any comments, thoughts, on this stock.

cynic - me too - I'm more concerned about it going into administration if a solution can not be found - then I'd be truly busted not able to close the short!

not sure what happens in those circumstances .... do you have any definitive info from your broker on same?

cynic - will check with gni

There are special provisions enabling buying to close shorts even though shares are suspended. Basically you would agree a price with a market maker or the spreadbetter.

thanks Kayak ..... knew it would have to be closable somehow

Not sure it's wise to be short with bids in the offing and trying to second guess a bid size. A bit dangerous?

yup ..... but will leave to run for the moment at least, even though my gut feeling is that any bid will be worth no more than 2p!

Cant imagine any financial institution making a bid before examining NRK's books.

Goes without saying halifax.

To start a wider discussion, what is the value of NRK? People are bandying around extremely small numbers, but the value of the loan book must be substantial. Is there anyone around here who is good at the fundie stuff? I freely admit I'm crap and always have been. I mean they have to pay interest on what they've borrowed on the money markets too, but similarly they've got it coming in from the mortgagees who by all accounts are merrily paying what they are due every month. I could go on, but was wondering others views.

Anyone enlighten me?

I wonder if you should put the question to RAB Capital Big Al, they must of made some assessment having invested some 5% of its fund in NRK.

Big Al - NRK has 113bn of mortgages which need to be sold at a discount - if sold at only a 5% discount - that's a loss of 5.65bn - they have just over 2.bn of net assets so the bank would then be insolvent

response from broker re holding short positions if share suspended ...

Generally, it depends on the reason for suspension - and whether any explanations have been given. Risk make an assessment and almost always, the stock goes to full 100% Initial Margin. It is suspended at whatever the Exchange suspends it at, and then we wait until the stock either comes back to the market or disappears.

If a stock goes into administration then it would almost certainly go into suspension and again, 100% IM etc....would apply. But, since administration would most likely mean Bankruptcy, there could be other difficulties. It can be difficult or impossible to close the position, and if one could find a seller to match your short out, then it would require LSE approval. Also we would have to wait on the Administrators to see whether there are any other liabilities.

The knock-on effect from the US sub-prime market shows no sign of letting up in Japan.
In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up and Bonsai bank announced plans to cut some of its branches. Yesterday is was announced that Karaoke Bank is up for sale and will likely go for a song while today shares in Kamikaze bank were suspended after they nose-dived and 500 back office staff at Karate Bank got the chop. Analysts report that there is something fishy going on at Sushi bank and staff fear they could get a raw deal.

Sounds like Northern Rock has turned into Rotten Pork

Falco .... you should be ashamed of yourself! .... lol!!

Good for a laugh Falco like it..

LOL Falco.

Cheers Balmoral. It still begs the question Gus proposed. I'm also uncertain as to why they need to sell at a discount.

Re the value of NRK mortgage book.
Think of it as a bond. ie it has a face value and a coupon, though the coupon is likely to be only just over the BoE base rate.
Add to this mix that the risk is higher now due to faorecasts of possible house value reductions and that NRK often lent more than a property was valued at.
Now add in that the income from these loans has to be collected from various sources, not just one, and the costs incurred from that and the legal expenses of protecting your investment through the courts if necessary, and that much of the book will never reach maturity, as the loan is repaid early at the borrowers discretion and you can now try to value it.
Discount of 5%?
Probably much higher than that.
Alan

AL ..... because this is pretty much a fire sale, so why on earth would anyone want or be prepared to pay full whack?

presumably it needs to be sold at a discount because the of the current higher cost of borrowing in the interbank markets.