any comments, thoughts, on this stock.

alan ..... you know far more than i about these things, but then i know bugger all! .... however, is not FSA's role merely to ensure that the regs are adhered to rather than to take a stand for or against a company's legal method of doing biz? ..... similarly, while a judge may consider a certain law to be unfair or just plain stupid, he can only pass judgement as the law then stands.

meanwhile i have, with a little difficulty, refrained from shorting further

Not quite!
The FSA mandate is not about law and criteria. It is about outcome. It is allowed to set the rules it sees fit to achieve the purpose of protecting the retail investor.
If it followed the rules perfectly, then the rules were wrong. If it didn't then it is negligent.
This is certainly the path it would follow against a regulated company.
Be aware the FSA maintains details of all financial activities with a massive computer model programmed to predict areas of concern in any regulated company. Surely the model picked up the low rates, high delinquincies and low deposits?

Driver...at least there nice and cheap -):

as usual, you make a very interesting point ..... i really do not know .... for sure any report will exonerate FSA, though that is not the point!

by the way, i believe NRK's delinquencies were far below the industry norm .... so now what? ..... NRK would defend itself and its practices quite robustly, and possibly successfully, using that criteria alone.

should have been very greedy and sold lots and lots more! ...... sp tumbling sharply again

=========

so have been not quite so greedy and sold just a goujon more at 139.3

going, going,















Gone.

so glad I sold last week when they bounced from 170p to 220p and down again...i managed to get 207p...bought at 279...still made a loss but not as bad as i could have done...phewee! Put money back into TAT up 10% wiped half my losses away...Thank you lord!

TATE..sorry! Life is sweeeet!

having held on to NRK when i promised i wouldn't (would have broken even), i was deservedly soundly spanked ...... fortunately i have now more than made up for that indiscretion!

panickkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk!!!!!!!!!!!!!!!!!

Great day, cynic - closed at 135p...100p tomorrow? r u tempted to short further? I AM!

i did, per above at 139.3 ...... very briefly sp dropped to 121, but happy enough to see post-auction finish at 132.1

and here's the clue as to why ......

Spanish businessman Jose Maria Ruiz-Mateos has informed Northern Rock's advisors that he is no longer interested in acquiring a stake in the stricken UK mortgage lender, Thomson Financial News has learnt ...... "The circumstances for the bank have worsened noticeably, and that obliges me and the group of investors that accompany me not to continue with the proposed investment."

Looking terminal to me .Do you think we will be asked to observe a minutes silence or applaud ?. Perhaps that would depend on whether you are short or long. Got out
at 1.85 on Friday ( thank god.)

At the end of the day this is a gamble with great odds, its not often you get to bet on one of the giants falling..... Golden rule, only gamble what you can afford to lose... Regarding Jose Maria Ruiz-Mateos more likely the vulture was told to f#$c off as he only wanted a 10% stake and five minutes of fame!!.

Not necessarily terminal, and may even be worth a punt.................
Heres the reasoning.
We have focused our attention on the NRK mortgage book. Delinquincy set to rise, though there are worse out there. Over exposed from a LTV point of view and poor underwriting. They also have minimal deposits for a lender of their size.
But these are not the only assets.
There is a limited high street presence, but an excellent on-line product. There is also a very large (due to their aggression) unsecured book, which has the luxury of not being of a fixed term or rate.
If the mortgage book was sold off at less than value (they usually sell for more, but these are troubled times), one wonders whether they could negotiate the sale of the unsecured book, which is unusually attractive, to the same bidder. This would possibly offset the loss on the secured book and return the bank to level pegging.
Now I do not know the figures and these are just guesses on my part, but I do know that much of their high LTV lending was done on an unsecured basis for much of the loan, and it has a clause in it that states if it is not repaid with the mortgage the rate becomes very high. I also know it is NRK standard practice to offer credit cards to non delinquent borrowers at attractive rates, with the rider that the rate may be changed at any time.
So we have large amounts of saleable debt that can be restructured by a prospective purchasor, and lots of unsecured debt that is very unlikely to be kept at its current 6.99% for long, as mortgagors move on or default.
The unsecured debt is seperate from the mortgage, can be reassigned and has the benefit of being instantly securitisable.
it may be possible for NRK to negotiate decent rates for these to those getting the mortgage book for a song, and then starting allover again as a slimmed down operation.
Whats that worth? No idea, but if they can break even on the sale, then the rest of the company must be worth something. Still waiting for the water to clear before I make any great decisions.
Alan

alan ... i was under the impression that mortgages were sold on at a DISCOUNT of about 5%, not a premium, and it is that primarily that makes most of the world believe the company is effectively insolvent and that consequently the shareholders of all types will get zilch .... if what you say is true, then why are not the other banks and financial institutions buzzing round the rotting carass like flies? ..... i am always happy to be corrected by you, for you are far more knowledgeable.

cynic,
Like most things...........it depends!!
Think of a mortgage book as a bond.
NRK are currently trying to sell a bond with a coupon of probably about 5.5%, with the associated costs and risks of collecting the interest. Par value is the amount outstanding on the loans.
18 months ago this was attractive (compared to bonds) and selling at a premium, thats how banks made money. Particularly the higher rate sub-prime stuff.
Now it is unnatractive. Not so much for the rate, but for the uncertainty surrounding the payments.
Sub prime and prime do not operate in isolation. If sub prime borrowers struggle, prime ones probably will too. This is where I think NRK has unrealised potential. The unsecured stuff is more like 7%, which is much more attractive, and is variable.
In simple terms, NRK had 3 areas where it was being foolhardy with its lending criteria.
1) Long term fixes at silly low rates (mine is 4.99%). This is poor and will take a hit.
2) Very high income multiples and so increased risk. Again very unattractive and will take a hit.
3) 125% LTV lending. This looks outrageous and would be very unattractive, but.........only 95% of the LTV was secured. The remaining 30% was unsecured, with the option of securitising if required. There may be value there. In the event of any misdemeanour on the account the rate for the 30% can be raised to SVR+2% (almost 9%). Now a 6.5% (or thereabouts) secured bond on 95% LTV with an extra 30% at a potential 9% that can be secured looks more like an attractive proposition, especially when that 30% is variable and on full status, prime customers only.
If NRK can stop this becoming a distressed purchase where the vultures cannot cherry pick at any price they fancy, this could be NRK's saving grace.
The first 2 are reasons why the book will sell at a discount and the third is why they often sell at a premium.
Sorry if it is a bit muddled but it is a very complex area without the exact figures to hand.
Alan

These are going to be suspended later on to day, and then broken up, no value left for share holders?? get out now while you still can. IMHO

falling sharply again...good shorting...113p now

alan .... many thanks for your explanation; my very limited intellect just about coped.

hyleo ..... i thought i was being brave to foolhardy topping up my short late yesterday at 139.3 .... clearly not ...... does one short further? ..... quite possibly ..... in fact, just sold another goujon at 121