any comments, thoughts, on this stock.

balugaa,

Now the book, the NRK book is a prime book, why the hell would anyone discount a prime book,


Because much of it was at long term fixes, very aggresively priced, as low as 4.69% for 15 years, and because the underwriting allowed for up to 5 times joint income and self certification to 85% LTV.
Not only is it more exposed than most to an economic downturn, but the book would not even be profitable on those rates.
As I said before though, there are areas of the book that are actually quite attractive, the question is can NRK avoid a fire sale, where the attractive bits would go cheaply and the unattractive bits would have an even bigger discount.
Alan

i think this is what is missed,

It doesnt matter how aggressively priced it is, it doesnt matter what factor of joint income you lend, the point here, is that how likely are the borrowers to default ..

that is the question, if the answer is not very likely (aka prime book) why the discount?

Now wrt economic downturn, everybank has been been lending at those levels, over the past few years, so the problem then will be a sector one not a NRK one ..

I guess the question is whether or not i would buy them, i did buy some at 3 would i top up .. hell no ..

NRK does look much much stronger over the past 1 week.

It may be a prime book, but that depends on your definition of prime!!
85% LTV self cert is not prime. 5 x joint income is not prime, and as for the rates for long term fixes, they were top of the pile for a long time, by quite a distance in some cases.
IF their is a downturn, and IF householders feel the pinch, then undoubtedly the sector will suffer, but the NRK book may be the first to be cut and probably the deepest.
After all, what would you pay for loan notes to individuals at 4.69%, when you have to collect it, risk defaults, the security is shaky and the loan was made at a very generous 5 x income? Remember, this is fixed for 15 years but if rates drop significantly, most will be repaid early, and currently you can stick your brass in ING and get 5.25%!!!
Alan

yes but you forget that that 4.69 rate has been offloaded elsewhere, all thats left is that you owe me .. x amount of cash, .... and as long as you keep paying it, im a happy bunny ..

The way it works from my understanding is this, they lend you the money they charge you a rate, they then take that rate is sell it off as some structure, probably paying 4.67 everytime you pay them they keep the 2bps and send the rest forward ..

Surprised no one on here talking about Panorama Programe today.

still holding a small stake at 3 ....if....if it gets through this... betting/guessing? on 5 plus longer term....anybody concur? or is this just wishful thinking?

I've been out of the loop for a week.

How it can all change, eh? ;-0

General Motors UK retail arm for financial services (GMAC-RFC) have just announced the closure of its heavy sub prime business, High Street Home Loans.
They will still operate as GMAC, but this is for minor sub prime.
Alan

Where is everybody?Stock jumps up 26% to 2.61 and nobody has a word to say.
All i can say is nobody knows what the price of these shares should be at.

your last comment is spot on ..... the bears must feel like heretics at the stake!

Cynic, SHORT now at 260p!


Northern Rock declines comment on rumoured bid approach as share price soars - AFX


LONDON (Thomson Financial) - Northern Rock declined comment on whether it has received a bid approach following speculation in the market that sent the beleaguered mortgage lender's share price soaring.

At 10.50 am, the share was up 50 pence or 23.8 pct at 257 pence.

A week ago you would have been "shot down in flames " to suggest that this price may be reached. Lemming effect at work it would appear.

98 ...... was foolish before; why do think i should now be insane? .... lol!

STOCKWATCH Northern Rock soars as hedge fund takes 4 pct of co




LONDON (Thomson Financial) - Shares in Northern Rock PLC soared nearly 25
pct in midmorning trading on news that hedge fund SRM Global, had taken a 4 pct
stake in the stricken mortgage lender.
At 10.58 am, Northern Rock shares were up 56 pence, or 27 pct, at 265.
Earlier today SRM, run by trader Jon Wood, declared a 4 pct stakeholding in
Northern Rock, held in derivatives.
The rise was also fuelled by the Bank of England's decision yesterday to
provide the stricken mortgage lender with extra breathing space as it holds
talks with potential buyers.
In a statement on Tuesday, the Treasury said an earlier government guarantee
on Northern Rock savings deposits made before Sept 19 2007 has now been extended
to all deposits made after that date.
One analyst who declined to be named also pointed to the fact that lending
banks were making life difficult for hedge funds to short the stock.
"No hedge fund can short Northern Rock now," he said. "The banks are lending
the stock at 20 pct interest instead of the usual 20 basis points, making it
almost impossible to short."


Note the comment about shorting!

The comment about shorting is indeed very interesting. I haven't dared get into this stock but now, of course, wish I had. Do I dare buy any now? (259.75-260.5) Might it reach 300p?? This has been an amazing rollercoaster to watch!

Toya ..... stay out! ...... no one but no one knows where all this will ned ....... to make worthwhile money you would need to invest a reasonable amount of money, but you could easily lose far more than you would like, though a guaranteed stop would at least limit that ...... my inclination would be to short, but then i never thought 200 would be breached (upwards) or if so, not by much

Toya don't listern to anyone.If you feel to go in to NRK get in.
Cynic is all free to give his opinion which he did saying 175p/190p or more realistically 50p/100p or balanced 150p.
WHO KNOWS?

exactly so ..... no one has any idea, but it is a brave brave brave call in either direction and sp has now jumped a further 20p since i posted 32 minutes ago!