BNB - Babcock & Brown

I luckily cut my losses at $17 when I was down from $23. Not because of my own luck but I purchased more and the lender would offer no further gearing. I looked at the annual report and I couldn't understand it and figured if the lenders wouldn't lend against it then it must be in further trouble then I could see. Lucky otherwise I would have been down from $6k to roughly a few $hundred.

I can see both perspectives.

On the one hand, you are right. Everyone is an individual, they should be judged on the merits of their actions, not the actions of others.

On the other hand, reality is reality. And the reality is that relatives do tend to share personality traits. Who would you rather trust with your money? Take 2 otherwise identical people, with one difference. The first one comes from a family with no history of dishonesty, the second one comes from a family of crooks. I know which one I'd rather trust with my money.

These are complex issues with no simple answers

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Interesting question about comparing people with one coming from a family of crooks and another a family of cleanskins.

I don't imagine that the Green family situation is as cut and dried as that. Certainly one brother was shown to be crooked and we are suggesting the other is less than squeaky clean. Doesn't really add up to a whole tribe of shonks though which lets down your argument.

Another perception is that perhaps to be brilliantly successful in business you need to be a charming, ruthless, sociopath. Sort of Gordon Gecko character.

In fact we may recognise such characteristics in successful entrepreneurs and decide that while they are potentially ruthless crooks, they are our ruthless crooks and that if we go along for the ride we could make a pot of money. Lets think about. Can we easily identify highly successful businessmen who do not have ruthless and perhaps amoral characteristics? Do we have a business culture that would publicly rebuke such a person before the whole ship collapsed? Has it happened yet?

We certainly haven't seen such a culture with the explosion of executive salaries in the past 10 years. Maybe its time to bring up the issue of just what is acceptable in the name of making a profit.

Interesting read regarding how BNB might be able to extract some capital from one of it's children, BBW.

http://business.theage.com.au/business/more-babcock-wind-hot-air-20081127-6jc0.html

basilio said:

Interesting question about comparing people with one coming from a family of crooks and another a family of cleanskins.

I don't imagine that the Green family situation is as cut and dried as that. Certainly one brother was shown to be crooked and we are suggesting the other is less than squeaky clean. Doesn't really add up to a whole tribe of shonks though which lets down your argument.

Another perception is that perhaps to be brilliantly successful in business you need to be a charming, ruthless, sociopath. Sort of Gordon Gecko character.

In fact we may recognise such characteristics in successful entrepreneurs and decide that while they are potentially ruthless crooks, they are our ruthless crooks and that if we go along for the ride we could make a pot of money. Lets think about. Can we easily identify highly successful businessmen who do not have ruthless and perhaps amoral characteristics? Do we have a business culture that would publicly rebuke such a person before the whole ship collapsed? Has it happened yet?

We certainly haven't seen such a culture with the explosion of executive salaries in the past 10 years. Maybe its time to bring up the issue of just what is acceptable in the name of making a profit.

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a) I never said the Green family was a "tribe of shonks". I merely said that if one brother is a crook, the chances of Phil being one are materially higher than they otherwise would be. I stand by my comment.

b) i don't agree that we want business leaders to be "our ruthless crooks" They will only be "ours" for as long as it suits them. As soon as their self interest in no longer aligned with shareholders, the shareholders will suffer. Furthermore, there would be a material chance that the amoral character you describe will make decisions that will come back to bite us all, history is full of such examples

We want leaders to have true entrepreneurship, ie actually create something that is useful. Whether that be digging minerals out of the ground, finding new and more efficient appliances/vehicles, etc. A far cry from the financial engineering tosspots who never created a true dollar of wealth in their lives.

Bottom line: Phil Green is a lying, narcissistic, incompetent tosspot. Who has gotten away with it. Some might admire him for this, hopefully most won't.

People don't seriously think Phil Green is going to get away with making up false company records?
Shareholders or ASIC will bring a suit against him for breach of director's duty and he can be made personally liable in spite of his resignation.
I do, however think that a quick fix would be to do what some US guys did to a Lehman director - use him as a punching bag at the gym.

posh said:

People don't seriously think Phil Green is going to get away with making up false company records?
Shareholders or ASIC will bring a suit against him for breach of director's duty and he can be made personally liable in spite of his resignation.
I do, however think that a quick fix would be to do what some US guys did to a Lehman director - use him as a punching bag at the gym.

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I wish I shared your optimism. But I think that he'll get away with it. He'll hide behind some obscure accounting standard/s, and have enough falsified documents, etc. And frankly, I don't think ASIC will care. They are a government organisation after all.

On the other hand, reality is reality. And the reality is that relatives do tend to share personality traits. Who would you rather trust with your money? Take 2 otherwise identical people, with one difference. The first one comes from a family with no history of dishonesty, the second one comes from a family of crooks. I know which one I'd rather trust with my money

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Actually Mr T I was focusing on your suggestion that one would be less likely to trust a person who comes from a family of crooks rather than one who comes from a seemingly honest background. Appeared to link with your comments on Phil and Max Green.

Totally agree with the theory that we don't want our business leaders to be amoral and/or ruthless crooks. Yes, shareholders and the broader society will get bitten as result of their actions. As the fallout from the current financial crisis unfolds there are more and more examples of the completely shonky practices which fueled the process. This has particularly been the case with lending practices in America (and probably elsewhere). One of the features has been the intimidation of whistle blowers and refusal by market regulators or the mainstream press to expose the problems until its all too late. see below

I put up the theory of some people attempting to "go along for the ride" with a sharp entrepreneur because in my experience it does happen all too easily. A few years ago for example friends of mine tried to introduce me to PIPS - People in Profit system. It took a millisecond to work out that this was ponzi scheme which promised 2% a day returns, was totally crooked and would collapse.

BUT....but... it worked for a while. Tens probably hundreds of thousands of people put their money in and watched as their online accounts swelled. But what I found interesting was that PIPS continued far longer and with far more success than many similar scams. I suggest it did this because its pitch was so good and the promoters so visible that a number of people joined thinking they could get in and out before the inevitable bust.

In a similar vein in a bull market stocks are manipulated and ramped shamelessly and much of the profit made by individuals and companies has nothing to do with a product but simply the buying and selling of bits of paper.

We do need quality business leaders and excellent products. My question is whether the current structure of our economic system rewards such efforts by making sure that financial paper shufflers don't end up with the lions share of our money.




Sex, Lies, and Subprime Mortgages
The sexual favors, whistleblower intimidation, and routine fraud behind the fiasco that has triggered the global financial crisis
http://www.businessweek.com/magazine/content/08_47/b4109070638235.htm

PIPS
http://www.quatloos.com/people_in_profit_system_pips.htm

Excellent discussion on PIPS and in particular the psychology of sucking people in to Ponzi schemes
http://www.sitnews.us/0305Viewpoints/032505_david_hanger.html

Babcock & Brown secures $200m temporary lifeline
http://www.theaustralian.news.com.au/story/0,24897,24745531-643,00.html

Would this push the SP upward tomorrow?

One thing to consider in trying to answer that question is that the stock has not traded since the current problems with the banking syndicate emerged.

Reasonable jump today with the end of the trading halt, what are your thoughts on this company with the announcement of lifeline funding?

I actually thought the share price would go down today as sellers ran for the exit while they had a chance.

Does anyone know why BNB this has jumped from .15 two days ago to .38 today, on increased volume. Can't see any announcement there.

The final twitch of life berfore rigour mortis sets in?

Dunno actually, I'd noticed it, but couldn't see anything either.

At this stage I'd be better off if they did go belly up, then I could claim a loss.

Found this article? Do you think this could be the reason?

" Babcock Shares Jump on Speculation Banks Agree to Survival Plan "

http://www.bloomberg.com/apps/news?pid=20601080&sid=aAiU.8wHh_cA&refer=asia

Another news that might be influencing the stock price. (Long term)
http://www.caller.com/news/2009/jan/05/wind_farms/

outback said:

At this stage I'd be better off if they did go belly up, then I could claim a loss.

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G'day, I think you'd be better off selling them now, unless you expect the sp to keep improving.

If you sold them on-market at least you could claim the capital loss as CGT relief against some other capital gains, if you have any.

If they go into receivership or administration, it may take years before the company is formally wound up and only then could you claim any CGT relief.

This is problem current holders of AFG Allco like me, have.

This is just my understanding based on a recent conversation with my tax accountant.

I watched it go up to like 49c and i was like wow whats happening... Then it came tumbling back down very quickly to 36c -ie 2 mins if that.

This does remind me of how it when up from 70c to $2.xx a little while ago. So hopefully it'll keep this trend so i can make a smaller loss lol.

I'd be happy if they got to 70 cents, small gain and out.
I would think the day traders are having a ball with this one at the minute.

I had a look at the SP on friday and thought to myself "throw $1k on and sell at a small profit". Missed it yesterday, didnt even look at it and then a mate rang me this morning and told me it was up 50% and there was a possible financing announcement due on Monday or something, so i PLUNGED another $500 on it. Can't wait to it tops a dollar by Monday (wishing). Still......i could have just done dinner for a couple of months too.

Go you good thing.

Reply (just released) from BNB to a speeding ticket lets us know that around the 12th of Jan we should have a better idea of the future of this company.