Growing Evidence That The Upturn Is Upon Us
Every monthly fluctuation in average house prices tell us little as there is so much background noise.
The broad picture is amply illustrated by this graph:
The reductions in public spending and period of high unemployment are yet to come into play. Interest rated cannot remain at 0.5% either.
There are years of pain yet to come and so far things have been pretty mild.
Andy Harrison CEO of easyJet told me recently that he expects only three airline to post profits in the coming year. One of them was his, the other was Mr O' Learys and the third was Lufthansa.
I can believe that.
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The broad picture is amply illustrated by this graph:
The reductions in public spending and period of high unemployment are yet to come into play. Interest rated cannot remain at 0.5% either.
There are years of pain yet to come and so far things have been pretty mild.Andy Harrison CEO of easyJet told me recently that he expects only three airline to post profits in the coming year. One of them was his, the other was Mr O' Learys and the third was Lufthansa.
I can believe that.
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Nice chart....
The CMT's will say that £60 to £70K area is an easy eyeball first price target........
Yes they will go lower.....
The CMT's will say that £60 to £70K area is an easy eyeball first price target........
Interest rated cannot remain at 0.5% either.
Last edited by cjd_a320; 8th Jul 2009 at 16:29.
I don't think they will go lower. I believe what the Bond Market says. UK IR's are going back to normality and then higher. 7% would be my estimate. Commercial lending being 7% + margin.
Inflation beckons. Those who are hurt by inflation vote. A lot.
The Baltic Dry is collapsing again. The price of a shipping container from Japan to West Coast USA have slumped by a third to less than £700 since March. The system is badly badly damaged.
This Winter will be bad. Winter 2010 will be horrific for airlines.
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Inflation beckons. Those who are hurt by inflation vote. A lot.
The Baltic Dry is collapsing again. The price of a shipping container from Japan to West Coast USA have slumped by a third to less than £700 since March. The system is badly badly damaged.
This Winter will be bad. Winter 2010 will be horrific for airlines.
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Inflation..... in a self liquidating & non-self-liquidating credit contraction.....Kind of goes againsts your asset deflation posts?
It takes a long, long time to work off a 75 year credit cycle impulse.. before inflation can even think about rising its head...
Curve ball of course for (uk based) is a sterling crisis, but we wont panic retail just yet....
)
It takes a long, long time to work off a 75 year credit cycle impulse.. before inflation can even think about rising its head...
Curve ball of course for (uk based) is a sterling crisis, but we wont panic retail just yet....
)
We could indulge in a long and protracted discussion about deflation vs inflation and I've done so on other forums several times and know the arguments backwards. Suffice to say I'm not persuaded strongly either way but I have a bias towards inflation. I just bought a Stihl Kombi System petrol strimmer and they jumped in price by 9% on 1st July. My wifes Ford Focus was subject to a 4% price rise in June on all of Fords products. The Mars Bar in the vending machine at work is unchanged in price but now down to 27grams in weight.
I see asset deflation in houses. Inflation everywhere else.
But that would be a little too esoteric a discussion for this thread on this forum.
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I see asset deflation in houses. Inflation everywhere else.
But that would be a little too esoteric a discussion for this thread on this forum.
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Yes we on the same page about inflation, just a question of time frame....
Of course you will see disparities between sterling & non sterling denominated core goods as you pointed out with your examples. Over all if we don't not have a significant Sterling correction againts the Major pairs then delfation is the primary driving force.
Its just good to see you pointing out some economic realities wannabes want to ignore.....
Of course you will see disparities between sterling & non sterling denominated core goods as you pointed out with your examples. Over all if we don't not have a significant Sterling correction againts the Major pairs then delfation is the primary driving force.
Its just good to see you pointing out some economic realities wannabes want to ignore.....
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The following chart from FlightGlobal shows aircraft orders up to the first half of 2009.
After cancellations Boeing have a net order of just 1 aircraft and Airbus 68.
Full article: Airbus and Boeing see orders collapse as deliveries hit record levels
After cancellations Boeing have a net order of just 1 aircraft and Airbus 68.
Full article: Airbus and Boeing see orders collapse as deliveries hit record levels
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Nationwide offers 125% mortgage
The Nationwide Building Society has introduced a mortgage allowing borrowers to take loans worth 125% of the value of the home they are buying.
BBC NEWS | Business | Nationwide offers 125% mortgage
A return to the bad old days?
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Your grasp of economics and the finanancial markets is impressive.
Presumably, armed with such foresight and knowledge, you are now fabulously wealthy, having played the markets like a true master of the universe?
Your grasp of economics and the finanancial markets is impressive.
Presumably, armed with such foresight and knowledge, you are now fabulously wealthy, having played the markets like a true master of the universe?
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Aircraft entering into the storage facilities in Az, Ca, Nm are not all retirements. Often these are placed into storage by the operators or lessors (asset owners) as economically that is the most appropriate implementation for them at this time.
In respect of retirements an aircraft is only retired when the data plate is cut off. That's it it will never fly again.
The decision to retire an aircraft is dependent on the type, the accumulated parts value its maintenance status and return to service considerations.
Often, it is the case that the lessor is better off to place the aircraft into storage and keep the write down on the asset, especially when there is little prospect of placing the aircraft onto contract at terms that are financially viable.
Yes there are aircraft going into storage, and yes retirements are occurring, though the retirements we have been working on are subject to maintenance status and recoverable parts values.
Likewise with the property market, many aircraft were bought at high values which are not achievable right now.
The Exec jet market is hurting too, there are a lot to choose from with both listed and un-listed aircraft. Its getting worse.
Right now i am seeing some very attractively priced assets for disposal, however, the financial capacity to fund acquisitions is not available.
In respect of retirements an aircraft is only retired when the data plate is cut off. That's it it will never fly again.
The decision to retire an aircraft is dependent on the type, the accumulated parts value its maintenance status and return to service considerations.
Often, it is the case that the lessor is better off to place the aircraft into storage and keep the write down on the asset, especially when there is little prospect of placing the aircraft onto contract at terms that are financially viable.
Yes there are aircraft going into storage, and yes retirements are occurring, though the retirements we have been working on are subject to maintenance status and recoverable parts values.
Likewise with the property market, many aircraft were bought at high values which are not achievable right now.
The Exec jet market is hurting too, there are a lot to choose from with both listed and un-listed aircraft. Its getting worse.
Right now i am seeing some very attractively priced assets for disposal, however, the financial capacity to fund acquisitions is not available.
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goods inflation is definietly on the cards for the next 12 months or so - in the retail head office i currently work in we are increasing prices across the board next year.
VAT likely to be returning to 17.5% (VAT reduction has been the biggest joke - 99% of retailers increased their prices after 3 months and have been pocketing the 2.5% difference thank you very much) but this has meant they are going to increase prices next spring summer to countinue the profit growth they have had from the VAT. Also poor $ exchange all means that retailers are have profit margins squeezed next spring summer seasons - standby for price hikes and inflation (80% of goods from China, paid for in $)
But perhaps the goverment wants inflation with the amount of money they have been printing (debt) that debt will now be worth less in real terms? perhaps an economist can clear that one up for me, I am just a wannabe CPL!
VAT likely to be returning to 17.5% (VAT reduction has been the biggest joke - 99% of retailers increased their prices after 3 months and have been pocketing the 2.5% difference thank you very much) but this has meant they are going to increase prices next spring summer to countinue the profit growth they have had from the VAT. Also poor $ exchange all means that retailers are have profit margins squeezed next spring summer seasons - standby for price hikes and inflation (80% of goods from China, paid for in $)
But perhaps the goverment wants inflation with the amount of money they have been printing (debt) that debt will now be worth less in real terms? perhaps an economist can clear that one up for me, I am just a wannabe CPL!
High inflation does erode the debts of those most heavily in debt in society which are people in their 30's and 40's with large mortgages and in paid employment. A few years of 8% inflation can make those mortgage debts shrink. The retired on fixed pension incomes would be much less happy.
However, broadly the retiring generation are in a much better financial position than their children so perhaps a transfer of wealth is in order. Unfortunately the older generation vote more often so this is politically difficult.
There has never been an example in a developed currency whereby printing money did not result in galloping inflation which usually needs constraining with high interest rates. Unfortunately the UK along with much of the West is in a least-worst scenario where all the options are pretty horrible.
Bottom line - the market needs not so many airline pilots as it once did.
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However, broadly the retiring generation are in a much better financial position than their children so perhaps a transfer of wealth is in order. Unfortunately the older generation vote more often so this is politically difficult.
There has never been an example in a developed currency whereby printing money did not result in galloping inflation which usually needs constraining with high interest rates. Unfortunately the UK along with much of the West is in a least-worst scenario where all the options are pretty horrible.
Bottom line - the market needs not so many airline pilots as it once did.
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But perhaps the goverment wants inflation
They do want "monitorization" of debt. However like with any other large scale government "Projets" ... It makes the Deflation out look even stronger.
Money supply shows that "paper" is still being vaporized as soon as its coming of the press and will continue to do so for a long, long time...
Sadly we're in this for the long haul and it will have a devastating effect on aviation for years to come...
Last edited by cjd_a320; 10th Jul 2009 at 12:41.
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Sadly we're in this for the long haul and it will have a devastating effect on aviation for years to come... 
I am currently a student at *********** UK, I I have passed numerous assessments and currently hold a Private pilots license. However I am only 2 months into my course and have been told by Barclays bank that they will no longer fund it.
(There not funding it, you are with debt)
There is alot of security, in the way of life insurance, loss of medical license, loss of flying license insurance, as well as a skills protection plan, which states that if i fail due to lack of ability they will repay the full course costs.
I have done extremely well in my first set of exams. Upon completion of the course I am a fully qualified airline pilot. My family has invested the additional 29,000 required to complete the course, I simply need a corporate sponsor or investor that can lona the short fall of £37,200. This can be repayed within 5 years with a negotiable interest rate.The starting salaries are around £28,000+ benefits, and can expect around 71,000 after 5 years.
This is the best aviation training school in the world, I hope that an investor will be able to invest in me, to allow me to finish this training and enter a very skilled profession, with good stability and highly payed salaries to pay back the loan plus interest.
Thank you very much for your time
REQUIRED AMOUNT: £37,200
MINIMUM INVESTMENT AMOUNT: £10,000
INVESTMENT REASON: Other
(There not funding it, you are with debt)
There is alot of security, in the way of life insurance, loss of medical license, loss of flying license insurance, as well as a skills protection plan, which states that if i fail due to lack of ability they will repay the full course costs.
I have done extremely well in my first set of exams. Upon completion of the course I am a fully qualified airline pilot. My family has invested the additional 29,000 required to complete the course, I simply need a corporate sponsor or investor that can lona the short fall of £37,200. This can be repayed within 5 years with a negotiable interest rate.The starting salaries are around £28,000+ benefits, and can expect around 71,000 after 5 years.
This is the best aviation training school in the world, I hope that an investor will be able to invest in me, to allow me to finish this training and enter a very skilled profession, with good stability and highly payed salaries to pay back the loan plus interest.
Thank you very much for your time
REQUIRED AMOUNT: £37,200
MINIMUM INVESTMENT AMOUNT: £10,000
INVESTMENT REASON: Other
What can I say, sand check, head check, bury head check......
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People are still in a form of Bubble psychology... Can't blame them really.
Its become accepted behaviour over the past 30 years, that if "things" come down or pull back it must be a good time to buy into. Fine during a credit expansion but deadly in a credit contraction.
We just need to work through this mini "bailout bubble" phase before the herd reaches its "point of recognition" of true economic reality....
Its become accepted behaviour over the past 30 years, that if "things" come down or pull back it must be a good time to buy into. Fine during a credit expansion but deadly in a credit contraction.
We just need to work through this mini "bailout bubble" phase before the herd reaches its "point of recognition" of true economic reality....
Last edited by cjd_a320; 10th Jul 2009 at 14:22.
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US economy 'may return to growth this year'
Recovery in the United States and other leading economies should herald a return to growth by the end of this year or early in 2010, Tim Geithner, the US Treasury Secretary said today.
In an upbeat message after talks with Alistair Darling in London, on the first leg of an international tour to Europe and the Middle East, Mr Geithner conceded that significant threats to the global outlook were still persisting.
But the Treasury Secretary said the foundations for an upturn in the US and elsewhere had been laid.
“I think the policies have been very effective in arresting, in mitigating the force of the storm and we’re starting to see a better basis for recovery starting to be made in the US.
In an upbeat message after talks with Alistair Darling in London, on the first leg of an international tour to Europe and the Middle East, Mr Geithner conceded that significant threats to the global outlook were still persisting.
But the Treasury Secretary said the foundations for an upturn in the US and elsewhere had been laid.
“I think the policies have been very effective in arresting, in mitigating the force of the storm and we’re starting to see a better basis for recovery starting to be made in the US.
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British Airways signals five year recovery for business class travel
The market for business class travel, which has been in free-fall since the start of the recession, could take at least five years to recover, the head of British Airways’ American operations has said.
Premium rate passengers, first and business class, have traditionally been BA’s lifeblood. But Simon Talling-Smith, executive vice president for BA in the Americas, said that with nearly 70 per cent of businesses slashing their travel budgets and with companies increasingly moving executives into economy class or relying on video conferencing instead of face to face meetings, airlines had their work cut winning back that business.
"BA’s view is that it will take quite a long time, potentially more than five years, before the full value of the business market returns," he said.
"Right now [businesses] are putting more people into economy class. Our business and first class business volumes have fallen by around 15 per cent, but economy volumes have fallen by about 1 per cent [for the six months to June 2009]. One could reasonably guess that a certain number of business class customers are down trading to economy."
Premium rate passengers, first and business class, have traditionally been BA’s lifeblood. But Simon Talling-Smith, executive vice president for BA in the Americas, said that with nearly 70 per cent of businesses slashing their travel budgets and with companies increasingly moving executives into economy class or relying on video conferencing instead of face to face meetings, airlines had their work cut winning back that business.
"BA’s view is that it will take quite a long time, potentially more than five years, before the full value of the business market returns," he said.
"Right now [businesses] are putting more people into economy class. Our business and first class business volumes have fallen by around 15 per cent, but economy volumes have fallen by about 1 per cent [for the six months to June 2009]. One could reasonably guess that a certain number of business class customers are down trading to economy."
