is it safe, page-2

absolutely there is risk - but it isn't as much as many realise and it is mostly quantifiable.

As I have posted before, for the next six months rams faces increased funding costs of up to 17.5m which still leaves it with a NPAT for FY08 above 40m. The risk really is that either:

1. there are skeletons in the closet that Rams hasnt disclosed to the market regarding revenue risk (very unlikely given 85% of loan book revenue for 08 is guaranteed and any undisclosed risk like this could lead to prosecution by ASIC and John Kinghorn being sued by shareholders).
2. The credit crunch becomes so severe that companies are unable to refinance prime 1 XCP and AAA RMBS in six months time. This would be unprecedented and would mean many, many banks and companies that have leveraged balance sheets would go to the wall and would result in a 1929 style crash. Nobody is coming out and saying this and indeed some investors, notably Warren Buffett, are actively looking at distressed mortgage lenders who they see as massively undervalued.