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	<title>Comments on: National Granite</title>
	<link>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/</link>
	<description>FT Alphaville from FT.com</description>
	<copyright>Copyright The Financial Times Ltd 2006. "Alphaville", "FT" and "Financial Times" are trademarks of the Financial Times.</copyright>
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	<pubDate>Wed, 20 Aug 2008 10:30:34 +0000</pubDate>
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	<ttl>5</ttl>
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		<title>by: bsb</title>
		<link>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13238</link>
		<pubDate>Thu, 21 Feb 2008 16:48:49 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13238</guid>
					<description><![CDATA[thanks Sam, you are certainly one of the few who really understand all this - very rare thing in the media at the moment it seems.

the Lords have blocked the bill for now and are demanding an immediate independent audit.  not sure what they are seeking to achieve with that - auditors recently seem to have been having trouble quantifying the risks around mortgages...]]></description>
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		<title>by: Sam Jones</title>
		<link>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13233</link>
		<pubDate>Thu, 21 Feb 2008 15:16:02 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13233</guid>
					<description><![CDATA[bsb, I think Mr R Murphy has the wrong end of the stick - and is taking our dear Chancellor somewhat out of context.

In the quote Murphy refers to (Labour Conf) Darling is talking about regulating off-balance sheet bank conduits - ABCP programmes, SIVs and such like. The kind of structures into which banks park assets to earn a convenient arbitrage on and get them off their balance sheets (Though in the case of many ABCP conduits, banks have a 100% cp backstop)

Granite is not a conduit. It is a mortgage securitization vehicle (a structure around since the mid 1980s, when traders at Salomon dreamt up a way of converting mortgages into bonds. etc.)  There's nothing "sneaky" about it.

I think Murphy is also wrong in stating that Granite cant exist independent of Northern Rock. It can. It is designed, in fact, specifically for that purpose - to be bankruptcy remote from its parent.]]></description>
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		<title>by: bsb</title>
		<link>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13232</link>
		<pubDate>Thu, 21 Feb 2008 14:33:33 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13232</guid>
					<description><![CDATA[check out richard murphys latest post

http://www.taxresearch.org.uk/Blog/2008/02/20/northern-rock-you-cant-not-nationalise-granite-because-it-has-no-existence-apart-from-northern-rock/

seems to be saying that, while technically what darling and this article is saying are correct, darling is hiding behind the very same off balance sheet accounting games that he had promised to end]]></description>
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		<title>by: Banditry &#187; Blog Archive &#187; Northern Rock again: why Granite isn&#8217;t that hard</title>
		<link>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13228</link>
		<pubDate>Thu, 21 Feb 2008 13:50:44 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13228</guid>
					<description><![CDATA[[...] [***] Technically, there’s a five-year ‘expected maturity’. However, legal maturity isn’t for 25-30 years from loan tate (with the earliest 30-year loans from 1999 falling due in 22 years or so), and that’s the only point when Northern Rock is expected to bail out bondholders if things have gone terribly wrong - except that by then, all the mortgages will have been paid back or written off. The five year ‘expected maturity’ merely means that Northern Rock has to pay trivial (by comparison with asset size) penalties and annoy Granite bondholders a bit - it cannot be compelled to buy the bonds back. This FT blog explains exactly what NR’s residual liabilities to Granite are. [...]]]></description>
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		<title>by: cabs</title>
		<link>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13227</link>
		<pubDate>Thu, 21 Feb 2008 13:37:07 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13227</guid>
					<description><![CDATA[anon, the seller share ranks pari passu with the funding share so everyone gets the same performance. NRK however does put up the reserve fund for the trust (£552m at last count). Northern Rock synthetically bought protection on the reserve fund by issuing two deals called Whinstone.]]></description>
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		<title>by: anon</title>
		<link>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13223</link>
		<pubDate>Thu, 21 Feb 2008 12:35:59 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13223</guid>
					<description><![CDATA[An equity investment in a vehicle that issues MBS, and the taxpayer has not much to fear?!? If these mortgages default the seller share is the first to go...]]></description>
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		<title>by: NotAApplegarth</title>
		<link>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13222</link>
		<pubDate>Thu, 21 Feb 2008 12:32:49 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13222</guid>
					<description><![CDATA[Thank heavens ! Finally , a reporter who bothered to read the facts on Granite. I would take this one step further : Granite provides Northern Rock with a very cheap (by current market standards) source of funding for its mortgages. As long as it is not unwound, it provides tremendous value to the Rock and .... for the taxpayer. But reporting that would be just dull would it not. Screaming that Granite is stealing taxpayers money is just so much more fun.]]></description>
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		<title>by: stickershock</title>
		<link>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13220</link>
		<pubDate>Thu, 21 Feb 2008 12:26:17 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/02/21/11087/national-granite/#comment-13220</guid>
					<description><![CDATA[Read in one Fixed Income Market Commentary this morning: 

"Yesterday’s Northern Rock debate in the UK Parliament was high comedy. Outraged Tory and Liberal know-nothings demanded to know why an evil New Jersey fund called “Granite” has stolen the best Rock assets. Politics over substance again… but fantastic nonsense to listen to.]]></description>
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