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Trust fund babies...

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john_1
Super Contributor
Had dinner with a bunch of friends who have all had the pleasure of being previously advantaged in the trust fund department... It is really quite scary what losses have taken place..One even lost money dirrectly from the Maddoff scandal... If you think this is an american issue that is not going to hurt the SA economy you are about to get a serrious wake up call me thinks.
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46 REPLIES 46
platsak
Super Contributor
John. what trust funds/managers are you referring to?
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SimonPB
Valued Contributor
how much Maddoff or Stanford or which ever crook in in SA, relative to overall size ??
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john_1
Super Contributor
700 000 dollars relative size unkown..but enough to hurt me thinks
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SimonPB
Valued Contributor
ya, but how many people in SA ?? me thinks some, but not a flood, compared with masterbond etc ..
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john_1
Super Contributor
Sorry to be unclear..I did not mean maddof is coming I mean the massive effect to our real economy as we watch US markets melt.
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Not applicable
the most more important story is that of banks exposure to BEE deals....I sense a playing down of the significance...
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john_1
Super Contributor
Ya... This is true. I have said many times that these deals were set up with seemingly no consideration for the down side... question.... if a company was BEE compliant and the BEE loose their stakes..is the company still compliant or do the share holders have to fork out more cash..
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SimonPB
Valued Contributor
chartist, give us the bank/bee story then ??
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platsak
Super Contributor
Also maybe take in consideration the Banks which lent the monies. The security asset alue is now problably substantially less and with earnings on most companies substantially down the payment of those loans can become an issue. BEE deals in which companies is now the most toxic in the opinion of the forum?
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Not applicable
well Simon, almost if not all BEE deals are way under water.....the banks carry the risk as they are the ones who need to be repaid for these vast deals which relied on asset prices increasing ad infinitum....just like subprime the whole scheme is based on a false premise....can only result in a kack outcome
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john_1
Super Contributor
Read in the week end paper..mmvelaphanda resourses may disapear before the year is out??
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Not applicable
actually this is something which was reported about some 2 months ago...what surprised me (and the reporter I had the opportunity of meeting) was the absolute and very firm denial...thats usually when the dead rodentometer goes sky high
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Not applicable
actually that was around 16 November last year....I recall raising it here at the time but no one even thought it worthy of discussion...
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john_1
Super Contributor
its just because the rest of us have never seen a dead rodentometer before..
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platsak
Super Contributor
Mvela is the BEE part of lots of entities. Should they be forced to start liquidating assets in order to pay of debts it would problably be very nasty for quite a lot of companies and financial institutions. Maybe we must start to list all entities exposed to the above.
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SimonPB
Valued Contributor
ya, so banks hold the shares for the loans as collateral, and dividends are supposed to pay off the loans .. Q is, what shares, at what price, how much still owed, which banksetc .. This story has being banging around for some time - but I haven't seen any hard details, whoch is what I would be liking .. and this info must largely be in the public domain ??
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Not applicable
yes must be but to see through the prevarication and obfuscation is the challenge...one positive is that there is a way to price the assets...
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Not applicable
Well something is making SA banks retest new lows, and I don't think its overseas factors only. Clever money seems to be getting out - head and shoulders patterns where you look.
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SimonPB
Valued Contributor
who's this clever money ??
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