HarryDent's 30% might be a tad high but I'd be provisioning for at least 15% of the loan book to become a mixture of bad and/or delinquent. Not all of it will be written off either...just not been serviced in the present climate. But that doesn't help TIM in these very critical times. Besides who would want to buy an under-performing book?
The TIM type loans aren't the big game for many of these investors who, right now, are more concerned with keeping the family home and other larger more tangible investments going.
I know of one investor who has no intention of making anymore MI payments and he won't do anything till they react. Then he reckons the usual legal frustration process might see him forced to really act in about a years time.
Next Point: In really tough times, people are only as honest as they can afford to be. Just watch the number who will try to play the "The non-recourse loan was only really put in place to keep the tax people happy. I really don't have to pay it."
I'm afraid the smoke in the TIM house is gathering strength.
And they want to go agri-business...a public company with the normal overheads of a public company!
Who has ever met a genuinely wealthy farmer where the wealth has been accumulated from crops?
For the record I am a former TIM shareholder...and acted on the advice of TII when the share price was much, much higher. I've seen the lows and there haven't been any highs.
TIM Price at posting:
17.5¢ Sentiment: Sell Disclosure: Not Held
