Derivex

No, no that's all wrong!

This is what would really happen:

a) The pub with no beer
The pub would develop a beer-free business model which involved providing the infrastructure (cash registers, stools, atmosphere) enabling those who brewed beer to match up with people who wanted to buy beer. This would create a massive microbrewery-led beer market and make the pub THE place to go to buy and sell microbrewery beers. The pub would charge a small premium on every beer for its profit.


b) The pub with beer at $2 a glass
The pub would open with the largest variety of beers known to man, including some beers which are unavailable anywhere else.
It would pioneer a one-step purchase model where you simply walk to the counter, put down your $2 coin and they would hand you the beer you like. Each beer would contain an RFID tag which, once inside you, would let the pub know which beers you like and allow it to suggest other beers, spirits and cocktails you may enjoy every time you entered the pub. On this basis the pub would rapidly expand into supplying a huge range of different products, some of which would appear to have nothing to do with beer. Finally the pub would invent instant brew beer where you only had to order it and the beer would be brewed on-premise before you had a chance to get thirsty.


c) The pub with free beer
The pub with free beer would use the free drinks to bring in massive crowds. It would then charge beer companies and other advertisers to place advertising all around the pub. The pub would pioneer new beer advertising approaches, including human billboards who leap out at you at odd moments while you are drinking your free beer and finally an approach where you were not allowed to enter the pub until you read the billboard on the front of the building.

In all three cases the initial investors would then list the pubs on the stock market and walk away with massive profits.

Cheers,

Aceyducey

PS:
a) ebay (www.ebay.com)
b) Amazon (www.amazon.com)
c) Gamespot (www.gamespot.com)
 
capital, cash flow or liabilities

What capital, cash flow or liabilities does derivex have?
This doesnt seem to have been covered in any discussion.

Is that something that might be important if I take on a mortgage??
No one seems to have received funds from a loan application yet?
Any one have an application in?
 
Well, if I get a Derivex loan, I''ll be sure not to give them an email address. I'm almost certain now, that they're responsible for all the SPAM in the world.

:D :D :D

Jireh
 
ggumpshots said:
What capital, cash flow or liabilities does derivex have?
This doesnt seem to have been covered in any discussion.

Is that something that might be important if I take on a mortgage??
No one seems to have received funds from a loan application yet?
Any one have an application in?

I don't know if anyone really knows about capital, cash flow or liabilities. Since it's a privately held company, it's really all speculation. There are "known knowns" and "known unknowns". I suppose it's the "unknown unknowns" about Derivex that frighten people...that is...if your name began with a "D" and ended with a "onald Rumsfeld".

I suspect, like any new business, they've got to get a certain number of customers in and then the whole thing gets rolling. They have seed capital from their key investors and need to give out some money to get a certain amount of loan repayments going (ie. cash streams) before they can build on profits from their "3-tier leveraged CMT thingy" and lend even more money.

It may last a short time. It may last a long time. I'm most sceptical that it would last more than a generation. I'm wondering if eventually other smart applied finance types figure out their secret, patented system, if too many competitors will change the nature of the market for AAA backed mortgage payment streams, or the nature of the CMT market.

It sounds like a good thing, but if you're willing to believe Derivex will continue as a going concern, then the next question is, "does the business model scale?" What happens if other competitors enter the market?

Hmmm.

Jireh
 
The whole 3 tier CMT step bond residual bond tranche amortising pass thru annuity convertible paired hedge arbitrage risk free claim is all bullsh!t.

Just beacuse you have access to a financial dictionary it does not mean you can defeat the laws of present and future value of a cash flow.

If you can really find capital for nothing. then good on you because you have just outsmarted every other company in the free world.
 
quintets said:
I'm most sceptical that it would last more than a generation.
I've been quite open minded on the model, but even I don't see the offer lasting long. It is a desperate bid to find a safe haven for US$ by people who, rightly or wrongly, believe their currency is at the edge of the abyss. When the excreta hits the cooling device, he who looses less wins.

By the end of the decade everyone will expect interest again. That is normal. That interest free money is being offered now "proves" to me that we are in abnormal times. But I've been saying that for a year!!!!

Thommo
 
My Head Hurts

I have read and read and read and watched and read and then read some more.

Still can anyone tell me if:

1. Has any advertising actually ever been done?
2. Has anyone settled on anything they are doing?
3. Why are there only 2 accredited brokers in Australia?
4. If it takes 18months to get the funding process right, how can it be they are ready now?
5. Free money is one thing, expecting investors to risk capital for the kind of returns they are predicting really gets me thinking.

I showed this to my accountant and solicitor and both tried to explain to me the finer acts of Economics and Capitalism. The fact the press or media haven't jumped on this wave and run with it really makes me paranoid of just how real it can be.

I sit and wait for something to happen and although my head says stay away, my hip pocket is telling me to jump right in and take a chance.

Natalie, I want to say thanks for all your critique and information, it has been very helpful and answered a lot of why this will not work on paper.

This patented system they have must be something from mars.....
 
Let me point out (again) that is you borrow in USD or Yen and then hedge the currency risk you will not save more than 1/10 of 1% on your borrowing rate. (and that would be on a good day)

If you borrow in USD or Yen and don't hedge your currency risk you should be commited to the nearest mental institution.

There is no free lunch in cross currency borrowing.
 
In searching for the worst case scenario here, I don't think anyone's hit it on the head yet. The worst case scenario is not that Derivex will go bust and you will have to refinance you home to pay out the loan which will be called in by the receivers. The worst is that Derivex will go bust and when the receivers go to call the loan in, you find that the repayments you've been making for 5 years were not going to pay off your loan and in the whirlpool of shuffling money between accounts and funds, all your repayments have been siphoned off somewhere and you still owe the original value of the loan. Without our going to the trouble to find out what's in the 'black box' and exactly how this business model works, that is a very real worst case scenario that has to be taken into account.

TMC
 
Worst Case Scenario

I don't believe that is a worst case scenario.

Wouldn't your loan agreement state clearly what you paid and what it was meant to be.

I can't see how any receiver can ask for more than what you owe.

I have dealt with receivers, they make a claim on a debt you may have, you prove what you have on record and most times with proof you pay what you can show is really owing.

Correct me if I am wrong here.

The only worst case scenario I see for borrowers is the loan is called in.

The worst case scenario for investors is they lose their investment.
 
tmc said:
In searching for the worst case scenario here
Worst Case Scenario: You die

So long as this doesn't happen you can recover.

If this does happen, you won't care about recovering.


Frankly if you're always looking for the worst case you'll help it come true.
Equally if you focus on the best case you'll help it along as well.

IMHO a much better approach to dealing with risky situations (aka all of them) is to:
  1. Identify and quantify the reasonable case risks.
  2. Mitigate the risks you can control.
  3. Decide if the remaining risks are within your tolerance level.
  4. Do or not do (there is no try).
Cheers,

Aceyducey
 
What a great post Acey

you have written what I have been thinkin :D

Maybe this is the way everyone make their own judgement about Derivex....works for me :D
 
Hi all,

No, its not about the risks and the potential what if's.

It is about if it is real.

I asked Simon a couple of days ago if anyone had actually received their loan from the applications made. I am still waiting for a reply.

No-one here should make an application until we hear of at least ONE that has gone through and received the loan funds.

How much were those applications? $495 I believe.

bye
 
nat r said:
If you can really find capital for nothing. then good on you because you have just outsmarted every other company in the free world.


...or in other words "you cannot get another six pack from an empty fridge"!
 
Bill.L said:
Hi all,

No, its not about the risks and the potential what if's.

It is about if it is real.

I asked Simon a couple of days ago if anyone had actually received their loan from the applications made. I am still waiting for a reply.

No-one here should make an application until we hear of at least ONE that has gone through and received the loan funds.

How much were those applications? $495 I believe.

bye

Hi Bill,

Without wanting to answer for Simon or anyone else, and without having decided one way or the other in which camp I stand, I thought I might reply. Contrary to popular belief, the fact that someone has not taken time out of their schedule to reply to you does not a charlatan make....

(a) According to their website, Derivex do not even launch their loans until Monday 17th January - not sure how youre expecting people to have funds before then. Yes, brokers have been accredited, but according to the information I have they have been submitting applications to Derivex for a grand total of 4 business days.

(b) The application fee is $275. Its there on the website.

Best wishes,

Jamie.
 
nat r said:
Let me point out (again) that is you borrow in USD or Yen and then hedge the currency risk you will not save more than 1/10 of 1% on your borrowing rate. (and that would be on a good day)

If you borrow in USD or Yen and don't hedge your currency risk you should be commited to the nearest mental institution.

There is no free lunch in cross currency borrowing.


TMC good point
Byronet Goodpoint

so are both correct?

Nat r.....
I have borrowed in yen, for my aussie property ,no hedging as the economy
here in Japan will be in the doldrums for more years than you can believe.
The Ministry of Finance is an omnipotent overlord from what I can fathom but still no one is really in control here. No sign of any structural change .
With a loan at less than 2% I am happy but not sure where the yen will be in 15 years when the loan is called in.
Anyway please elaborate so I can let my keepers know if I should be let out of the asylum
 
ggumpshots said:
I have borrowed in yen, for my aussie property ,no hedging as the economy here in Japan will be in the doldrums for more years than you can believe.
How's the exchange rate risk been Gumpshot?

Cheers,

Aceyducey
 
tmc said:
In searching for the worst case scenario here, I don't think anyone's hit it on the head yet. The worst case scenario is not that Derivex will go bust and you will have to refinance you home to pay out the loan which will be called in by the receivers. The worst is that Derivex will go bust and when the receivers go to call the loan in, you find that the repayments you've been making for 5 years were not going to pay off your loan and in the whirlpool of shuffling money between accounts and funds, all your repayments have been siphoned off somewhere and you still owe the original value of the loan. Without our going to the trouble to find out what's in the 'black box' and exactly how this business model works, that is a very real worst case scenario that has to be taken into account.
So the worst case is you have a 5% interest fixed loan for N yrs. AND you get to choose whether you refinance it elsewhere or just give it back to the receivers.

Who is taking the risks here - Derivex or me ?

Who thinks the payoff of saving $100Ks interest by risking a $275 app fee is a good one (assuming at least a couple posters get loans settled) ?
 
Just thinking to myself

[Just thinking to myself]
When I was about 8, I discovered banks pay interest on deposits. I couldn't believe it - it was too good to be true - free money. Easy I thought, I just get lots of money and live off the interest. I couldn't understand how they could possibly pay money out for free, but I tried it & it worked.

Then 20 yrs later I discovered IP - people actually pay rent to live in your IP and pay off your mortgage for you - I couldn't believe it - it was too good to be true - free growth. Easy I thought, I just get lots of property and live off the rent. I got one IP & I tried it & it worked, so I got a few more. I wondered why everyone didn't do it - mmmmm maybe they didn't understand it, maybe they were too risk averse, dunno, but it works for me.

Now 10 yrs later I've just discovered interest free home loans. I think I'll do a bit of DD, read the T&C, check to make sure someone has done it before me & is happy, work out the worst case scenario (5% fixed loan for as long as they survive), work out payoff ($275 risked to return possibly $100Ks).

Mmmmm, all looks good so far, I just need to make sure others have successfully settled loans then I might just give it a try. I'm pretty risk averse, so I''ll just try it a little at first - if it really does work I might just refi another prop next year.........[/Just thinking to myself]
 
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