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spin

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  1. Please feed back if you get an answer. The CEO there has a very impressive background. As I have said elsewhere FFH does seem to be able to attract real talent to its projects. Thanks for the thread. Looks like an impressive start for Go Digit https://www.irdai.gov.in/ADMINCMS/cms/frmGeneral_Layout.aspx?page=PageNo4097&flag=1
  2. "According to the terms of their revolver they cannot close stores at this pace throughout the entire year. (they are limited to a specific number annually)." -ve covenant allows for 250 per quarter and 500 TTM (iirc prior revolver was 100) Even then the collateral agent will waive that covenant. Spin
  3. FCharlie :: "Also, depreciation is much, much higher than capex. What is behind that?" The deperication of the operating leases mentioned previoulsy is a part of the difference you note. This itemization and reconciliation between cash flow, income statement and balance sheet should help explain why the delta. http://i49.tinypic.com/2mpg2z4.png In summary for the prior 3 years, D&A on the following balance sheet items shake out at: - PPE ~31% - Equpment Leases ~34% - Acquired intangiables ~26% - Internal capatalized Software and customer costs ~9% The ~26% expense on acquired intangibles is mainly due to the allocation assigend to 'customer base' from the ~6B ACS acquisition n 2010 and is amortized over 10 years. The following anlaysis should show the D&A is reasionable to the investment spend -ie: no hidden cash flow bounty. Acquisitions are backed out over this 3yr snapshot period due to the large lumpy ACS buy but should be added in over longer trend. http://i47.tinypic.com/2yuhsnk.png Spin
  4. This was a nightmare for me as well for me with ibkr. I tried to work with a well known inst. portfolio fund manager software package for nine months but due to ongoing issues abandoned the effort. I ended up writing a script in perl to do it. It was a huge amount of work as the underlying forex transactions in non base currency is divorced from the actual instrument you trade ( option,stock,future) in the nonbase currency market. I feel your pain. It took me years to solve it and I had to refine 4 years or returns when finally I got it working correctly. I had lots of trades so could not use the spreadsheet method scorpion mentioned. You have to track a FIFO queue (or weighted average amount) of each non base currency to do it correctly for tax purposes. Consider using a contract programmer to take the ibkr exchange rates and trade data from activity flex statements. Good luck it's a big job if you trade lots of nonbase currencies and instruments. Ibkr was no help either when I tried to work with them on it. Spin
  5. "The point being that if you read the fine print (actually it should be clear enough from the data below) then it is as clear as daylight that the last place you want to be is at the A5 level, because you are being pushed down in the capital structure the whole time." This isn't correct. A5 isn't pushed down. A4 is a WAL extnesion protection tranche for A1-3 to ensure the buyers can control WAL for ALM purposes. So the shortfall reference is driven by CPR/prepay speeds and not credit costs. Think of it this way: If A1-3 was a more traditional amortizaiton waterfall trance paydown from principal loan repaymants vs the A1-3 bullet structure with A4 extension protection/redemption fund trance structure, then the A5 trance would be in the same position under slow CPR speeds. All that is hapening is that if prepays slow you shift the shorfall into a new A4 note allowing A1-3 to be payed out. A5 still has the same $$ amount in-front of it and the same $$ supporting it. This is why the monthly reports show the CPR and the collections in the redemption fund and the information memorandum show the target redemption fund amount by month. Also note that any credit losses in the deals are shared pari pasu with any outstaniding A1-5 notes after protection is exhausted. Mezzz eats then AB eats then losses shared on the other outstanding A notes. So from a credit loss perspective A5 isn't disadvantage by the A1-3/A4 structure. Also remember on the high LTV loans yo have to blow the LMI then excess spread and the mezz protection and AB before A1-5 gets nicked. These deals are pretty strong deals really. I wouldn't be betting against the AOFM holdings even though Australian house prices are overvalued. The A tranches have lots of protection. B2's might get nicked though. Here is the latest AOFM holdings if your interested: www.aofm.gov.au/content/_download/rmbs/rmbs_data_20110523.xls Note that AOFM holds all the smaller players which is a policy decision to allow the smaller lenders to compete against the big 4 who effectively control something like 80% of the residential lending market. The guys that will get hurt out of this Australian housing bubble are the over extended home owners and then the LMI providers. Spin
  6. "Just eyeballing some of the CDS prices it seems the Australian banks CDS are already selling for a premium." JPMorgan Chase & Co 66 Spread (bps) Wells Fargo & Co 86 Spread (bps) Berkshire Hathaway Inc 98 Spread (bps) Goldman Sachs Gp Inc 105 Spread (bps) Westpac Bkg Corp 103 Spread (bps) Aust & New Zld Bkg Gp Ltd 102 Spread (bps) Natl Aust Bk Ltd 102 Spread (bps) You'll need to go to the dealer desk to get CDS quotes on specific RMBS tranches if offered. These comments may interest: http://cornerofberkshireandfairfax.ca/forum/index.php?topic=2998.15 Australian banks will suffer in any Asian induced downturn but capital likely won't implode like in US. You can make an argument that the bank most vulnerable to a downturn is National Australia Bank as it has the highest C&I exposure and lowest residential exposure. Spin
  7. Westpac- http://www.westpac.com.au/about-westpac/investor-centre/funding-securitisation/outstanding-issuance-summary/ Commonwealth- http://www.commbank.com.au/about-us/securitisation/mortgage-backed-securities/default.aspx CDS http://www.markit.com/cds/most_liquid/markit_liquid.shtml Spin
  8. CBA (#1 bank) Slide deck justifying to bondholders why no property bubble (Australian banks can't self-fund lending from deposits so are reliant on foreign bond holders for ~20-30% of capital)- http://www.asx.com.au/asxpdf/20100909/pdf/31sdyy8h1qk3rv.pdf Two articles hi-lighting deceptive stats used in CBA slide deck. http://www.moneymorning.com.au/20100910/has-commonwealth-bank-deliberately-misled-investors.html http://www.abc.net.au/news/stories/2010/09/24/3021480.htm WBC (#2 Bank) - Says no bubble pp51-54 https://www.westpac.com.au/docs/pdf/aw/ic/2010_FY10_IDP1.pdf Article on WBC claims. http://www.abc.net.au/news/stories/2010/10/28/3050984.htm?site=melbourne Stephen Keen - Most vocal critic of Australian house prices. Economist who lost a bet to Macquarie economist on house prices. http://www.debtdeflation.com/blogs/ Investor sentiment: Australia is the miracle economy having ~20 year of uninterrupted economic growth. There is a whole generation of highly-levered retail residential investors at the margin using the ATO tax offset from rental losses (negative gearing) against traditional earned income to justify the holding of a housing asset for capital gains. http://www.ato.gov.au/content/downloads/IND00237831N17290610.pdf Shorting Australian banks: While Property prices may be high or overvalued, remember LTVs on bank lending are generally reasonable and loans are full recourse-no jingle mail. High LTV risk is partially off loaded to Mortgage insurers though for WBC MI insurer is captive. WBC average 44% Current LTV on current non MI loan book. http://i56.tinypic.com/11txt2d.png Banks, while susceptible to any downturn, may not be the best way to play a housing correction if your expecting bank capital to implode a.la. US Banking. There will will be pressure on banks though especially if international bondholders refuse to roll debt at reasonable rates - however Australian government will step in again with AAA government bank guarantee to bond investors to ensure banks can continue to fund. While continued rising interest rates in Australia put continued pressure on the marginal borrower, Australia housing probably will be unlikely to correct meaningfully unless there is a recession triggering job losses that force the hand of the investor class and typical home-owner causing a flooding supply less sensitive to price. For this to happen you need to take a view on China as Australia is joined at the hip to China in-terms of continued economic prosperity. Spin
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