Originally Posted by
Enumerate
How could lost soul be "deadly accurate" about SCF's financial position when Sandy Maier has not released any substantive data on either loan impairments, recoveries, new cash inflows or roll overs. It is not possible for anyone to be "accurate" - however, I think they are successful in terms of being "deadly" - as poison is "deadly".
Hilllary's discussion on capital adequacy is simply laughable. Not once does he estimate the size of the loan book - after reconstruction. How could you comment of capital adequacy - when you don't know the size of the business you are modelling?
Hillary's discussion on loan recoveries doesn't even cite the information presented in the press releases.
I think Hillary went to the Bernard Hickey school of financial analysis - if you throw enough mud, something will stick, somewhere. This is not "deadly accurate" - this is something different from that.
Why do Hillary and Hickey comment on something they so clearly do not understand. Don't they realise that the Trustee is managing some fairly stringent covenants on the equity and debt structures? As far as these gentlemen are concerned, the Trustee either does not exist or is incompetent. Neither has presented an analysis of the covenants - so I would question whether they understand anything that the Trustee is doing.
SCF is not an insolvent business. SCF is not a business with insufficient equity capitalisation.
SCF is a business with too much of it's equity capitalisation in the form of equity investments. SCF is a business downsizing, disposing and restructuring of portions of it's loan book. It is also facing cash management issues due to the profile of maturities on it's debt. Both these factors are huge risks - they are not, necessarily, unsolvable.
From an investor perspective - Hillary and Hickey are simply poisonous. They cannot construct a feasible analysis of SCF because, like frightened school girls, they run off chasing the first bit of financial "scandal" they get a whiff of. Neither of these commentators seem to understand the timetable of events, the role of the trustee in setting this timetable. Where is the analysis of what the ratings agency thinks? Both of them have not grasped the fundamental structural elements of restructure - the "good bank", the "bad bank" and "equity investments" - because they never present their analysis with these structural divisions. Why not publish their view of the 31 August balance sheet - this would lead to a very interesting shaping and focusing of the SCF discussion?
Lost souls has about as much credibility as predicting a 30% reduction in house prices ... say.