A Sea of Red

[hillchaser]

Hey Filthy - What dya reakon - Are we there yet ?

I can see us getting back to 5500. - Blood on the streets ??

[pevfan]

Ouch!!...Looks like I've been stung with Centro. Should'na listened to the finance "expert" on 774 a coupla Sat mornings ago...she said all the bad news had already been factored into Centro's price at that stage....little did she /we know.

There's a big Centro shopping centre just down the road from us...think I better get my Xmas shopping done there pretty quick, might not be there for much longer

[keri]

Pev, it'll be bought out by someone else before you could blink.

[keri]

A much better response than mine, Filthy!

[pevfan]

Thanks for your reassuring words Filth and Keri. Aint exactly got the sheep station on it but I kinda figured the same as you. Might as well hang onto them for now as they dropped so much yesterday that they're worth stuff all atm anyway.

[pevfan]

Anyway, it's all Labor's fault...There'll probably be a world wide recession now and THAT will be all the ALP's fault as well.

Bloody hopeless economic managers they are...why did I vote for them....

[jimmyc1985]

IMO, the unlisted CNP funds are OK (for now - when they lift the embargo on the suspended retail funds, quite a few people will pull their money out, and CNP has a mandate to coinvest 40-50% in those funds...money which they don't have), but the headstock is f*****. The reason why they couldn't get their CMBS issue away is because banks figured out that the Group actually doesn't own much, hence their was too little to securitise against in the current environment. If a REIT, of all possible corporate vehicles, suspends distributions (the major reason why REITs exist) and freezes movements in funds under its management, it's a fair bet they are well and truly down the toilet - pretty much the same thing as a bank refusing to pay interest and not letting people make a withdrawal.

Filth, seems as though your financial advisor mate is talking about the 40-odd syndicated retail funds CNP manage as being OK, and he's probably right, but CNP itself is a carcass swinging in the breeze. I would most certainly not want to have one cent of my money in either of their two unlisted direct property funds (the ones they froze) - CNP currently holds 50% of the FUM in those two funds as a core co-investment, so when CNP get picked apart and the new owner, be it a bank, trade buyer or otherwise, moves in and draws down on those funds, they're in the poo.

CNP is an incredibly complicated beast, which is saying something seeing as though quite a few REITs run a pretty complicated model. The only bloke in the world who knows, to a tee, what is really going on at the moment is Andrew Scott. But for mine, it's lights out at some stage in the next 3 months. Only thing that could save them in their current format would be the Fed Reserve + Whitehouse's efforts to get liquidity going in the asset-backed securities markets, which might give them a small chance of successfully refinancing by their D-Day in February (albeit at a much higher rate).

[jimmyc1985]

IMO, the unlisted CNP funds are OK (for now - when they lift the embargo on the suspended retail funds, quite a few people will pull their money out, and CNP has a mandate to coinvest 40-50% in those funds...money which they don't have), but the headstock is f*****. The reason why they couldn't get their CMBS issue away is because banks figured out that the Group actually doesn't own much, hence their was too little to securitise against in the current environment. If a REIT, of all possible corporate vehicles, suspends distributions (the major reason why REITs exist) and freezes movements in funds under its management, it's a fair bet they are well and truly down the toilet - pretty much the same thing as a bank refusing to pay interest and not letting people make a withdrawal.

Filth, seems as though your financial advisor mate is talking about the 40-odd syndicated retail funds CNP manage as being OK, and he's probably right, but CNP itself is a carcass swinging in the breeze. I would most certainly not want to have one cent of my money in either of their two unlisted direct property funds (the ones they froze) - CNP currently holds 50% of the FUM in those two funds as a core co-investment, so when CNP get picked apart and the new owner, be it a bank, trade buyer or otherwise, moves in and draws down on those funds, they're in the poo.

CNP is an incredibly complicated beast, which is saying something seeing as though quite a few REITs run a pretty complicated model. The only bloke in the world who knows, to a tee, what is really going on at the moment is Andrew Scott. But for mine, it's lights out at some stage in the next 3 months. Only thing that could save them in their current format would be the Fed Reserve + Whitehouse's efforts to get liquidity going in the asset-backed securities markets, which might give them a small chance of successfully refinancing by their D-Day in February (albeit at a much higher rate).

Could be a Gordon Gecko moment coming on Jimmy

. Nice!

Apparently there's a new Wall Street coming out soon. Should be a cracker.

BTW, i've got a few mates who were at the Centro institutional briefing on Tuesday. Scott was a shattered man - pretty much in tears. They're G-A-W-N. Reminds of that game Jenga - someone's pulled out one of the blocks near the bottom, and the whole structure is going to collapse!

[jimmyc1985]

Centro in a trading halt all day today. The last time they remained in a trading halt over the weekend pending an announcement was before they dropped the nuclear bomb on 17/12 that they were close to insolvency.

Wouldn't surprise if they came out on Monday or Tuesday and announced that the administrators have taken over.

[jimmyc1985]

Centro in a trading halt all day today. The last time they remained in a trading halt over the weekend pending an announcement was before they dropped the nuclear bomb on 17/12 that they were close to insolvency.

Wouldn't surprise if they came out on Monday or Tuesday and announced that the administrators have taken over.

Hope MFS have done their due diligence better than HIH did with FAI.

The markets will be interesting this year Punters!! Jim, can you see a lot of Put action! I think Resources and hence your WPL should be safe but its going to bumpy this year but this will present opportunity, 24 months out.

Anyone know where you can buy physical Gold?

The offer by MFS to buy the management rights to the CMCS syndicates would've been very low-ball, because there's not much equity value in the management rights per se for a variety of reasons. Firstly, when Centro as funds manager gets replaced, there's a fee of 2% of net assets payable out of the trusts to Centro. Secondly, a large portion of the value of the management rights to syndicated funds lies in being able to raise new equity or rollover existing syndicates upon their expiration date, but these are no longer feasible - most investors will seek to pull their money out at the first available opportunity, and i can't imagine any investors stumping up new money to get involved in a CMCS syndicate. Thirdly, the 6 US syndicates that Centro owns management rights to (#32, 35, 36, 38, 39 and 40) will all suffer big asset writedowns, particularly the more recent ones (numbers 38-40) as yields in the US on retail assets have blown out by ~200bps, and as management fees are charged as a percentage of assets under management, the fees from the US syndicated funds will be much lower over the next few years. So i can only imagine that any offer put by MFS would've been put on a terminal value basis rather than on a perpetual value basis.

Part of the reason why i think Centro is technically insolvent has to do with their deceptive reporting standards. Shareholders who've bought shares in a company that's been misleading in its reporting and have suffered loss as a consequence can now (in some circumstances) have their rights elevated from shareholder (last in line in the event of liquidation) to a creditor. Centro have basically already admitted they misled investors over their classification and disclosure of debt maturation, and given the billions of dollars that have been wiped off their market cap since they did this, there's potentially many millions of dollars of shareholder claims that could be elevated to the status of creditor. Net result: equity value of Centro is diminished so severely and is so unquantifiable that they have to call in administrators.

[keri]

http://news.ninemsn.com.au/article.aspx?id=68120

News on Centro chief.

[hillchaser]

Hey Filthy - What dya reakon - Are we there yet ?

I can see us getting back to 5500. - Blood on the streets ??

I'd just like to quote myself and say that we are not far of 5500 now. i think the TA actually shows that if we break through 5750 the nxt stop is 5400 but why stop there.

Filth - I did come across a few sites in Australia where you can buy (online) physical gold. There are also a few gold trusts that you can buy into here in Aust. I'll try and dig them out. then again maybe you were being ironic.

[hillchaser]

Here we go again ... I think 5500 was optimistic....I think we are going to see blood on the street by the end of this week.

[hillchaser]

Hey Filthy

This is some information a friend passed on to me

Physical. The Australian alternatives of which I am aware are the Perth Mint or the Australian Bullion Company. http://www.perthmint.com.au and http://www.ausbullion.com/


There are various options ( e.g.allocated or unallocated ) and they deal in other precious metals. The costs need to be considered, of course, and you might want to compare the spreads offered at any one time by the two companies. Obviously they store it for you, as I wouldn't want to park it in my garage or under the bed.

Both companies will send you a daily Email with the latest prices.

Alternatives are the exchange traded securities (e.g. ASX code GOLD), which track the price of gold (Aussie) fairly closely, although I think there is a market maker involved. At least that gives liquidity even if the spreads are a little wide at times.

I have a funny feeling that we are heading for a pullback to the 4800's

Gold might be worth it but I'm thinking oil ...
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