If you had your 'life savings' in Northern Rock, what would you do?

[Bozza]

BTW down £1.27 and 57 million shares traded this morning already.

There may be a killing to be made with these

Undoubtedly there will be but, again, you'd have to be quite brave to call the bottom on them.

People were saying 'good time to get in' after Friday's plunge. They opened down another 30% this morning. Those who got in late on Friday would be nursing big losses already.

 

[Bozza]

Its just a shame that so many middle Englanders are just too intelectualy challenged to realise and insist on doing their best to take the bank that looks after their money into the hands of another firm.

NR were going to be taken over before all this fun and games began. They'll get taken over when this dies down a bit. Nothing has changed.

 

[Grendel]

I think the problem is that we can remember BCCI going bust and 'joe public' are the ones that don't get bailed out.

BCCI didn't go bust, they were closed down. Besides which, the circumstances are rather different. I don't think there's any suggestion that Northern Rock are engaged in fraudulent activity or financing terrorist organisations.

 

[desprateseagull]

i would take it out- if they are so 'solvent', why arethey running to BoE for support?

going by their deposit rates (only 30% of funding from personal savings a/cs, other banks are higher?). they have left themselves open to a high risk of debts going bad, which has affected them (and others) quite badly..

has ANYONE managed to get their £££ out, via online ?

 

[ROSM]

One of the function of the bank of england is to be 'lender of last resort' in the past, the money markets and other banks would have got in first but now they are keeping thje cash they have as they are all being bitten.

NR is a strange case as most Building societies offer good rates to attract savings they can then lend. NR focussed on borrowing off markets to lend.

Those who keep their cash in may well (and indeed should) get a loyalty interest rate as well as new investors seeing a decent rate. Those who have borrowed through NR may well see their interest rates rise too. Difficult balancing act to work out how much to raise Interest rates without jeopardising the ability of your borrowers to pay back - especially when some are on 110% loan to value calculators (a NR speciality). Also in some cases, borrowers may be 'encouraged' to go elsewhere by rate rises which gives a cash flow to NR but reduces their loand book.

If I had less than £30k with them, I would keep it there - any more and I would be pushing some cash around> IF however I had a loan through them, I would be shopping elseweher very quickly.

 

[bhaexpress]

This morning just before 9AM I passed the Northern Rock building in Bromley. The queue was the better part of 100 yards long (I have never seen that many people in Bromley at that hour before). They had been queuing since 5AM.

 

[Tricky Dicky]

I'd be tempted to take the money out and buy Norther Rock shares with it. Someones going to buy them.

 

[desprateseagull]

NR share price now down to just under £3.00 today, if interested..

i get a welcome 'dont panic' letter from the MD on their site (OK, i'm bored), but the rest is not available (server busy.. yeah right).

share price tracker- not live..

http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/3/23193/default.stm

 

[Lokki 7]

There are a lot of potential bidders casting a jealous eye over the NR mortgage portfolio. I am tempted to buy this stock at some point, but the old adage about trying to catch a falling knife has me very cautious. Worth seeing where things have settled by about Wednesday I reckon. It is afterall a profitable business.

 

[cjd]

Just spoke to Northern Rock about an ongoing application for a loan. She seemed very relaxed about the situation and said it was "business as usual", with regard to anything outside of the withdrawals.

 

[El Presidente]

The lines of old grannies dribbling down their cardigans as they act like sheep to take out their money is pathetic. There is more chance of the Albion signing Thierry Henry than NR going under, unless everyone panics and takes their money out. The BofE has given NR a huge overdraft facility.

The only winners in this will be the banks themselves (excuse to put up charges and interest rates to borrowers) and smart kids in the city, who will make a killing on NR shares when they get wind of a takeover.

 

[bhaexpress]

There are a lot of potential bidders casting a jealous eye over the NR mortgage portfolio. I am tempted to buy this stock at some point, but the old adage about trying to catch a falling knife has me very cautious. Worth seeing where things have settled by about Wednesday I reckon. It is afterall a profitable business.

Multi millionaire relative is planning to buy stock in NR and he seldom gets it wrong.

 

[Bevendean Hillbilly]

Nothing to worry about whatsoever in my opinion.

The reason they asked The Bank of England for assistance is not down to them being in trouble, rather that other banks are reluctant to lend any money in general at the moment and the NR tend to borrow more money "Wholesale" than other providers, because they can get better return rates than other banks that way..

In fact the NR according to the news this AM is one of the highest profit generators around.

They will be bought very soon IMO, so buy NR stock now.

 

[Cian]

I did notice a lot of the people taking money out were of the older, had accounts when it was a building society variety... probably not the most profitable customers anyway.

 

[The Wookiee]

Are they accepting new accounts ?

 

[Cian]

They are from Irish customers and I can't get on to the UK website to check but I'd assume so.

 

[Hunting 784561]

"Flight to Quality" - Definition :

"Flow of funds from riskier to safer investments in times of marketplace uncertainty or fear. For example, the flow could be from risky investments to safer investments within a given country, or from higher-risk countries to lower-risk countries"


-- I think there is zero chance of NR going under, as the BOE has said they will underwrite them, but in uncertain times it is always the second tier financial institutions that suffer, and NR is very much a second-tier bank, with an apparently flawed business model. Anything up to £ 35K savings and you are covered, any more than that and you should look to diversify your savings around a bit .

I can see the first tier institutions ( RBS, HSBC, HBOS, etc) being the main beneficaries of a 'flight to quality' over the next few weeks.

 

[Gazwag]

Its all a ruse by the government, all the sheep run around withdrawing their life savings and they may then think, "Blimey I didnt realise I had all this money, maybe I will buy that new car/holiday/tv" thereby increasing business profits resulting in more tax being payable. Tomorrow there will be concerns about bad weather this winter leading to these people rushing out to the supermarkets to buy up all the bottled water for when their pipes freeze and they cant get out.

The people most worried will be the NR staff who's jobs will soon disappear following a takeover and branch closeurs.

 

[BUTTERBALL]

The lines of old grannies dribbling down their cardigans as they act like sheep to take out their money is pathetic.

All that waiting is hard work for them too!

 

[Bozza]

I think we should have another poll for all those 'buy NR shares' merchants.

Of course there is money to be made but the key is the timing. It's no good to say today "buying NR shares will make you rich" and then coming back here in a week or two and saying "told you so" when you have given no indication of when you did (or would have) actually been brave enough to actually buy some stock.