Cable Forum - Changes on the High Street

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Re: Changes on the High Street

Quote:

Originally Posted by nomadking (Post 36043493)

NRs problem wasn't deposit-loan ratio. When they sold on the loan, it was not that different to the mortgagee repaying the loan, because they sold the house or took out a mortgage elsewhere. That mortgage was no longer on their books. If a loan has been repaid, it no longer figures in any deposit-loan ratio.

---------- Post added at 22:55 ---------- Previous post was at 22:52 ----------

People lie about their outgoings, and the capital was the property, especially with houses prices increasing. In the US, mortgage brokers were falsifying documents in order to "earn" commission.

I worked for a UK sub-prime lender (2003-2007, approx. £3 billion market cap) as Head of Technology, then for a year as IT Programme Manager for Barclays Capital - your interpretation is not congruent with actuality.

Quote:

With half a decade’s hindsight, it is clear the crisis had multiple causes. The most obvious is the financiers themselves—especially the irrationally exuberant Anglo-Saxon sort, who claimed to have found a way to banish risk when in fact they had simply lost track of it. Central bankers and other regulators also bear blame, for it was they who tolerated this folly. The macroeconomic backdrop was important, too. The “Great Moderation”—years of low inflation and stable growth—fostered complacency and risk-taking. A “savings glut” in Asia pushed down global interest rates. Some research also implicates European banks, which borrowed greedily in American money markets before the crisis and used the funds to buy dodgy securities. All these factors came together to foster a surge of debt in what seemed to have become a less risky world.

Start with the folly of the financiers. The years before the crisis saw a flood of irresponsible mortgage lending in America. Loans were doled out to “subprime” borrowers with poor credit histories who struggled to repay them. These risky mortgages were passed on to financial engineers at the big banks, who turned them into supposedly low-risk securities by putting large numbers of them together in pools. Pooling works when the risks of each loan are uncorrelated. The big banks argued that the property markets in different American cities would rise and fall independently of one another. But this proved wrong. Starting in 2006, America suffered a nationwide house-price slump.

The pooled mortgages were used to back securities known as collateralised debt obligations (CDOs), which were sliced into tranches by degree of exposure to default. Investors bought the safer tranches because they trusted the triple-A credit ratings assigned by agencies such as Moody’s and Standard & Poor’s. This was another mistake. The agencies were paid by, and so beholden to, the banks that created the CDOs. They were far too generous in their assessments of them.

tl:dr - the companies that were supposed to provide oversight and manage risk didn’t in the chase for profits and bonuses.

Re: Changes on the High Street

Another use for high streets

Quote:

Shops on the UK’s high streets could soon become retirement accommodation thanks to government plans to shake up the planning system, according to the head of the country’s biggest senior living provider.

McCarthy & Stone is looking closely at opportunities to buy up commercial property in city centres that it can turn into housing for its elderly residents, said John Tonkiss, the company’s chief executive.

https://www.ft.com/content/9d585476-...0-9755806e261a

Re: Changes on the High Street

Quote:

Originally Posted by 1andrew1 (Post 36043565)

Another use for high streets

https://www.ft.com/content/9d585476-...0-9755806e261a

They have a place in our City now where they replaced a leisure centre , trouble is many of the units in there are still up for sale now.

Re: Changes on the High Street

Quote:

Originally Posted by 1andrew1 (Post 36043565)

Another use for high streets

https://www.ft.com/content/9d585476-...0-9755806e261a

Middlesbrough Council have bought a shopping centre and a nice old building. They're looking at using some of the space for flats and turning the area into a little leasuire park.

Re: Changes on the High Street

Quote:

Originally Posted by cimt (Post 36043646)

Middlesbrough Council have bought a shopping centre and a nice old building. They're looking at using some of the space for flats and turning the area into a little leasuire park.

I like the idea of more council housing.

Re: Changes on the High Street

Pizza Express £1.1bn in debt. :confused:

https://www.theguardian.com/business...king-1000-jobs

Re: Changes on the High Street

Quote:

Originally Posted by jfman (Post 36043700)

Pizza Express £1.1bn in debt. :confused:

https://www.theguardian.com/business...king-1000-jobs

And they can’t blame Covid, they plunged to that figure by December 2018. That’s absolutely shocking. :Yikes:

Re: Changes on the High Street

Quote:

Originally Posted by jfman (Post 36043700)

Pizza Express £1.1bn in debt. :confused:

https://www.theguardian.com/business...king-1000-jobs

l was quite surprised they carried so much debt as some debt in itself is not a problem if a company can service its debt comfortably but it seems their problems go back quite a bit..

Re: Changes on the High Street

Quote:

Originally Posted by denphone (Post 36043702)

l was quite surprised they carried so much debt as some debt in itself is not a problem if a company can service its debt comfortably but it seems their problems go back quite a bit..

Debt in itself is not a problem but it’s hard to see how they ever thought they could service a pile that big. There have been some dreadful decisions made in that company.

Re: Changes on the High Street

Quote:

Originally Posted by Chris (Post 36043703)

Debt in itself is not a problem but it’s hard to see how they ever thought they could service a pile that big. There have been some dreadful decisions made in that company.

It shows how capitalism has become more about finance than the bread and butter of economics.

Den, you or I couldn’t get £1.1bn into debt selling pizza. We’d, individually or collectively, get laughed out of town.

Re: Changes on the High Street

Quote:

Originally Posted by jfman (Post 36043704)

My younger brother worked for a company called Palmer and Harvey for quite a few years who repeatedly said they were in decent shape financially but of course they were convenient with the truth and it went tits up 3 years ago.

https://en.wikipedia.org/wiki/Palmer_and_Harvey

Re: Changes on the High Street

Quote:

Originally Posted by denphone (Post 36043705)

Looks like they spent the noughties buying up businesses with other people’s money then couldn’t pay the bank back.

Re: Changes on the High Street

Quote:

Originally Posted by Chris (Post 36043706)

Looks like they spent the noughties buying up businesses with other people’s money then couldn’t pay the bank back.

Not business savvy myself but it seems it was a business collapse just waiting to happen.

Re: Changes on the High Street

Same end result as Carillion winning contracts it couldn't fulfill

Business eh, a risky venture if you push too far ;)

Re: Changes on the High Street

Quote:

Originally Posted by Carth (Post 36043711)

Same end result as Carillion winning contracts it couldn't fulfill

Business eh, a risky venture if you push too far ;)

With other people’s money. ;)

Not so risky.