Growing Evidence That The Upturn Is Upon Us
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So wrong on so many levels. I find it interesting that the last Tory chancellor, the amiable and eminently pragmatic Ken Clarke agrees with me that the UK banks need to quit their casino habit - or in his own words: "go back to being boring". Just one thing though - since he was in the government that deregulated the financial services sector, perhaps you should write to him suggesting that he should give some of his ill gotten gains to homeless charities.
Over here the left wants to blame it all on Bush, since it happened on his shift. The right wants to blame it on Obama (elected after the event) or on Rubin & Clinton who sat on their hands while Citi paid Phil Gramm (R-TX btw) to finish off Glass-Steagall. Naturally, the Daily Mail agenda is to blame it on the Islington Politburo because it happened on their shift, and after all, they did reshuffle the regulators to look more like a cozy focus group. I'm not giving any of the above a pass at all, but none of them are as personally responsible for either the idea or implementation of financial deregulation as their 80s predecessors. Of course, that doesn't fit into the Daily Mail worldview at all. So lets blame someone else, eh?
--------
Since the ABS market (except the Fannie/Freddie 'agency' stuff) was always so illiquid that there was virtually no secondary market, the rationale for ABS investors was the same regardless of whether they are a casinobank, a hedge fund, or a traditional asset manager. Nobody 'traded' them in the usual sense of the word until after the crunch. Before the crunch you bought and you held. You did it because you were getting paid a comparatively good rate of interest on a supposedly risk free asset in an era of very low interest rates. You did not expect to make a capital gain - the prices just didn't move. The only place you could get a quote from to do your monthly mark was the originator - there were no market makers. In most cases if you did want to sell you sold it back to them and they shopped it to someone else who got less than they asked for in the initial allocation feeding frenzy. After the cruch there are vulture funds around run by savvy traders who will buy them from you at a price that will make your shareholders/investors cry, but does reflect the real risk in the structure.
On the other side, there are 2 reasons to be a 'securitizer', if that isn't too much of a Bushism.
1. The textbook says the guy with the AAA tranche gets paid first from the interest pool but he doesn't. You do. As the lead manager you have what is effectively the 'last risk piece' - so long as there is enough interest still coming to cover the admin costs you are quids in for at least 5-7 years when the deal clean up call might come into play if enough of the loans have been repaid. It doesnt matter a jot if some or all of the investors lost their shirt, you are still getting paid. I know a few people who still have their jobs solely for that reason - they're 'managing' the wreckage of CDOs they put together. Now that is a risk free play.
2.
(a) you are a retail or commercial lender. lets say for the sake of argument a UK bankasino, but you could equally be down the street from me in FL. In ye olde days you took deposits from x y and z and you lent to a b and c at twice the rate. Boring! Not much chance for a big bonus there. Later on you worked out that thanks to the usual shape of the yield curve you could borrow for LIBOR + peanuts for 1 month, keep rolling that over, lend the same amount as 25 year mortgages and make hundreds of bps for nothing. Bonus!!! What could go wrong?
The problem is that with my finite capital there's only so much of this that I can put on my balance sheet because of the dreadful nanny state. And I sooo wanted that new Aston Martin that I saw in the Daily Mail. If only they allowed me to take more personal responsibility I could make a fortune. Wait a minute, I have an idea. If I securitise the mortgages on my books I can flog them off, getting them off my balance sheet and then start all over again. Every time I get paid a juicy managers fee (see part 1. above) regardless of what happens. As an added bonus I can keep the really juicy equity tranche. I structured the deal in such a way that there's more than enough interest left over after the investors have been paid their 'LIBOR + a bit'. In 18-24 months all that excess interest will add up to more than my equity investment, yes there wil be a few defaults but its the mid-noughties, default rates are low and when I reposess those properties they'll have gone up in value and I'll make another killing. Oooh, I can see the bonus now!!! Does anyone know the phone number for Sunseeker?
(b) you are a Wall Street Casino, or maybe you are Countrywide. You know that a lot of those condo mortgages you just bought from that personally responsible ex-bankster-turned-broker in Hallandale Beach are going to blow up, starting real soon. You just don't care. You know that you are going to get paid your management fee and that the saps that you offload the 'LIBOR + a bit more' tranches onto are taking the risk. Happily, there are hedge funds out there with a massive risk appetite who specialise in buying up equity tranches. All I have to do is haggle and discount it a bit for them, but the fees I'm creaming off the top of the structure will soon add up to more than the discount, and I'll be completely risk free.
THAT is how it worked. Alan Greenspan believed that in a completely free market businessmen would behave responsibly because they were concerned about their reputation above all else. He might as well have believed in Jedi magic. The reality was that after deregulation of the financial markets, competitive pressure distilled not the best practise like the theory said it would, but the worst - the shysters rose to the top, and the rest adopted their behaviour in order to compete and get their shareo of the pot. It wasn't just my casino - or even just the casinos and bankasinos. Look at AIG. S&Ls anyone? Enron? ...
Once very last point. There is a lot of consumer debt out there, far too much. But it is a tiny pinprick compared to the outstanding liabilities of the players in the derivatives market - now over 1 quadrillion dollars. I think that's a million billion. What's their capital base by comaprison? Its like putting up a fish finger as the deposit on a new D-JET. Where is the personal responsibility in the financial markets?
I'm done. I will do what I usually do and dissapear from this thread for a couple of weeks.
Over here the left wants to blame it all on Bush, since it happened on his shift. The right wants to blame it on Obama (elected after the event) or on Rubin & Clinton who sat on their hands while Citi paid Phil Gramm (R-TX btw) to finish off Glass-Steagall. Naturally, the Daily Mail agenda is to blame it on the Islington Politburo because it happened on their shift, and after all, they did reshuffle the regulators to look more like a cozy focus group. I'm not giving any of the above a pass at all, but none of them are as personally responsible for either the idea or implementation of financial deregulation as their 80s predecessors. Of course, that doesn't fit into the Daily Mail worldview at all. So lets blame someone else, eh?
--------
Since the ABS market (except the Fannie/Freddie 'agency' stuff) was always so illiquid that there was virtually no secondary market, the rationale for ABS investors was the same regardless of whether they are a casinobank, a hedge fund, or a traditional asset manager. Nobody 'traded' them in the usual sense of the word until after the crunch. Before the crunch you bought and you held. You did it because you were getting paid a comparatively good rate of interest on a supposedly risk free asset in an era of very low interest rates. You did not expect to make a capital gain - the prices just didn't move. The only place you could get a quote from to do your monthly mark was the originator - there were no market makers. In most cases if you did want to sell you sold it back to them and they shopped it to someone else who got less than they asked for in the initial allocation feeding frenzy. After the cruch there are vulture funds around run by savvy traders who will buy them from you at a price that will make your shareholders/investors cry, but does reflect the real risk in the structure.
On the other side, there are 2 reasons to be a 'securitizer', if that isn't too much of a Bushism.
1. The textbook says the guy with the AAA tranche gets paid first from the interest pool but he doesn't. You do. As the lead manager you have what is effectively the 'last risk piece' - so long as there is enough interest still coming to cover the admin costs you are quids in for at least 5-7 years when the deal clean up call might come into play if enough of the loans have been repaid. It doesnt matter a jot if some or all of the investors lost their shirt, you are still getting paid. I know a few people who still have their jobs solely for that reason - they're 'managing' the wreckage of CDOs they put together. Now that is a risk free play.
2.
(a) you are a retail or commercial lender. lets say for the sake of argument a UK bankasino, but you could equally be down the street from me in FL. In ye olde days you took deposits from x y and z and you lent to a b and c at twice the rate. Boring! Not much chance for a big bonus there. Later on you worked out that thanks to the usual shape of the yield curve you could borrow for LIBOR + peanuts for 1 month, keep rolling that over, lend the same amount as 25 year mortgages and make hundreds of bps for nothing. Bonus!!! What could go wrong?
The problem is that with my finite capital there's only so much of this that I can put on my balance sheet because of the dreadful nanny state. And I sooo wanted that new Aston Martin that I saw in the Daily Mail. If only they allowed me to take more personal responsibility I could make a fortune. Wait a minute, I have an idea. If I securitise the mortgages on my books I can flog them off, getting them off my balance sheet and then start all over again. Every time I get paid a juicy managers fee (see part 1. above) regardless of what happens. As an added bonus I can keep the really juicy equity tranche. I structured the deal in such a way that there's more than enough interest left over after the investors have been paid their 'LIBOR + a bit'. In 18-24 months all that excess interest will add up to more than my equity investment, yes there wil be a few defaults but its the mid-noughties, default rates are low and when I reposess those properties they'll have gone up in value and I'll make another killing. Oooh, I can see the bonus now!!! Does anyone know the phone number for Sunseeker?(b) you are a Wall Street Casino, or maybe you are Countrywide. You know that a lot of those condo mortgages you just bought from that personally responsible ex-bankster-turned-broker in Hallandale Beach are going to blow up, starting real soon. You just don't care. You know that you are going to get paid your management fee and that the saps that you offload the 'LIBOR + a bit more' tranches onto are taking the risk. Happily, there are hedge funds out there with a massive risk appetite who specialise in buying up equity tranches. All I have to do is haggle and discount it a bit for them, but the fees I'm creaming off the top of the structure will soon add up to more than the discount, and I'll be completely risk free.
THAT is how it worked. Alan Greenspan believed that in a completely free market businessmen would behave responsibly because they were concerned about their reputation above all else. He might as well have believed in Jedi magic. The reality was that after deregulation of the financial markets, competitive pressure distilled not the best practise like the theory said it would, but the worst - the shysters rose to the top, and the rest adopted their behaviour in order to compete and get their shareo of the pot. It wasn't just my casino - or even just the casinos and bankasinos. Look at AIG. S&Ls anyone? Enron? ...
Once very last point. There is a lot of consumer debt out there, far too much. But it is a tiny pinprick compared to the outstanding liabilities of the players in the derivatives market - now over 1 quadrillion dollars. I think that's a million billion. What's their capital base by comaprison? Its like putting up a fish finger as the deposit on a new D-JET. Where is the personal responsibility in the financial markets?
I'm done. I will do what I usually do and dissapear from this thread for a couple of weeks.
I Have Control
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Upturn over?
I loved the idiotic title of this thread, and feel sad that the debate on today's reality may have finished.
For what it's worth, my view is that bmi/bmir/bmibaby are all finished, at least in their present forms. One ageing male diva unloaded his primary business interest at a time most profitable to himself, which was utterly predictable. (Sod his workers!) When the 3 companies eventually disappear below the waves, there might actually be room in the UK market for some pilot job creation. And no, this is not sour grapes from my side. Nor wishful thinking.
Finally, best of luck to WWW. (The sage of Pprune)
For what it's worth, my view is that bmi/bmir/bmibaby are all finished, at least in their present forms. One ageing male diva unloaded his primary business interest at a time most profitable to himself, which was utterly predictable. (Sod his workers!) When the 3 companies eventually disappear below the waves, there might actually be room in the UK market for some pilot job creation. And no, this is not sour grapes from my side. Nor wishful thinking.
Finally, best of luck to WWW. (The sage of Pprune)
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sour grapes?
Could have fooled me Roy, seems like you are taking pleasure in everyones predicament here at BD, not just here but elsewhere. What a strange post to make on this thread for wannabees. How on earth could the disappearance of BD below the waves possibly make room for pilot recruitment, could you explain that for me? Why dont you just look after the hernia and get on with your own thing. bmi is finished for you at least.
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bmi sunk
No fooling. bmi gave me 2 pushes on commercial grounds, many others too. Then offered me a left-seat at baby on different T & C's from LHR. With no thought to my ethical new employers. As a company, bmi showed immature behaviour. Most of us offered returns told them to stick it.
Now we fly with temp bmi lads pathetically grateful to be part of us....so much better than bmi....they all wish to stay...but sadly no chance.
The problems lie in the bmi management, who just line their pockets and shaft the staff. A group of underperformers.
End result...not positive, esp in a recession.
No sour grapes, but sorry for the mates still stuck there.
Good enough for you, Mr. Aggressive? Have a most happy time.
Now we fly with temp bmi lads pathetically grateful to be part of us....so much better than bmi....they all wish to stay...but sadly no chance.
The problems lie in the bmi management, who just line their pockets and shaft the staff. A group of underperformers.
End result...not positive, esp in a recession.
No sour grapes, but sorry for the mates still stuck there.
Good enough for you, Mr. Aggressive? Have a most happy time.
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BA's new business class only plane
British Airways is going where only failures have gone before. Three London to New York business class only airlines have already collapsed - Silverjet, Maxjet, Eos - hit by rising oil prices.
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Bit of journalistic license on that one. KLM and Swissair have been doing it for a while with Privatair.
Uh. Okay. So the same as if Ryanair/Flybe/Anyone else operate a flight 30% full? The double decker bus I came to work on only had 8 people on it, so I guess that makes me responsible for xx times the emmissions?
Originally Posted by Treehuggers
That has outraged environmentalists, who say each traveller will be responsible for about three times the emissions of regular flights.
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The 1990's recession which caused >3m unemployed and saw several large airlines go bust in the UK lasted for 2 quarters. This one is started in the last 2 quarters of 2008 and is still running now... Its already a much bigger and longer lasting recession than we have seen for three generations. And that's if it ended today.
With interest rates held where they are and £150,000,000,000 of newly printed money being pumped into the system I'd be amazed if the recession didn't end soon. But don't think that means everything goes back to normal. The bombing may have stopped but the city is still in ruins..
WWW
With interest rates held where they are and £150,000,000,000 of newly printed money being pumped into the system I'd be amazed if the recession didn't end soon. But don't think that means everything goes back to normal. The bombing may have stopped but the city is still in ruins..
WWW
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Recession end & the wannabe
So what should the wannabe do now?
Background
The UK airline industry is still in a bad way however I see that some smaller company's are being quick off the mark to take advantage of lower lease rates on aircraft & the inertia of the bigger airlines who have (over?) reacted late to the market down turn.
Some employers are clearly trying to take advantage of the situation with talk of bases closing & pilots laid off, I think that this is a bit rich for at least one airline that is having crewing problems. Oh and this stance comes as the pay reveiw approches.
The time is not yet right for airlines to come knocking on the doors of the wanabes but the list of those from Zoom, Silverjet & XL who are out of work is getting shorter.
Wannabe action plan
Don't get sucked in by the glossy publicity and pictures of young people looking happy standing on the steps of airliners with South American military quantitys of gold braid. These are the people who have copped onto the fact that the wannabe is going to pay to sit in the (second) best seat on the aircraftand are going to charge a fortune for this "oportunity".
The market is not ready for this and won't be for two to three years minimum. Life would be so much better in the long run if all of you kept well clear of these money sucking parasites.
It might be the time to think about a very slow move towards a modular (f)ATPL, training prices are keen but DO NOT give up the day job and DO NOT borrow the money, at this stage play only with real cash that is yours (as always not more than £500 up front).
Slow forward movement is the name of the game with the aim of being ready to do the IR in about three years. If the market shows that it is picking up then borrowing a little money might be in order to quicken the pace but this won't be for two to three years and hopfully you will have done most of the trainning by then.
It should put you ahead of the market without exposing you to too much debt and you will still have a job if the market is slow off the mark.
Background
The UK airline industry is still in a bad way however I see that some smaller company's are being quick off the mark to take advantage of lower lease rates on aircraft & the inertia of the bigger airlines who have (over?) reacted late to the market down turn.
Some employers are clearly trying to take advantage of the situation with talk of bases closing & pilots laid off, I think that this is a bit rich for at least one airline that is having crewing problems. Oh and this stance comes as the pay reveiw approches.
The time is not yet right for airlines to come knocking on the doors of the wanabes but the list of those from Zoom, Silverjet & XL who are out of work is getting shorter.
Wannabe action plan
Don't get sucked in by the glossy publicity and pictures of young people looking happy standing on the steps of airliners with South American military quantitys of gold braid. These are the people who have copped onto the fact that the wannabe is going to pay to sit in the (second) best seat on the aircraftand are going to charge a fortune for this "oportunity".
The market is not ready for this and won't be for two to three years minimum. Life would be so much better in the long run if all of you kept well clear of these money sucking parasites.
It might be the time to think about a very slow move towards a modular (f)ATPL, training prices are keen but DO NOT give up the day job and DO NOT borrow the money, at this stage play only with real cash that is yours (as always not more than £500 up front).
Slow forward movement is the name of the game with the aim of being ready to do the IR in about three years. If the market shows that it is picking up then borrowing a little money might be in order to quicken the pace but this won't be for two to three years and hopfully you will have done most of the trainning by then.
It should put you ahead of the market without exposing you to too much debt and you will still have a job if the market is slow off the mark.
I can go along with that.
WWW
WWW
Here, have a cigar!
WWW
WWW
PPRuNe Handmaiden
NetJets Europe just culled 18% of it's office staff in Lisbon and London. 
Aer Lingus underlines woes facing airlines with 600 job cuts - Telegraph
Oooh, its starting to feel like the good old days again for this thread..
WWW
Oooh, its starting to feel like the good old days again for this thread..
WWW
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I take it yesterday's news from BA was covered?
BBC NEWS | Business | British Airways to cut 1,700 jobs
You're a terrible influence WWW!
BBC NEWS | Business | British Airways to cut 1,700 jobs
You're a terrible influence WWW!
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Can the moderators delete this thread....as there is no signs of upturn...or can we at least change the title to signs we are still in between a rock and a hard place?!
PPRuNe Handmaiden
The thread title is supposed to be ironical.
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Disagree
Wannabe action plan
Don't get sucked in by the glossy publicity and pictures of young people looking happy standing on the steps of airliners with South American military quantitys of gold braid. These are the people who have copped onto the fact that the wannabe is going to pay to sit in the (second) best seat on the aircraftand are going to charge a fortune for this "oportunity".
The market is not ready for this and won't be for two to three years minimum. Life would be so much better in the long run if all of you kept well clear of these money sucking parasites.
It might be the time to think about a very slow move towards a modular (f)ATPL, training prices are keen but DO NOT give up the day job and DO NOT borrow the money, at this stage play only with real cash that is yours (as always not more than £500 up front).
Slow forward movement is the name of the game with the aim of being ready to do the IR in about three years. If the market shows that it is picking up then borrowing a little money might be in order to quicken the pace but this won't be for two to three years and hopfully you will have done most of the trainning by then.
It should put you ahead of the market without exposing you to too much debt and you will still have a job if the market is slow off the mark.
Don't get sucked in by the glossy publicity and pictures of young people looking happy standing on the steps of airliners with South American military quantitys of gold braid. These are the people who have copped onto the fact that the wannabe is going to pay to sit in the (second) best seat on the aircraftand are going to charge a fortune for this "oportunity".
The market is not ready for this and won't be for two to three years minimum. Life would be so much better in the long run if all of you kept well clear of these money sucking parasites.
It might be the time to think about a very slow move towards a modular (f)ATPL, training prices are keen but DO NOT give up the day job and DO NOT borrow the money, at this stage play only with real cash that is yours (as always not more than £500 up front).
Slow forward movement is the name of the game with the aim of being ready to do the IR in about three years. If the market shows that it is picking up then borrowing a little money might be in order to quicken the pace but this won't be for two to three years and hopfully you will have done most of the trainning by then.
It should put you ahead of the market without exposing you to too much debt and you will still have a job if the market is slow off the mark.
I have been a pilot/QFI/FI(a)/F/O then Capt and TRI/E. Now just in the last couple of years of my career. Light hopefully at end of tunnel! Pension over years has been screwed around with but hey, i'm not alone there right? I have watched this site on and off for the last few years, but only now do I get a 'log in' as I can not stand to see the rubbish posted by some people.
My advice to wannabes. Hang on, save up, look for airline part sponsored of affiliated courses and look to train somewhere that has a good reputation and lots of airline backing! I have seen several modular students lack even the basic elements or airmanship and handling skills, not to mention situational awareness in the sim checks. Not all are bad, some are indeed very good, but it would not suprise me if they had a natural high aptitude! How some passed their IRT with the CAA is beond me! Many modular training routes are cheaper, but they want your money just as badly! Somethimes withot even giving you an assesment of your suitability for the course!
On the other side of the course the candidates from integrated courses tend to do a lot better. Not all pass the sim check still, but the percantage is much higher. why? Well they are traied to a known standard and can demonstate their skills to myself when undertaking a basic profile in the sim check. When I pause after giving them several climbs, decents, and vectors with one or two nav aids tuned, i ask them to point on the radar minimums chart to where we are in the sky. Almost all get it right first time. We can even tell, during type conversion courses where an individual trained! The integrated route is expensive, but they do select you and test you to see if you will be able to see the course through and look attractive to airlines at the end of your 14-18 months. The modular route is sketchy and pilots from the route tend not to have any consistancy in ability,usually due to training at various locations,with diferent styles and techniques being demonstated. Sadly to the detrement of the candidate in the sim during the interview stages. Having also been an FI i would advise anyone serious on doing an integrated route not to spend lots of momey on a PPL. By all means do some flying lessons or trial flight to see if you enjoy being in the air, and in a small training aircraft. However bad habits learnt from some dodgy PPL instructors will leave you struggling a little, or maybe a lot, when conducting your 'professional' flying training. The integrated route has, and rightly so,a steep learning curve. You want to ideally be learning for the first time, not 'unlearning' then relearning something done differently, or correctly! consistency in training is vital!
At the end of the day you have to do what is right for you and what you are happy with, regardless of what I or anyone else writes on this site! My nepthew is very keen to take up flying as a career and I can't seem to put him off it. In fact the harder I try the more he wants it! I went to the Flyer?? exhibition at Heathrow earlier in the year. I was suprised just how many schools and airlines were there! He ended up with a great deal of information for the various schools and airlines, a lot of info all in one place. I was sceptical at first but on seeing the exhibition i was impressed.
I would advise people serious on going to atten if and when it is next on.My advise to him is also to wait it out until new courses appear. But each to their own.
Anyway thats my two pennys. Happy landings and best of luck to all.
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Inertia !
The news from both BA & Aer Lingus is an example of the inertia of big companys, just like oil tankers they take a long time to change direction.
The actions of these companys has far more to do with history and the people who have managed through internal politics and union pressure to unbalance the resopnsability/pay balance.
BA cabin crew are a prime example with some of the older CSD's taking home more money than some flight crew and two to three times as much as the Licenced engineers maintaning the aircraft.
The industry simply cant afford the luxury of the £60,000 p/a cabin crew and no doubt equaly overpaid backroom "management". So I think that you will find that these are the people who will take the brunt (if not all) of the cuts.
The view for the pilots & engineers is looking far brighter in the long term and even in the short term is not too bad with one or two smaler and more agile company's expanding in a buyers market for leasing aircraft.
The actions of these companys has far more to do with history and the people who have managed through internal politics and union pressure to unbalance the resopnsability/pay balance.
BA cabin crew are a prime example with some of the older CSD's taking home more money than some flight crew and two to three times as much as the Licenced engineers maintaning the aircraft.
The industry simply cant afford the luxury of the £60,000 p/a cabin crew and no doubt equaly overpaid backroom "management". So I think that you will find that these are the people who will take the brunt (if not all) of the cuts.
The view for the pilots & engineers is looking far brighter in the long term and even in the short term is not too bad with one or two smaler and more agile company's expanding in a buyers market for leasing aircraft.