South Canterbury Finance Limited

[Alan3285]

At that point in time they are. To have value there needs to be liquidity and if there are no buyers or sellers the owners are sitting on something that has no value.

Take for example FTX - the last sale price is still shown as 0.03 - but no buyers or sellers. By your reckoning existing shareholders still have 0.03 value in their shares. That I suspect would be wishful thinking.

Or take for example, in property, the christchurch Horror House. The RV would have shown a value, there were keen sellers but no-one wanted to buy. As it turned out there is no value in that property as it burnt to the ground - in fact it may even have negative "value" since debts are now owed for demolition costs.

Value will,of course, return when buyers and sellers come back together at an agreed price.

Okay - thanks for that. I just wanted to understand the level of reasoning behind your thinking.

Alan.

[Enumerate]

I think the Marac news has the fixed interest market in a flap:

Risk Manager goes walkabout -

http://www.stuff.co.nz/national/3300...-found-in-park

$2.5m crack in the floorboards - just how robust are Marac's internal risk mgnt processes -

http://www.stuff.co.nz/business/3303...sts-Marac-2-5m

Fact of the matter is that South Canterbury have also demonstrated poor controls and poor judgment. I found the fact that they were delayed, for a number of critical weeks, in filing a prospectus acceptable to the Securities Commission to be deeply worrying. These people are stewards of billions of dollars - you would expect they could file an acceptable prospectus for raising debt in the New Zealand market!

There are better places to put your money.

[winner69]

I think the Marac news has the fixed interest market in a flap:

Risk Manager goes walkabout -

http://www.stuff.co.nz/national/3300...-found-in-park

$2.5m crack in the floorboards - just how robust are Marac's internal risk mgnt processes -

http://www.stuff.co.nz/business/3303...sts-Marac-2-5m

Fact of the matter is that South Canterbury have also demonstrated poor controls and poor judgment. found the fact that they were delayed, for a number of critical weeks, in filing a prospectus acceptable to the Securities Commission to be deeply worrying. These people are stewards of billions of dollars - you would expect they could file an acceptable prospectus for raising debt in the New Zealand market!

There are better places to put your money.

..... and it seems that even some of the stuff used in that prospectus is to be restated .... not a good look at all

[Alan3285]

Marac is also refusing to say if the guy going 'walkabout' is related to the dodgy loan.

NZ Herald - 9 Feb 2010: Marac won't say if hidden loan linked to runaway

If it wasn't related wouldn't you have expect them to have issued a denial pretty quickly, or am I reading too much into it?

Alan.

[Enumerate]

If it wasn't related wouldn't you have expect them to have issued a denial pretty quickly, or am I reading too much into it?

In these times it does not take much for the market to add "one" plus "one" and arrive at the answer of -42!!

It is clear that the present day Marac is not the same as the Marac of old. However, the $2.5m loss is hardly life threatening. Of greater concern to the market is that risk assessment and management processes, in financial firms, are working to reasonable expectation. Any "bad press", in this regard, causes the entire sector to be punished!!

[Alan3285]

In these times it does not take much for the market to add "one" plus "one" and arrive at the answer of -42!!

It is clear that the present day Marac is not the same as the Marac of old. However, the $2.5m loss is hardly life threatening. Of greater concern to the market is that risk assessment and management processes, in financial firms, are working to reasonable expectation. Any "bad press", in this regard, causes the entire sector to be punished!!

Actually, you could take it as a very positive sign.

Whatever management are doing now, they have found the problem that was created years ago. Looks like they might be improving, so it should be taken as a positive sign really.

Alan.

[Enumerate]

Actually, you could take it as a very positive sign.
Whatever management are doing now, they have found the problem that was created years ago. Looks like they might be improving, so it should be taken as a positive sign really.

Alan, I wish I had your bright, sunny and optimistic, disposition.

Alas, I am cursed with a restless brooding - I keep thinking: "how many more difficulties will they find if they further improve their audit and control mechanisms".

I am haunted by an old geology phrase: "If you want to shoot elephants; look where elephants have been shot before".

I am plagued with the notion that a greater mess might be just under the surface, down Timaru way ...

My only comfort is that my hard earned $$ are well away from these deep dark pits.

[Alan3285]

Hi Enumerate,

Alan, I wish I had your bright, sunny and optimistic, disposition.

Alas, I am cursed with a restless brooding - I keep thinking: "how many more difficulties will they find if they further improve their audit and control mechanisms".

I am haunted by an old geology phrase: "If you want to shoot elephants; look where elephants have been shot before".

I am plagued with the notion that a greater mess might be just under the surface, down Timaru way ...

My only comfort is that my hard earned $$ are well away from these deep dark pits.

{Grin}

The deepest, darkest pits, are where all the juiciest pickings are! You just have to be rational and balanced in your choices, comparing returns to risks.


Alan.

[Enumerate]

The deepest, darkest pits, are where all the juiciest pickings are! You just have to be rational and balanced in your choices, comparing returns to risks.

Don't get me wrong ... I too have been spelunking many of these deep dark pits ... some of which I have decided to toss my money into.

As an example, I cite Bluestar Group (BLU020).

- Ask most investors and they think Eric Watson is involved ... absolutely wrong. (I agree that as a leading indicator for someone about to be shafted - the "Eric Watson presence on the register" is a pretty good predictor. However, his Bluestar group was a completely different animal).

- The Trust Deed is very good. The fact that the senior lenders have forced the halt of interest payments is commercial reality for a business of this type in a recession following on from the GFC liquidity issues. This is where I depart company from Chris Lee who has said there is some kind of obligation by the company to continue payments. The senior lenders are exercising their power - but the BLU020 holders are being compensated by an increase in the accruing interest margin.

- There are two factors that mitigate the risks, in my mind. 1) Printing businesses are usually "first out of the blocks" at the end of a recession; and 2) The ultimate, significant, owner of the business is the CHAMP hedge fund (funding management buy-outs, derivative of a large NY based fund) - hence as long as the business has prospects, there will be appropriate levels of equity in the business.

This is a view you will not get from your retail broker. There are significant risks - but even more significant rewards. I recommend BLU020 for your further analysis. (Of course, if you find anything untoward - I would appreciate hearing about it).

There are many other interesting deep dark pits ... I love the complexities of the various Macquarie funds - another point of difference I have with Chris Lee who tends to like much more traditional investments.

[percy]

Actually, you could take it as a very positive sign.

Whatever management are doing now, they have found the problem that was created years ago. Looks like they might be improving, so it should be taken as a positive sign really.

Alan.

As a PGC shareholder I think you have it right. It looks like Greenslade and new team have new controls now in place,which i take as a positive sign
The new people brought in and who now are in control are of a higher calibra than their predecessors.A lot of chickens have come home to rost in all finance companies.Those like Marac now have strong balance sheets,better management,tighter controls,so their future looks positive.