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Thread: Clinton cards was caused to enter administration by "loan to own"

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    Clinton cards was caused to enter administration by "loan to own"

    I know this is from last month,but I just saw this:

    http://www.guardian.co.uk/business/2...ation-retailer

    http://www.guardian.co.uk/business/2...-clinton-cards

    "Earlier its biggest supplier had said it planned to push the British retail chain into administration."

    Basically,they bought up £35 million in debts/loans from Barclays and taxpayer owned RBS,and then asked for them to be settled more or less immediately. Since Clinton Cards could not do so,they had to enter administration. The US company then acquired the stores it wanted and got rid of the rest,meaning thousands of job losses.

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    Re: Clinton cards was caused to enter administration by "loan to own"

    Yup, not unheard of.

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    Re: Clinton cards was caused to enter administration by "loan to own"

    happened to game as well

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    Re: Clinton cards was caused to enter administration by "loan to own"

    All the more reason to ban debt trading.
    Quote Originally Posted by Agent View Post
    ...every time Creative bring out a new card range their advertising makes it sound like they have discovered a way to insert a thousand Chuck Norris super dwarfs in your ears...

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    Re: Clinton cards was caused to enter administration by "loan to own"

    Quote Originally Posted by aidanjt View Post
    All the more reason to ban debt trading.
    That sounds like a reasoned understanding from someone who has obviously worked in a company that has needed to raise capital.

    Or its just a "down with finance" mentality.

    Clintons should never have bought Birthdays, they couldn't properly service their debt and had been circling the drain for some time.

    By forcing them in to administration the buyer will conviently avoid certain shops it doesn't want to take on, depending on the way this pans out, but given the amount of money they are looking to invest (buying this way is still investing in the company just like a traditional hostile takeover) they will probably have to pay any owed severence to the staff.

    The idea that a ban on debt trading and this would be luvvy duvvy is completely stupid.

    It also makes me dispare more, because sadly, rather than fixing underlying issues with our 'western economy' (out in Asia right now, its very hard not to remember certain bits of the collapse of the romain empire!) we are blaming those who actually will probably bring more stability to it, it reminds me of the people who wanted Cadburies to remain 'british' but not so much they'd have to buy a stock themselves.
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    Re: Clinton cards was caused to enter administration by "loan to own"

    Quote Originally Posted by TheAnimus View Post
    That sounds like a reasoned understanding from someone who has obviously worked in a company that has needed to raise capital.
    I didn't say ban loans, I said ban debt trading.
    Quote Originally Posted by Agent View Post
    ...every time Creative bring out a new card range their advertising makes it sound like they have discovered a way to insert a thousand Chuck Norris super dwarfs in your ears...

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    Re: Clinton cards was caused to enter administration by "loan to own"

    Quote Originally Posted by TheAnimus View Post
    it reminds me of the people who wanted Cadburies to remain 'british' but not so much they'd have to buy a stock themselves.
    Actually,I think he was not saying"down with finance" AFAIK.

    The problem is that there are two sets of people:
    1.)Those connected with the financial world who have a luvvy duvvy view of it. Of course why wouldn't they?? They are getting their income from it,so won't bite the hand that feeds them. Hence they will gloss over any problems or criticisms.

    2.)Those outside of it,whose lives suffered due to the current financial issues. The hand that fed them is affected so they will have a hatred of the financial sector. Of course why wouldn't they?? The hand that fed them has been affected by them,and they couldn't give a toss about how the financial sector feels. OTH,many people gloss over the fact that they pushed themselves into unnecessarily levels of personal debt,by overspending,not saving enough and taking on too much personal debt which means even when it comes to finding new work they are less flexible.

    They tend to gloss over any criticism by blaming the banks and government instead.

    Basically there is a lot of what you can called flip-flop fanboism of sorts in both.
    Last edited by CAT-THE-FIFTH; 16-06-2012 at 10:38 AM.

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    Re: Clinton cards was caused to enter administration by "loan to own"

    Quote Originally Posted by aidanjt View Post
    I didn't say ban loans, I said ban debt trading.
    Ah huh.

    So which methods do you allow? Bonds? Oh wait, those can be traded, we'd better ban those!

    Why did Clintons choose a method which allow the terms to be changed like this, because it was cheaper. They where not forced too, there where many other options available, but this was almost certainly cheaper.
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    Re: Clinton cards was caused to enter administration by "loan to own"

    Quote Originally Posted by CAT-THE-FIFTH View Post
    Actually,I think he was not saying"down with finance" AFAIK.
    The comment in I quoted in particular actually said down with debt trading. Now thats a very useful productive form of trading. He didn't say down with re-packaging heavily correlated collateralised debt obligations, which is something I think most people would agree with. He said down with debt trading. So either he knows little of what he talks about, or he means what he says. If the latter then it is a very sizeable amount of the finance industry he is proposing to do away with, I think its important to be balanced and realise that its not a broken methodology.
    Quote Originally Posted by CAT-THE-FIFTH View Post
    The problem is that there are two sets of people:
    1.)Those connected with the financial world who have a luvvy duvvy view of it. Of course why wouldn't they?? They are getting their income from it,so won't bite the hand that feeds them. Hence they will gloss over any problems or criticisms.
    Indeed, but they are few and far between and often easy to spot because of their analysis of very recent events. You also do know I'm not working in Finance per say, its just an industry I know a little about, and have worked in previously.
    Quote Originally Posted by CAT-THE-FIFTH View Post
    2.)Those outside of it,whose lives suffered due to the current financial issues.
    We don't let victims determin sentancing for a good reason. What shocks me is how rather than look at the underlying issues, people are blaming a symptom. Myself I'm becoming increasingly concerned that we will make matters worse because there is a politically popular notion of blaming "bankers" whoever those may be. Whenever you talk to someone who is a Guardian grade reader, its strangely reminiscent of "what have the romans ever done for us" apparently we're somehow slaves to finance, I'm told that a lot, and apparently they've done nothing good. You then mention one product one example, people say "oh yes well obviously thats helpful".

    Then as I've said time and again by people not even starting to understand what they are criticising, makes any real reform quite hard.
    Quote Originally Posted by CAT-THE-FIFTH View Post
    They tend to gloss over any criticism by blaming the banks and government instead.

    Basically there is a lot of what you can called flip-flop fanboism of sorts in both.
    There is very little fanboism for finance it would seem, most of the pro finance lot have no issues with a lot of the mortgage sales people in the US been locked up, introducing APR style concepts and upfront indication of loan costs if people say miss a payment (a common one in the US apparently, mortgage is 3% then 30% if you miss a payment, sold almost exclusively as it happened to lower socioeconomic groups who, guess what, when modeled would almost certainly miss a payment within 36 months). Few if any defend those pratices.

    But this, so what Clinton was doomed when it bought Birthdays, everyone uses online services now or the supermarket. That is why they are going to be bought out, and massively re-structured, not because of debt trading. The difference is the US firm pushes straight away for the insolvency, rather than either risking or giving the benefit of the doubt (depending on how you look at it) for a longer term.
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    Re: Clinton cards was caused to enter administration by "loan to own"

    Quote Originally Posted by TheAnimus View Post
    We don't let victims determin sentancing for a good reason. What shocks me is how rather than look at the underlying issues, people are blaming a symptom. Myself I'm becoming increasingly concerned that we will make matters worse because there is a politically popular notion of blaming "bankers" whoever those may be. Whenever you talk to someone who is a Guardian grade reader, its strangely reminiscent of "what have the romans ever done for us" apparently we're somehow slaves to finance, I'm told that a lot, and apparently they've done nothing good. You then mention one product one example, people say "oh yes well obviously thats helpful".
    Having said that,judges also in many cases have given sentences not appropriate to the crime,which has made things worse too. TBH,I think most of the annoyance is more to the massive amounts of public money which was needed to prop up a large number of banks. You will notice that the banks which did not need money from the government don't get criticised anywhere as much as those which needed financial aid.

    Unlike other companies we could not let them collapse in large numbers, which makes the actions of both them and the government regulators more annoying. So,yes I can understand why people are pissed off.

    Like I said in connection to the comment was the following:

    Quote Originally Posted by CAT-THE-FIFTH View Post
    OTH,many people gloss over the fact that they pushed themselves into unnecessarily levels of personal debt,by overspending,not saving enough and taking on too much personal debt which means even when it comes to finding new work they are less flexible.
    This is the other aspect of the story which too many people denigrate in importance too. The problem,is that too many people are doing this and still doing this even now. The financial sector did screw up,but the fallout is made even more worse,by the fact people don't think of the future.

    To many people want to blame the financial sector for everything. How many needed that larger house,or the latest gadget,new car,etc,when their income and income stability was not enough to cover it sufficiently??

    They also blame the financial industry for this too! It was because loans were too easy.

    FFS!!

    Quote Originally Posted by TheAnimus View Post
    Then as I've said time and again by people not even starting to understand what they are criticising, makes any real reform quite hard.There is very little fanboism for finance it would seem, most of the pro finance lot have no issues with a lot of the mortgage sales people in the US been locked up, introducing APR style concepts and upfront indication of loan costs if people say miss a payment (a common one in the US apparently, mortgage is 3% then 30% if you miss a payment, sold almost exclusively as it happened to lower socioeconomic groups who, guess what, when modeled would almost certainly miss a payment within 36 months). Few if any defend those pratices.
    Now,once the fallout happened,more people are wiser(just like after the crashes in the 1920s and 1980s). However,in the past in all cases when concerns were raised(before the collapse happened),most were ignored.

    Quote Originally Posted by TheAnimus View Post
    The difference is the US firm pushes straight away for the insolvency, rather than either risking or giving the benefit of the doubt (depending on how you look at it) for a longer term.
    In some ways,this might be a better system. Quite a large number of better known US companies have gone through this,and ended up better for it AFAIK(although there are those that collapsed). Better to try and nip the problems in the bud,than wait for them to fester.
    Last edited by CAT-THE-FIFTH; 16-06-2012 at 11:57 AM.

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    Re: Clinton cards was caused to enter administration by "loan to own"

    Not much more to say than what you already have TheAnimus

    This sucks for Clintons - but as with at least 90% of the "debt problems" or "credit crisis" - whilst it's popular to blame the bankers and financial institutions who trade in bad debts, it's US, the consumers and companies that have the bad debt, who are really to blame.

    If Clintons had not bought birthdays, their debt would be manageable and they would not be in this exact same mess. They would probably still be close to bankruptcy thanks to the proliferation of "the card factory" et al, but not for the same reason.

    Same goes for those that have had houses repossessed or suddenly had lots of debt called in at once - people *choosing* to get into more debt than they could afford to pay off. Just because an institution allowed you to take the debts out doesn't mean it's their fault.

    It's a concept I struggle to see from most people's point of view - I don't blame the bankers or the debt traders - I blame the people who took out the bad debts in the first place.

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    Re: Clinton cards was caused to enter administration by "loan to own"

    Quote Originally Posted by Spud1 View Post
    I don't blame the bankers or the debt traders - I blame the people who took out the bad debts in the first place.
    I would buy this, *if* the bankers and debt traders didn't push and lobby and bribe for deregulation and create chaotic market conditions.
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    Re: Clinton cards was caused to enter administration by "loan to own"

    Quote Originally Posted by CAT-THE-FIFTH View Post
    Unlike other companies we could not let them collapse in large numbers, which makes the actions of both them and the government regulators more annoying. So,yes I can understand why people are pissed off.
    So then surely that is an important issue? How to make it so any organisation can fail.

    Ironically we are seeing the same thing with Greece, people are so worried about what would happen if it defaults, they are willing to fund greece to provide a 'soft landing' or even keep it afloat in the euro.
    Quote Originally Posted by CAT-THE-FIFTH View Post
    blame the financial industry for this too! It was because loans were too easy.
    Yup sadly thou we look doomed to repeat that.
    Quote Originally Posted by CAT-THE-FIFTH View Post
    Now,once the fallout happened,more people are wiser(just like after the crashes in the 1920s and 1980s). However,in the past in all cases when concerns were raised(before the collapse happened),most were ignored.
    Ah but the issue was that a lot of the people who where saying that had credibility issues. It reminds me of the morons who protest mobile phone masts, I actually saw one lot a few years back, protesting one that was near a school. I commented to one of the mothers her child was getting sunburnt, which she said was 'fine'. All the time clutching a plackard about radiation. It's very easy to ignore a neighsayer, the issue is most financial markets are designed so people put their money where their mouth is. Since the collapse people like Schiller in one of his books talk about methods to allow this to happen better.

    But you see why I get fed up when people take this popularist view point, for some reason this story is written to make those providing the loans the villian. Not the idiots at Clintons who completely failed to adapt their business to the likes of supermarket card sales, online services and even in store printing, but instead bought another chain.
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    Re: Clinton cards was caused to enter administration by "loan to own"

    why do governments have to throw money at failing banks? let them die

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    Re: Clinton cards was caused to enter administration by "loan to own"

    Quote Originally Posted by aidanjt View Post
    I would buy this, *if* the bankers and debt traders didn't push and lobby and bribe for deregulation and create chaotic market conditions.
    Uh hu. It's the evil bankers fault now because they pushed, lobbied and bribed to create chaos?

    There are two very easy to read books, "The Tiger That Isn't" and "The undercover economist".

    Please read something about statistics and how maths is wrongly portraid almost always in the media, and something about how the theories of economics work. Then maybe something like "The black swan" to see how they don't work.

    You talk about bankers as if they all hold the same view, they don't, thats the point. If they did, nothing would happen.

    Once again your talking completely and demonstratably out of ignorance, have jumped to a standard response of "oh the evil coperations and washington".

    It just makes me think of this so badly.
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    Re: Clinton cards was caused to enter administration by "loan to own"

    Quote Originally Posted by HalloweenJack View Post
    why do governments have to throw money at failing banks? let them die
    That is what people thought until the collapse of LB and BS.

    Sadly, nothing has been done to stop this problem of a bank being too large to fail.

    http://nymag.com/news/businessfinance/bottomline/58991/
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