Jtc Share Discussion Threads

[haughtonhoney] 11/7/2018 08:19

Financial positionThe Company remains in a sound financial position. Net debt at the end of this financial year is expected to be about GBP740m........it's a funny old world.

[aleman] 11/7/2018 08:00

USA firing on all cylinders? Bricks and mortar retail is doing worse. Restaurant footfall has been falling for 3 years and cinemas have been doing poorly for about a year until "Incredibles II" was released. Harley Davidson sales have been falling sharply. Car sales have been down slightly.despite record manufacturer "incentives". Credit card defaults have been rising sharply. Student loan delinquencies have been rising. Mortgage rates have risen and housing market sales volume has been easing (often a precurser to prices starting to fall as we've seen in the UK). Ad revenue trends had turned mixed. Airline margins slumped. The USA looked to be showing early signs of going into recession like the UK until Trump's tax cuts - they just postpone the day of recking and probably make it worse due to the need to pay back the money borrowed.


The Fed suggested the yield curve was no longer working well as a predictor last time and decided to ignore it - that turned out well didn't it?





Tim Martin comments on Europe again, in a way our media refuse to:

[homebrewruss] 11/7/2018 06:31

'Replace yield curve as a recession predictor? The FED considers an alternative' :

[mattjos] 10/7/2018 23:26

Thanks Aleman for your commentary ... whilst I do hope for the best, my instincts are the opposite.Gold is not yet signalling near-term fear but, June & July usually weak months .. I am watching to see how Gold shapes up in August and if that gives another early warning of events in the Autumn.My business experience still shows the USA economy firing on all cylinders .. Europe better than 3-5 years ago & UK rather treading water. First thing I look for is our blue-chip customer base requesting to Hire rather than Buy our machines.. that has previously heralded problems ahead. This year has seen the very early signs of that appearing here in the U.K. Still very small signal but, I've noticed it over last 3-4 months so am now more alert to it. Where will the tipping point be, seems a question on many lips right now but, in the absence of any definitive problems, the party goes on.

[aleman] 10/7/2018 22:48

A year or two ago stockmarkets, commodities, property prices and consumer price inflation were all rising - probably a little too quickly. They've all been brought to heel so policy is .... keep on raising and add in further tightening with QT!

And here's a 5-30 spread in the swap market that has already inverted, though it does not seem to predict recessions as well as the Treasuries curve:

[mattjos] 10/7/2018 22:35

Aleman .. the whole yield curve obsession .. have we ever before witnessed an end to QE & a shrinking of the Fed Balance Sheet, coupled with rising rates? The obvious answer is no, we have not.Faced with such uncertainty, is not an inevitability that fear of this confluence of events would cause yield curve to act as it is now doing but, does it necessarily follow that we are approaching the door of the next recession?It's not clear to me that is the case ... I admit there appears to be a likelihood but, certainly not a nailed-on certainty. This is all uncharted territory but, dragons are not always present in unmapped areas. However, I do think we'll know the answer by October/November this year

[aleman] 10/7/2018 22:21

The middle of the US yield curve, as measured by the 2-10 spread continues to hover near its low since the last recession, at +0.28%. The longer end, as measured by the 5-30 spread, continues to flatten alarmingly, at a new low of +0.21%, down from +0.25% a week ago and +0.98% a year ago. You can watch how the US curve has flattened over the last year here:

[captainfatcat] 10/7/2018 16:30

The seabed that is fished (trawled) in my area essentially looks like a underwater ploughed field any obstruction to the trawls ie wreckage that might foul the nets that is avoided is like a underwater oasis and teaming with life.

[jtcod] 10/7/2018 14:42

hTTps://youtu.be/P3SsM1RYdI4Lol

[mount teide] 10/7/2018 14:33

Thames Sea Bass anglers - professional and amateur - would confirm there is 80 years of evidence to support the view that these type of structures create a natural haven for sea life.

Some of the best Sea Bass fishing in the country is to be found in the crystal clear waters of the deepwater channels in the outer Thames Estuary, close to the legs of the Red Sand and Shivering Sand Towers - Second World War Naval Sea Forts off the North Kent coast.

The strong tidal currents rushing past the large legs of these structures act as a magnet for sea life and particularly small fish trying to get out of the strong tidal flows, only to find huge numbers of large highly conditioned sea bass prowling in wait for the unwary.

In the Sea Angling world a 10lb sea bass is considered a fish of a lifetime - a sadly now departed 'Sea Angler' and 'Shooting Times' journalist, who like a friend and i, regularly targeted these locations for Sea Bass in small high powered craft in the summer months, using light sport tackle with a free-lined live mackerel bait - stopped counting the number of fish he caught over 10lb one year at around 143 after he could't remember where he'd got to(all the fish were returned alive to fight another day - Sea Bass are one of the strongest fighting, slowest growing fish in our seas to reach maturity).

[jtcod] 10/7/2018 14:05

Much like the reports on the need for housing Aleman. Try getting an unbiased report there. :-)

[aleman] 10/7/2018 13:58

Shipwrecks have often been seen to increase biodiversity but we could take that principle to far. Why not just chuck all our rubbish in in the sea! It could have merits. If only we could debate such things rationally - and perhaps even do small well-monitored public trials - without vested interests filtering evidence and hijacking the debate.

[jtcod] 10/7/2018 13:33

Haha I wonder who paid for this marine wildlife report? :-)hTTps://www.bbc.co.uk/news/science-environment-44726346

[jtcod] 10/7/2018 13:23

I agree CFC its an incredible achievement particularly given the inexperience and young ages of those being saved.

[captainfatcat] 10/7/2018 13:18

JTC I think it is just an outstanding achievement even finding them let alone getting them out. I have done a bit of diving the past in some pretty grim zero vis conditions but would never consider going underground its just so incredibly dangerous.

[jtcod] 10/7/2018 13:07

All 12 boys and coach rescued safely. Their families must be so relieved.hTTps://news.sky.com/story/live-mission-begins-to-rescue-last-four-boys-from-thai-cave-11431632

[aleman] 10/7/2018 11:16

Media are tending to spin the May GDP figure as positive and suggesting an August rate rise but I disagree.

Construction, Manufacturing and Production were all negative Q on Q while Services were positive. We know the B of E and ONS have been disagreeing about the extent of the weather hit in March so they must disagree about the rebound from it. We also know that, since then, there have been a raft of retail CVAs with significant job losses and store closures that are now hitting commercial rents and property values. Domestic rents and house price rises have continued to slow and there is increasing signs of a global slowdown, amid turbulence in emerging markets, as short $ interest rates continue to rise and a trade war breaks out. I think it would be very unwise to link a slightly better monthly report, which comes with high error, to an increase in the Bank Rate by the B of E in August which could be significantly over-egging the pudding when previous rate rises still seem to having a significant decelerating effect and rising political uncertainties might suggest a pause or a cut rather than a rise. Flattening yield curves are also suggesting the central banks are overdoing things. Bond markets are asking for rate cuts.

[mount teide] 10/7/2018 09:28

The last week has confirmed beyond all doubt the return of Presidential Government with the titular head of Mrs May, but run by an executive of unelected Whitehall advisors.

Meanwhile political Ministers at the head of Departments are routinely sidestepped by the officials of the PM's Office. We saw this in the days of President Blair.

The issue now is not about BRINO but, whether the Government represents the people or whether they regard themselves as an arrogant, condescending ruling elite. A mindset that also routinely affects the House of Lords, and needs to be addressed.

If the latest polls of Conservative voters are a reliable guide (60%+ against May's BRINO stitch up), then i strongly suspect at the next general election they will teach the Conservatives a very hard lesson - that the will of the people does matter. This doesn't necessarily mean they will vote Labour - they just won't vote Conservative.


Independent sovereign nations do not collect taxes on behalf of foreign governments. Independent sovereign nations do not accept the jurisdiction of unelected foreign judges.
Independent sovereign nations do not swallow wholesale, rules made by unaccountable foreign bureaucrats.
Independent sovereign nations are at liberty to conclude free trade deals with any country in the world.

If President May and her boss Reich Chancellor Merkel, the Supreme Commander of the Armed Forces of the EU, gets their way, none of that will apply. Britain will still be subject to European directives, the rulings of European judges and largely unfettered taxpayer subsidised, low wage Eastern European immigration. That’s not Brexit by any stretch of the imagination.

[jtcod] 09/7/2018 11:57

There seems to be a growing level of justification of ‘covenant lite’ loans from bank friendly journalists in recent months.

Firstly, what are CL loans?
(From financierworldwide.com) “Generally speaking, a covenant-lite or ‘cov-lite’ loan is a type of borrower-friendly secured loan facility that lacks the usual protective covenants typically found in more traditional loan facilities, with limited restrictions on the debt-service capabilities of the borrower. The core feature of most cov-lite loans is the absence of financial maintenance tests, usually imposed in the form of covenants (i.e., ongoing obligations on the part of the borrower) in a loan agreement, which require the borrower to meet certain performance standards on a monthly or quarterly basis. In addition, these types of facilities may at times allow a borrower to undertake certain actions that are generally prohibited or restricted in most standard financing arrangements.”

The reason this subject is getting so many headlines is that Cov-lite loans have now reached 77% of leveraged loans in the US:


Here is an argument in defence of this trend:
“Michael Mackenzie’s article ( “Leveraged-loan market expands to become $1tn asset class”, May 8) asserts correctly that market growth has been accompanied by a weakening of credit terms (covenants). The orthodoxy that “covenant-lite” loans are uniformly riskier investments, and presage higher losses in the next downturn, belies the complexity of the asset class and recent experience.

The pre-eminent measure of credit risk is the financial metric of leverage. The data available suggest that net leverage for the covenant-lite group is converging to the levels of covenant-heavy issuers — currently 1x from 2.3x in 2012. The difference in leverage/credit risk between the two groups has not only moderated, but appears to be cyclical, not structural.

Moreover, covenant-lite issuer spreads in this cycle have traded inside the covenant-heavy group, indicating that covenant-lite issuers have received lighter deal terms precisely because they have been fundamentally sound. Additionally, covenant-lite loans have displayed a smaller propensity to default historically (albeit a short history) and realised higher recovery rates, as less restrictive terms helped issuers restructure their balance sheet in times of crisis.]

Focus on the rampant covenant-lite trend is likely to be obscuring the more pertinent issue at play — when covenants do exist, how much protection do they really provide? In particular, the resurgence of weak restricted-payment covenants have allowed
dividend recapitalisations to divert capital to equity holders at the expense of creditors.

A covenant-lite loan isn’t necessarily riskier just because it is light on covenants, and it will not be the single determinant of losses in the next credit downturn. Other relevant considerations such as the quality of the capital structure, financial health of the enterprises, and the ability of the sponsor to recapitalise the company are necessary to determine the riskiness of a loan.”


This is a persuasive argument on the face of it. However, my skeptical mind started flashing red lights as soon as I read the following sentence: “The orthodoxy that “covenant-lite” loans are uniformly riskier investments, and presage higher losses in the next downturn, belies the complexity of the asset class and recent experience.”

Those last 3 words are so convenient. Anyone with long-term experience in banking knows that the worst dislocations of the banking system always have roots going back many many years. It is precisely because the lending excesses have been allowed to continue unhindered for so long that financial crises occur. I knew as far back as 1997 that RBS had a serious problem with their lending culture. In the SME sector their lending practices were off the charts even at that early stage. I was so concerned at the time that I warned people of the risks of relying on this bank for their exclusive financial well-being. As I say it always starts way-back.

The argument above defending Cov-Lite lending growth is like so many arguments that fool people. They are made up of lots of little half truths that hide one big lie. The lie in this case is that it is somehow positive that banks are relaxing their underwriting rules because the customer must be more worthy of trust. Relaxing the ‘tried and tested’ underwriting rules of banks is NEVER good in the long run. The reason banks have established those rules is precisely because experience has proved they needed them to survive bad times. A Bank’s very solvency stands on fractions rather than the whole. 5% bad debt or even 3% will knock it like a skittle. The rise and rise of Cov-Lite debt is a sure sign the banks have been chasing business and willing to compromise their standards in order to achieve their targets. This is exactly what happened with sub-prime. It’s roots were in the mid 1980’s when consumer credit scoring came in. The early adopters found that lending terms could be tailored to hitting their growth targets. It freed the head office from branch managers making conservative decisions based upon customer interviews. As the targets grew the further relaxation of sub-prime terms were used as the bulwark to hit lending targets. Then they parcelled them up in tranches to disguise the lending weakness for people who had no understanding of underwriting practice. Because it was based upon consumer property it was under control up until houses prices faltered. The rest as they say is history. The Cov-Lite book will probably be fine up until corporate earnings falter.

[mount teide] 09/7/2018 11:54

David Davies had been completely sidelined and was being used by the duplicitous May to legitamise the direction the fanatical Remoaners and her Whitehall civil serpent 'Cabinet' were taking this complete capitulation.

His good advice has deliberately been ignored all along - he has has a total of just 4hrs of meetings with Barnier THIS YEAR!

His leaving has exposed the truth, that it was May and Hammond's treacherous plan to give in to the softest of Brexit's they thought they could get away with.

Evidenced by her meet with Merkel BEFORE this 'cabinet' meeting.

Who's side does she think shes on? There appears to have been huge collusion between the German run EU bureaucracy and our civil service. May has a lot to answer for - the passage of time has shown the reins of Brexit in Government should never have been handed to those who did not want to leave under any circumstances.

[blusteradjuster] 09/7/2018 10:51

New homes in suburban England would need to be fitted with electric car charging points under a government proposal to cut emissions.

Ministers also want new street lights to come with charge points wherever there's on-street parking.

Details of a sales ban on new conventional petrol and diesel cars by 2040 are also expected to be set out.

The strategy comes at a time when the government is facing criticism for failing to reduce carbon emissions.

The government's target is to reduce the UK's greenhouse gas emissions by at least 80% of 1990 levels by 2050.

[blusteradjuster] 09/7/2018 10:30

Another one caught.



Nissan has admitted that it has uncovered falsified data from car exhaust emissions tests at most of its Japanese factories.

The firm did not disclose how many cars were involved, but said emissions and fuel economy tests had "deviated from the prescribed testing environment".

The carmaker added that inspection reports had been "based on altered measurement values".

Nissan pledged there would be a "full and comprehensive investigation".

It added that "appropriate measures" would be taken to stop any future recurrence.

Nissan's shares fell more than 4.5% on Monday after the company alerted investors that a statement on exhaust emissions was imminent.

Last year, Nissan recalled 1.2 million vehicles in Japan after regulators said safety checks did not meet domestic requirements.

A subsequent investigation into why its safety inspections did not meet government standards has now led to the latest revelations.

The admission by Nissan comes after a huge scandal involving diesel emissions test cheating by Germany's Volkswagen.

Last month, VW was fined €1bn (£880m) by German prosecutors for selling more than 10 million cars between mid-2007 and 2015 that had test-cheating software installed.

[mount teide] 09/7/2018 09:45

Rees-Mogg turns the knife on May, slicing up her disingenuous Brexit in name only plan with the skill of a consultant surgeon.

Including the use of a brilliant analogy in an interview with Sky News: “David Davi's resignation is very important. It raises the most serious questions about the PM's ideas.”

Comparing her deal to an egg so softly boiled that it “isn't boiled at all”, he added: “A very soft Brexit means that we haven't left, we are simply a rule-taker.”
“If the proposals are as they currently appear, I will vote against them and others may well do the same.'

The Chequers deal was “the ultimate statement of managing decline”, he claimed, adding: “It focuses on avoiding risk, not on the world of opportunity outside the EU.

“Pragmatism has come to mean defeatism.

“We seek a new and equal partnership. not partial membership of the European Union, or anything that leaves us half in, half out. We do not seek to hold on to bits of membership as we leave.

“Tying the UK to transcribing the EU rule book to the letter rather than agreeing shared results will leave large barriers to trade with the rest of the world.

“There is unhelpful ambiguity in the text which could lead to results that are the opposite of those implied by the briefings that have been given.

“For example, the conclusion boasts that free movement will end, whereas in fact the agreement could be used to open it up again.

“It proposes “a mobility framework so that UK and EU citizens can continue to travel to each other’s territories and apply for study and work”.

“The same unclear construction applies to the ending of ‘vast annual payments to the EU budget’.

“As Norway and Switzerland pay for preferential access, does this mean simply ‘large’ payments but not vast ones?

“If the Brexit Secretary cannot support them they cannot be very good proposals.

“It was an attempt to bounce the cabinet. It was a serious mistake.”