{"id":24842,"date":"2017-08-23T08:53:28","date_gmt":"2017-08-23T13:53:28","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24842"},"modified":"2017-08-23T08:53:28","modified_gmt":"2017-08-23T13:53:28","slug":"bill-blain-on-providents-suprime-shock-cant-get-much-worse-youd-think-oh-yes-it-can","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24842","title":{"rendered":"Bill Blain On Provident’s Suprime Shock: “Can\u2019t Get Much Worse You\u2019d Think? Oh Yes It Can”"},"content":{"rendered":"

Bill Blain On Provident’s Suprime Shock: “Can\u2019t Get Much Worse You\u2019d Think? Oh Yes It Can”<\/a><\/h3>\n
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By Bill Blain of Mint Partners<\/a><\/em><\/p>\n

Blain’s Morning Porridge<\/strong><\/p>\n

Provident Financial. What a mess. Is it an opportunity?<\/p>\n

Provident has become the story of the week<\/a>. In case you missed it: the stock has been hammered and its bonds are trading massively down on the back of multiple bad news bullets: an FCA investigation into the Vanquis credit card and loan repayment options, a failed new technology introduction and new staffing approach that caused a leap in defaults from 10% to 43% (!), suspended dividends and the departure of the CEO. <\/strong><\/p>\n

Ouch.<\/p>\n

For years Provident was a respected name, secure in its niche supplying credit to the bottom of the UK credit pool. Its experienced independent door-to-door salesmen managed their clients pragmatically \u2013 a personal touch that kept defaults low and recoveries high. Earlier this year the model was turned on its head. The independent door-to-door guys were replaced by I-pad wielding scripted staff controlled by head office. The system appears to have collapsed overnight. Defaults soared. <\/strong><\/p>\n

The firm threw away control of its clients.<\/p>\n

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Venezuela’s ‘Goldman Bounce’ In Reserves Is Gone<\/strong><\/p>\n

The boost in foreign reserves Venezuela enjoyed after Goldman Sachs investment arm\u00a0picked up\u00a0$2.8 billion of\u2026<\/p>\n<\/div>\n<\/div>\n

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Muppets.<\/p>\n

Provident has been described as \u201cuninvestable<\/strong>\u201d.<\/p>\n

It looks like a case of classic management incompetence. Replace a tried and tested functional business model with something new that doesn\u2019t work. But there is more to it. It should remind fixed income investors of the importance of cash-flow \u2013 and exactly how cash is collected and overseen. Years of experience has taught us that firms with a tight control of their credit processes and sustainable businesses are the ones to invest in.<\/strong><\/p>\n

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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Bill Blain On Provident’s Suprime Shock: “Can\u2019t Get Much Worse You\u2019d Think? Oh Yes It Can” By Bill Blain of Mint Partners Blain’s Morning Porridge Provident Financial. What a mess. Is it an opportunity? Provident has become the story of the week. In case you missed it: the stock has been hammered and its bonds […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[15674,15703,4318],"class_list":["post-24842","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bill-blain","tag-provident","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24842","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24842"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24842\/revisions"}],"predecessor-version":[{"id":24843,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24842\/revisions\/24843"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}