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Northern Rock 30% Share Price Crash

Companies / Financial Crash Sep 14, 2007 - 11:33 AM GMT

By: Nadeem_Walayat

Companies Northern Rock 30% Share Price CrashNorthern Rocks Share price crashed by 30% today as the mortgage bank sought emergency funds from the Bank of England due to the credit freeze in the interbank money market which Northern Rock heavily relies upon. Panic gripped savers forming long lines outside Northern Rock Branches throughout the UK to withdraw funds. Investors dumping the stock on the market open where even unsubstantiated rumors of takeovers and white knights failed to halt the crash in the banks share price.


In our pre-market open article we warned about possible 'blood on the street' for Northern Rock stock holders as there was a high risk of a run on the bank as panicking depositors sought to withdraw savings. This is what has susbquently transpired. Northern Rock Bank Seeks Emergency Cash From The Bank of England

Northern Rock 30% Share Price Crash

Chart Courtesy of Bigcharts.com

Northern Rock is Britain's fifth largest mortgage bank, and the Bank of England deemed it necessary for Britain's economic stability to come to its rescue by offering the mortgage bank an open ended line of credit for the duration of the current liquidity crisis, which is set to continue well into 2008. The amount of the funding has not been specified but is estimated at more than £4 billion ($8 billion).

Northern Rock also issued a profits warning, that its profits for this year will be £147 million lower than expected.

Related Articles on the credit crunch hitting the financial sector.

By Nadeem Walayat
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The Market Oracle is a FREE Daily Financial Markets Forecasting & Analysis online publication. We present in-depth analysis from over 100 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

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Comments

Martin
18 Sep 07, 01:27
Interest and investments

It is about time eveyone stop in horror and smell the coffee. This is coming along way. We must look forward to try and stabilise the markets with great care and not haste. A depression resession is imminent.


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