i love british common law, whereby wastrel real person tenants can be (i) booted out on 30 days demand after 14 months per good contract, (ii) hounded into submission after 90 days of untimely rent in arrears, and (iii) held personally liable for all damages and chased around the little island until they perish, and (iv) ... most draconian of all, .... ohhhh, you know ... and let us not go there; and
whereby corporate entity tenants can be wound up based on simple letter submission to judge with tenancy contract attached, and people booted out, and heavy assets seized, and bank accounts frozen.
not even remotely concerned, done it, it works, and works great, because hk is neither china nor usa.
let us simply conclude that in a battle of tenant vs landlord in hk, tenants have zero (in case of misunderstanding, try ZERO) chance to win.
in the mean time, just in in-tray, per watch and brief,
Things to note:
MEETING ONE:
1 - One had a dinner with the Central Bank Governors in Jackson Hole last month. They were all sanguine about the credit crisis.
(these guys have been behind the curve for the past year. When will they wake up? Terribly concerning in my opinion).
MEETING TWO:
2 - AIG debt and debt insured by AIG for the most part has not been held by institutions or individuals but because it has been rated AAA, it has been held by financial institutions - namely banks. This will impact a lot of banks Tier 1 ratios. AAA can be leveraged basically 100 to 1. Single A? Much less? Less than Single A? Probably 1-to-1. Banks forced to reduce the size of their balance sheets once again. AIG has US$447 Billion in Credit Default Swap exposure in total.
3 - One of the guys I met today stated that both WaMu and National City are toast. He thinks WaMu by the end of the week. He thinks National City is in worse shape, yet the market doesn't realize it.
4 - Thinks that the FDIC will be slow in shutting banks down, at least those of any substantive size until after the election so that they are not accused of making political decisions. Look for the FDIC, etc. to be much more aggressive starting in early 2009.
Internally, we're seeing no problems with overnight financing from Chinese Banks. Almost all European and US banks are refusing to offer overnight money at the moment. They claim that they are "too busy." I'm presuming that a large amount of capital is being tied up to deal with Lehman counterparty risk issues.
As for me, I'm instructing my broker to open a Custodian Account for me today. Anything I own outside of my short-term trading portfolio will be transferred into this account. If I sense that they are next in line to go under, I'll liquidate it all and have 100% of my assets placed into the Custodial account.
Pretty depressing day.
p.s. One other point. Meeting two guy also stated that JP Morgan's leverage is 27-1 on balance sheet. Including off balance sheet, the ratio is closer to 50-1. He thinks there is irrational faith in Jamie Dimon and JP Morgan and that it is very vulnerable if the perception of JP Morgan turns (which he thinks will). Funny enough, he thinks Citi is okay - at least on a relative basis.....
|
