Sharemax appears to be spiralling to its doom. Multiple stories today report that they are late on dividend payments to investors and may not be able to pay dividends in the forseeable future.
Cash has run out. The overvalued, over-geared properties cannot support the income stream that was demanded from them.
No surprises here then.
Posted with WordPress for BlackBerry.
Ok, so that is an unfair title. But you’ll understand what I mean:
Zurich joins HSBC, Nationwide and Norwich Union in the club of companies fined by the FSA now.
In fairness, the fine wasn’t so much for losing the data, but rather for:
The FSA’s seriousness about these issues is mirrored in our looming Protection of Personal Information Bill. This is not the same as the disturbing proposals for a Protection of Information Bill which covers public or government information. Continue reading
Apparently, car thieves don’t want your pink car. It’s not because they don’t like the colour (although they probably don’t). It’s also not only that it’s too distinctive and will be easily spotted (see the discussion later about red cars).
It’s that nobody else wants it. The resale value is much lower than other vehicles, and the risks and costs of stealing it are no lower.
Unlike the conclusion around high risk vehicles in my post on hijacking, this actually means you should be safer in a pink car. Just not safer from ridicule.
Dutch professor, Ben Vollaard, studied theft rates for vehicles as part of his research area of the economics of crimes. The data covered 109 vehicles from 2004 to 2008. Not the largest sample size, but enough to start thinking. Continue reading
Michael Lewis, of Liar’s Poker fame, has written an engaging account of the role that subprime lending played in the global financial crisis. The new book is called “The Big Short: Inside the Doomsday Machine”.
The jargon that Lewis uses is generally explained and shouldn’t prevent non finance geeks from understanding the role of subprime lenders, mortgage originators and, of course, the Wall Street banks that fed the frenzy with CDSs, synthetic CDOs and bonuses for all.
The story places a few characters at the centre of the story. I wasn’t convinced that these guys were all skill and no luck, but they certainly seemed to have a clearer idea of what was going on in the murky, muddy waters of securitisations of that era than many of the supposed experts.
Overall, it’s won’t be the smash hit that Liar’s Poker is, but it’s entertaining reading all the time. The links to Gutfreund are tenuous and smell a little of name-dropping. If Lewis wanted to remind the reader of his role in toppling the ex CEO of Salomon Brothers he succeeded. If he wanted to somehow project the glory onto the new book, he failed.
Check out Book Finder for prices from several stores (new and used) in your currency including delivery costs to your location.
Moneyweb has an interview with Eskom CFO. For me, the point made about the reasons for differences between retail and industrial tariffs is worth highlighting. This is another example of where common perception is off.
(Incidentally, Eskom tariffs are currently 68 cents for residential, 28 cents for big industrial)
From the moneyweb interview:
PAUL O’FLAHERTY: What is one of the myths of this industry is that the key industrial user does subsidise the residential user – that’s a fact. And the reason for it, even though it seems on the tariff that you quoted, that can’t be – it is true because the cost of delivering electricity to someone living out in the sticks is a lot more than delivering it to a transmission station right next to a mine, for example. So there’s a significant cost differential in actually getting electricity out there, and therefore the key industrial users do actually subsidise the residential users.
May 6 2010. Dow falls more than 1,000 points intraday, including a drop of P&G from around $60 to (according to some accounts) below $40. The Dow recovered most of the falls quickly, but these trades are now part of the historical time series.
Banks and others using risk management tools often back-test their models against historical data to see how whether the models capture past market movements in estimating potential future market movements. This blip may appear as an anomaly in these tests for some time.
(It’s more typical for the tests to use only closing prices rather than intra-day prices. However, this actually reflects a weakness in the typical models and is only a fortunate escape from today’s problems)
In a previous post, Mumbling in the Dark, I argued that too much attention was being paid to Eskom’s proposed increased charges and too little at 5 separate points, the first being their actual cost of production.
It seems that NERSA has been looking at this and has discovered some areas where Eskom was incorrectly estimating their future costs. The numbers are large, but not so large in the greater budget of Eskom. This is more like a snowflake on an iceberg than anything meaningful, but it does show the value of looking at the real issues.
I blogged recently about why I park on the fourth floor of the Cape Town airport parkade, and also about understanding and utilising unlikely but extreme events to your advantage. There is actually a link between these two posts.
Parking on the top floor does have a cost. It takes longer to drive up all the ramps and does, perhaps, on average take longer than parking on the most convenient floor every time. This extra time is a premium I pay to reduce the potential for really bad outcomes and thus optimising the parking problem. For example:
I get no value out of successfully memorising my car location, but gain from removing this risk and this worry from my routine.
If your company has a foreign currency exposure due to imported input components, this is a risk and a worry over which you have no control. Your energies are better expended elsewhere, on the operational and sales issues that you can effectively change. Get rid of these risks and get on with your real business.