Sub-prime loan firm Provident Financial goes into Meltdown

[Paul]

And another crack in the financial dam appears today 

http://www.dailymail.co.uk/news/article-4814606/800-000-families-face-crisis-sub-prime-loan-firm-tanks.html

Full article and comments above, but key points to take away are

* Shares in Provident Financial crashed 66% yesterday as crisis looms

* Drop believed to be biggest one-day fall for a blue-chip FTSE 100 firm ever

* Peter Cook, the CEO, resigned 

* £1.7billion was wiped off its share value

* 800,000 customers of it doorstep collection business are at risk

* Door-to-door loan division would lose up to £120million this year

* Provident also revealed that the Financial Conduct Authority is investigating possible mis-selling claims at its credit card business Vanquis Bank.
It has 1.6million customers, and in addition to letting them borrow money it offers a product called a 'repayment option plan'. This allows borrowers to pay a monthly fee so they can freeze their account without incurring extra interest if they run into financial difficulties.
About a third of Vanquis customers are believed to have bought the product and they typically pay almost £155 a year for it. 
This potential mis-selling scandal which could ultimately cost up to £140million.

* Doorstep collection business – an operation with 801,000 customers who are typically charged annual interest rates of 535% APR, Only 57 per cent of debts are being collected on time,

 

Is this the house of cards about to collapse, only last week it was reported the epidemic of sub prime car loans being well into bubble territory.

It seems like it is 2007/2008 slow wreck repeating itself again

[Clens92]

20 minutes ago, Paul said:

Only 57 per cent of debts are being collected on time,

This is their main problem.  They're charging lower interest rates than the payday lenders, so the 'poor' are flocking to them.  Whether through misguided confidence or negligence, they have assumed that borrowers will pay their loans back - this simply isn't true for a large minority of those taking high-interest loans.

If I'd have been braver, I'd have bought a couple of grand in their shares yesterday; the market always overreacts.  It will decline gradually, but expect to see a bounce in the shares before the final slumps.

[Pipers]

IMO If a poor person can not pay a loan back and they have hungry children they will borrow at any interest rates because they are in dire straits and tomorrow may not come if they are in semi starvation.  

I maybe more left wing than most on here, I see a new society where the poor have less than even 3 years ago, less belongings hence the increase in car boot sales (they are more busy than the shops).  I have no sympathy for this pay day loan company  at all they borrow from the city at 2-3% then ask the poor to pay 535% interest, when in the past those same people would have gone to the local community centre and got second hand furniture for a few quid. ( those centres have been closed down by the Tory Government) the poor are now forced to go into debt that they can never pay back.  

The Neo- Liberals seem to think its the poor persons fault they are in debt by their bad decisions, this is a viscous lie in the vast majority of cases and is spread around through media to make the middle/elite classes feel good about themselves and have no sympathy for the working class and the precariat class.  Being in debt to pay for rent, utilities, food, taxes.is not bad money management its not being paid enough or the said bills are to high!  For the last 2 years my children's schools have asked for school uniforms that look in good condition to be handed in so its obvious parents cannot afford the uniforms and i live in an ok area.   

I think Paul is right, meltdown is true when the markets realise that the poor may not pay this money back and they will be better off going bankrupt of even just letting the bailiffs into their rented house to see they have not got anything worth taking and the debt cannot be collected not even a tiny percentage then the sector is screwed and will go into meltdown.                  

[sixgun]

"a product called a 'repayment option plan'. This allows borrowers to pay a monthly fee so they can freeze their account without incurring extra interest if they run into financial difficulties." 

Sounds like PPI - so it does not surprise me to hear the words 'mis-selling'. With all the press and legal hyenas circling PPI you would have thought they would have known better. Things like this are not mistakes. 

From the Daily Mail write-up it sounds like the company has been sabotaged. i wonder who has been shorting the shares since April? Who benefits?

Many of the people mixed up with exploitative companies like Provident Financial are poor and always will be poor. The typical person if they won a decent amount on the lottery would be broke again by next year. i know and have know many. My father used to have a loan company. i once asked him why he dealt with the people he did. His answer was something like, these people were easy to exploit so why make life difficult. The trick was to recognise those who would not repay their loans. The trick is to get basically honest people addicted to loans.

A 'friend' of a friend gets most of his stuff from Brighthouse. He ends up paying several times more than needed and he is always hard up. Even if he comes into money it is gone in no time flat. It is about instant gratification. The idea of saving up for a TV over 6 months and getting a good deal paying cash in the sales is never entertained. He wants the TV now and ends up paying over 3 times the amount over 3 years.

There is indeed trouble brewing. The auto makers have not been selling cars. They have been channel stuffing and selling on tick. Unemployment is much higher than the official figures show. There are many loans going wrong. Credit card debits are going wrong. If there were an increase in interest rates feeding into mortgages there would be massive defaults and then a property market and stock market meltdown. 

[Pipers]

2 hours ago, sixgun said:

"a product called a 'repayment option plan'. This allows borrowers to pay a monthly fee so they can freeze their account without incurring extra interest if they run into financial difficulties." 

Sounds like PPI - so it does not surprise me to hear the words 'mis-selling'. With all the press and legal hyenas circling PPI you would have thought they would have known better. Things like this are not mistakes. 

From the Daily Mail write-up it sounds like the company has been sabotaged. i wonder who has been shorting the shares since April? Who benefits?

Many of the people mixed up with exploitative companies like Provident Financial are poor and always will be poor. The typical person if they won a decent amount on the lottery would be broke again by next year. i know and have know many. My father used to have a loan company. i once asked him why he dealt with the people he did. His answer was something like, these people were easy to exploit so why make life difficult. The trick was to recognise those who would not repay their loans. The trick is to get basically honest people addicted to loans.

A 'friend' of a friend gets most of his stuff from Brighthouse. He ends up paying several times more than needed and he is always hard up. Even if he comes into money it is gone in no time flat. It is about instant gratification. The idea of saving up for a TV over 6 months and getting a good deal paying cash in the sales is never entertained. He wants the TV now and ends up paying over 3 times the amount over 3 years.

There is indeed trouble brewing. The auto makers have not been selling cars. They have been channel stuffing and selling on tick. Unemployment is much higher than the official figures show. There are many loans going wrong. Credit card debits are going wrong. If there were an increase in interest rates feeding into mortgages there would be massive defaults and then a property market and stock market meltdown. 

@sixgun You have just written a typical explanation of Neo-Liberal's idea towards the poor.  There are stupid people and addicts who want instants gratification but you have just suggested that up to 40 million people in the UK are that this is just not true.  The middle class is smaller than you think.  Ask yourself why did the Conservatives get rid of of all the community centres that provided old furniture very cheaply? Then cut benefits, plus now cut working benefits, while rents are increasing and the Conservatives are not building homes?  Why have the Tories not nudged the BOE to increase interest rates?  

Plus there is one very good reason to indebt a person that is never mentioned on the BBC etc and that is the person in debt then removes themselves from the electoral register.  

Also I have noticed even Tesco are now giving food to children for free if they go into the shop in the summer holidays!!!    

[sixgun]

 In 1901 HG Wells wrote "Anticipations of the New Republic." This was heralded by the ruling class as a masterpiece. It described the world as HG Wells felt it should be. It stretched forward to the modern day. i suspect he was something of a ghost writer. The serf/slave class, those not in the middle class, were described as excrement. This is what the ruling class think of them. They would kill most of them. In Wells' book he says by 2000 it should be possible to kill the people. They are doing this, they fluoridate the water 'for health reasons'. Fluoride is a poison. In the 1970's food advice was altered. Saturated fats were out and carbs were in. Since then there has been an explosion of obesity and diabetes. I see the sperm count of men in the West has dropped over 50% in the last 30 years. The people are educated to be stupid and consume junk.

Zbigniew Brzezinski who recently died and was a high ranking US governmental adviser and architect of Al Qaeda, said:

"To put it bluntly: in earlier times, it was easier to control one million people than to physically kill one million people; today, it is infinitely easier to kill one million people than to control one million people." 

Stalin thoughts were that:

“If only one man dies of hunger, that is a tragedy. If millions die, that's only statistics.”

So what is done is to enrich the elite, to secure their position and to 'bleed', control and ultimately kill the people. 

The BBC is a propaganda arm of authority, Tesco gives away food as a promo stunt, interest rates are low until the elite decide to crash the financial system, no political party will help you once they get into power. "If voting made a difference, they wouldn't let us do it. " Mark Twain.

[BigDave84]

14 hours ago, sixgun said:

 In 1901 HG Wells wrote "Anticipations of the New Republic." This was heralded by the ruling class as a masterpiece. It described the world as HG Wells felt it should be. It stretched forward to the modern day. i suspect he was something of a ghost writer. The serf/slave class, those not in the middle class, were described as excrement. This is what the ruling class think of them. They would kill most of them. In Wells' book he says by 2000 it should be possible to kill the people. They are doing this, they fluoridate the water 'for health reasons'. Fluoride is a poison. In the 1970's food advice was altered. Saturated fats were out and carbs were in. Since then there has been an explosion of obesity and diabetes. I see the sperm count of men in the West has dropped over 50% in the last 30 years. The people are educated to be stupid and consume junk.

Zbigniew Brzezinski who recently died and was a high ranking US governmental adviser and architect of Al Qaeda, said:

"To put it bluntly: in earlier times, it was easier to control one million people than to physically kill one million people; today, it is infinitely easier to kill one million people than to control one million people." 

Stalin thoughts were that:

“If only one man dies of hunger, that is a tragedy. If millions die, that's only statistics.”

So what is done is to enrich the elite, to secure their position and to 'bleed', control and ultimately kill the people. 

The BBC is a propaganda arm of authority, Tesco gives away food as a promo stunt, interest rates are low until the elite decide to crash the financial system, no political party will help you once they get into power. "If voting made a difference, they wouldn't let us do it. " Mark Twain.

What we are seeing is the pacification of modern society, through elite control at a much younger age. As a teacher of secondary age children,  my wife is constantly in shock at the level of ability in the areas of reading and writing shown by the children she teaches. Far too many are clueless on basic matters of personal finance- a subject taught to students in US schools. Then children are expected to leave school, become independent with no personal financial tutoring or experience,  no real world life skills and in an increasing amount of cases, qualifications in subjects that have no real real world relevance.  No wonder they then fall foul of credit card companies offering extortionate borrowing rates.

[sixgun]

2 hours ago, BigDave84 said:

As a teacher of secondary age children,  my wife is constantly in shock at the level of ability in the areas of reading and writing shown by the children she teaches. 

Dave - are you saying their literacy levels are shockingly low?

Certainly important life skills should be taught as an absolute minimum. This includes money management. 

Charles Dickens, a social commentator and of course author put it nicely.

Quote

 

^{Mr Micawber's..recipe for happiness:}

^{"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."}

^{Charles Dickens, David Copperfield}

 

This is the failing that leads people into debt. i have been wealthy in my time but i have had times when i was really hard up, living hand to mouth. There is skill and knowledge and a tenacity needed to survive and actually prosper on very little.  i see so many these days who have little money, never have any money and never will have any. If people were taught how to make do and mend, to be frugal, then this would hit consumption and this would hit profits. However profit is not the real goal, it is to keep people poor, ignorant and dependent. They can then be controlled and present less of a threat.

[BigDave84]

I believe people cannot be saved in any state of poverty when they live in a state of ignorance about the causes of their poverty.  I hear all too often people blaming others for their lack material wealth and poverty. They blame the tories,  they blame the rich, they blame others, but never themselves.  I had a friend through church that needed assistance to feed here children and buy their school uniform.  However her home had a very nice Samsung curved tele, she had the latest phone, X box etc. 

[Roy]

From a recent Zopa email: (copy and paste)

"Since 2010 the UK has seen continually improving consumer credit performance leading to historically low levels of bad debt.

In early 2016, we at Zopa started to see some early signs of a possible change in this trend. It now looks like the change is real:
 

Publicly available data suggests consumer default and insolvency levels are reaching levels which are more consistent with historic norms prior to 2010; and

The Bank of England in their credit conditions survey stated “Lenders reported that default rates on both credit cards and other unsecured lending to households were reported to have increased significantly in Q2 [of 2017].”

They are warning lenders that they are likely to get lower returns because of increased losses (defaults).

A warning to those who dabble in unsecured lending! It's been a long time coming, but I know a change is gonna come... 

 

[Kman]

31 minutes ago, BigDave84 said:

I had a friend through church that needed assistance to feed here children

Why do people have children they know full well they can't provide for

"Far too many are clueless on basic matters of personal finance- a subject taught to students in US schools."

Why should we depend on the state to teach our children everything, parents should be doing this

I guess the trouble is sh1t parents raise sh1t chidren to raise more sh1t children - not sure how you break that cycle. 

 

[sixgun]

i see video of the Civil Rights Movement in America. This is portrayed as some great progress. It was not. The 1960's was the era when Cultural Marxism gained a foothold in the West and like a cancer it has spread and is killing the patient. 

Blacks as a group are failing in America and yet Civil Rights were supposed to make their lot better. The thing is it was not designed to make things better. Civil Rights gave birth to Identity Politics and Victim Mentality. i see nonsense about Blacks suffering 'Post traumatic Slave Syndrome'. You are failing b/c your great great great great grandfather was born into slavery and you are suffering a post traumatic syndrome b/c of it.  

http://yourblackworld.net/2013/03/02/the-black-family-is-worse-off-today-than-in-the-1960s-report-shows/

The plan is to create victim mentality so people learn to fail. The plan is to divide people and create conflict. Political correctness is not about being nice to each other it is about mind control.

 

[Roy]

Actually, I chose the song because I liked it.

Not everything needs to be analysed.

[sovereignsteve]

2 hours ago, Kman said:

I guess the trouble is sh1t parents raise sh1t chidren to raise more sh1t children - not sure how you break that cycle.

It's always been like that in certain sectors of the population. The problem is getting worse as people are being rewarded more and more for this behaviour.

I seriously worry about the future; "evolution" is supposed to ensure the survival and thriving of the most intelligent, adaptable and strong.

[reidpj]

34 minutes ago, sovereignsteve said:

It's always been like that in certain sectors of the population. The problem is getting worse as people are being rewarded more and more for this behaviour.

Totally agree, 100% spot on.  When are we going to learn that rewarding the rich, at the expense of the poor, will never be the way forward? 

[Pipers]

3 hours ago, BigDave84 said:

I believe people cannot be saved in any state of poverty when they live in a state of ignorance about the causes of their poverty.  I hear all too often people blaming others for their lack material wealth and poverty. They blame the tories,  they blame the rich, they blame others, but never themselves.  I had a friend through church that needed assistance to feed here children and buy their school uniform.  However her home had a very nice Samsung curved tele, she had the latest phone, X box etc. 

Can you please In your opinion clarify what are the causes of poverty in the UK? 

[reidpj]

44 minutes ago, sovereignsteve said:

"evolution" is supposed to ensure the survival and thriving of the most intelligent, adaptable and strong.

According to who?  Certainly not Darwin lol

[Kman]

7 minutes ago, reidpj said:

Totally agree, 100% spot on.  When are we going to learn that rewarding the rich, at the expense of the poor, will never be the way forward? 

I thought he meant rewarding having children without being able to provide for them by being given council houses and benefits 

 

[reidpj]

12 minutes ago, Kman said:

I thought he meant rewarding having children without being able to provide for them by being given council houses and benefits 

 

Really??  I thought he was referring to the those in our community that benefit most from Government handouts - the 1% lol

[Pete]

Poverty is relative.

Real poverty is when you have nothing to eat, no clothes to wear and live under a sheet of corrugated iron.
If you live in real poverty you will not have any problem with your weight and BMI other than the fact that you look more like a skeleton than a hippo.
You will definitely not have a smart phone, flatscreen TV, Sky Sports, smoke 20 a day, drink beer and vodka and have Friday nights out clubbing travelling by taxi.

Poverty and being " hard-up" are not the same thing.
Starving is a real motivator for working for food and basics.  
You only need to visit some other countries to see this.

The welfare state should be providing a safety net for unfortunate people facing unplanned hardships due to a spouse bereavement or loosing a job.
Households with 3 generations of able-bodied full time benefit claimants should never be tolerated as long as there is litter on the streets and with council budget cuts, hedges overgrown and play parks plagued by dog mess. Young mothers with several children often from multiple fathers should not be provided cash, only vouchers and the fathers should have to contribute to their children's welfare, not be able to ignore their responsibilities.
 

Being hard-up is tough and I have personal experience and to improve my lot I had to relocate from a government defined "assisted area" leaving behind my roots and school friends, preferring a job rather than the dole. Several years later I had to quit a good job ( but not particularly well paid ) and move to a cheaper area where rents and housing was affordable. That entailed my kids starting new schools etc. Why people who are living off the state feel entitled to live in the "community" is strange because they have a choice to move elsewhere.

 

 

 

[Markh]

Some people will always be on the welfare and benefits because of their circumstances, That's what it is designed for.

It's the lazy I deserve everything *******, who give nothing back to society that need to be neutered or worse. 

I care for a disabled person,(not paid) my wife works(average wage job) we buy reduced going out of date food, don't drink, don't smoke, pay all the taxes, no car, occasionally a cheap holiday in UK every few years, ect ect. We live below our means just to get bye. 

Every day I'm reminded how ****** up things are by my scum neighbor's who run two car's, take holidays every year, smoke, buy useless crap, ect ect, And I'm taking about young fit active people.

The silver lining for me is.... when (not if)  things go tits up, we will have more of a inclination how to get bye.

Do I sound bitter...

 

 

[sovereignsteve]

10 hours ago, Kman said:

I thought he meant rewarding having children without being able to provide for them by being given council houses and benefits 

 

 

10 hours ago, reidpj said:

Really??  I thought he was referring to the those in our community that benefit most from Government handouts - the 1% lol

I guess you can take it whichever way you want to