Monday, November 19, 2007

Dead duck?

Barratt Share Price

Don't know much about share prices, but can anyone explain to me why Barratt Developments have lost over 60% of their value since February? I thought there was a housing shortage and the government was promising to build lots of houses??

Posted by phdinbubbles @ 10:13 AM (3271 views)
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6 thoughts on “Dead duck?

  • dohousescrashinthewoods says:

    “Follow the money” – it tells more truth than state media.

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  • Similar story for Persimmon (although not as bad). I can only assume it is something to do with the profits expected in the years ahead?

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  • Because the stock market is a leading indicator!

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  • When the good times were rolling, companies across the board were lax on paperwork and accountability. Nobody bothered to hold them to account as long as the asset value was rising. Now that the bad times are coming, companies are having to dig up the old paperwork and re-check things. Arguments will fly between shareholders, directors, board members, and accountants, about who said what and why. The sloppy paperwork will be a key part of this. Three good examples of this:

    From MoneyWeek:
    “… Bear Stearns was sloppy in how it administered the funds. They had set the funds up in the Cayman Islands, and sought to have them liquidated there, but the US judge denied the request. The problem is that Bear did not take the steps to have its Caymans domicile stick. I’m no expert, but having sat in on a few presentations, minimum steps include keeping your books and records in the jurisdiction, having a local attorney and local administrators for the fund, holding annual meetings in person (how awful can it be to be required to go to the Caymans once a year?). But Bear apparently couldn’t be bothered to do even that. …”
    http://www.moneyweek.com/file/38032/the-bear-stearns-saga-isnt-over-yet.html

    From Reuters:
    “Subprime’s paper trail proves to be an obstacle. A judge in Ohio threw out 14 foreclosure proceedings brought on behalf of Deutsche Bank last month, saying the company had not proved it legally owned the mortgage loans when it filed the foreclosure proceedings. The legal paperwork transferring ownership from the original lender is not typically filed until a loan gets into trouble.”
    http://www.reuters.com/article/ousiv/idUSN1531300420071115

    From the New York Times:
    “It has long been a common practice for lenders to bring foreclosure proceedings without attaching proof of ownership of the underlying note. Tracking down such documentation may be more challenging because of securitization, the pooling of mortgages into trusts that are subsequently sold to investors.”
    http://www.nytimes.com/2007/11/17/business/17lend.html?ref=business

    This is probably a good time to be a lawyer….

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  • Oops… I meant to post that in response to the article next down in the blog, “Have it – Lloyd’s braced for wave of credit crunch claims”. I’ll copy it across. Apologies.

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  • Did I hear that right? The reporter on BBC News 24 just said that Barrat reported a 17% decrease in new house prices in the last 6 months.

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