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Fairfax in Greece


tyska
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On the surface this sounds a little unsettling for me.

 

"

(Reuters) - Greece's biggest lender National Bank (NBG) said on Wednesday that Canadian investment fund Fairfax Holdings was interested in taking part in the bank's recapitalisation."

 

http://www.reuters.com/article/2013/03/13/nbg-fairfax-recapitalisation-idUSL6N0C5F0M20130313?feedType=RSS&feedName=marketsNews&rpc=43

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No different than their investment in Bank of Ireland.  Cheers!

 

Just seems to an outsider, that Greece has a much more of a systemic problem and Ireland more of a bubble problem.

 

Definitely.  But Greeks will continue to run businesses, borrow, save and everything else that people do day to day at financial institutions.  There is downside risk, but the upside is that they may end up owning a chunk of the largest and best capitalized bank in Greece, just like they own the only non-government owned bank in Ireland.  Invest when things are most pessimistic...Fairfax is great at that!  Cheers!

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No different than their investment in Bank of Ireland.  Cheers!

 

 

The only difference is that the Government of Ireland actually took measures to fix the country's problems, while the Greeks seem to be more interested in denying/delaying.  Buying into temporary disorder is potentially interesting, but buying into perpetual chaos?  Not sure this is the best idea!

 

SJ

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No different than their investment in Bank of Ireland.  Cheers!

 

 

The only difference is that the Government of Ireland actually took measures to fix the country's problems, while the Greeks seem to be more interested in denying/delaying.  Buying into temporary disorder is potentially interesting, but buying into perpetual chaos?  Not sure this is the best idea!

 

SJ

 

They'll fix things eventually.  People generally do when push comes to shove.  After all of the outrage, politics and protest, things eventually go back to some sort of normality.  Cheers!

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No different than their investment in Bank of Ireland.  Cheers!

 

 

The only difference is that the Government of Ireland actually took measures to fix the country's problems, while the Greeks seem to be more interested in denying/delaying.  Buying into temporary disorder is potentially interesting, but buying into perpetual chaos?  Not sure this is the best idea!

 

SJ

 

Greece is certainly not as strong as Ireland. Still this is interesting to study. I remember in 2012 Q4 letter, Dan Leob also pointed out that they bought a ton of Greece national debt and feels bullish about Greece's future.

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No different than their investment in Bank of Ireland.  Cheers!

 

Just seems to an outsider, that Greece has a much more of a systemic problem and Ireland more of a bubble problem.

 

Initially no one really understood how much off balance sheet commitments the government had but I believe that is all now known. NBG's biggest problem AFAIK is that they hold of a ton of gov bonds, I don't think they did anything really terrible other than owning greek bonds (such as buying a bad mortgage paper factory). Seems like with those factors it would be a good place for the Fairfax team to look for deals. True Greece has a lot of issues with tax evasion and corruption but from what I remember reading in The Boomerang NBG was actually fairly well run.

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This is quite interesting.

 

 

No different than their investment in Bank of Ireland.  Cheers!

 

 

The only difference is that the Government of Ireland actually took measures to fix the country's problems, while the Greeks seem to be more interested in denying/delaying.  Buying into temporary disorder is potentially interesting, but buying into perpetual chaos?  Not sure this is the best idea!

 

SJ

 

Greece is certainly not as strong as Ireland. Still this is interesting to study. I remember in 2012 Q4 letter, Dan Leob also pointed out that they bought a ton of Greece national debt and feels bullish about Greece's future.

 

Ireland wasn't as strong as Ireland two years ago. 

 

There are preferred shares NBG.pr.a that trade in the US.  The dividend is non- cumulative, and suspended.  I am going to look at the prospectus when I am flying in two weeks to see if they can issue new prefs before they re-instate the dividend on existing issues.  They have also been tendering for prefs that are cumulative.  I did very well on RBS preferreds. 

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This is quite interesting.

 

 

No different than their investment in Bank of Ireland.  Cheers!

 

 

The only difference is that the Government of Ireland actually took measures to fix the country's problems, while the Greeks seem to be more interested in denying/delaying.  Buying into temporary disorder is potentially interesting, but buying into perpetual chaos?  Not sure this is the best idea!

 

SJ

 

Greece is certainly not as strong as Ireland. Still this is interesting to study. I remember in 2012 Q4 letter, Dan Leob also pointed out that they bought a ton of Greece national debt and feels bullish about Greece's future.

 

Ireland wasn't as strong as Ireland two years ago. 

 

There are preferred shares NBG.pr.a that trade in the US.  The dividend is non- cumulative, and suspended.  I am going to look at the prospectus when I am flying in two weeks to see if they can issue new prefs before they re-instate the dividend on existing issues.  They have also been tendering for prefs that are cumulative.  I did very well on RBS preferreds.

 

 

IMO, it's not really about whether Ireland was in better shape 2 years ago than Greece is now.  Rather, it's a cultural thing about whether a country has a propensity to have an adult conversation to acknowledge the situation that it's in, identify practical solutions, and then accept the bad tasting medicine.  Canada did it 15 years ago.  Ireland did it.  The United Kingdom is doing it.  I have faith that the Americans will eventually have that adult conversation and make adult decisions.  All of them are primarily anglophone, advanced economies.

 

On the other hand, I am completely unconvinced that the southern european countries are able to actually have that adult conversation and actually take the bad tasting medicine.  I hear ridiculous denial from people when I travel to France.  In Spain, I wander around in disbelief about how things are run...or are not run.  The Greeks that I have spoken to point the finger at the Germans for their problems.  All of this is unbelievable. 

 

Maybe I have mis-assessed our southern European friends, but I just don't think that they have the collective emotional maturity to take the bad tasting medicine.

 

Sorry to all those whom I've offended.

 

SJ

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This is quite interesting.

 

 

No different than their investment in Bank of Ireland.  Cheers!

 

 

The only difference is that the Government of Ireland actually took measures to fix the country's problems, while the Greeks seem to be more interested in denying/delaying.  Buying into temporary disorder is potentially interesting, but buying into perpetual chaos?  Not sure this is the best idea!

 

SJ

 

Greece is certainly not as strong as Ireland. Still this is interesting to study. I remember in 2012 Q4 letter, Dan Leob also pointed out that they bought a ton of Greece national debt and feels bullish about Greece's future.

 

Ireland wasn't as strong as Ireland two years ago. 

 

There are preferred shares NBG.pr.a that trade in the US.  The dividend is non- cumulative, and suspended.  I am going to look at the prospectus when I am flying in two weeks to see if they can issue new prefs before they re-instate the dividend on existing issues.  They have also been tendering for prefs that are cumulative.  I did very well on RBS preferreds.

 

 

IMO, it's not really about whether Ireland was in better shape 2 years ago than Greece is now.  Rather, it's a cultural thing about whether a country has a propensity to have an adult conversation to acknowledge the situation that it's in, identify practical solutions, and then accept the bad tasting medicine.  Canada did it 15 years ago.  Ireland did it.  The United Kingdom is doing it.  I have faith that the Americans will eventually have that adult conversation and make adult decisions.  All of them are primarily anglophone, advanced economies.

 

On the other hand, I am completely unconvinced that the southern european countries are able to actually have that adult conversation and actually take the bad tasting medicine.  I hear ridiculous denial from people when I travel to France.  In Spain, I wander around in disbelief about how things are run...or are not run.  The Greeks that I have spoken to point the finger at the Germans for their problems.  All of this is unbelievable. 

 

Maybe I have mis-assessed our southern European friends, but I just don't think that they have the collective emotional maturity to take the bad tasting medicine.

 

Sorry to all those whom I've offended.

 

SJ

 

SJ

 

I don't disagree with you but I would like to add one comment. Germany did help in this whole process and benefited greatly. For years they enabled the southern countries to purchase goods from Germany (they are a major exporting country) and only now when the southern countries can no longer afford to purchase German goods do we hear talk of austarity......so they did have a small  role in all of this.

 

I trust FFH has thought things through and hope we end up with a big chunk of a large, profitable Greek bank one day. First Ireland, now Greece, FFh may end up as the largest "Eurobanker" when this is over!

 

Cheers

Zorro

 

 

 

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IMO, it's not really about whether Ireland was in better shape 2 years ago than Greece is now.  Rather, it's a cultural thing about whether a country has a propensity to have an adult conversation to acknowledge the situation that it's in, identify practical solutions, and then accept the bad tasting medicine.  Canada did it 15 years ago.  Ireland did it.  The United Kingdom is doing it.  I have faith that the Americans will eventually have that adult conversation and make adult decisions.  All of them are primarily anglophone, advanced economies.

 

On the other hand, I am completely unconvinced that the southern european countries are able to actually have that adult conversation and actually take the bad tasting medicine.  I hear ridiculous denial from people when I travel to France.  In Spain, I wander around in disbelief about how things are run...or are not run.  The Greeks that I have spoken to point the finger at the Germans for their problems.  All of this is unbelievable.

 

Maybe I have mis-assessed our southern European friends, but I just don't think that they have the collective emotional maturity to take the bad tasting medicine.

 

Sorry to all those whom I've offended.

 

There is a bit of moralizing here, which of course is fine, but don't let this get in the way of making money.  The bank, I suspect, did fine until the crisis and capitalized will do fine again, at Prem thinks so; at some point, as Parsad points out, business will be investing and borrowing and will need a financial intermediary!

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Apparently the deal aborted...

 

Greece's National Bank (NBG) (>> National Bank of Greece) said on Friday Fairfax Financial Holdings Ltd's (>> Fairfax Financial Holdings Ltd) interest in taking part in the bank's recapitalization had ebbed because the Canadian investment fund wanted changes to the terms that were beyond NBG's control.

 

NBG, the country's biggest lender, said in a bourse filing that Fairfax had expressed an interest in up to 1.5 billion euros, which amounts to 10 percent of a capital raising to increase the bank's solvency to levels required by the central bank.

 

"The expression of interest remained at an initial phase because Fairfax asked for changes in the framework of the recapitalization that are beyond National Bank's control," NBG said in the filing.

 

NBG officials would not provide further details.

 

http://www.4-traders.com/FAIRFAX-FINANCIAL-HOLDING-1409991/news/Greece-s-NBG-says-path-to-Fairfax-deal-hits-roadblock-16543627/

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  • 2 weeks later...

This is quite interesting.

 

 

No different than their investment in Bank of Ireland.  Cheers!

 

 

The only difference is that the Government of Ireland actually took measures to fix the country's problems, while the Greeks seem to be more interested in denying/delaying.  Buying into temporary disorder is potentially interesting, but buying into perpetual chaos?  Not sure this is the best idea!

 

SJ

 

Greece is certainly not as strong as Ireland. Still this is interesting to study. I remember in 2012 Q4 letter, Dan Leob also pointed out that they bought a ton of Greece national debt and feels bullish about Greece's future.

 

Ireland wasn't as strong as Ireland two years ago. 

 

There are preferred shares NBG.pr.a that trade in the US.  The dividend is non- cumulative, and suspended.  I am going to look at the prospectus when I am flying in two weeks to see if they can issue new prefs before they re-instate the dividend on existing issues.  They have also been tendering for prefs that are cumulative.  I did very well on RBS preferreds.

 

 

IMO, it's not really about whether Ireland was in better shape 2 years ago than Greece is now.  Rather, it's a cultural thing about whether a country has a propensity to have an adult conversation to acknowledge the situation that it's in, identify practical solutions, and then accept the bad tasting medicine.  Canada did it 15 years ago.  Ireland did it.  The United Kingdom is doing it.  I have faith that the Americans will eventually have that adult conversation and make adult decisions.  All of them are primarily anglophone, advanced economies.

 

On the other hand, I am completely unconvinced that the southern european countries are able to actually have that adult conversation and actually take the bad tasting medicine.  I hear ridiculous denial from people when I travel to France.  In Spain, I wander around in disbelief about how things are run...or are not run.  The Greeks that I have spoken to point the finger at the Germans for their problems.  All of this is unbelievable. 

 

Maybe I have mis-assessed our southern European friends, but I just don't think that they have the collective emotional maturity to take the bad tasting medicine.

 

Sorry to all those whom I've offended.

 

SJ

 

Blast from the past.  In late December, 1992, we decided to take our very young children and their French teacher and the French teacher's young children plus her mother and sister on a trip from the states to Paris where the French teacher had lived a few years before then.  At that time the US was starting to take its medicine after unwise financial choices whose chickens had finally come home to roost. 

 

I imagined we would stay at a first class hotel in downtown Paris with off season rates.  Did I get a shock.  The lowest rate for a first class room was $300 US up to $600 US per night! And we needed two or three rooms plus a small suite.  That price  was outrageous so we wound up staying at a one star hotel in Vincennes recommended by some low budget missionary friends. Madam Roberta reverted to the mode of her student days at The Sorbonne. 

 

We rode the metro.  Madam Roberta showed us wonderful sights that tourists never see,  and we met gracious French nationals.  We walked miles and miles every day from Christmas through the New Year.  We lived on bread and cheese. Each of us lost 5+ pounds of extra weight.  (Although we did eat once  at moderate priced Goldenbergers for the best French dinner we had ever experienced).  It turned out to be the best vacation we had ever had.

 

I think if our Southern European friends would go off the Euro to a devalued national currency that they might have to live mostly on bread and cheese for a couple of years.  They might wind up a few pounds lighter without starving.  And then they would  enjoy life more with a full employment economy.  :)

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I think if our Southern European friends would go off the Euro to a devalued national currency that they might have to live mostly on bread and cheese for a couple of years.  They might wind up a few pounds lighter without starving.  And then they would  enjoy life more with a full employment economy.  :)

 

twacowfca,

whenever you write something, I always reply “I couldn’t agree more!” … I know, I am extremely boring!! … Maybe, someone on the board is even beginning to think that we have stricken some sort of economic deal… Well, it wouldn’t be illegal, would it?!  ;D ;D ;D

 

Jokes aside, if the southern European countries are not able to actually have that adult conversation and actually take the bad tasting medicine, it doesn’t mean we could go on enduring the damages a way overvalued currency is imposing on us!

 

Prices in economics are as important as fundamental values, and MUST make sense. When prices do not make sense for too long a time, depression is the most common result. Keynes understood this very well, and we should learn from experience and from history.

 

So, please, first give us “southerner spoiled kids” a currency that makes sense. Then, maybe, we will shock the whole world and start behaving as grown-ups! Until our currency doesn’t make any economic sense at all, we will keep whining and complaining…

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

 

 

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Is Divorcing An Abusive Spouse Ever Too Expensive?

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

Daily+3.28.13.pdf

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"On the other hand, I am completely unconvinced that the southern european countries are able to actually have that adult conversation and actually take the bad tasting medicine.  I hear ridiculous denial from people when I travel to France.  In Spain, I wander around in disbelief about how things are run...or are not run.  The Greeks that I have spoken to point the finger at the Germans for their problems.  All of this is unbelievable."

 

+1

 

Germany pay probably most of the bills and get in exchange most of the insults. That´s ridiculous.

There is a lot of self-denial and unability to look at one´s own faults in southern europe.

 

Sorry to everybody I have insulted.  ;)

 

giofranchi, do you think the Euro is overvalued?

 

 

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giofranchi, do you think the Euro is overvalued?

 

If we had a United States of Europe, with a banking, a political, and a fiscal union, the Euro imo would be slightly overvalued relative to the USD: PPP is around 1.15, and it simply doesn’t make any sense to me that the cost of living in the “United States of Europe” should be higher than the cost of living in the USA. After all, the USA economy is much more vibrant than its European counterpart, right?

 

Of course, the “United States of Europe” are a distant dream… the reality, instead, is very simple: the Euro today is unbearably high for nations like Italy, Spain, and even France.

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

 

 

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giofranchi,

 

do you know the Ferrero business in Italy? It is probably the best company in Italy I know of.

It is a confectionery company, which sells Ferrero Rocher, Kinder Schokolade, Hanuta, Nutella, Tic Tac etc.

It´s like See´s Candy, but much, much bigger. And you get addicted to this stuff.  ;)

 

The Ferrero family is on the Forbes list with $20,4 billion.

 

It would be a wonderful purchase for Berkshire Hathaway. What do you think?

 

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