more DEFLATION !!!

Significant excerpts:

Analysts at rating agency Moody’s warned on Monday that Mr Halabi is unlikely to be able to meet his obligations. “It’s very likely the loan will default,” said Alexander Zeidler, an analyst based in London. “We don’t think too many institutions will be willing to lend the amount of money needed to refinance.

Once you’re unable to refinance, you are unable to carry on operations at the same level as you did if you could have refinanced. This is deflationary.

Experts say banks are being flooded with requests to refinance loans against shops, offices and warehouses that are due to be repaid in the next few months. There are an estimated £50bn-worth of property loans due between now and 2010 that are struggling to find willing lenders because of the ongoing credit-freeze.

Again, these are entities that have sustained material losses either in their business or in their private lives and now require loans to carry on their operations. This means that their activities are curtailed now and will be curtailed later. This can only be deflationary.

Mr Halabi, who is worth £2bn according to the latest Sunday Times Rich List, down from £3bn in 2007

This guy is worth 2b Pounds and is looking to roll over loans for 1.4b???? So then, what’s his real net worth you think? And that is the beauty of borrowed money. For as long as the lender doesn’t mind lending money, the borrower can build an empire regardless of whether said empire is profitable or not. The typical case in point is Dubai. But when the chips are down and the lender calls the loans back, and your assets are not profitable and are depreciating fast to boot, the only thing you can do is sell your assets very often at a loss.

Commercial property values in Britain have fallen an estimated 40pc since the top of the market in 2007.”

This can only be deflationary

http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/5115045/Halabi-struggling-with-1.4bn-debt-pile.html

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One Response to “more DEFLATION !!!”

  1. Halabi: the grand finale (sorry, could not resist) « Guido's temple of the absurd Says:

    […] the grand finale (sorry, could not resist) By guidoamm As outlined exactly one year ago to the day, this is how it […]

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