgrade and decision by TPG to pull its planned £179m investment. In frantic efforts to keep B&B's capital raising on track, four of its core shareholders stepped in to support an enlarged £400m rights issue alongside the six largest high street banks.

The end of B&B is very significant. Could we see Queues forming as savers try to get their money out despite Brown's assurances that the British economy is well placed to avoid the downturn that is affecting the rest of the world?

[EmpiricalBear]

Seems like its only a matter of days now.

Time to activate plan Z.

[Thucydides]

http://www.telegraph.co.uk/money/main.jhtm...8/cnbrad108.xml

Bradford & Bingley shares crash

By Philip Aldrick and Katherine Griffiths

Last Updated: 1:59am BST 08/07/2008

Bradford & Bingley shares crashed 16pc to 42p yesterday, dropping further below the 55p-a-share price of its £400m rights issue, as the City speculated that the

buy-to-let lender is worthless

.

Pali International, a stockbroker, cut its target price for the bank to "zero" and calculated B&B's "net present value" to be -14p. In a separate note, banking specialist Fox-Pitt, Kelton said: "We cannot rule out the possibility of an effective failure with shareholders receiving little or nothing for their shares."

This came in the wake of last week's Moody's downgrade and decision by TPG to pull its planned £179m investment. In frantic efforts to keep B&B's capital raising on track, four of its core shareholders stepped in to support an enlarged £400m rights issue alongside the six largest high street banks.

The end of B&B is very significant. Could we see Queues forming as savers try to get their money out despite Brown's assurances that the British economy is well placed to avoid the downturn that is affecting the rest of the world?

Who would be surprised? If there were pictures of lines of people outside B&B trying to get their money out, who would be surprised? The only thing that surprises me is that it has not happened already. I notice Mr Declan on BBC trying to assure the masses all last week their savings were safe. But for how long?

[fluffy666]

Seems like its only a matter of days now.

Time to activate plan Z.

That would imply that there were at least 26 plans. The evidence suggests otherwise..

[homeless]

if i had money with them i would take it out, not because i might lose the money but because of the timescale before you get your money back if it fails.The sorting out opf its finances to pay out would most likely take months.Also im sure there will be no intrest paid on your money once it went bust.

[Realistbear]

if i had money with them i would take it out, not because i might lose the money but because of the timescale before you get your money back if it fails.The sorting out opf its finances to pay out would most likely take months.Also im sure there will be no intrest paid on your money once it went bust.

The receivers will take their time. NuLabour government gets first dibs then secured creditors and last of all the masses who believed the dream and put their savings with a BTL merchant.

[Nationalist]

In other news: Litter of Kittens Discovered In Alistair Darling's Office

There must be frantic efforts behind the scenes to stop B&B becoming NR II. The govt really does not want to own another bank.

[VeryMeanReversion]

FTSE100 not taking it well, 2.2% down in the first five minutes. It's all your fault RB for your negative outlook.

VMR.

/sarcasm off/

[Shrink Proof]

Look on the bright side. There's been an end to "boom & bust."

Apparently....

[grey shark]

39.5p

[Guest Steve Cook]

Look on the bright side. There's been an end to "boom & bust."

Apparently....

There certainly has. It's just bust from now on.....

[Realistbear]

39.5p

Last Trade: 38.76 p

37.00 p

Edited July 8, 2008 by Realistbear

[The Ayatollah Buggeri]

The receivers will take their time. NuLabour government gets first dibs then secured creditors and last of all the masses who believed the dream and put their savings with a BTL merchant.

This may be wishful thinking on my part (I put this year's mini cash ISA into a B & B one-year bond, as its rate was the best on offer at the start of April), but in the event that B & B did actually become insolvent, NuLab would politically have no choice but to do another Northern Rock. This is because:

1. Any significant delay in refunding retail depositors following a failure would risk provoking a run on any other institution with even a whiff of a question mark as to its viability;

2. If the FSCS guarantee was exposed as worthless, that would undermine the entire retail banking system;

3. They'd risk damaging legal action (why did you underwrite NR but not B & B?);

4. It would be another very stout nail in their electoral coffin.

[Realistbear]

This may be wishful thinking on my part (I put this year's mini cash ISA into a B & B one-year bond, as its rate was the best on offer at the start of April), but in the event that B & B did actually become insolvent, NuLab would politically have no choice but to do another Northern Rock. This is because:

1. Any significant delay in refunding retail depositors following a failure would risk provoking a run on any other institution with even a whiff of a question mark as to its viability;

2. If the FSCS guarantee was exposed as worthless, that would undermine the entire retail banking system;

3. They'd risk damaging legal action (why did you underwrite NR but not B & B?);

4. It would be another very stout nail in their electoral coffin.

But.........what if A&L go down this week also? Gordon will be powerless to stop a full scale run on our banks all of which are, IMO, insolvent in the real sense of that word. IMF?

[grey shark]

Last Trade: 38.76 p

37.00 p

31p

CNBC presenter talking of B & B and capitulation in the same sentence

[Wait & See]

When will Darling make 'THE SPEECH'

[Realistbear]

A & L holding up well, considering.

ALL & LEICS (LSE:AL.L)

Last Trade: 232.00 p

Trade Time: 8:24AM

Change: 16.50 (6.64%)

[Realistbear]

When will Darling make 'THE SPEECH'

I would imagine he has been summoned by Gordon this morning as they wonder what to do if B&B are suspended and have to call in the Receivers by lunchtime.

BRADFORD & BINGLEY (LSE:BB.L)

Last Trade: 35.00 p

Trade Time: 8:28AM

Change: 7.00 (16.67%)

BRADFORD & BINGLEY (LSE:BB.L)

Last Trade: 32.50 p

Trade Time: 8:29AM

Change: 9.50 (22.62%)

Prev Close: 42.00

Open: 40.25

Bid: 35.00

Ask: 23.00

1y Target Est: 76.88p

5p by lunchtime?

Edited July 8, 2008 by Realistbear

[Paddles]

Nobody has yet asked the million dollar question... do B&B's standard BTL terms and conditions include a margin call clause? If so, it is surely only a matter of time before the rotting corpse of BTL is finally shovelled into a hole in the ground. I rather suspect that B&B are long past caring about bad publicity.

I can't find a copy of their standard terms and conditions on their website. Maybe someone who has the time could contact them?

https://www.bradford-bingley.co.uk/about/contact/index.asp

32p now, according to blokey on Radio 4.

[beans on toast]

Boom and Bust (B& bank will not exist by the end of the week.

[Realistbear]

32p now, according to blokey on Radio 4.

Last Trade: 31.50 p

Its as exciting as watching the Hindenburg burn. Not a pleasant sight at all, but exciting nonetheless. And so symbolic of everything Gordon's HPI miracle stood for going down in flames.

Edited July 8, 2008 by Realistbear

[Dylan]

Oh, the humanity.

[grey shark]

When will Darling make 'THE SPEECH'

He's putting together a speech now ,

problem is he doesn't know what to say , advisors are suggesting using words like 'sorry' and 'we're £ucked' .

Edited July 8, 2008 by grey shark

[sikejsudjek]

They are clearly going down, and fast.

All the VI loons that were stating NR had a sound loan book were also spouting the same rubbish about B&B having lots of cash to the end of the year. Clearly they are in big trouble. Chances are that people with big deposits have been moving money out already, to add to the loan problems.

Will they last the day ? Darling's eyebrows will be gyrating now.

[Guest Shedfish]

lest we forget, B&B are the clowns who did the 'buy to let' campaign just on the wrong side of the ragged top, pricing out a few more for the sake of a desperate last fast buck

I would imagine he has been summoned by Gordon this morning as they wonder what to do if B&B are suspended and have to call in the Receivers by lunchtime.

gordon's still popping the rennies and solpadeine after last night's banquet at the global food summit. wasn't he out of the country on holiday when NR went pop?

i'm not given to predictions, but i give B&B 2 weeks tops