Northern Rock

[Dr Pit]

Anyone got any shares?

How low do you think they will go?

Will they be taken over, or maybe go under?

What does anyone think?

[Hamburger Pimp]

I think they will be taken over. Consumer confidence in the company's name has suffered irreparable damage.

Also, what a crowd of knackers those people were who queued up overnight to withdraw money from the bank. Stupid, stupid, stupid.

[Dr Pit]

I think they will be taken over. Consumer confidence in the company's name has suffered irreparable damage.

Also, what a crowd of knackers those people were who queued up overnight to withdraw money from the bank. Stupid, stupid, stupid.

Quite

[Malcolm Robinson]

Dr Pit,

How can the stock be valued now?

[Monsta®]

i for one hope they don't get taken over as it's a north east institution, and as far as the wood headed tw*ts that cued up! they should of deleted there accounts and told them to !*!@# right off!

[Malcolm Robinson]

Eloquently put, as ever monsta!

[Merlin]

Eloquently put, as ever monsta!

If I had loads a money I would be buying shares at this very moment,just like my 'mate' Freddie Shepherd,if anyone can sniff a good money making scheme he can!

[Symptoms]

Same old story ... 'old money' robbing 'new money'. Banks & most 'City Institutions' were set-up, and are currently run in the main, by the old monied families. Proof, if needed, in the papers this morning. Some Northern Rock directors might be local folk but just look at the names: Ridley (the well-known family of coal owners), Fenwick (big shop in Town and 1 in London's exclusive Bond St), token Local Grammar Schoolboy (in charge now but will make a good fall-guy for the old money lot) - seen the size of his monster house. Fleece the wage earners, get the commission up-front, sod the consequences - a modern day moto for that old profession The Money Lenders. Crooks the lot of them!!!

[Malcolm Robinson]

Same old story ... 'old money' robbing 'new money'. Banks & most 'City Institutions' were set-up, and are currently run in the main, by the old monied families. Proof, if needed, in the papers this morning. Some Northern Rock directors might be local folk but just look at the names: Ridley (the well-known family of coal owners), Fenwick (big shop in Town and 1 in London's exclusive Bond St), token Local Grammar Schoolboy (in charge now but will make a good fall-guy for the old money lot) - seen the size of his monster house. Fleece the wage earners, get the commission up-front, sod the consequences - a modern day moto for that old profession The Money Lenders. Crooks the lot of them!!!

Always been the same if you want to make real money, open a bank!

[Malcolm Robinson]

If I had loads a money I would be buying shares at this very moment,just like my 'mate' Freddie Shepherd,if anyone can sniff a good money making scheme he can!

Don't think I would at the moment Merlin seeing as it has been turned down by half a dozen other banks as a white knight takeover.

[Malcolm Robinson]

As I said.............

http://www.telegraph.co.uk/money/main.jhtm...MC-mcn_25092007

[Merlin]

As I said.............

http://www.telegraph.co.uk/money/main.jhtm...MC-mcn_25092007

Todays news says they are still going to pay large dividends to shareholders,more money in the back pocket for my 'mate' Freddie

[Hamburger Pimp]

Or maybe not

[Malcolm Robinson]

Or maybe not

Looks like we are going to see one of monsta’s mates take it over, Johnny foreigner, so another NE institution bites the dust! Who the hell is this wine dealer looking at it, there must be shed loads of dosh in bottles of plonk!

Real shame about the dividend!!!!!!!!!

[Monsta®]

Looks like we are going to see one of monsta's mates take it over, Johnny foreigner, so another NE institution bites the dust! Who the hell is this wine dealer looking at it, there must be shed loads of dosh in bottles of plonk!

Real shame about the dividend!!!!!!!!!

el grecko's no mate of mine!  

[Dr Pit]

Dr Pit,

How can the stock be valued now?

Very difficult to say as it seems they dont have as much in assets as you would expect.

I thought they may get taken over, but apperently their mortgage books are so big that the

monopolies commision would not allow another large lender to have them. It would maybe need to be split up.

Only time will tell.

[Malcolm Robinson]

Very difficult to say as it seems they dont have as much in assets as you would expect.

I thought they may get taken over, but apperently their mortgage books are so big that the

monopolies commision would not allow another large lender to have them. It would maybe need to be split up.

Only time will tell.

Hmmm.............

http://www.telegraph.co.uk/money/main.jhtm...MC-mcn_27092007

[threegee]

Anyone got any shares?

June 22nd:

Thank you for closing down Northern Rock. The most positive move in years. I reconsidered closing my account but on careful consideration determined to leave £1 in it - just so you'll have the pleasure and expense of administering it for the next 20 years.

OMG my £1 is at risk then?!!

Maybe this is their come-uppance for treating the local communities that they built their business on like readily expendable historic artefact's?

[Malcolm Robinson]

June 22nd:

OMG my £1 is at risk then?!!

Maybe this is their come-uppance for treating the local communities that they built their business on like readily expendable historic artefact's?

Don't know if I totally agree GGG, although I also closed my accounts there when I saw first hand their shoddy business tactics!

Let us not forget just how much they have pumped into local communities by way of their charitable foundation. That must run into many millions? I know it was just a tax dodge for them but at the same time.........

[threegee]

Don't know if I totally agree GGG

I'm not sure that there's any disagreement here. You think they used "shoddy business tactics" and I think that they betrayed their customers and betrayed our Town.

On the other hand you think the "charitable" contributions are redeeming, and I think that their real (and legal) duty was to their customers and shareholders, and not the self glorification of the "great and good" on the Northern Rock

board. This, ultimately, at someone else's expense.

The only difference here is that I have experience of how big company politics work, and you don't! Believe me it's as mind numbingly shabby as anything our local politicians could contemplate! The "rats" on the Northern Rock board will desert the sinking ship with all the obscene fees they have "earned" safe and clear, but will never - ever - be brought to book. That's how this particular sub-system works.

[Malcolm Robinson]

"On the other hand you think the "charitable" contributions are redeeming, and I think that their real (and legal) duty was to their customers and shareholders, and not the self glorification of the "great and good" on the Northern Rock

board. This, ultimately, at someone else's expense."

At the end of the day GGG they didn't HAVE to put one penny into any local projects and I presume the dividends would have been larger for the shareholders if they hadn't.

[threegee]

At the end of the day GGG they didn't HAVE to put one penny into any local projects and I presume the dividends would have been larger for the shareholders if they hadn't.

Precisely my point! It wasn't their money to throw around. Strictly it was attributable to shareholders who were/are taking all the risks. Did they ask the shareholders or customers to sanction this?

But.. it's the (already overpaid) board who take credit for this prior beneficence. With hindsight they needed larger capital reserves. A huge misjudgement that the board should take full responsibility for. Business should be run as businesses; it's in nobody's long-term interest that it should be otherwise.

Steer clear of any company that employs figure-head directors for who they are rather than what they are achieving day to day! High-rise office blocks with huge illuminated signs are another warning that even the biggest vessel is never *that* far away from the rocks when the inevitable storm breaks.

[Malcolm Robinson]

Precisely my point! It wasn't their money to throw around. Strictly it was attributable to shareholders who were/are taking all the risks. Did they ask the shareholders or customers to sanction this?

Like the other “mutual’s” that privatised, NR didn’t have a “normal” route to the market, instead they were “sold” at a vast discount to the prevailing market price at the time and didn’t everyone think they were on a bus which only went one way, up! So much for the shareholders taking the risks backing a “new” company!

I still cannot understand why they went belly up? They borrowed money to finance their customer’s purchases and charged percentage points above the interest rates they paid to these customers and made bucketfuls of cash by strict governance of overheads and aggressive marketing for new customers. I can see them loosing market share by protecting this spread when their rates went up but essentially they must have had long term contracts locked in, ie, their mortgage book which must have already been financed, unless of course if they only financed a set forward projection of repayments?

Anyway 175 million quid into local charities over the last 10 years is not a bad record and if it was done for publicity, tax advantages or engraftation it doesn’t matter it would have been sorely missed. It must have been voted on at the AGM's GGG.

[Malcolm Robinson]

"Northern Rock Foundation Reassures Grant Holders

Following the crisis at Northern Rock, the Northern Rock Foundation have issued a statement on their website to reassure grant holders. It states that the Foundation "is fully able to meet all its existing commitments" and that "grant payments will be made as scheduled."

Foundation Director, Fiona Ellis, said: "Those who founded Northern Rock Foundation were determined that, whatever else might change in the world, the name of the Foundation and its ability to work for the benefit of the North East would continue. That is why they arranged for the Foundation to own 74,333,500 shares in Northern Rock plc.

"In the event of a wind up of the company or in other circumstances detailed in the Foundation's articles of association, these shares may be converted and sold on the open market for reinvestment. There is a summary of this position in our annual accounts which are publicly available.

"While we are grateful for the concern of those in the sector about the foundation, the Trustees are confident that even with the slight predicted decrease in the 2007 profits of the plc, they have sufficient reserve to carry on with business much as usual."

Meanwhile the Journal has launched a campaign to support the Northern Rock, highlighting the £175m given to charities in the region over the past ten years. However, some readers question why they should support a bank that has taken such big risks and while the management are not taking responsibility for the crisis. "

Source: Vonne E-Bulletin

[threegee]

Like the other "mutual’s” that privatised, NR didn’t have a "normal” route to the market, instead they were "sold” at a vast discount to the prevailing market price at the time and didn’t everyone think they were on a bus which only went one way, up! So much for the shareholders taking the risks backing a "new” company

...

I still cannot understand why they went belly up? They borrowed money to finance their customer’s purchases and charged percentage points above the interest rates they paid to these customers and made bucketfuls of cash by strict governance of overheads and aggressive marketing for new customers.

....

Anyway 175 million quid into local charities over the last 10 years is not a bad record and if it was done for publicity, tax advantages or engraftation it doesn’t matter it would have been sorely missed. It must have been voted on at the AGM's GGG.

Three points here:

Flotation: You can't sell something to those who already own it - the members! As to your "Gnomes of Zurich" theory: The only other person I knew who benefited from the flotation lived in a council house in Blyth and was "on the social"! I advised her not to sell, but after a while the temptation became too much. She did OK though.

Bust: They went belly-up because their forward commitments exceeded their forward borrowing powers - just like many of the customers they repossessed homes from. Essentially they put all their eggs in the interbank market, instead of spreading risk around, like any prudent borrower. If they'd stuck to their historic financing arrangments (e.g. you, me, and their other Bedlington branch customers) they'd have ridden out the storm.

Shareholder's Money: No, it wouldn't have. It will have been slipped under the radar as an insignificant - but necessary, and easily affordable - contribution to the area. Compared with the astronomic sums being bandied about in the annual accounts it was indeed so. As too are the unnecessarily high directors fees chums on the board vote other chums on the board. But... margins are ultra-thin in this biz - else why close the Bedlington branch and inconvenience thousands of customers (who will need servicing anyway, if they are not to be lost) to save a few tens of thousands of pounds?

"In the event of a wind up of the company or in other circumstances detailed in the Foundation's articles of association, these shares may be converted and sold on the open market for reinvestment. There is a summary of this position in our annual accounts which are publicly available.

...

...even with the slight predicted decrease in the 2007 profits of the plc, they have sufficient reserve to carry on with business much as usual."

...

...some readers question why they should support a bank that has taken such big risks and while the management are not taking responsibility for the crisis. "

In the immortal words of Mandy R-D Well they would say that, wouldn't they? By some reckoning the shareholders are wiped out several times over, and consequently so is their trustee's ill-judged investment in the mother ship. But look at the people involved, and it's easy to see why this sort of thing too frequently happens to trust funds tied to commercial organisations.

Annual accounts are a statement of history past. Even at the best of times they don't reflect current trading. And, the directors of any organisation that can't meet its future liabilities are guilty of a criminal offence if they continue to trade.

Naturally, I'm with the "some readers" on this one!