sancho panza

Members
  • Content Count

    2,029
  • Joined

  • Last visited


Reputation Activity

  1. Informative
    sancho panza got a reaction from BadAlchemy in Credit deflation and the reflation cycle to come (part 2)   
    Hodges calls the black stuff down....
    https://www.icis.com/chemicals-and-the-economy/2019/11/oil-markets-hold-their-flag-shape-for-the-moment-as-recession-risks-mount/

    Oil markets can’t quite make up their mind as to what they want to do, as the chart confirms. The are trapped in a major ‘flag shape’.
    Every time they want to move sharply lower, the bulls jump in to buy on hopes of a major US-China trade deal and a strong economy. But when they want to make new highs, the bears start selling again.
    Its been a long journey  for the flag, stretching back to the pre-Crisis peaks at nearly $150/bbl in the summer of 2008. And the bottom of the flag was made back in 2016, after the last collapse from 2014 $115/bbl peak.
    Recent weeks have seen the bulls jump back in, when prices again threatened to break the flag’s floor below $60/bbl. And, of course, OPEC keeps making noises about further output cuts in an effort to talk prices higher.

    But as the charts from the International Energy Agency’s latest monthly report confirm:
    “The OPEC+ countries face a major challenge in 2020 as demand for their crude is expected to fall sharply.”
    This is OPEC’s problem when it aims for higher prices than the market will bear. Other producers, inside and outside OPEC, always take advantage of the opportunity to sell more volume. And once they have spent the capital on drilling new wells, the only factor holding them back is the actual production cost.
    Capital-intensive industries like oil have always had this problem. They raise capital from investors when prices are high – but high prices naturally choke off demand growth, and so the new wells come on stream just when the market is falling. Next year the IEA suggests will see 2.3mbd of new volume come on stream from the US, Canada, Brazil, Norway and Guyana as a result.
    OPEC’s high prices have already impacted demand, as the IEA notes:
    “Sluggish refinery activity in the first three quarters has caused crude oil demand to fall in 2019 for the first time since 2009.”

    OPEC has had a bit of a free pass until recently, though, in respect of the new volumes from the USA. As the chart shows, the shale drilling programme led to a major volume of “drilled but uncompleted wells”. In other words, producers drilled lots of wells, but the pipelines weren’t in place to then take the new oil to potential markets.
    But now the situation is changing, particularly in the prolific Permian basin region, as Argus report:
    “The Permian basin has been a juggernaut for US producers, with output quadrupling from under 1mbd in 2010 to more than 4.5mbd in October.  US midstream developers have responded with a wave of new long-haul pipelines to shuttle the torrent of supply to Houston, Corpus Christi and beyond.
    “The 670kbd Cactus 2 and the 400kbd Epic line went into service in August moving Permian crude to the Corpus Christi area. Phillips 66’s 900kbd Gray Oak pipeline is expected to enter service this month, moving Permian basin crude to Corpus Christi, Texas, for export.”
    As a result, some of that oil trapped in drilled but uncompleted wells is starting to come to market. So if OPEC wants to keep prices high, it will either have to cut output further, or hope that the world economy starts to pick up.

    But the news on the economic front is not good, as everyone outside the financial world knows.  Central banks are still busy pumping out $bns to keep stock markets moving higher. But in the real world outside Wall Street, high oil prices, trade wars, Brexit uncertainty and many other factors are making recession almost a certainty.
    As the chart shows, there is a high correlation between the level of oil prices and global GDP growth. Once oil takes ~3% of GDP, consumers start to cut back on other purchases. They have to drive to work and keep their homes warm in winter. And with inflation weak, their incomes aren’t rising to pay the extra costs.
    The US sums up the general weakness.  The impact of President Trump’s tax cuts has long disappeared. And now concerns are refocusing on the debt that it has left behind. As the function of debt is to bring forward demand from the future, growth must now reduce.  US GDP growth was just 1.9% in Q3, and the latest Q4 forecast from the Atlanta Fed is just 0.3% .
    Its still too early to forecast which way prices will go, when they finally break out of the flag shape. But their failure to break upwards in the summer, when the bulls were confidently forecasting war with Iran, suggests the balance of risks is now tilting to the downside.

  2. Informative
    sancho panza got a reaction from VeryMeanReversion in Credit deflation and the reflation cycle to come (part 2)   
    the bad data continues to stack up but as ',markets remain irrational etc etc'
    https://wolfstreet.com/2019/11/13/the-holy-cow-moment-for-subprime-auto-loans/
    The Holy-Cow Moment for Subprime Auto Loans; Serious Delinquencies Blow Out
    by Wolf Richter • Nov 13, 2019 • 157 Comments • Email to a friend
    But it’s even worse than it looks. And this time, there is no jobs crisis. This time, it’s the result of greed by subprime lenders. 
    Serious auto-loan delinquencies – auto loans that are 90 days or more past due – in the third quarter of 2019, after an amazing trajectory, reached a historic high of $62 billion, according to data from the New York Fed today:

    This $62 billion of seriously delinquent loan balances are what auto lenders, particularly those that specialize in subprime auto loans, such as Santander Consumer USA, Credit Acceptance Corporation, and many smaller specialized lenders are now trying to deal with. If they cannot cure the delinquency, they’re hiring specialized companies that repossess the vehicles to be sold at auction. The difference between the loan balance and the proceeds from the auction, plus the costs involved, are what a lender loses on the deal.
    The repo business, however, is booming.
    But delinquencies are a flow: As current delinquencies are hitting the lenders’ balance sheet and income statement, the flow continues and more loans are becoming delinquent. And lenders are still making new loans to risky customers and a portion of those loans will become delinquent too. And now the flow of delinquent loans is increasing – and this isn’t going to stop anytime soon: These loans are out there and new one are being added to them, and a portion of them will be defaulting.
    Total outstanding balances of auto loans and leases in Q3, according to the New York Fed’s measure (higher and more inclusive than the Federal Reserve Board of Governors’ consumer credit data) rose to $1.32 trillion:

    Serious delinquencies jumped to 4.71% of these $1.32 trillion in total loans and leases outstanding, the highest since Q4 2011, when the auto industry was emerging from collapse. And on the way up, this 4.71% is just above the level of Q3 2009, months after GM and Chrysler had filed for bankruptcy and a year after Lehman had filed for bankruptcy, when the US was confronting the worst unemployment crisis since the Great Depression, and when people were defaulting on their auto loans because they’d lost their jobs:

    The current rate of 4.71% is just 56 basis points below the peak of Q4 2010. But these are the good times – and not an employment crisis, when millions of people who lost their jobs cannot make their loan payments.
    So what is going to happen to auto loan delinquencies when employment experiences a pullback, even a fairly modest one, such as when one million people lose their jobs? That was a rhetorical question. We know what will happen: The serious delinquency rate will set a record for the annals of history.
    But it’s even worse than it looks.
    “Prime” auto loans have minuscule default rates. The total of $1.3 billion in auto loans and leases outstanding includes leases to consumers who could pay cash for the vehicles but lease them for various reasons. According to a different measure by Fitch, “prime” auto loans currently have a 60-day delinquency rate hovering at a historically low 0.28%.
    Of the $1.32 trillion in auto loans outstanding, about 22% are subprime, so about $300 billion. Of them roughly, $62 billion are seriously delinquent – or around 20% of all subprime loans outstanding. One in five!
    But this subprime delinquency fiasco is not a sign of an employment crisis and a brutal recession as these types of numbers indicated during the Financial Crisis. Employment is still growing, and unemployment claims are near historic lows. Nevertheless, subprime auto loans are defaulting at astounding rates.
    What’s going on? Greed – not an economic crisis.
    Subprime lending is risky but immensely profitable. The thing is: Customers who have a subprime credit rating are painfully aware of it. They have been turned down for low-interest rate loans. They have been turned away. And now they walk on a car lot where their credit rating suddenly is no problem. And they become sitting ducks. The industry knows this.
    They don’t even negotiate. They just accept the price, the payment, the interest rate, and the trade-in value. They’re ecstatic to get a car. And they end up with a huge payment at a high interest rate, and given how strung out they already are to be subprime rated in the first place, that loan is doomed.
    That’s the irony: a low-interest-rate loan on an affordable car, sold at an average profit, would give the customer a much higher chance of keeping the loan current than a loan with a 15% interest rate on a car the customer cannot afford, including a big-fat dealer profit of the type that can only be obtained from a sitting duck. Those loans, born out of greed, and are doomed.
    This is what we’re seeing here. These loans were born out of greed over the past few years, as the industry was getting very aggressive in pursuing subprime rated customers because they’re sitting ducks and so immensely profitable. What we’re seeing now are the consequences of that greed.
  3. Agree
    sancho panza got a reaction from Cattle Prod in Credit deflation and the reflation cycle to come (part 2)   
    how much?
    that's daylight robbery.
    Must say I like the look of Fres over 5 years from here.could go down but huge upside too.
    decl long
  4. Agree
    sancho panza got a reaction from Van Lady in Economic Survival & Breakdown Of Society   
    compsot bin now in situ,going to start weeding the plots ready for the february planting season......exciting times.
  5. Agree
    sancho panza reacted to dgul in Recession anyone?   
    I think we're currently in recession (just about).  However, we'll not find out about this for about 6 months.
  6. Informative
    sancho panza got a reaction from Dogtania in What's going to collapse next...   
    a recap for those at the back.....
    https://www.retailgazette.co.uk/blog/2019/11/retailers-fell-collapsed-administration-this-year-mamaspapas-mothercare/
    Here are all the retailers that have fallen into administration this year
     
    There’s no denying the unfortunate fact that 2019 has been yet another challenging year for UK retail, partly due to a high number of businesses falling into administration.
    According to auditing giant KPMG, 44 retail businesses entered administration in just the six months to September, including a number of high street stalwarts.
    Broadly speaking, administrations are a process that can be subdivided into two categories: trading administrations, as seen with BHS in 2016, and pre-pack administrations – as seen today with Mamas & Papas.
    The insolvency process is different to a CVA, which is what Sir Philip Green’s Arcadia Group retail empire opted for over summer. The general rule of thumb is that business would opt for a CVA when the only other likely alternative is to enter administration.
    Meanwhile, there has also been raft of retailers forced into shutting shops and announcing major redundancies to cope with the changing retail landscape
    Marks & Spencer is in the midst of plans to close 100 stores to cut costs, while fellow retail giant Tesco announced plans to cut 4500 jobs in August.
    Elsewhere, Boots confirmed in June that it will close 200 stores in the UK in another blow for the high street.
    The Retail Gazette has compiled a list of all the main retailers that have have fallen into administration in 2019 – so far:
    Greenwoods – January 2
    The Yorkshire-based menswear retailer collapsed less than 18 months after it was first rescued from administration, which was founded 158 years ago. It was the first victim of the year.
    Mahabis – January 2
    Specialist online footwear retailer also Mahabis fell into administration at the very beginning of the year. It called in administrators KPMG on December 27 but made the announcement in the new year.
    The co-founder of Simba Sleep, James Cox, quicklystepped in to buy Mahabis out of administration.
    Hardy Armies – January 10
    The Savile Row retailer, best known for being a dressmaker for the Queen, went into administration for the second time in just over a decade.

    Oddbins – February 1
    The wine specialist closed a raft of stores after it fell into administration in February, the second time it had collapsed in around eight years.
    Bennetts – February 12
    The Derbyshire-based department store, dubbed the oldest department store in the world, collapsed into administration after being hit by weakening consumer confidence, online competition and growing costs.
    A new buyer stepped in to rescue Bennetts from administration in April, keeping its flagship Derby store open but closing down the Ashbourne branch.
    Better Bathroom – March 1
    More than 300 jobs were lost after the UK’s largest independent bathroom retailer, Better Bathrooms, called in administrators and shut down all 13 of its stores.
    Since buying Better Bathrooms out of administration, Buy it Direct has been running it as an online business.
    LK Bennett – March 7
    LK Bennett’s collapse into administration was perhaps the first high-profile retail casualty of the year. A month later, 21 UK stores were earmarked for closure after LK Bennett was bought out of administration by Chinese-based company Byland UK. The store closures resulted in 110 job losses.

    Office Outlet – March 19
    The former stationery chain, formerly known as Staples, fell into administration after suffering from weak demand for stationery supplies and suppliers cutting the credit terms on which it traded.
    Within a few weeks, administrators Deloitte confirmed that 16 stores would shut down, resulting in 161 job cuts.
    Pretty Green – April 1
    Liam Gallagher’s Pretty Green collapsed into administration after weeks of speculation, after it took hit from House of Fraser’s administration in August last year.
    It was reportedly left around £500,000 out of pocket from House of Fraser’s collapse, becoming one of hundreds of suppliers and concessions to lose money.
    Within days, the retailer was bought out of administration by JD Sports in an undisclosed deal.
    Debenhams – April 9
      Debenahams was taken over by a consortium of lenders, known as Celine, after the department store group fell into administration.
    The pre-pack deal meant all of Debenhams’ previous shareholders – including Mike Ashley’s Sports Direct, which had a near-30 per cent stake in the department store – lost their equity.
    Soon after Celine took control and removed the department store from the stock market, it launched a CVA to speed up the store closure programme it had first announced in late 2018.
    Select – May 10
    Select fell into administration in May, placing 1800 jobs at risk.
    It was the second time the retailer had fallen into administration, after it underwent a CVA process in April last year.
    Administrators then launched a CVA in a last ditch attempt to save the womenswear retailer. This was approved by creditors in June.
    Rococo – May 31
    Luxury chocolate retailer Rococo fell into administration and insolvency specialists from BDO were appointed to take care of the procedure.
    Karen Millen & Coast – August 6
    Karen Millen, which at the time also owned Coast, was put up for sale by its Icelandic owners in June.
    By August, both retail brands were placed into administration and then immediately sold to Boohoo in a pre-pack administration deal.
    The deal entailed Boohoo acquiring Karen Millen & Coast’s online business and assets. This meant Karen Millen’s stores shut down, resulting in 1100 job losses.
    House of Fraser extends administration for another year – August 20
    House of Fraser extended its administration for a further 12 months, weeks after owner Sports Direct labelled its problems as “nothing short of terminal in nature”.
    Forever 21 – September 30
    Forever 21 closed 350 stores globally after filing for Chapter 11 bankruptcy protection in the US.
    Forever 21 said it will axe half of its store estate after filing for Chapter 11 bankruptcy in the US The fast fashion retailer, which has just a few stores in the UK, filed for bankruptcy thanks to the growth in online retailers such as Amazon.
    Forever 21 confirmed its UK store closures a month later.
    Bennetts falls into administration again – October 4
    Bennetts, the Derby retailer regarded as the world’s oldest department store, had been saved again after a successful last-ditch rescue attempt by a local businessman.
    Administrators at Bridgewood Financial Solutions confirmed the sale after taking back control of the 285-year-old department store in August.
    French Sole owner London Sole had only operated Bennetts since April, when it was first bought out of administration.
    Links of London – October 9
    When Links of London collapsed into administration, it placed 350 jobs at risk.
    The retailer’s administrators Deloitte have appointed GCW as property advisers for the jewellery retailer’s portfolio.
    Links of London was owned by Greek retailer Folli Follie, which was embroiled in a major accounting scandal.
    Bonmarche – October 18
    Bonmarche collapsed into administration, putting almost 2900 jobs at risk, shortly after retail tycoon Philip Day gained majority control of the retailer.
    Bonmarche currently employs 2887 staff It is reportedly seeking to close 100 of its 318 stores in the UK as it continues to explore all options for the future.
    The retailer is in talks with prospective buyers while 100 stores are earmarked for possible closure if the business cannot be sold, Drapers reported.
    It is the second time Bonmarche has fallen into administration in seven years, after it was previously bought in a rescue deal by private equity firm Sun European Partners in 2012.
    Bonmarche was later floated on the London stock exchange before Philip Day, the retail tycoon owner of the Edinburgh Woollen Mill Group, purchased a majority stake earlier this year through his investment company Spectre Holdings.
    A large number of shareholders then sold their stakes to Day, giving him a 95 per cent ownership in the retailer.
    Watt Brothers – October 18
    When Watt Brothers filed for administration, it resulted in the immediate redundancy of over 200 jobs after failing to secure new investments.
    The Scottish retailer appointed Blair Nimmo and Alistair McAlinden of KPMG as joint administrators to oversee the sale of the business.
    Mothercare – November 6
    Around 2800 jobs are at risk of being cut after Mothercare officially appointed administrators for its UK operations and business services arm.
    This will likely lead to the closure of all 79 of its UK stores, and places almost 2800 staff at risk of losing their jobs.
    PwC administrators were appointed to close down Mothercare’s UK retail business Mothercare stressed that its overseas operations, which comprises more than 1000 stores in 40 countries, would continue to trade as normal as the administration would not include it.
    The retailer’s collapse into administration came 18 months after it launched a major CVA, which led to the closure of 55 stores.
    Mamas & Papas – November 8
    Mamas & Papas became the second UK maternity chain this week to call in administrators – doing so in the same week as main rival Mothercare.
    However, unlike its rival, a pre-pack administration for Mamas & Papas has already been confirmed and as a result six unprofitable stores are set to close immediately, resulting in 73 job cuts.
     
  7. Agree
    sancho panza got a reaction from Cattle Prod in Credit deflation and the reflation cycle to come (part 2)   
    https://us10.campaign-archive.com/?e=72fd910da5&u=451473e81730c5a3ae680c489&id=348aa8d2f2

    wondered where you'd been of late.Like @Barnsey been quiet too.
  8. Agree
    sancho panza got a reaction from Great Guy in horsey places selling up   
    That's a cost average and probably correct over a long enough timeline spunko.But there's every chance punters could walk into a roof repair/heating/rewiring that could cost tens of thousands..Particualrly the first.
    This is also the issue of gardening/cleaning.We have an average 3 bed house and we employ gardener and cleaner.Anything thats a decent size will likely need possibly £10k p.a of services as well.If you've got parkland,then that will need maintaining as well.
    For the first few years of our marriage,I did the cleaning/gardening to a very low standard.Eventually,Mrs P sacked me when the kids came along.
     
    Edit to add-listing of any sorts adds a lot of hassle and cash to maintenance bills as well.
  9. Agree
    sancho panza got a reaction from Great Guy in horsey places selling up   
    These have been coming on in Leics for a year or so.High cost of keeping nags also doesn't help.
     
    genereally wifey's who like nags aren't cheap to keep either.Just sayin''..
     
    obviously,if the buyers don't like keeping nags,they're not really going to pay a premium for stables.Bodes well for dog food manuracturers.
  10. Agree
    sancho panza got a reaction from Bear Hug in Credit deflation and the reflation cycle to come (part 2)   
    Commercials are the players who use gold on a daily basis or have a need for it.Inherently,as you say,they will be net short as they use futures to hedge their exposure to the physical ie they don't want to be left with overpriced inventory.Someone such as a jewellry manufacturer will be sat on gold (ie long) for a period of time and will hedge it dropping in value while he/she holds it.Which was why I was referncing the depth of the commercials short positions which are historically sizeable and also the amount of open interest,clearly a lot of people looking for direction and willing to spend to hedge it.
     
    The net long of 2018 was indeed unusual it was effectively regular users of the yellow stuff saying they saw no point hedging their long physical position.
     
     
     
    the start of the 1950's bull was from an intergenerational low.the 2008 run was from en elevated position

  11. Informative
    sancho panza got a reaction from MvR in Credit deflation and the reflation cycle to come (part 2)   
    Commercials are the players who use gold on a daily basis or have a need for it.Inherently,as you say,they will be net short as they use futures to hedge their exposure to the physical ie they don't want to be left with overpriced inventory.Someone such as a jewellry manufacturer will be sat on gold (ie long) for a period of time and will hedge it dropping in value while he/she holds it.Which was why I was referncing the depth of the commercials short positions which are historically sizeable and also the amount of open interest,clearly a lot of people looking for direction and willing to spend to hedge it.
     
    The net long of 2018 was indeed unusual it was effectively regular users of the yellow stuff saying they saw no point hedging their long physical position.
     
     
     
    the start of the 1950's bull was from an intergenerational low.the 2008 run was from en elevated position

  12. Informative
    sancho panza got a reaction from MvR in Credit deflation and the reflation cycle to come (part 2)   
  13. Informative
    sancho panza got a reaction from MvR in Credit deflation and the reflation cycle to come (part 2)   
    you n me both.
    Agree on the bit in bold Harley.As regulars on here will know the only measure of hosuing used in inflation figures is the imputed rental equivalnce measure that's the 'H' in CPIH...............and independent types like Shaun Ricarhds pour scorn on it as a measure of rents.
    Aslo worth us pointing out that the imputed rental figure that comprises 12% or so of GDP is an accounting fiction.
    Scary chart time.Surprising lack of correlation S&P500 and oil
    https://www.macrotrends.net/1453/crude-oil-vs-the-s-p-500
    Crude Oil vs the S&P 500
    This interactive chart compares the daily price of crude oil versus the level of the S&P 500 over the last 10 years. In 2008, it was the S&P that refused to confirm the final spike in commodity prices whereas in 2016, oil is the asset class that is indicating that global deflationary forces are setting in.


  14. Agree
    sancho panza reacted to Harley in Credit deflation and the reflation cycle to come (part 2)   
    I would actually cost the social costs of that increased population as at least as high.  I'm not just talking the touchy subjective stuff but stuff like increased benefits, NHS, police, education, social services,, etc spend, traffic congestion, housing costs, lower wages, and so on.  All the stuff borne by us plebs, not the corporates and the like who get cheap labour, higher demand, lower training costs, etc.  And the polos and civil servants who get to sit at the world's top tables as long as selection is only by total and not per capita GDP.
    PS:  Regarding economists, most work for a living, so are mercenary and have a job to do.  No reason to expect them to be impartial.
  15. Agree
    sancho panza got a reaction from Durabo in Credit deflation and the reflation cycle to come (part 2)   
    as MP and K say, one ratio doesn't fit all ,there are nuances.
    having said that,Fresnillo,Goldfields,Newmont,Barrick,Anglo,Kinross leap out to me as the value plays there worth investigating more.Having said that we already have 1%+ positions in each.
    We've been buying Kinross over the few days after it's recent drops.
    Every time I lookat XAU,I think Barrick looks particualrlygood value for where we are,
  16. Agree
    sancho panza got a reaction from Bear Hug in Credit deflation and the reflation cycle to come (part 2)   
    as MP and K say, one ratio doesn't fit all ,there are nuances.
    having said that,Fresnillo,Goldfields,Newmont,Barrick,Anglo,Kinross leap out to me as the value plays there worth investigating more.Having said that we already have 1%+ positions in each.
    We've been buying Kinross over the few days after it's recent drops.
    Every time I lookat XAU,I think Barrick looks particualrlygood value for where we are,
  17. Agree
    sancho panza reacted to DurhamBorn in Credit deflation and the reflation cycle to come (part 2)   
    Yes,all market economies are debt driven.The problem now is the debt issued by the treasury/CBs isnt going into productive assets and investment its going on welfare spending.In the UK there is very little point working if you have 2 children unless you can get £40k a year.The left have got themselves into all areas of the state,so the only answer will be inflation.Of course as always happens those who suffer the most from left centred policy are the poor.The teachers,uni staff etc are protected with inflation linked pensions.
    The economy is sending a clear signal,it doesnt have the productive capacity to cover the spending pledges on it.So massive industrial spending/growth,or deflation.Once we are deeper into deflation printing will go mad and fire up a reflation.
  18. Agree
    sancho panza got a reaction from Dogtania in Credit deflation and the reflation cycle to come (part 2)   
    There were huge strutural problems with the British economy in the 80's that needed resolving.1 was the inefficiency of the public utilities 2 public sector unions that bled the economy of productive capacity 3 structural unemployment resulting from sterling strength psot north sea oil 4 entrepreneurial failure..
    There was always going to be a painful transition as these were dealt with and got resolved.If you were mobile your chances were better but in Leicester we lost a lot of jobs that used to be considered jobs for life
    4a few anecdotes-mates dad spoke to one of the directors at Woodalls and suggested making a couple of new products.Director told him,'at woodalls we make it and the consumer buys it.'Mates dad decided to get out as he could see the end from that.
    grandads mate worked in the pits near Barnsley.He used to tell me as a kid how inefficient the pits were.Lot of miners got paid mega redundancy incl him but most didn't use it wisely.
    In each generation that faces a big recession,despondency is an issue.We felt it in the 80's but new opportunities did come along and always will do.
    I see a lot of people who blame all their ills on someone/somethign else and whislt they may have a point,you have to be proportionate in dsipensing blame.
    My Mrs was born and raised in south africa.She often points out that a lot of our problems are what might be called first world problems.Quite right too.
  19. Agree
    sancho panza got a reaction from Heart's Ease in What's going to collapse next...   
    a recap for those at the back.....
    https://www.retailgazette.co.uk/blog/2019/11/retailers-fell-collapsed-administration-this-year-mamaspapas-mothercare/
    Here are all the retailers that have fallen into administration this year
     
    There’s no denying the unfortunate fact that 2019 has been yet another challenging year for UK retail, partly due to a high number of businesses falling into administration.
    According to auditing giant KPMG, 44 retail businesses entered administration in just the six months to September, including a number of high street stalwarts.
    Broadly speaking, administrations are a process that can be subdivided into two categories: trading administrations, as seen with BHS in 2016, and pre-pack administrations – as seen today with Mamas & Papas.
    The insolvency process is different to a CVA, which is what Sir Philip Green’s Arcadia Group retail empire opted for over summer. The general rule of thumb is that business would opt for a CVA when the only other likely alternative is to enter administration.
    Meanwhile, there has also been raft of retailers forced into shutting shops and announcing major redundancies to cope with the changing retail landscape
    Marks & Spencer is in the midst of plans to close 100 stores to cut costs, while fellow retail giant Tesco announced plans to cut 4500 jobs in August.
    Elsewhere, Boots confirmed in June that it will close 200 stores in the UK in another blow for the high street.
    The Retail Gazette has compiled a list of all the main retailers that have have fallen into administration in 2019 – so far:
    Greenwoods – January 2
    The Yorkshire-based menswear retailer collapsed less than 18 months after it was first rescued from administration, which was founded 158 years ago. It was the first victim of the year.
    Mahabis – January 2
    Specialist online footwear retailer also Mahabis fell into administration at the very beginning of the year. It called in administrators KPMG on December 27 but made the announcement in the new year.
    The co-founder of Simba Sleep, James Cox, quicklystepped in to buy Mahabis out of administration.
    Hardy Armies – January 10
    The Savile Row retailer, best known for being a dressmaker for the Queen, went into administration for the second time in just over a decade.

    Oddbins – February 1
    The wine specialist closed a raft of stores after it fell into administration in February, the second time it had collapsed in around eight years.
    Bennetts – February 12
    The Derbyshire-based department store, dubbed the oldest department store in the world, collapsed into administration after being hit by weakening consumer confidence, online competition and growing costs.
    A new buyer stepped in to rescue Bennetts from administration in April, keeping its flagship Derby store open but closing down the Ashbourne branch.
    Better Bathroom – March 1
    More than 300 jobs were lost after the UK’s largest independent bathroom retailer, Better Bathrooms, called in administrators and shut down all 13 of its stores.
    Since buying Better Bathrooms out of administration, Buy it Direct has been running it as an online business.
    LK Bennett – March 7
    LK Bennett’s collapse into administration was perhaps the first high-profile retail casualty of the year. A month later, 21 UK stores were earmarked for closure after LK Bennett was bought out of administration by Chinese-based company Byland UK. The store closures resulted in 110 job losses.

    Office Outlet – March 19
    The former stationery chain, formerly known as Staples, fell into administration after suffering from weak demand for stationery supplies and suppliers cutting the credit terms on which it traded.
    Within a few weeks, administrators Deloitte confirmed that 16 stores would shut down, resulting in 161 job cuts.
    Pretty Green – April 1
    Liam Gallagher’s Pretty Green collapsed into administration after weeks of speculation, after it took hit from House of Fraser’s administration in August last year.
    It was reportedly left around £500,000 out of pocket from House of Fraser’s collapse, becoming one of hundreds of suppliers and concessions to lose money.
    Within days, the retailer was bought out of administration by JD Sports in an undisclosed deal.
    Debenhams – April 9
      Debenahams was taken over by a consortium of lenders, known as Celine, after the department store group fell into administration.
    The pre-pack deal meant all of Debenhams’ previous shareholders – including Mike Ashley’s Sports Direct, which had a near-30 per cent stake in the department store – lost their equity.
    Soon after Celine took control and removed the department store from the stock market, it launched a CVA to speed up the store closure programme it had first announced in late 2018.
    Select – May 10
    Select fell into administration in May, placing 1800 jobs at risk.
    It was the second time the retailer had fallen into administration, after it underwent a CVA process in April last year.
    Administrators then launched a CVA in a last ditch attempt to save the womenswear retailer. This was approved by creditors in June.
    Rococo – May 31
    Luxury chocolate retailer Rococo fell into administration and insolvency specialists from BDO were appointed to take care of the procedure.
    Karen Millen & Coast – August 6
    Karen Millen, which at the time also owned Coast, was put up for sale by its Icelandic owners in June.
    By August, both retail brands were placed into administration and then immediately sold to Boohoo in a pre-pack administration deal.
    The deal entailed Boohoo acquiring Karen Millen & Coast’s online business and assets. This meant Karen Millen’s stores shut down, resulting in 1100 job losses.
    House of Fraser extends administration for another year – August 20
    House of Fraser extended its administration for a further 12 months, weeks after owner Sports Direct labelled its problems as “nothing short of terminal in nature”.
    Forever 21 – September 30
    Forever 21 closed 350 stores globally after filing for Chapter 11 bankruptcy protection in the US.
    Forever 21 said it will axe half of its store estate after filing for Chapter 11 bankruptcy in the US The fast fashion retailer, which has just a few stores in the UK, filed for bankruptcy thanks to the growth in online retailers such as Amazon.
    Forever 21 confirmed its UK store closures a month later.
    Bennetts falls into administration again – October 4
    Bennetts, the Derby retailer regarded as the world’s oldest department store, had been saved again after a successful last-ditch rescue attempt by a local businessman.
    Administrators at Bridgewood Financial Solutions confirmed the sale after taking back control of the 285-year-old department store in August.
    French Sole owner London Sole had only operated Bennetts since April, when it was first bought out of administration.
    Links of London – October 9
    When Links of London collapsed into administration, it placed 350 jobs at risk.
    The retailer’s administrators Deloitte have appointed GCW as property advisers for the jewellery retailer’s portfolio.
    Links of London was owned by Greek retailer Folli Follie, which was embroiled in a major accounting scandal.
    Bonmarche – October 18
    Bonmarche collapsed into administration, putting almost 2900 jobs at risk, shortly after retail tycoon Philip Day gained majority control of the retailer.
    Bonmarche currently employs 2887 staff It is reportedly seeking to close 100 of its 318 stores in the UK as it continues to explore all options for the future.
    The retailer is in talks with prospective buyers while 100 stores are earmarked for possible closure if the business cannot be sold, Drapers reported.
    It is the second time Bonmarche has fallen into administration in seven years, after it was previously bought in a rescue deal by private equity firm Sun European Partners in 2012.
    Bonmarche was later floated on the London stock exchange before Philip Day, the retail tycoon owner of the Edinburgh Woollen Mill Group, purchased a majority stake earlier this year through his investment company Spectre Holdings.
    A large number of shareholders then sold their stakes to Day, giving him a 95 per cent ownership in the retailer.
    Watt Brothers – October 18
    When Watt Brothers filed for administration, it resulted in the immediate redundancy of over 200 jobs after failing to secure new investments.
    The Scottish retailer appointed Blair Nimmo and Alistair McAlinden of KPMG as joint administrators to oversee the sale of the business.
    Mothercare – November 6
    Around 2800 jobs are at risk of being cut after Mothercare officially appointed administrators for its UK operations and business services arm.
    This will likely lead to the closure of all 79 of its UK stores, and places almost 2800 staff at risk of losing their jobs.
    PwC administrators were appointed to close down Mothercare’s UK retail business Mothercare stressed that its overseas operations, which comprises more than 1000 stores in 40 countries, would continue to trade as normal as the administration would not include it.
    The retailer’s collapse into administration came 18 months after it launched a major CVA, which led to the closure of 55 stores.
    Mamas & Papas – November 8
    Mamas & Papas became the second UK maternity chain this week to call in administrators – doing so in the same week as main rival Mothercare.
    However, unlike its rival, a pre-pack administration for Mamas & Papas has already been confirmed and as a result six unprofitable stores are set to close immediately, resulting in 73 job cuts.
     
  20. Agree
    sancho panza got a reaction from Talking Monkey in Credit deflation and the reflation cycle to come (part 2)   
    There were huge strutural problems with the British economy in the 80's that needed resolving.1 was the inefficiency of the public utilities 2 public sector unions that bled the economy of productive capacity 3 structural unemployment resulting from sterling strength psot north sea oil 4 entrepreneurial failure..
    There was always going to be a painful transition as these were dealt with and got resolved.If you were mobile your chances were better but in Leicester we lost a lot of jobs that used to be considered jobs for life
    4a few anecdotes-mates dad spoke to one of the directors at Woodalls and suggested making a couple of new products.Director told him,'at woodalls we make it and the consumer buys it.'Mates dad decided to get out as he could see the end from that.
    grandads mate worked in the pits near Barnsley.He used to tell me as a kid how inefficient the pits were.Lot of miners got paid mega redundancy incl him but most didn't use it wisely.
    In each generation that faces a big recession,despondency is an issue.We felt it in the 80's but new opportunities did come along and always will do.
    I see a lot of people who blame all their ills on someone/somethign else and whislt they may have a point,you have to be proportionate in dsipensing blame.
    My Mrs was born and raised in south africa.She often points out that a lot of our problems are what might be called first world problems.Quite right too.
  21. Agree
    sancho panza got a reaction from spunko in What's going to collapse next...   
    A good mate used to deliver for these last year.He was telling me that he was delivering deliveries straight onto previous delvieries last year ie they were sending supplies out without customers relly needing them.
    Then the afternoon drops got dropped  and then he got laid off a few months back.
    I shorted them briefly a while back but there was better opportunities in the builders themselves imho.
    DB is long Card factory.I've shorted them once over the last year and would do again.But they do have good footfall and revenues have held up surrisingly wel.
     
    on a separate topic sort off,took the chance to go in M&S in Leicester today for some footfall research.Clothing section was dead.Looks terminal.I jsut can't see how they're offering is ever going to get 25-40 female like Mrs P in there.Prices are high and some of the stuff I wouldn't put my mum in.
  22. Agree
    sancho panza got a reaction from Heart's Ease in Credit deflation and the reflation cycle to come (part 2)   
    under the 'what bubble ' series.its important to note that the revolving credit figures excludes people like myself who pay of cc every mpnth.add car/studetn/cc/non krotgage debt and that's a fair chunk of US gdp-nearly $5trn stcok
     
    one of Wolfs best
    https://wolfstreet.com/2019/11/08/the-state-of-the-american-debt-slaves-q3-2019-paying-the-university-corporate-financial-complex/
    Paying the University-Corporate-Financial Complex and the big bifurcation.
    Student-loan balances jumped by 5.1% in the third quarter compared to Q3 last year, or by $80 billion, to a new horrifying record of $1.64 trillion, having skyrocketed by 120% in the 10 years since Q3 2009, according to Federal Reserve data released Thursday afternoon. Over the same 10-year period, when student loans soared 120%, the Consumer Price Index has increased 19%. Student loan balances are 7.6% the size of GDP, up from 5.1% in 2009.

    But the explosion of student debt is not because there is an explosion in enrollment in higher education. On the contrary: According to the latest data from the National Center for Education Statistics, enrollment fell by 7% between 2010 and 2017. But those fewer and fewer students are borrowing more and more to pay for tuition, transportation, electronic devices, and other things that the University-Corporate-Financial Complex gets rich off.
    This includes “student housing,” which has become a hugely hyped asset class with its own student-housing Commercial Mortgage Backed Securities where delinquency rates are now spiking.
    Everyone is trying to make money off the proceeds from these government-guaranteed loans. The students are just the money-conduit from the taxpayer to:
    Universities trying to grow their empires Corporations such as Apple selling their products to students Textbook publishers with monopolistic rip-off strategies. Landlords seeking a high yield on their investment, and Wall Street seeking fees on securitizing it all. Ticket vendors, grocery stores, bars, restaurants, car dealers, airlines, and others. Auto loans and leases.
    Total auto loans and leases outstanding for new and used vehicles in the third quarter rose 4.3% from a year ago, by $50 billion, to a record of $1.19 trillion:
    Over the past 10 years, since Q3 2009, auto loan balances have surged 62%, compared to the increase in the Consumer Price Index of 19% and population growth of 8%. So, on an inflation-adjusted per-capita basis, the burden of these loans has increased. In terms of the size of the overall economy, auto-loan balances have ticked up from 5.1% of GDP in 2009 to 5.6% of GDP currently.

    This 4.3% rise in auto loan balances outstanding has occurred despite new-vehicle unit sales that declined by 1.6% so far this year and despite lackluster used-vehicle unit sales. It’s the result of numerous factors, including:
    Higher Average Transaction Prices for new vehicles ($38,000) and used vehicles ($14,000) Rising loan-to-value ratios Lengthening average duration of auto loans: 84 months are common, 96 months are available Rising popularity of leases by people who could otherwise would have paid cash for their vehicles. Credit cards and other Revolving credit
    Outstanding balances on credit cards and other revolving credit, such as personal lines of credit – but not credit secured by housing, such as HELOCs – rose 3.6% in Q3 compared to Q3 last year, to $1.04 trillion (not seasonally adjusted). This was a record for a third quarter, and was the second highest quarter ever, below only the borrow-till-you-drop holiday frenzy of Q4 last year.
    But in overall terms, as a national average, consumers have been fairly prudent by American standards, compared to the era before the Great Recession, to the consternation of lenders that milks enormous profits from credit-card debt where interest rates can exceed 20%.
    Over the past 11 years since Q3 2008, just before it all fell apart, credit card balances edged up only 5.8%. Over these 11 years, the Consumer Price Index rose 22% and the population grew about 9%. So adjusted for inflation and per-capita, consumers have shed credit card debt.
    In terms of the size of the economy: In Q3 2008, revolving credit amounted to 6.8% of GDP. Today, it’s down to 4.8% of GDP. So, in terms of credit cards, consumers overall as a national average have become more prudent.

    The big bifurcation.
    On one side are consumers who use their credit cards only as payment system and to get cash-back, miles, and whatever loyalty rewards, but they pay their cards off every month and carry no balances and pay no interest or fees. Since they have no interest-bearing credit card debt, their activities are not included in consumer credit.
    On the other side are consumers with maxed-out credit cards or with large balances, and they have personal loans, payday loans, etc. They’re sitting ducks for the lending industry because they cannot pay off the loans but pay interest and fees out of their nose, wobble from paycheck to paycheck, and if something goes wrong, become delinquent. It’s these people who owe the lion’s share of that $1.04 trillion in revolving credit – which is why credit card debt sours so fast during a downturn.
    Total Non-Housing consumer credit.
    Student loans, auto loans, and revolving credit combined into total consumer credit — which excludes housing related credit such as mortgages — jumped by $193 billion in Q3 from a year ago, or by 4.9%, to $4.13 trillion, another record:

    That $193 billion increase in consumer debt over the past 12 months – whether from student loans, auto loans, or credit cards – was spent and boosted consumer spending (about $14.5 trillion) by 1.3%. And it boosted GDP by about 0.9%. That’s why economists want consumers to borrow-and-spend.
    Students are an increasingly big part in this GDP-boost formula. That’s why economists and politicians don’t want to attack the problem where it really is: cracking down on the costs.
    Instead, they’re trying to reshuffle as to who is paying for it – and it’s not the two beneficiaries of this process, namely the students getting an education and the University-Corporate-Financial Complex leeching off the process.
    And they have found taxpayers who are owed this money. Broad student loan forgiveness is also utterly unfair to former students who paid off their loans and now would have to pay off the loans of other students; to parents who sacrificed a lot to fund their kids’ education and now would have to fund the education of other kids; and to many students themselves, who tried to avoid student debt, worked like maniacs and skimped on everything to pay their way through college, who went to the cheapest schools and stretched out their education, and who got less fancy jobs because of it, and now they would have to pay off the debt of other students that splurged on debt and might have ended up with better jobs.
    The real problem that needs to be dealt with in terms of student loans is the cost of education – not who pays for it – and the costs are driven by the primary beneficiary of all this, the University-Corporate-Financial Complex.
    UPDATE Nov 9: Dear readers, excellent comments and discussions below. You’re missing out if you don’t venture below the line. And you can chime in as well.
  23. Agree
  24. Agree
    sancho panza got a reaction from Heart's Ease in Credit deflation and the reflation cycle to come (part 2)   
    Please don't mlaugh but most of my SCS records are pen on paper.I work a lot of paper.Rough notes with portfolio holdings.When one of the kids gets to my study and scrwawls al over my papers I keep saying I need to start working on a PC but using paper helps me organiose my thoughts.Our 3 year old doesnt care and anythign thats needed for setting up his doctors surgeries and shops get used and destroyed .....It takes me a lot of time to upload them onto the thread.I may have time wed but I may not.
    Yeah,I was dip buying Kinross in my short term account fri but I still wouldn't touch Eldorado having sold in sept.Was glad to be out having held since 2017
    @Clueless Imbecile as well.I think the answer lies in buying sectors that are eesentail to daily life and trade plsu some PM's imho.
    What CI talks about is the risk of buying the FTSE 100 ETF when he shoudl be looking for sectoral exposure.The essemtials of life are food,oil,gas,electricity.Theyre the places that will find it easiest to hedge inflation.things funded with credit eg hosuing may stuggle although a mortgage -if you can get one-in an inflationary envronement is a good option.even if the price doesn't move with inflation the debt will decline relative to the uderlying if wages keep abreast of it ir even if they lag some.
    currency debasement can gather pace at 6%/7%.
    I came out of school in Leicester in 87.Huge unempklyoement ad the facotires that had employed tens of thosuansds of people in textiles and engineering had gone.
     
    Companies like Bentleys(knitting machien maker),Woodalls(carpentry machines),Corahs(textiles),Co Op Shoe factory,Ricard Roberts(textiles)..............was very hard looking for a job.People remember the coal mining decline because of the strike but places like Leicester lost loads of jobs.ANd good paying skilled jobs too.
    Theyve never come back.
  25. Informative
    sancho panza got a reaction from VeryMeanReversion in Credit deflation and the reflation cycle to come (part 2)   
    under the 'what bubble ' series.its important to note that the revolving credit figures excludes people like myself who pay of cc every mpnth.add car/studetn/cc/non krotgage debt and that's a fair chunk of US gdp-nearly $5trn stcok
     
    one of Wolfs best
    https://wolfstreet.com/2019/11/08/the-state-of-the-american-debt-slaves-q3-2019-paying-the-university-corporate-financial-complex/
    Paying the University-Corporate-Financial Complex and the big bifurcation.
    Student-loan balances jumped by 5.1% in the third quarter compared to Q3 last year, or by $80 billion, to a new horrifying record of $1.64 trillion, having skyrocketed by 120% in the 10 years since Q3 2009, according to Federal Reserve data released Thursday afternoon. Over the same 10-year period, when student loans soared 120%, the Consumer Price Index has increased 19%. Student loan balances are 7.6% the size of GDP, up from 5.1% in 2009.

    But the explosion of student debt is not because there is an explosion in enrollment in higher education. On the contrary: According to the latest data from the National Center for Education Statistics, enrollment fell by 7% between 2010 and 2017. But those fewer and fewer students are borrowing more and more to pay for tuition, transportation, electronic devices, and other things that the University-Corporate-Financial Complex gets rich off.
    This includes “student housing,” which has become a hugely hyped asset class with its own student-housing Commercial Mortgage Backed Securities where delinquency rates are now spiking.
    Everyone is trying to make money off the proceeds from these government-guaranteed loans. The students are just the money-conduit from the taxpayer to:
    Universities trying to grow their empires Corporations such as Apple selling their products to students Textbook publishers with monopolistic rip-off strategies. Landlords seeking a high yield on their investment, and Wall Street seeking fees on securitizing it all. Ticket vendors, grocery stores, bars, restaurants, car dealers, airlines, and others. Auto loans and leases.
    Total auto loans and leases outstanding for new and used vehicles in the third quarter rose 4.3% from a year ago, by $50 billion, to a record of $1.19 trillion:
    Over the past 10 years, since Q3 2009, auto loan balances have surged 62%, compared to the increase in the Consumer Price Index of 19% and population growth of 8%. So, on an inflation-adjusted per-capita basis, the burden of these loans has increased. In terms of the size of the overall economy, auto-loan balances have ticked up from 5.1% of GDP in 2009 to 5.6% of GDP currently.

    This 4.3% rise in auto loan balances outstanding has occurred despite new-vehicle unit sales that declined by 1.6% so far this year and despite lackluster used-vehicle unit sales. It’s the result of numerous factors, including:
    Higher Average Transaction Prices for new vehicles ($38,000) and used vehicles ($14,000) Rising loan-to-value ratios Lengthening average duration of auto loans: 84 months are common, 96 months are available Rising popularity of leases by people who could otherwise would have paid cash for their vehicles. Credit cards and other Revolving credit
    Outstanding balances on credit cards and other revolving credit, such as personal lines of credit – but not credit secured by housing, such as HELOCs – rose 3.6% in Q3 compared to Q3 last year, to $1.04 trillion (not seasonally adjusted). This was a record for a third quarter, and was the second highest quarter ever, below only the borrow-till-you-drop holiday frenzy of Q4 last year.
    But in overall terms, as a national average, consumers have been fairly prudent by American standards, compared to the era before the Great Recession, to the consternation of lenders that milks enormous profits from credit-card debt where interest rates can exceed 20%.
    Over the past 11 years since Q3 2008, just before it all fell apart, credit card balances edged up only 5.8%. Over these 11 years, the Consumer Price Index rose 22% and the population grew about 9%. So adjusted for inflation and per-capita, consumers have shed credit card debt.
    In terms of the size of the economy: In Q3 2008, revolving credit amounted to 6.8% of GDP. Today, it’s down to 4.8% of GDP. So, in terms of credit cards, consumers overall as a national average have become more prudent.

    The big bifurcation.
    On one side are consumers who use their credit cards only as payment system and to get cash-back, miles, and whatever loyalty rewards, but they pay their cards off every month and carry no balances and pay no interest or fees. Since they have no interest-bearing credit card debt, their activities are not included in consumer credit.
    On the other side are consumers with maxed-out credit cards or with large balances, and they have personal loans, payday loans, etc. They’re sitting ducks for the lending industry because they cannot pay off the loans but pay interest and fees out of their nose, wobble from paycheck to paycheck, and if something goes wrong, become delinquent. It’s these people who owe the lion’s share of that $1.04 trillion in revolving credit – which is why credit card debt sours so fast during a downturn.
    Total Non-Housing consumer credit.
    Student loans, auto loans, and revolving credit combined into total consumer credit — which excludes housing related credit such as mortgages — jumped by $193 billion in Q3 from a year ago, or by 4.9%, to $4.13 trillion, another record:

    That $193 billion increase in consumer debt over the past 12 months – whether from student loans, auto loans, or credit cards – was spent and boosted consumer spending (about $14.5 trillion) by 1.3%. And it boosted GDP by about 0.9%. That’s why economists want consumers to borrow-and-spend.
    Students are an increasingly big part in this GDP-boost formula. That’s why economists and politicians don’t want to attack the problem where it really is: cracking down on the costs.
    Instead, they’re trying to reshuffle as to who is paying for it – and it’s not the two beneficiaries of this process, namely the students getting an education and the University-Corporate-Financial Complex leeching off the process.
    And they have found taxpayers who are owed this money. Broad student loan forgiveness is also utterly unfair to former students who paid off their loans and now would have to pay off the loans of other students; to parents who sacrificed a lot to fund their kids’ education and now would have to fund the education of other kids; and to many students themselves, who tried to avoid student debt, worked like maniacs and skimped on everything to pay their way through college, who went to the cheapest schools and stretched out their education, and who got less fancy jobs because of it, and now they would have to pay off the debt of other students that splurged on debt and might have ended up with better jobs.
    The real problem that needs to be dealt with in terms of student loans is the cost of education – not who pays for it – and the costs are driven by the primary beneficiary of all this, the University-Corporate-Financial Complex.
    UPDATE Nov 9: Dear readers, excellent comments and discussions below. You’re missing out if you don’t venture below the line. And you can chime in as well.