Interesting thoughts. IMF is a very capital intensive operation....

Interesting thoughts.

IMF is a very capital intensive operation. At the moment IMF is struggling to convince equity holders that it's market concept is a functional proposition, at the scale that IMF now operates.

VW has already cost VW shareholders a USD $18 billion share price fall. If this is their sustained loss, perhaps a basis of a claim.

http://fortune.com/2015/09/23/volkswagen-stock-drop/

US losses to suppliers and existing fleet owners, who may or may not, need to update their emission control software will probably incur huge costs & liabilities that dwarf the shareholders immediate losses.

IMF's capitalisation of only USD$ 156 M, with a dreadfully slow payback over many years is tiny. So too it is a specialist operator, requiring highly skilled & street wise legal skill, oversight & perceptive opinion to assess the probable outcomes of cases.

Obviously the size of a potential claim has no direct bearing on the size of legal funding needs, which would only need be a small fraction. However to be the principal underwriter to legal firms acting in the VW case - I'd guess that IMF is simply too tiny, and understaffed and probably still too inexperienced.

So IMF?

I suspect it could only put up it's hand for the crumbs that tumble from the international stage.

Our only hope, as domestic equity holders, that if IMF does attract US work, that it is funded out of US funding, (as IMF itself will need to obtain funding, so as to on-fund any action) as it is stupid funding US activity from equity raized on the expensive ASX and through a dear domestic currency.

Will EU work arise too? Is it clear that the EU has the same emission standard? Dunno yet?

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At some point VW's risk quantum will be become more clear.

This claim may dwarf the vast ENRON claim, that was the subject risk for Blythe Masters to mould the CDS swap option product. Blythe Masters and her team ground out the mechanics & math to mitigate and spread the risk The risk reduction products (re-worked after Markowitz) oft blamed for demise of the US housing market.

Still a vast unregulated international market.

But work here, for IMF? Nah! Berkshire Hathaway Specialty Insurance (“BHSI”) under Ajit Jain probably have the scale and savvy to underwrite this type of one off risk. It's their cup of tea.