27 June 2007

Insiders cash out --- RAMS joins the queue

Well what can you say. Australian property has aways orbited around the business cycle, as it should, like a planet orbiting a star in a ellipical orbit the gloden rays of profit have ebbed and flowed like the seasons. But what if this this star is actually part of a double system, and that within the cyclical trends there is a larger secular trend that waxes and wanes, the stagflation giant.

Well here is the news guys, US bonds yields have broken out of a decline that has lasted near twenty five years and at the same time the CDO model that has allowed aussie homeloans businesses like RAMS to print money are at the start of total dissarray. Interest rates have begun a rise that will end in fifteen years at rates in the high teens, or worse and the notion that you can loan money to anyone who can fog a mirror to buy property and then offload the risk to some dummies in a pension fund looking for yield will have long died. Ergo the RAMS model will in a short number of years be totally broke so is it not surprise that all the insiders are running to see the IPO boys. I wouldn't poke at it with a stick!

(Bloomberg) -- RAMS Mortgage Corp. plans to raise A$695 million ($590 million) in an initial public offering, after the Australian lender spurned a bid from Kohlberg Kravis Roberts & Co., two people with knowledge of the matter said.

Shares of Sydney-based RAMS will be sold at A$2.50 apiece, with founder John Kinghorn and another stakeholder to retain about 20 percent, according to the people who declined to be identified because details aren't public. The IPO will give the company a market value of A$885 million, they said.

Financial services companies in Australia are among those benefiting from buoyant demand for stock offerings. Sales of shares and equity-linked securities have almost doubled to $18 billion this year, compared with the first six months of 2006, according to data comp

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