Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Elroy Jetson who wrote (53309)	7/12/2006 4:37:51 PM
From: mishedlo	Read Replies (1) of 116555

You are IMO placing way too high odds on Veemac being the source of the problem. If necessary I believe I can get signed work orders for each house as well as sign offs from Lennar as being completed. Veemac was actually accusing one of its suppliers of fraud (a lumber company overbilling Veemac) that I do not want to name. Veemac says other subs had fraud charges against that supplier as well. The amounts were not that huge but he was being overbilled. He had nothing but praise for the Truss company supplying the orders for the Lennar houses. Something went awry and I suspect it was a small cash flow problem turned into a huge one by Lennar for some reason. Those two reasons are 1) Stupidity by Lennar 2) Fraud by Lennar I am discounting fraud by Veemac but I am not discounting a cash flow problem by Veemac of some sort compounded by stupidity somewhere that led to this situation. That is the simplest explanation. I also suspect Veemac (the corporation) is toast. If Lennar does pay Veemac's workers via 1099s those workers (almost all Mexicans) will not pay taxes on that pay 100% guaranteed. Lennar will be liable for those back taxes. Mish

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