Friday, 29 July 2011

Swanning Around

Cyprus is also needing assistance and bail out, although not to the same extent as its larger fellow members of the EU. Nassim Nicholas Taleb’s theory of “Black Swan” events has had a great deal of attention in recent years.

Automatic Earth has an intriguing item on this which suggests that the problems in Cyprus arise from just such an event. It is worth reading for the full explanation of what can happen when you least want or expect it.

In the meantime closer to home, this blog has suggested already that there are a set of pre-conditions in the leasehold property sector that have the potential to go bad if some unlucky circumstances arises. Naked Capitalism has sounded a warning.

Few seem to be aware that serious issues with one of the major UK operators in this sector have led to the Bank of America owning a number of companies. This has happened because they were security for debts owed to the Bank which could not be met.

Amongst the companies are not only major property management services but a number who own the Freeholds of very many properties. It is interesting to see how the Bank of America deals with property financial issues on its home territory.

So should you see new blocks of flats suddenly being razed to the ground there is a rational explanation. At least, that is, according to the Bank of America and its associated financial agencies. Those stuck with the mortgages, other debts and liabilities that have lost their investment in their home may not see it that way.

Buy shares in demolition firms?

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