Begbies Traynor Share Discussion Threads

[aleman] 22/3/2017 10:22

US bank card default rates taking off.

[aleman] 21/3/2017 17:10

Several US auto stocks fell today after used car prices fell unexpectedly in February, taking the annual NADA index change to -7.1%. Lots of new cars are leased. The average negative equity on lease expiry recently has been over $4k. This news will make matters much worse. More motorists will owe more at the end of their lease. They will have less money/more debt for their next car. Leases will get more expensive as more depreciation will need to be allowed for in future. New car sales will fall as leases get more expensive, motorist have less money, car loans and leases are seeing delinquencies rise rapidly, and the supply of cars onto the market increases as more leases expire from the bumper years of 2011 on, aggravated by increasing repossessions. Thanks to more loans and more leases, the US auto market is more cyclcial than ever and it is going into recession.





In a reversal of what typically occurs in February, wholesale prices of used vehicles up to eight years old fell substantially last month, dropping 1.6% compared to January. The drop was counter to the 1% increase expected for the month and marked just the second time in the past 20 years prices fell in February

[aleman] 21/3/2017 12:53

See AltFi article to see explosion of arrears to highest since 2010 (This looks to include non-US platforms like Zopa):



Scroll Down to explosing delinquncies at Lending Club and Prosper online platforms:

[aleman] 21/3/2017 11:36

CPI 2.3% versus 2.1% expected. RPI 3.2% versus 2.9% expected. Core RPI 3.5%.



Tough times ahead for retailers with costs rising more quickly last month and wages only up 2.2% (and apparently slowing?) as of January. Small suppliers are the ones suffering so far, apparently, but the big retailers can only squeeze so much and then they start to suffer, too.

[aleman] 21/3/2017 09:36

The banking cycle looks to have turned. Net charge-offs are rising again. Although still low, note that they were still low in 2000 and 2007 before shooting up. By the time the peaks were in, in 2002 and 2010, stockmarkets had long since tumbled.

[aleman] 21/3/2017 08:08

In the market at large, the uncertain economic outlook has put at risk some major engineering, procurement and construction contracts. As contract owners have delayed payments to contractors, insolvencies in the supply chain have increased, leading to more disputes.

[aleman] 20/3/2017 17:08

Online lending platforms getting deeper into defaults trouble problems.

[aleman] 20/3/2017 14:50

UK retail footfall continues to decline in February - high street flat, retail parks -2.6%.

[aleman] 18/3/2017 11:26

Hi, topvest. The deterioration in most credit markets seems to have accelerated sharply in the last couple of months. I doubt the recession will be as late as 2018.

[topvest] 17/3/2017 20:25

Very interesting indeed Aleman. Next recession is definitely closer..that's for certain. Maybe another year or two off in my view.

[aleman] 17/3/2017 17:16

They are doing 8 year loans on cars now in the US. Should we be surprised that a record 31% of trade-ins were in negative equity in 2016? And that is as used prices start to turn down and are expected to fall faster in 2017. The average shortfall is now a record $4914. What do they do with that - roll it over onto another car, probably? What could possibly go wrong? The more people borrow and lease for car ownership, the more cyclical this market becomes. The fact it has started to turn down and increase defaults on car loans increases the chances of turning the Q1 US slowdown into recession. GDP growth in 2014 to 2016 was bought with some dodgy credit. Chickens are now coming home to roost.

You'll be pleased to know there seems to be a similar pattern developing in the UK market.

[aleman] 17/3/2017 10:05

US subprime auto loan delinquencies spike above the January 2009 high of the last financial crisis.

[aleman] 16/3/2017 10:21

Atlanta Fed's GDP forecast for Q1 drops to only 0.9%. In only 6 weeks, it has fallen from 3.4% to 0.9%. The US deficit was already forecasted to jump next year on better numbers than this

[aleman] 16/3/2017 09:54

The namss in trouble are getting bigger - American Apparel, Banana Republic, Brantano, Jones Bootmaker, Blue Inc - and now 800 jobs threatened as Brantano enters second admininstration

[aleman] 15/3/2017 16:02

4.2m (10%) of US student loans in default by at least 9 months - up 600k in a year. $130bn and rising of write-downs is going to be painful for some lenders when they get booked.

[aleman] 14/3/2017 20:16

March 10, 2017 Posted by kingcade

Americans are getting more behind on their timeshare rental payments, according to Fitch Ratings. Approximately 3.75 percent of timeshare borrowers were behind on their bills in the fourth quarter, up from 3.37 percent in the same period a year earlier, and the highest level since the end of 2011, according to the report.

According to Fitch, the defaults are evidence that loan companies are becoming less strict when financing to customers. These companies are also writing off more loans. The default rate rose to 0.70 percent in the fourth quarter from 0.61 percent in the same period a year earlier.

[aleman] 14/3/2017 19:57

US credit union data - note the sharp rise in business loan delinquencies which seems at odds with some US business surveys.



The delinquency rate on loans at federally insured credit unions was 83 basis points in the fourth quarter of 2016, little changed from 81 basis points one year earlier. Loan performance was mixed across categories:

The delinquency rate on fixed real estate loans was 54 basis points in the fourth quarter, down from 64 basis points one year earlier.
The credit card delinquency rate was 114 basis points, up from 101 basis points in the fourth quarter of 2015.
For auto loans, the delinquency rate was 72 basis points in the fourth quarter of 2016, compared with 68 basis points one year earlier.
The delinquency rate for member business loans stood at 158 basis points, up from 109 basis points in the fourth quarter of 2015.
The student loan delinquency rate was 126 basis points in the fourth quarter of 2016, compared with 115 basis points one year earlier.

The net charge-off ratio for all federally insured credit unions was 55 basis points in the fourth quarter of 2016, up from 48 basis points in the fourth quarter of 2015.

[aleman] 14/3/2017 11:40

It's a small sector but US marketplace lenders show 3rd quarter of recession as charge-offs rocket to 17% from 3% 3 years ago.



Also small but US commercial mortgage backed securities' delinquencies rose in Feb.

hxxp://www.scotsmanguide.com/News/2017/03/CMBS-delinquencies-edge-up/

[aleman] 13/3/2017 15:38

US hard indicators weakening, soft ones soaring - which are right? US bank loan growth slows sharply.

[aleman] 13/3/2017 12:16

US mortgage deliquencies expanding again as subprime lending increases.



Oz prime mortgage delinquencies increasing again.

[aleman] 09/3/2017 11:52

The last time Santander Consumer's US auto loans showed an improvement in delinquency rates was Q3 2014. Every quarterly tranche of loans issued since then shows a higher delinquency rate accumulating than the previous one. Increased car sales since 2014 have been bought with increasingly reckless lending that is now running into trouble.



Zopa has just updated it's credit risk data. 2016 and 2017 tranch loans are now running with projected default rates similar to the last crisis peak. (4.08% and 4.89% projected versus 2008's 4.24% actual, respectively, after 2008 overan its projection of 3.58%. The low in this cycle was an actual 0.69% in 2012.) Now imagine if this 7-fold increase is repeated right across the banking system. UK consumer spending has been bought since 2013 by increasingly risky lending that is now running into trouble.

[aleman] 09/3/2017 07:47

6.5% annual fall in retailers footfall in February.

[aleman] 07/3/2017 10:08

We have seen an improvement in activity levels in our insolvency business in the third quarter, as anticipated at the time of our half year results which we reported in December 2016. This leaves us well placed for a strong last quarter ...

That sounds reasonably promising and I've found an insolvency practitioner that is recruiting for an expected increase in business.




Alvarez & Marsal Bolsters Business To Prepare For Wave of Restructurings
William Louch
06 Mar 2017
The firm has boosted its restructuring practice ahead of an anticipated surge in restructuring work
London-based advisory firm Alvarez & Marsal has boosted its restructuring team with the appointment of six former KPMG partners, as the firm prepares for a wave of insolvencies among U.K. retailers in 2017.