Another obe bites the dust....Shame on them
- Thread starter WashingtonBrown
- Start date
hi WashingtonBrown
this one is a bit more interesting to me
for one reason
and one reason only
what happens to the deposit bonds market
I don't hold any deposit bonds thru this company( why mine are cash deposits) but they are one of the largest deposit bond companies and they had some very interesting financial structures with them.
I will be following them very closely as this I think has got a very different type of fallout and may find alot of other companies having alot of problems if the reciever starts to call in those bonds.
remember that a site must have ex amount of presales and they are underpinned by these bonds very interesting to see what happens if the bond holder don't have the cash.
in a market like this currently, in sydney melb and bris( gold coast) this may be a big problem for a few lenders.
my spin
this one is a bit more interesting to me
for one reason
and one reason only
what happens to the deposit bonds market
I don't hold any deposit bonds thru this company( why mine are cash deposits) but they are one of the largest deposit bond companies and they had some very interesting financial structures with them.
I will be following them very closely as this I think has got a very different type of fallout and may find alot of other companies having alot of problems if the reciever starts to call in those bonds.
remember that a site must have ex amount of presales and they are underpinned by these bonds very interesting to see what happens if the bond holder don't have the cash.
in a market like this currently, in sydney melb and bris( gold coast) this may be a big problem for a few lenders.
my spin
Well if I had any money in one of these coes I would be bailing out damn quick !!
If there is a rush, then I guess we will see a few more being unable to meet redemptions and they will fall over as well.
A run on these will get nasty unless we start seeing more home units sold I would guess.
If there is a rush, then I guess we will see a few more being unable to meet redemptions and they will fall over as well.
A run on these will get nasty unless we start seeing more home units sold I would guess.
Surely people hand over money to these types of investments knowing full well of the risks involved!
To me this is more of a speculation than an active investment strategy and as an investor you should only go into it with an amount of money that you know you can afford to lose! It's risky because you have no control and news like this does not surprise me at all!
To me this is more of a speculation than an active investment strategy and as an investor you should only go into it with an amount of money that you know you can afford to lose! It's risky because you have no control and news like this does not surprise me at all!
hi alex
no sorry to say its not a bank
bridgecorp is a funder of lots of sorts and has a few very different arms this problem is due to a problem with bridgecorp finance a part of the main company and its this problem that is the ripple you see here from my understanding.
the issue that you have yet to see again from my understanding is that bridgecorp was also the major underwriter for what they call revocable letters of offer.
they are the same as a deposit bond
here is the problem the gaurentor for the bond or the company
will pay the lender
and the holder of the note can cash in the bond before its due.
the cost of the bond is about 7% of its face value.
or as they say you get about 20% on your investment money and they are very popular.
in effect you have an investor that is investing in the bond(that is called a revocable letter of offer) and its underwriten by a fund in this case bridgecorp from my understanding (they are not the only lenders in this market there is alot more some will only do them on whole site)(they are seen as a type of insurance policy in effect).
but this is the first that I have seen that the underwriter has a problem if this is the case and its not been seen as yet.
For me this part of there business would be in the millions.
I know of one listed fund that does note do this underwriting unless the total bonds ammount is above 10mil and they underwrite all the presales on this form of bond so they will be looking very carefully.the trouble with all these funds is this ripple effect and as one faulters the others follow and as lenders risk rises so does the touch light start to get shone into these areas and there are not as secure as it seens.
.002
no sorry to say its not a bank
bridgecorp is a funder of lots of sorts and has a few very different arms this problem is due to a problem with bridgecorp finance a part of the main company and its this problem that is the ripple you see here from my understanding.
the issue that you have yet to see again from my understanding is that bridgecorp was also the major underwriter for what they call revocable letters of offer.
they are the same as a deposit bond
here is the problem the gaurentor for the bond or the company
will pay the lender
and the holder of the note can cash in the bond before its due.
the cost of the bond is about 7% of its face value.
or as they say you get about 20% on your investment money and they are very popular.
in effect you have an investor that is investing in the bond(that is called a revocable letter of offer) and its underwriten by a fund in this case bridgecorp from my understanding (they are not the only lenders in this market there is alot more some will only do them on whole site)(they are seen as a type of insurance policy in effect).
but this is the first that I have seen that the underwriter has a problem if this is the case and its not been seen as yet.
For me this part of there business would be in the millions.
I know of one listed fund that does note do this underwriting unless the total bonds ammount is above 10mil and they underwrite all the presales on this form of bond so they will be looking very carefully.the trouble with all these funds is this ripple effect and as one faulters the others follow and as lenders risk rises so does the touch light start to get shone into these areas and there are not as secure as it seens.
.002
hi alex
no the problem with these funds is that they do need to churn investors or investor money and when the car stops its very hard to move it forward again.
we are still seeing the ripples of 2003 and they will not go away in a hurry.
high returns are good in a burning hot market but alot harder in a still or corrected market and these funds get burnt
fact of financial life
no the problem with these funds is that they do need to churn investors or investor money and when the car stops its very hard to move it forward again.
we are still seeing the ripples of 2003 and they will not go away in a hurry.
high returns are good in a burning hot market but alot harder in a still or corrected market and these funds get burnt
fact of financial life
Been in NZ for work over the past week and based on what I heard on the radio, it was not so much people wanting access to their funds, but an inability to pay the promised rates of return to the existing investors. They actually lost a quite a bit of money through Westpoint apparently, which wouldn't have helped.
You would have thought so Xenia but this continues to happen. There are many people who are short-sighted and focus purely on the interest rate/return without looking at the accompanying risk. I think they said there are 18,000 investors who have lost over NZD500m (Well maybe not all, the receivers will be busy at least!). There's a good carrer choice for someone
Hello Mr doom n gloom
No waves..
just another company that sought a large amount of finance with relatively high risk attached due to the way finance was structured and profits forecasted. Happens regularly with non-finance organisations all the time..!
A domino effect for sure for similar organisations however no mainstream effect at all on general residential / commercial market.
Dont count your lucky stars yet.. Sky hasnt fallen and all is well
Harris
A ponzi Scheme then ????
Seems like we need to provide new inflow of capital to pay the old investors, with no real return on existing "invested" funds........................
ta
rolf
Seems like we need to provide new inflow of capital to pay the old investors, with no real return on existing "invested" funds........................
ta
rolf
I know a couple who have never borrowed a cent in their lives. They would never ever consider buying a share in a company as they consider shares way too risky. They ended up with a bit of property, although payed cash, and used inheritance money.
Anyway, I know they have some high interest rate investments in these sorts of things, and I talked to them about it the other day, and suggested they get out.
Na, the great interest rates are blah, blah, blah. Bank interest not enough, what would they do with the money? So it's staying
At least I tried.
See ya's.
Anyway, I know they have some high interest rate investments in these sorts of things, and I talked to them about it the other day, and suggested they get out.
Na, the great interest rates are blah, blah, blah. Bank interest not enough, what would they do with the money? So it's staying
At least I tried.
See ya's.
