|
I'm not persuaded that the involvement of the USA in WWII was anything other than generous and costly. Any walk in a Normandy war cemetery reveals a staggering swathe of American names.
We would not have won without them. Warnings of schools going bust are quite right. Some will - I guarantee it. Don't let them take your money with it as they sink below the waves. Now, timing. As I've argued at length and been shot at for doing so this WANNABE business is about timing more than anything else. I got my first job in an airline in 2000 because every airline was hiring like crazy. 2005 and 2006 were vintage years and 2007 had a good first 6 months. 2002, 2003 and the first half of 2004 were bad or very bad. That was a hiccup. Sept 11th sent a few EU airlines bust but other expanded very shortly after. In 2002/3 easyJet and Ryanair order 300 new aircraft. Swissair and Sabena went under and many downsized temporarily. But 300 new firm orders meant that most unemployed pilots found new right and left hand seats in short order. This time it will be totally and utterly different. IT will. I promise you. You HAVE to understand that this is 1990. The stock market has crashed, the banks have nearly collapsed and now the recession, not a dip, is upon us. To reflect the rest of the economy the airline industry will shrink by 20%. 20% is not Maxjet or some cancelled order or anything less than the failure of some major top 10 UK airlines. Not singular. This will happen in 2009 or early 2010. As such there will be thousands of hugely experienced pilots on the employment market until 2012 at the very very very earliest. Many of you have no idea how bad things will be, how miserable times can be. You will find out. There is NO way to avoid swallowing the medicine this time. If you are just graduating from an Integrated course then you have a massive debt, no prospect of a job for years and your best option is bankruptcy. Stark. I warned you. WWW :( |
Originally Posted by WWW
I'm not persuaded that the involvement of the USA in WWII was anything other than generous and costly. Any walk in a Normandy war cemetery reveals a staggering swathe of American names.
Oh and I agree, if you are looking for work or starting an integrated course now or in the next year or so you're not in a great position. |
If it wasn't for the the Americans being bombed into action at Pearl Harbour the fight for a free Europe would have been lost. |
Chris is right again, I think the americans only got involved cos they knew they were in with a chance of winning something.
|
Lets not head off down the path of debating US involvement in WW2 as its a bit too far off topic even for me.
Instead I recommend reading todays column by Ambrose Evan-Pritchard: Do our rulers know enough to avoid a 1930s replay? - Telegraph The freight rates for Capesize vessels used to ship grains, coal, and iron ore have fallen 95pc to $11,600 since May, hence the bankruptcy of Odessa’s Industrial Carriers last week with a fleet of 52 vessels. Cargo deliveries dropped 15.2pc at the US Port of Long Beach last month, but that is a lagging indicator. From what I have been able to find out, shipping is slowing as fast as it did in the grim months of late 1931. “The crisis is now in full swing across the entire world,” said Giulio Tremonti, Italy’s finance minister. “It is hitting the real economy, the productive forces of industry. It’s global, it’s total, and it’s everywhere,” he said. Italy’s industrial output has fallen 11pc in the last year. Foreign orders have dropped 13pc. But we are all in much the same boat. Europe’s car sales fell 9pc in September (32pc in Spain). US housing starts fell to a 45-year low in September. Last week, the International Monetary Fund had to rescue... He is a bear but its a nice summary with some compelling anecdotals and I believe the closing sentiment to be accurate. Wannabes really need to ignore slowdowns such as Sept11th and learn all about what happened to the airline industry during the 1990 - 1994 period. That will be the best guide to 2008 - 2012. Unfortunately. Next year a lot of passengers just won't turn up. WWW |
From what I have been able to find out, shipping is slowing as fast as it did in the grim months of late 1931. Of course, the effect on the global economy of not shipping iron ore, grain etc around the world does indeed have an impact on the economy, but not in the same way as in 1931. |
This chart compares total credit market debt to U.S. GDP.
The average of this ratio over the last 100 years has been around 155%. This ratio peaked first heading into the Great Depression at 260% (after then falling back to 130%) but has now risen to an unprecedented 350%! This is why this time is going to be so much worse than the 1991 recession. http://alphaville.ftdata.co.uk/lib/inc/getfile/2440.jpg Highlights from the latest Hayman Advisors letter to clients (courtesy of the FT) How long and deep will this recession be? To develop an educated guess, we must study historical OECD housing busts and their implications for the broader economies and local banking systems. According to a masterful piece by Goldman Sachs Global Economic Team, there have been 24 housing price busts since the 1970’s. Each bust saw at least a 15% real home price decline. The average decline in this sample set is just over 30% with a bottoming after 6 years. Housing busts are generally prolonged experiences with severe economic and banking implications. We believe house prices will drop approx 34% from peak to trough and the economic decline will take at least another 2 ½ years. The average home price decline of the 24 that were studied was 31% and the average duration was a staggering 25 quarters (just over 6 years)! A few other observations from past housing crisis: 1. Sharp declines in GDP growth (output gaps become deeply negative), 2. GDP growth bottomed several quarters after the busts began, 3. Growth recovered much more slowly but output gaps lagged for longer, 4. There is significant damage in the “Big Five” banking crises (GDP fell 6.6 percentage points and the slowdown lasted for 5 years), 5. Interest rates rose going into the bust and then fell, 6. Credit growth generally slowed (in the current case, credit growth has come to a crashing halt). We think we will see 10-12% unemployment, a 4-5% decline in GDP, and the equity markets could drop at least 70% from peak to trough. Remember, the capital structures of most of America’s companies have taken on more and more senior debt, subordinated debt, preferred, convertible preferred, trust preferred, and God only knows what else in front of equity. This means the “equity” piece of the cap structure is enormously positively or negatively leveraged to changes in funding costs and enterprise values. A drop of 70% for the S+P is absolutely possible. Remember, all of the loss estimates we have reviewed have really ignored the coming losses in credit card debt, commercial and industrial loans, commercial real estate loans, CDS contracts, auto loans, and unsecured personal loans. We are experiencing the global deflationary bust of all time. It will deflate the values of just about all assets. Anything and everything we own will decline precipitously in value. We are not perma-bears like some others, but we must be realistic about facing this terrible economic environment. You will keep hearing the lie that the banks are afraid to lend to one another. This is not the case. The fact is that they are not lending to each other because they have run out of money. They have nothing to lend. WWW |
At least it's not as bad as the 1970s BBC NEWS | Business | 'It's not as bad as the 1970s' Apparently.
|
The 1970's saw three day weeks and my Grandad milking the cows by candlelight because the miners had shut down the power stations - no, we're not quite there.
Unwinding all this debt though will take years and prosperity in terms of spending power will not return to 2007 levels for at least a decade. The days when borrowing £75k to spend on flying training felt normal will not return for quite some time. Perhaps this is a good thing. Airline losses in 2009 are going to be horrendous. 100% guaranteed. WWW |
Many business losses in 2009 are going to be horrendous. 100% guaranteed.
This problem is by no means unique to aviation. |
FT.com - Southwest’s loss
Published: October 16 2008 14:53 | Last updated: October 16 2008 20:40 Ask any gambler – on the way up its all about skill, on the way down its damned bad luck. So how should the results of Southwest Airlines be treated? On Thursday, the group reported its first quarterly loss in 17 years. The only investment-grade US airline, and one of the few actually to make an economic return, Southwest reported paper losses due to the fall in the oil price – marking-to-market the group’s fuel hedging arrangements produced a $247m charge. If that is treated as an exceptional item, then Southwest made money. But it points to a big problem ahead for the airline. The group began hedging in the late 1990s and it has been a competitive advantage ever since as struggling peers lacked the credit quality to pursue a similar strategy. The effect on profitability has been dramatic; this year alone the group has saved $1.3bn on its fuel bill so far. In fact, were the help from fuel hedges to be excluded, the $4.8bn in operating profit Southwest has generated since 2001 would fall to just $500m. That edge on costs is now gone. Southwest has locked in an in effect rate of $73 per barrel of oil for three quarters of its 2009 fuel needs, above current prices. Furthermore, with some hedging in place at $90 or more, a further cheapening of crude could prompt margin calls – which has caused the airline to draw down pre-emptively $400m of a revolving credit line. Some advantages remain. The group’s point-to-point model is inherently more efficient than peers based at big airport hubs. Nor is its balance sheet weighed down by debt. But the rest of the industry has been forced on a crash diet due to bankruptcies and spiralling fuel costs As the recession bites, Southwest needs to prove that it has not just enjoyed the blessings of lady luck. |
Originally Posted by WWW
spending power will not return to 2007 levels for at least a decade.
I also think we are witnessing the beginning of the end of the 70K loan for flight trainning and the many of the wannabees in the system or those about to join it, in time are going be yet more casualties of the 'credit crunch'. I can't see banks being willing to make wreckless loans of this magnitude for a very long time once they start seeing the dozens, maybe even hundreds of defaults that will inevitably start to occur over the next few years. If the boom when it happens turns out to be as big as some are predicting, this may well leave a gap in the market....enter airline sponsorship in the shape of the MPL. |
All this and yet there are still people on threads not too far from here asking how they can get themselves into £70k-100k of debt to join at the back of a very very long and growing queue of people with both a frozen and un-frozen ATPL looking for jobs..... I hate to be rude but I am gonna be anyway.... some folks are just f**king stupid..... but I guess people like that with such a lack of financial sense are a large part of the reason we are in this mess anyway..... I despair sometimes.
|
I seem to recall the reason we're in this mess is largely down to the activities of the financially sophisticated 'experts'.
|
I wouldn't believe everything you read in the press Alex.... we are in this mess because the everyday man in the street have borrowed too much money and is now less likely to pay it back. This is causing house prices to fall in the US etc etc... this is then impacting things like the CDO market. That is why money markets are frozen too much leverage everywhere including households.
The political answer is to blame the city as it doesn't cost votes. Did you know banks were 40% of total UK corporate tax takings for the government? thats a big hole to fill. Funny that.... the wanabee that is 70k in debt and defaulting on his loan is sat next to the the BTL investor and others who shirk responsibilities they signed up to and they sit at the root cause of this crisis.... it is these loans not being repaid that creates the huge losses for the banks. |
Thought I would post this here, although posted on another forum, I'm sure you will agree its relevance. Sir Richard Branson on Fox News. He mentions the Great Depression more than once. And he also says that if HBOS went down, so would Virgin.
|
There's greed everywhere. I think it's a bit rich to blame Joe the plumber for taking out too big a mortgage when it's offered to him, though.
The charge 'a lack of financial sense' could be levelled at banks offering high LTV mortgages (did they think they boom was going on forever?) to governments unwilling to regulate to slow the boom (some did - in France you can't get a mortgage if the repayments exceed a third of your income) and to financial institutions who can't identify the extent of toxic debt they hold (how stupid is that?) and use financial instruments so complex that very few can understand the debt they hold (also, how stupid is that?). It's notable that the financially sophisticated are very good at identifying a trend but seem incapable of spotting when a trend is about to reverse, just look at the 'experts' who were forecasting oil at $200 a barrel by Christmas. When the market is going up, oh, it's going to go on forever and when it's going down, oh, it's going down forever. It seems to me a child with a pin could do better. |
Interesting times ahead. I applied to LloydsTSB for a mortgage last year. I needed to know how much I could borrow with my present income, then with my new 'pilot job' lower income, and also adding in the wifes income to the equation. We would be able to borrow, jointly, £325,000 on a 100% type repayment mortgage. Needless to say we didn't take that much as our joint income at that time was approx £65k, and we thought we might just be pushing it a bit.
Why would a lender be so stupid? Greed? We had A1 credit scores from paying back loans etc over the years. I guess that helped, but many people are going to be in a whole world of sh*t soon. Luckily we borrowed just what we needed (less than half) but even now I still feel it is a lot of money, regardless of the fact I spent £110k getting my present job if I add in everything on the way. I can only advise anyone even thinking of borrowing any money right now to have a serious think about things and wait a year or two at least! I know it all sounds so harsh to come onto a pilot forum to be told don't bother, but I think that for once, the best bet is to maybe take the advice being offered on this thread very seriously. Sorry we can't be more positive. :( |
I think the public for borrowing, the banks for lending and the government for turning a blind eye can all be apportioned blame fairly evenly. The public have the defence of being a bit thick, the other two do not.
The Machiavellian side of me think that in both the US and UK the government of the day calculated a change of administration was likely and thus the bursting bubble would be the-other-lots problem so they let the bubble grow. I wouldn't fancy George Osbornes job of sorting out the public finances of 2010 - 2015. Would you? It is possible to celebrate rather than lament the US/UK/Wests prediliction for boom and bust. Creative Destruction is real. Hosing money around does ensure that some is sprinkled on wacky but worthy new businesses. Google probably wouldn't have got going were it not for the promise of millionaire making stock options prevalent during the tech bubble. Whatever. We are where we are and the graph I posted above shows that we are somewhere we haven't quite been before. There has never ever ever been a credit and asset price bubble like we have spent the last decade living through. Its new. Its new in both scale and in breadth. If we are to return to historical norms we will have to have GDP shrinkage of around 6% per year for 2 years and then stagnation/low growth for a decade. That would be deeply horrible. Perhaps it won't happen. I suspect it will though. If you look at the the CAA statistics there were 1146 new CPL's issued in the year to August 2007 (over a year out of date I know). That is the sort of scale of competition that the Wannabe is up against. Plus redundancies. Plus foreigners who speak English and hold JAA licenses. The figures for Professional License Issues and Renewals per year shows: Year ----- 06-07 5384 05-06 5362 04-05 3434 03-04 2775 The statistics are not detailed nor consistent enough to draw definitive conclusions. Nevertheless it looks very much as if the last 3 years has seen a tidal wave of people going through the training system. Were this to fall back to 03-04 levels then the flying training industry is going to shrink by close to half. Be careful out there and unless you are a window licking loon DO NOT borrow vast sums of money to fund training unless bankruptcy suits your circumstances. Which is very well might. WWW |
I agree with WWW's first paragraph. A lot of the time, the general public are blamed for borrowing too much, which is strictly true but it suggests that there is a money pot from which the general public have free reign and can take as and when they please!
In fact, the bank with the financial knowledge gave them the option to borrow that amount. I'm sure the bank manager or mortgage / long term liability advisor would not be giving those loans out without consideration from the bank's risk assessment team, therefore, it has been decided by those that run the bank and assess the risk, that the general public can have those loans despite the risk that this will carry in the event of a downturn, therefore, to me, they are primarily responsible! They knew the risks but dished out the credit anyway. Of course, the poor punter that signed on the dotted line to say "I understand the above" clearly didn't have those risks conveyed to them! In short, it doesn't seem unreasonable to suggest that the banks put a sniff of financial return above the welfare and ethical aspect of lending to those that in all honesty, couldn't afford it. It's like a dietician giving a child a lot of sweets and then blaming the child when their teeth rot... |
| All times are GMT. The time now is 12:44. |
Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.