Loans and Finance

Loans and Finance


News and information about loans, money, debt, finance and business issues.

Tuesday, October 06, 2015

China Bloody Good 6.8% Growth

The IMF has warned/advised China that it must consign its three decades of “extraordinarily rapid growth” to the past, if the economy is to avoid a hard landing.

The IMF is concerned that using debt-financed investment to boost growth is unsustainable.

Changyong Rhee, director of the IMF’s Asia and Pacific Department, warned of the “dangers of excessive leverage” that were highlighted by China’s recent stock market crash and the risks linked to using investment and credit to lift the economy.

As per the Telegraph:
Since the financial crisis, growth in China has relied heavily on investment and credit, with the biggest build-up of leverage going to state-owned enterprises, the real estate and construction sectors, and weaker corporates. This created growing vulnerabilities which — while still manageable — cannot continue to accumulate.”

That being said, the growth prospects for China (compared to the rest of the world) are still bloody good. The IMF believes China will expand by 6.8% this year and 6.3% in 2016 as the economy moves towards consumption-driven output.

Monday, October 05, 2015

£2BN Lloyds Spring Sale

The government will be offering ordinary investors bonus shares and a 5% discount, as part of the £2bn Lloyds share sale in Spring 2016. This will mark the final stage of Lloyds Banking Group’s return to the private sector.

UK Financial Investments, the Government's vehicle for holding assets acquiring during the financial crisis, has already cut its stake in Lloyds from 40% to less than 12% through a series of sales to institutional investors.

Members of the public will be given a 5% discount to the trading price, and one bonus share for every 10 shares they hold for more than a year - up to a maximum of £200 worth of bonus shares.

Priority in the sale will be given to individuals applying for less than £1,000-worth of shares.

Friday, October 02, 2015

#VWGate - Sales of 4,000 UK Vehicles Suspended

Volkswagen is suspending the sale of 4,000 vehicles in the UK in the wake of the emissions scandal.

It seems that the vehicles may be equipped with the device that cheated emissions tests in the US. This will affect vehicles across the VW group including the VW, Audi, Skoda and Seat brands.

In theory this is a temporary measure, until a technical fix is found.

Thursday, October 01, 2015

#VWGate - 1.18 Million UK Cars To Be Recalled

As the clusterfuck of #VWGate grinds on, it is now apparent that almost one in 10 diesel cars (ie 1.18 million) on the UK's roads may need to be recalled.
The Telegraph states that they are mostly passenger cars, including; 508,276 VWs, 393,450 Audis, 76,733 Seats and 131,569 Skodas, as well as 79,838 vans.

VW said it would contact owners over the next few days to correct the problem, and has set up an online portal where customers can check to see if their vehicles contain the emissions-rigging software.

The group said that it would present "technical solutions and measures to the relevant authorities" in October.

That's all very well and good. However, the sharp eyed amongst you may be pondering, if there really is a viable technical solution why was this not employed at the time thereby avoiding the need for wholesale global fraud?

There is a strong possiblity that if there is no viable solution, then the next best alternative for the consumer is to be given a replacement car that does actually meet emissions standards.

We shall see what the outcome really is. However, whatever the outcome, one thing is clear this is going to cost Volkswagon an arm and a leg!

Monday, September 28, 2015

#VWGate - Volkswagon Warned Not To Fix Test Results


Despite Volkswagon's Board ongoing claims that they knew nothing about the company's emission test fraud, Reuters reports that Volkswagen's own staff and one of its suppliers warned years ago about software designed to thwart emissions tests.

VW technicians had warned about illegal emissions practices in 2011. No explanation was given as to why the matter was not addressed then.

Separately, Bild am Sonntag newspaper said VW's internal probe had turned up a letter from parts supplier Bosch written in 2007 that also warned against the possible illegal use of Bosch-supplied software technology.

Cynics might ponder that the denials by board may have something to do with the fact the Winterkorn, and his soon to depart cronies all want to leave with their pensions and annual company car allowances intact.

Friday, September 25, 2015

#VWGate - Ignorance Is Bliss for Winterkorn

Martin Winterkorn

Those of you who worry about the future of Martin Winterkorn, now that he has been forced to quite as CEO of Volkswagon, should not fret.

Thanks to the fact that he "knew nothing" about Volkswagon's global emissions fraud, he will be entitled to walk away with a pension pot of around $32M. Also, and remember German's don't do irony, he will be entitled to a new company car every year!

Ignorance truly is bliss, for if he had known about the fraud (or the Board had admitted that he had known about the fraud) he would have been entitled opt none of the above.

Do remember that some/all of those board members who have allowed him the bliss of ignorance, will themselves soon be leaving with fat exit packages.

There's irony for you!

Thursday, September 24, 2015

#VWGate - Winterkorn Knew Nothing?

In the ongoing clusterfuck known as #VWGate, Volkswagen's chief executive Martin Winterkorn quit on Wednesday saying he accepted responsibility for "irregularities found in diesel engines". However, he claimed that he had not been aware of any wrongdoing.

As per Sky News, he said:
"I am shocked by the events of the past few days. 

Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group."
In the event that he really did not know anything about this, serious questions arise about the corporate governance within Volkswagon.

Software was purchased/developed that was designed to be used to fraudulently pass emission tests. The software had to be installed in cars in various countries. Both these actions/processes would have required executive approval and sign off.

Who signed off on this, and where are the records?

Volkswagen then spent a considerable time fencing with US authorities, when the data was first questioned by the US, trying to avoid admitting that it had committed fraud on a global level.

Were senior executives unaware that the US authorities were questioning the validity of the data? Somewhat unlikely surely?

I find it very hard to believe that the board knew nothing about this, if it genuinely did not know then VW's corporate governance sucks!

Wednesday, September 23, 2015

Greek Banks Are Fucked

Nothing at all surprising in this, it had been predicted (but ignored by the foolish) that the banks would need at least Euro20BN.

Volkswagon Is Fucked!

Volkswagon continues to implode, having admitted that 11 million vehicles worldwide could have been fitted with software which misled regulators. The United Nations said that the scandal was ‘deeply troubling’.

As various countries launch investigations into the Volkswagon fraud, shares in the company are now down 41% since news of the scandal broke.

Whilst the media are suggesting that this could be the end of the diesel car, there are suggestions that the fraud also relates to petrol cars.

At some stage the shares will represent a good trading opportunity (albeit for a dead cat bounce). However, the question is when will they hit bottom? 

Tuesday, September 22, 2015

Volkswagon Implodes

Volkswagon continues to implode, as now ROK will be investigating possible emission rigging results.

Monday, September 21, 2015

Tsipras Wins - Greece Loses

Tsipras is a canny politician, but a lousy financial leader of his country.

Friday, September 18, 2015

Private Education Is a Great British Export

Pueri Alleynienses!

Thursday, September 17, 2015

NS&I Interest Rate Notification Invalid

Margaret Thatcher To Feature On $10 Bill

Wednesday, September 16, 2015

UK Unemployment Down