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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: John McCarthy who wrote (72907)	12/27/2007 10:54:13 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

How does one invest for inflation and deflation? globaleconomicanalysis.blogspot.com Mish

To: John McCarthy who wrote (72907)	12/27/2007 11:57:10 AM
From: Elroy Jetson	Read Replies (3) \| Respond to of 116555

Let's be frank, Centro Properties Group is in trouble because they recently bought a large American retail owner New Excel Realty Trust for $3.7 billion with 97% debt (in addition to the existing $2.5 billion of debt owed by New Excel. Worse still, this $3.7 billion of debt was short-term financing which had to be replaced with permanent financing by February 15, 2008. Imagine buying a group of shopping centers with only 3% equity down! The results are all too predictable. Centro began this insanity in 2003 when they created a joint venture with Southern California developer Ray Watt's "Watt Commercial Properties". Ray's business entities have filed for bankruptcy so many times over the years that I can't even tell you the number. Ray Watt simply doesn't understand risk. In the midst of this flurry, similar to Sam Zell's sale of his properties to Blackrock, much larger retail owner Westfield Properties of Melbourne has also been unloading their US shopping centers off to Centro at top dollar. Paying top dollar with only a whisper of equity is a recipe for disaster, even in the best of times. .