RE: [OPE] Northern Rock

From: Philip Dunn (hyl0morph@yahoo.co.uk)
Date: Sun Feb 24 2008 - 15:54:23 EST


Hi Paul,

I'm not so sure about what you say. The £45 billion is the value of the
mortgages that Northern Rock have conveyed to Granite, not the whole of
NR's mortgage assets. Granite have issued bonds backed by them. These
bonds represent an exposure. Ultimately, NR will have to redeem them.
How much are NR's mortgage assets actually worth?

£100 billion seems about right to me.


On Sat, 2008-02-23 at 17:14 +0000, Paul Cockshott wrote:
> Jurrian quotes the Telegraph

> To the £25 billion direct loan to the bank must be added the £30
> billion in guarantees, making the total exposure for the taxpayer £55
> billion. But when the Rock's mortgage book is thrown into the pot, the
> total increase in public sector net debt is £100 billion.
> http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/02/08/dl0802.xml

> The paper is confusing things here. The mortgage book consists of
> debts to the Northern Rock not by the Northern Rock, these thus serve
> to offset the existing taxpayer exposure not add to it.
> 
>  
> 
> 
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