Speculators chased the stock up 38% in early trading, suggesting pretty clearly that the Treasury's hopes of getting rid of the company in return for an immediate repayment of £11bn of the £25bn it owes, look set to be confounded.
It was always likely that the first "real" bid for Northern Rock would crystallize its value and it has.
The Virgin consortium is proposing to inject £1.3bn of equity and borrow the rest of the money it needs from Royal Bank of Scotland, among others.
According to the terms of its bid, it would end up owning 55% of the company with existing shareholders able to subscribe for new shares at the same price of 25p.
The trouble is, the shares are trading at 109.4p this morning, up 23.5p or 27.36%.
The government is threatening to put the bank into administration if the Virgin bid is rejected. And it still can, if the Treasury forecloses on its loans.
But the market evidently thinks otherwise.
Hedge funds and the like aren't always, right of course. The ones who sold Northern Rock short have made a packet, the ones who bought into it have lost heavily and are feeling bruised.
Who will blink first, the Treasury or the speculators?
Or will the Virgin consortium raise its bid? It looks like it will have to if Virgin Money is to buy Northern Rock.Are financial markets ready to move on?
"Get a grip" is what they used to say, allegedly, when some hapless squaddies were about to go over the top and didn't think it was a very good idea (usually it wasn't). And that's roughly where we are with financial markets now.
It's been bad; for lots of people, especially home owners in the US, it's been awful.
It's been another bank-induced crisis (their ingenious off-balance sheet wheezes have nearly all backfired). And taxpayers and customers pick up the tab.
But that Mephistopheles de nos jours, Alastair Campbell once observed that, if you could keep the lid on a story for 10 days, something else would happen and the world would (as his one time boss Tony Blair often observed) "move on".
British PM Gordon Brown and Chancellor Alastair Darling (these are all Scots, you'll note) must be hoping Ali was right.
The same is true of financial markets. Unless a really big bank takes a really big powder, the markets will get used to the fact that $400bn, or whatever the figure is, will go down the tubes and normal business will resume.
Some hedge funds and big investment banks are already buying up distressed mortgage debt because it's almost free and a lot of it will be paid back.
Eventually the big lending (or clearing) banks will recognise this and start lending to each other again.
There's still a wall of money out there from China, from "sovereign investment" funds and the endless billions we all plough into pensions and the like.
The crisis will end when we all stop being excited by the crisis. When it becomes old news.
And that may not be too far away.
US retail sales might help
The day after Thanksgiving in the US is called "Black Friday", not because the stock market plummets but because it's the day of the year when everybody starts their Christmas shopping and retailers move "into the black".
Well last Friday the punters came out and stores across America reported better than expected sales.
One shopping day doesn't make a Christmas, of course, but there are still lots of affluent people in the US with credit cards burning a hole in their wallet.
As there probably are in the UK, we'll see.
Retail stocks have taken a powder in the UK recently and, no doubt, we'll see quite a few sales starting before Christmas.
But that's largely because consumers have woken up to the fact that you're a mug if you pay full price for a big-ticket item.
A few niche retailers will go bust over Christmas, but they always do.
Unless the Bank of England has completely lost its marbles, it will reduce interest rates in December and then in February.
The current level of UK interest rates and the pound against the dollar isn't doing anyone any favours, as Bank governor Mervyn King knows all too well.
A month or so ago, this column predicted that the next UK recession would commence in January 2008. Technically, a recession is two or more quarters of no growth. In reality, it's a sharp slowdown in the economy.
We're getting that already, starting in the mortgage market. It's still going to happen in January, when the Christmas bills come in.
If King and his chums don't act before then, it could go on for a lot longer.
Stephen Foster is a former news editor of 北京赛车pk10, former editor of Marketing Week and Evening Standard ad columnist. He is a partner in Editorial Partnership and writes the blog and Politics of the Media for Brand Republic.