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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Debtmatters | DEBT | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| 0.00 | 0.00% | 7.26 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 7.26 | 7.26 |
| Top Posts |
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Posted at 16/1/2012 11:24 by tpaulbeaumont Even though most investors use at least the average rating of 2 of the 3 agencies (S&P, Moodys, Fitch) the EFSF uses but 1, so I imagine they will speed up its replacement, as its now rated at teh lowest backers rating.Average common denominator Jan 15th 2012, 9:47 by A.P. | LONDON THE decision by Standard & Poor's (S&P) to lower the AAA ratings of France and Austria, and to downgrade seven other countries, Italy and Spain among them, earned a string of "Friday the 13th" headlines this weekend. In truth, there is no new information in the downgrades. Do not look to S&P for contrarian thinking: the rationale for demoting France and the rest is both cogent and unsurprising |
Posted at 15/1/2012 10:17 by tpaulbeaumont Europe's economiesA false dawn The recession has been mild so far. But things are likely to get much worse Jan 14th 2012 | from the print edition "The worries begin with sovereign debt. Barclays Capital reckons that euro-zone governments must raise 218 billion in new bonds in the first quarter, of which 167 billion is needed to pay maturing debt. Some 300 billion of short-term bills must also be sold. Italy will be the largest single issuer: it has two chunks of debt due in the last weeks of January and February. The government is likely to pay a high price for its money: yields on ten-year bonds are close to 7%. A bigger concern is that investors might snub one of Italy's bond auctions. That would be less of a worry if the euro zone had a stronger safety net for countries that have fallen foul of bond markets. But the EU summit in December deferred until March a discussion on whether to raise the 500 billion lending capacity of the euro zone's rescue fund. The standing of the fund relies on the credit of the countries that back it, including France, which is threatened with a two-notch downgrade to its AAA credit rating by Standard and Poor's. A decision on whether to downgrade all euro-zone government bonds is due before March-one more reason to fear the worst." |
Posted at 24/11/2011 09:59 by tpaulbeaumont The economies of southern and northern Europe make strange bedfellowsSINCE bond investors began to discriminate between the euro-zone economies, pushing yields on Spanish, Irish, Greek, Italian and Portuguese government debt soaring, much of the talk in northern Europe has been of profligate governments in the south. As these indicators show, the euro zone's problems go rather deeper than that. A large chunk of the single-currency area has a chronic competitiveness problem, with a horrible mixture of high unemployment, low productivity and low investment. One unsolved mystery is why all this ought to have some correlation with latitude. Answers to the Bundesbank, please. ^Ive got an idea... |
Posted at 18/9/2008 20:39 by giant steps 18th Sept 2008Extract ' LONDON (AFP) - Britain said Thursday it will bar short-selling -- when investors borrow company stock to sell it -- in financial shares and warned it could extend the ban to other sectors in order to steady the markets. "While we still regard short-selling as a legitimate investment technique in normal market conditions, the current extreme circumstances have given rise to disorderly markets," FSA chief executive Hector Sants said in a statement. "As a result, we have taken this decisive action, after careful consideration, to protect the fundamental integrity and quality of markets and to guard against further instability in the financial sector." "The FSA stands ready to extend this approach to other sectors if it judges it to be necessary," it added. The short-selling ban comes into effect at midnight (2300 GMT). The FSA will also require all investors holding short positions totalling more than 0.25 percent of a financial company's total shares to disclose details of those positions from Tuesday. ' |
Posted at 21/12/2007 17:30 by jdschwartz I was going to say the same thing twenty!Lets hope growth stays at around 15 to 20% on loanmakers, and after all, they have the staff to cope with that growth(and some) now the iva business is shot. Loss making ought to be well under control by now if the bosses are worth their salt. In fact I was hoping a director would buy today or soon, that would give/have given a bit of confidence to new and existing shareholders.Perhaps they cant because of takeover rules as they are in discussions etc. as they have said.I HOPE THEY DO NOT GET TAKEN OUT UNTIL THEY HAVE RECOVERED TO BE HONEST AS I COULD SEE THIS BEING A TEN BAGGER IN A COUPLE OF YEARS IF THEY PLAY THEIR CARDS RIGHT. I missed out on a ten bagger in 2003 with EVT(see my posts pre rocket!)I had 10k worth but I sold out when newsflow got quiet and used the money to put towards moving house when, with a view of buying back in once things had settled down. The trouble is if I had held them(at 1.5p I could have paid the mortgage OFF by selling them for 15p. a few months later.Mind you, when they doubled i probably would have thought about selling, as you do. Thats always the hard bit, knowing when to take profits. I am looking for a p/e ratio minimum of 10 to be conservative and realistically if review is good 12 to 15x loanmakers profit by end of jan. Some may value this co. purely on loanmakers current profit without their potential. In fact I am looking for debmatters to be rebranded as "Loanmakers" to show shareholders where the money is coming from now(they could still do the odd I.V.A. on the side perhaps. These shares would then experience reratings by all analysts and investors. Thet need to capture a good chunk of the credit crunch hangover business expected next year. This could be attractive as a good short term/medium and long term punt and not many others have recognised it yet. Might top up next week but probably too late at these prices now. I await shares mags comments as they have done before. |
Posted at 18/10/2007 12:07 by energyi Could this be the ruin of the buy-to-letters?17.10.2007 by Merryn Somerset Webb I appeared on BBC Breakfast last week with a buy to let investor who was convinced he was very rich. He had, he said, made £8m out of the buy to let boom. Further chat revealed that he had properties valued at £8m but £5.5m worth of debt. So he is on paper 'worth' £2.5m. You might think that sounds like a reasonable margin of error but I'm not sure its enough: property can turn nasty fast. Many of the reasons not to invest now (the main one being the fact that yields are lower than interest rates) have been widely discussed but here's one more reason to steer clear. Buy to let mortgages deals tend to contain little read covenants regarding the loan-to-value ratio of the mortgage. In a rising market this isn't the kind of thing borrowers take notice of but in a falling market they may find that it is the ruin of them. It works like this. The loans allow lenders to periodically revalue properties (at the borrowers expense naturally). If the value has fallen and the loan to value ratio has, as a result, risen above the level required by the mortgage (say from 80% to 85%) the lender can then ask the borrower to come up with more cash to get it back down. The result, says my lawyer friend, will be that as capital values drop, buy-to-let investors will start to receive letters from the lenders along the lines of "Dear Mr Bloggs, I should be grateful if you would restore your loan to value ratio by sending us a cheque for £25,000". This, most mortgaged-up-to-hilt investors will be utterly unable to do. The result? Panic selling and not just from the market's new entrants. People who have been in the market for more than a few years are keen to suggest that they will be immune from any drop in prices thanks to the equity they have built up. But most of them the man I met on the BBC sofa included - have also bought new properties in the last year. If margin calls for this is what they are - start coming in on these how are they going to come up with the cash? No one's immune. /more: |
Posted at 12/10/2007 13:57 by pork belly From Shares Mag last week: "Tejwani, who fingers Debt Free Direct as a potential consolidator, earlier this week put a 100p take-out value on Debtmatters."....fulShares Mag article on DEBT: Thursday, October 4, 2007 IVA downgrades Investors are being warned to brace themselves for earnings downgrades from Individual Voluntary Arrangement (IVA) providers Debts.co.uk (DETS:AIM) and Debt Free Direct (DFD:AIM). This follows Monday's dire trading update from Debtmatters (DEBT:AIM). Debtmatters warned it 'may no longer be able to deliver IVAs profitably.' A strategic review is underway and management admits a sale is being considered. This follows a continued tightening in terms from borrowers who object to fee levels taken by IVA providers. Roger Tejwani, analyst at Debt Free Direct's house broker Numis, says: 'We flag the downgrade potential at November's interims.' Meanwhile, Gerald Farr of Debts.co.uk's broker Seymour Pierce warns 'revenue numbers are probably a little high' for the £16 million cap. Debtmatters plunged 70% on the day of its profit warning and has since fallen further to an all-time low of 16.75p. Tejwani, who fingers Debt Free Direct as a potential consolidator, earlier this week put a 100p take-out value on Debtmatters. Shares says: Debt Free Direct and Debts.co.uk will eventually recover. Debtmatters offers a take out opportunity. SK HOLD Debt Free Direct, Debts.co.uk BUY Debtmatters |
Posted at 08/10/2007 02:57 by welshwiz P.b"The market normally gets valuaton right" Shares i bought that the big boy's sold for peanuts: corus,ashtead,spiren I havent been as excited for the fundamentals of a stock to be so out so kilter with its share price for some time.Whether its a quick sale for anything between 40-70p or a total re-organisation of the company for far higher gains i am not sure at this stage. Other skeleton's in the cupboard?Directors buying recently and the general good management record to date leads me to believe very unlikely. Future cash flow and the strength and main asset of Loanmakers mean's that Debt can re-brand and re-organise fairly swiftly and if debt managment only generates a small amount of profit Debt will be producing profits of at least 3mil without the iva business which isnt proven to be un-workable as yet. My hope it is the former(at the moment) as i hope to re-invest the proceeds into Ros(a stock that i have held for approx 3 years that i would recommend to no one other than believers in the management)who are a totally different kettle of fish and require more than the average amount of patience. If my posts have maligned you un-fairly then i apologise.I would hope in future though that you think before you post otherwise you are perceived as being un-truthfull and misleading. w.w Note:merrill Lynch(Blackrock) have been the only notifiable seller. Their track record especially of late hasnt exactly been exactly convincing. rsi of 10 or below is way oversold and is begging to be bought ;-) siesta time.... |
Posted at 25/12/2004 22:32 by dutch alert Sometimes I come across something that I find very interestingLiquidity/Rollover Risk on US Assets? A Nightmare Hard Landing Scenario for the US $ and the US Bond Market.. One of the most typical and common features of currency and financial crises in emerging market economies is "liquidity" or "rollover" risk. If a country has a large amount of short term debt that is coming to maturity and investors are unwilling to roll over (refinance) such debt, then a liquidity or debt rollover crisis may occur. The debt coming to maturity is usually the foreign currency (or foreign currency-linked) debt of the government (as the infamous Mexican Tesobonos in 1994) or the short-term foreign currency liabilities of the banking system (as the $20 billion plus of short-term cross-border inter-bank lines in Korea in 1997). Similar liquidity or rollover crises (also referred to as roll-off crises as investors roll off rather than roll over their claims) have been observed in every emerging market economy crisis in the last decade (see Chapter two of my new book with Brad Setser). Thus, as the US economy currently looks like the biggest and most leveraged emerging market of all, the legitimate question emerges of whether the US could be subject to such a liquidity run or rollover crisis. At first, the answer to such a question would appear to be negative for the following reasons: rollover risk is high if the short term liabilities are in a foreign currency and the country has limited short-term foreign assets to service such liabilities in case the foreign investors are unwilling to rollover their claims. In the case of the US instead, its domestic government debt is in local currency; thus, even if the US were to be subject to a roll-off crisis (investors rolling off rather than rolling over maturing Treasuries), it would not need to use scarce forex reserves to service its foreign debt; it could just print dollars to do that (and/or sharply increase interest rates). And indeed, it is highly beneficial to be a country not subject to "original sin" and the ensuing "liability dollarization"; lucky those who can borrow in their own currency and who are also reserve currencies. But things get a little more complicated when one scratches the surface of the issue. Even if a pure rollover crisis can be averted if the short-term claims of the government are in local currency as the country can always print local currency to finance such a run, the consequence of such monetary financing of a roll-off crisis would be a surge of liquidity that would lead to a sharp fall in the currency value. So, you can avoid a rollover crisis by printing money but you then exacerbate the currency crisis. Avoiding a severe currency crisis then becomes unfeasible for two reasons: first, the US does not have much forex reserves and thus could not deal with a free fall of the dollar via unsterilized forex intervention. Second, in this roll-off scenario an attempt to increase domestic interest rates to stem the currency run would not work as it would require a Fed open market sale of treasury bills: but given the roll-off crisis, foreign investors in US Treasuries are exactly wanting cash (and exiting $ assets) rather than T-bills and thus such a open market operation is effectively unfeasible (unless one spikes massively interest rates, something we will discuss later). Thus, a rollover crisis would take the form of a very sharp dollar fall as little could be done to stop it. Now, you may wonder what are the chances of a rollover crisis in the US? Again, one of the lessons of past financial crises is that once investors start to lose faith in a country's currency and its assets, they want to keep the maturity of their holdings of local assets as short as possible to be able to run if a crisis is incipient (see again the case of the Mexican Tesobonos or the Turkish case where foreign investors placed funds in very short dated local currency government bonds). It is indeed the deadly combination of fiscal deficits, large short-term debt and low forex reserves that triggers a currency run and/or a rollover run. So, what is the maturity of the US government debt and how has this maturity changed over time? We know that a larger fraction of the US Treasury auctions have been recently placed among foreign investors (and 51% of all US government debt is now held by foreigners, an historic high). We also know that foreign central banks hold their reserves in relatively liquid and short term Treasuries as they traditionally prefer short-term assets with limited market risk (i.e. with little risk that changes in long-term interest rates will trigger large capital losses on holdings of long dated-assets). We also know, from official Treasury data that the average maturity of US government bonds has sharply fallen in the last few years. In the late 1990s, when our budget deficits were turning into surpluses, the average maturity of issuance of Treasuries (i.e. the marginal maturity of newly issued debt) went up from about 50 months in 1994 to almost 90 months in 1999; and the average maturity of the total stock of debt thus increased from about 60 months in 1994 to about 70 months in 2000. But since 2000, things have radically changed: the average maturity of issuance fell from 90 months in 1999 to about 25 months by the end of 2002 to then recover only very modestly to to 34.2 by September 2004 (a much lower figure than its value in the 1970s, 1980s and 1990s) while the average maturity of the total debt has fallen from about 70 months in 2000 to only 55.1 in September 2004. How to explain such a sharp fall in the average maturity of the US government debt? Of course, with the sharp fall in short-term rates relative to long-term rates in 2001-2003, Treasury found it cheaper to finance itself short term rather than long term. But of course, if the expectations hypothesis holds, there is no free lunch here as long rates reflect expectations of future movements in short rates. More seriously, Treasury has tried to limit the short run fiscal costs of the growing budget deficit by reducing the maturity, and thus the interest bill, of government debt. But, as the experience of Mexico in 1994 suggest, this is a dangerous debt management strategy: issuing lots of cheap short-term debt may seem a bargain but if a rollover crisis then does occur serious trouble can ensue. Also, it is clear that one of the main reasons for the shortening of the US debt maturity is given by the identity and preference of the holders of this debt: since foreign central banks prefer to hold short-dated maturities in part because short term debt can be disposed of more quickly when necessity or preferences so require, the US Treasury has had to oblige and provide the assets, short dated T-bills, most preferred by foreign investors. Note also that (based on Treasury data), by now 51% of all US government debt is held by foreigners and at least 29% of all US foreign debt is held by foreign central banks. These figures are very large and historical highs for the US. So, what is the risk of a rollover crisis for US Treasuries? The official conventional wisdom is that such a risk is close to zero as the US has the largest, deepest and most liquid government bond market in the world. That is true but things are a little more complicated. Since the average maturity of US public debt is now less than 5 years (precisely 55 months), in the next few years the US will have to roll over every year hundreds of billions of government bonds that are coming to maturity (about $500 billion in 2005, rising to about $800 billion by 2009 and closer to a trillion by 2014). On top of this large refinancing of the existing outstanding maturing debt stock, the US will every year have additional net borrowings from the bond market equal to the US fiscal deficit. That fiscal deficit was $412 billion in fiscal 2004, is bound to be almost as large (based on the data of the first two months of fiscal 2005) in 2005 and could be as large as $1,134 billion in 2014 in a sensible and realistic scenario (the Bush tax cuts are made permanent, the AMT is fixed, discretionary spending grows at the rate of nominal GDP and 2% of payroll taxes are diverted to private accounts in a partial Social Security privatization). So, next year the US will have to rollover over and borrow over one trillion dollar of US Treasuries and by 2014 that fiscal financing need could be as large as $2 trillion a year. So, while the chance of a full-blown debt rollover crisis are now still small, it is enough that domestic and foreign investors decide to reduce the rate at which they additionally accumulate US Treasuries in their portfolios to have a serious financing problem that would spike interest rates and push the dollar sharply down. Note that, since 2001, net holdings of US Treasuries by US residents have been effectively flat. So, almost all of the net increase in US government debt held by the public has been absorbed by foreign investors (and increasingly foreign central banks). If such investors were to expect a continued depreciation of the US dollar, the expected capital losses on their holdings of Treasuries would be massive. Even a 10% nominal depreciation of the trade-weighted US dollar implies losses as high as $200 billion for foreign holders of US Treasuries. Thus, it is not far fetched to expect that non-residents may want to reduce the rate at which they accumulate US assets and US Treasuries in their portolios. If that were to happen, the dollar would sharply fall, US short, medium and long term interest rates would increase sharply and even the risk of a debt refinancing rollover crisis could not be ruled out. This is part of the "balance of financial terror" that Larry Summers has been referring to. The US is now hostage to the "kindness of strangers" (foreign central banks and foreign investors) for what concerns its ability to finance its fiscal and current account deficits. And, as discussed in previous blogs of mine (here and here) and of Brad, there are good reasons to believe that foreign investors will soon tire of financing the US at these cheap rates if we continue our reckless fiscal policies. When will this hard landing of the dollar and bond market occur? If the administration fiscal policy goals are aggressively pursued in 2005, there are increasing chances that such hard landing nightmare scenario may occur in 2005 or, at the latest, in 2006. Is this nightmare scenario far-fetched and too pessimistic? No, if you look carefully at the data, at the US financing needs and the dangerous combination of fiscal and external imbalances, reckless fiscal policy and reckless public debt management (extreme shortening of the maturity of public debt). Again, the lesson of past emerging market crises is that desperate governments start to play accounting games and try to shorten the maturity of their public debt as a way to reduce the interest cost of increasing fiscal deficits. Such maturity shortening is very dangerous as it increases liquidity/rollover risk in exchange for very short-term financing costs benefits, a most dangerous game to play. The same reckless financing policies are currently followed by the US. And the fact that the US can borrow in its own currency rather than in a foreign currency does not qualitatively reduce the risk of a debt rollover crisis: in that case the US may print dollars rather than formally default on its debt (as it would have to if its debt were in foreign currency given the lack of forex reserves to service it) but such monetary financing would be highly inflationary and would lead to a further nasty fall of the US $. In the best scenario, the US would still be able to keep on financing itself, in the middle of a debt rollover crisis, by sharply increasing short term and long term interest rates. That however would imply a severe recession in the US and the global economy. Am I alarmistic or unrealistic? No if you consider how our reckless fiscal and public debt policies, the absence of adult policy supervision in Washington and mediocre or inexistent US economic policy leadeship will soon lead us to what I referred before as the "Upcoming Twin Financial Train Wrecks of the U.S." You have been warned here first.. |
Posted at 18/6/2004 14:53 by energyi Philip Coggan: Mood swings By Philip Coggan Published: May 18 2004 11:13 | Last Updated: May 18 2004 11:13 How does sentiment affect financial markets? And can investors, by their understanding of such effects, anticipate market movements? For a long time academics were dubious about the idea that sentiment moved prices at all. They developed the idea that markets were "efficient" to the extent that prices reflected all the known information about an asset. While events such as the South Sea Bubble might have occurred in the past, this was put down to the lack of freely available information. Although academics did not rule out the idea that individual investors might be irrational, they believed rational investors would swiftly put them out of business. But a whole school of thought, dubbed "behavioural finance", has grown up to question these assumptions. First, it may be impossible for rational investors to impose their will. Regulators often impose restrictions against short-selling and other methods of speculating on price falls; this can give an upward bias to prices in the short term. The scope for speculating on falling prices may be limited by the availability of credit. As Keynes once said: "Markets can remain irrational longer than you can remain solvent." Furthermore, investors can be prone to a whole range of psychological flaws that may cause prices to depart from fundamental levels. Among those flaws are overconfidence about an individual's ability to analyse evidence and predict price movements; confirmation bias, in which investors look only at the evidence that backs up their views; and anchoring, when investors become fixated on a particular number (such as their buying price). The model of speculation developed by Hyman Minsky postulated a number of stages in a bubble. The first was some sort of displacement such as the end of a war or the adoption of an invention. That creates profitable opportunities, which will in turn be financed by easy credit. The initial profits give rise to euphoria as other investors are drawn in. This euphoria will lead to overtrading, as some speculate on the "greater fool" theory that others will always be willing to buy at a higher price. This speculation will usually be financed by borrowing. At some stage a few investors decide to sell. Prices lose momentum, then begin to fall as more investors realise the boom cannot last. The sell-off becomes a stampede. As bankruptcies occur, the final phase is revulsion as investors cease all desire for the asset concerned and banks become unwilling to lend against it. This gives us an idea of how a bubble develops and subsequently bursts. How do individual bubbles fit into this system? The dotcom era provides a good example. The displacement that occurred was the widespread use of the internet. Easy credit was available in the form of low interest rates, a plentiful supply of venture capital and a willing market for technology new issues. Speculation clearly developed as retail investors were drawn in to "day trading" and companies were floated with little evidence they could make profits or even earn significant revenues. The initial sell-off in March 2000 led to a three-year bear market that ended with some signs of revulsion as insurance companies drastically cut their equity holdings. Does the buy-to-let market in UK residential property fit the bill? It is hard to see what the "displacement" was that started the trend, unless it was investors' disillusionment with the traditional financial sector after the pension mis-selling and other scandals. However, credit has certainly been easy and there are signs of traditional investor traits, such as overconfidence in the ability of individual homeowners to escape any crash and anchoring on the nominal, rather than real, burden of repayment. There is also evidence of "overtrading". According to Commerzbank Securities, rental yields are at an all-time low of 3.7 per cent. Since this is below the cost of finance, it implies that buy-to-letters are investing purely in the hope of capital gain - the "greater fool" theory in action. That does not tell us, however, when or how the bubble might burst. Analysts of past bubbles have often found it particularly difficult to isolate a catalyst that brought the process to an end. There is no universal agreement on the causes of either the 1929 or the 1987 crashes, for example. The presence of "greater fool" buyers indicates, however, that the UK housing market, like a shark, must keep moving forward if it is to survive. Once the speculators start to give up hope of future capital gains they will be forced to exit the market. That suggests the widespread hope of a "soft landing" for the housing market, in which price rises will gently subside to zero, may be an illusion. It is certainly hard to find bubbles that have ended that way in the past. |
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