Thursday, July 31, 2008

Too Clever By Half

I hate it when I reach a new milestone in understanding how things work in this sorry, fucked-up world. But here we go again...

First, take a look at this mushy interview with Frank Lowy:
The Australian tycoon's cheery optimism in the face of the present pessimism about British prospects may well stem from the almost biblical narrative of his life. Born into a Jewish family in Hungarian-speaking Czechoslovakia, he survived the Holocaust along with his mother, brother and sister. 'My father was taken to Auschwitz and never returned,' he states sparely.
Now ask yourself why is Frank Lowy doing an interview like this right now? Shouldn't he be busy trying to fend of that US Senate investigation?

Lowy is doing the interview because he's in trouble. He has already put a lot of money into these London developments, and he stands to make a lot more. But if his financial backers get cold feet, the whole deal could collapse.

So he's gone to his friends, calling in favours:
Lowy (a former director of DMGT, the owners of the Mail and This is Money) is remarkably optimistic about the future of shopping in Britain...
Yeah, that's right, he's a former director of the company publishing this drivel. Well, at least they had the decency to mention that fact, even if they conveniently forgot to tell their readers about Lowy's big tax troubles.

Now pay careful attention to this bit at the bottom of the interview:
At a time when much of the property world is struggling to secure loans, he seems to be able to finance his projects. Westfield has been a customer of the National Australia Bank since 1960, although these days his bankers are spread across the globe and the company has debt outstanding in Britain, the US and Australia.
See that? OK, now read this:
NAB's new chief executive Cameron Clyne and chairman Michael Chaney today left open the option for NAB to finally bite the bullet in relation to the UK market and either make an acquisition or get out.

At a media conference in Melbourne, Clyne said he would be reviewing the bank's strategic direction in response to changed market conditions.
You see? NAB is getting cold feet. And why wouldn't they, especially given their own difficulties of late?
Chaney made clear today that NAB is not going to launch into an acquisition frenzy under Clyne's leadership with the sort of silly “double the business” target that has caused trouble at other companies. He did not rule out the sale of assets.

Clyne made reassuring noises about his commitment to reviewing risk management at NAB after last week's sudden $830 million provisioning charge. He said reviewing risk management was “one of my priorities”. That contrasts with Stewart's comment last week that risk management was fine.
"Stewart", of course, is the NAB director who just resigned in disgrace. And Frank Lowy is now categorized as a "risk".

PS: Seriously, I hate this shit. What sort of dumb bastard stays up till 11:30 pm joining these kind of dots, unless he is making a lot of money out of it himself? (I am not). I must be stupid, or mad, or both. Good night.

Oh and by the way, the new head of NAB is only 40 years old but already making $7.5 million per year.