Let's face it, if the banks liquidate CER, GMG or IIF then they'll end up needing to liquidate beyond those companies as the commercial property sector will be flooded with property for sale and with the mark to market accounting rules the inevitable chain of events would lead to a possible local banking and further property collapse as well . eg) AIG (on a larger scale) in the US wasn't allowed to go broke because of what the chain effect would be .
The whole economic mess started with low document home mortgages in the US and in 18 months has toppled banks, insurance firms, property trusts and many individuals .
IIF has 96% occupancy and it is only because of a Total Leverage Ratio that the market has panicked . Just like knowing where the margin loan calls would be triggered so too are the Leverage Ratios . It just takes a group of lenders to accept the general health of a company, stretch out any lending covenants, and take extra security over their assets ...... If they don't, they end up putting other companies under pressure and ultimately themselves .
I am strongly of the opinion that common sense will win the day and IIF and others will be given the breathing space to carry on .
The Rudd Bank concept is actually a very sound idea for the broader market and social well being .
IIF Price at posting:
12.2¢ Sentiment: ST Buy Disclosure: Held
