Using Veritas to Construct the "Per…

29-04-2017 Hits:49929 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:50233 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:49545 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:51443 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:50841 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:53423 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:34080 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:52062 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:51950 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:52258 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:54765 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:53728 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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I will be looking into this and will offer my opinion next week. A cursory glance at the press release doesn't reveal a cause for a 10% pop in the share price, save the normal volatility in the market accented by quad expiry date and the need for rebalancing of funds that track the indexes (ex. S&P Index funds).

From AP:

...Late Wednesday, the REIT said it closed on six mortgages totaling $1.3 billion. It used the $658 million in proceeds to buy a Las Vegas mall, pay partners and retire some debt.

Additionally, General Growth said it's working to close an additional $2.5 billion in other mortgages and hopes to raise up to $1.75 billion through property transactions.

The news came after Standard & Poor's downgraded the REIT's corporate credit rating on concerns over its debt and need for significant refinancing. However, the ratings agency pointed out that the company's core business remains strong, buoyed by its market position and high-quality portfolio.

At the beginning of the year, General Growth said nearly $5.61 billion of its short-term debt would come due in 2008 and 2009.

 So, they closed on just 23% (or less) of what they are going to need for the nest few quarters, in a quickly worsening CMBS , CRE and credit market, and some believe this is a good thing!!??? Do the math, they are AT LEAST $4.31 billion short. I hear they are seeking private non-debt capital (read expensive/dilutive) and their debt capital expenses have went up due to the ratings downgrade.

From Yahoo:

...[GGP] announced today it expects to close its sixth new mortgage loan since the beginning of 2008 next week. This sixth loan represents the final loan expected to be completed in the first quarter. The total of these six new mortgage loans for both the wholly-owned and joint venture properties was $1.3 billion. There was existing debt on four of the properties totaling $550 million. Consequently, these new mortgage loans are expected to generate excess proceeds of $750 million. The Companys share of the excess proceeds is expected to be approximately $658 million. The funds have been used in part to purchase The Shoppes at Palazzo in Las Vegas, to make contributions to joint ventures and payments to joint venture partners (this has raised significant red flags in my KV study of the homebuilders - JV assets are devaluing while debt service continues), to repay existing debt including the last outstanding unsecured JP Realty Public Notes, and for general working capital purposes...

During the second quarter of 2008, approximately $105 million of existing property loans, including the Companys 50% share of a joint venture mortgage loan, will mature. As of today, the Company is in various stages of discussions and/or due diligence with numerous lenders for new mortgage loans aggregating more than $2.5 billion (this is a rough environement, the two largest CMBS writer just had a run on the bank! While GGP gets most of its loans from plain vanilla mortgages, CMBS provides the liquidity to the market.). These potential mortgage loans are on income-producing properties that are currently unencumbered, as well as on properties with existing mortgages that will mature throughout the balance of 2008. Just in case you didn't pick up on this, they are encumbering their properties that don't have debt to raise capital. This is a bad thing. They are going further into debt at a time when their debt (LTV) is too high to begin with. I wonder if people even bother to read the press releases before they start buying the stock. Anyone who loses money can't say that GGP mislead them. It was stated clearly in black and white.

In addition, the Company is also in various stages of discussions and/or due diligence with numerous parties regarding various types and forms of non-debt capital. Currently, the aggregate amount of new non-debt capital generated if all of the potential transactions close is expected to be approximately $1.75 billion (This may be quite/dilutive to current shareholders - driving value per share downward). None of the non-debt capital transactions currently being discussed and/or pursued involve any public capital markets-type executions. All of the transactions, to the extent closed, would be private. Even more expensive without the public market liquidity discount.

At this time, the Company cannot be absolutely certain that any of these potential mortgage and non-debt transactions will in fact close during the second quarter of 2008. However, the Company currently anticipates at least $1.5 billion of aggregate mortgage and/or non-debt transactions will in fact close during the second quarter of 2008 and those transactions will produce at least $1 billion of excess proceeds. The Company expects to apply the majority of those proceeds to repay a $722 million acquisition loan and to use the balance for working capital purposes. The company has significant development overhead that has not been accounted for.

I still don't see how they are going to pull off the funding requirements without selling shares or properties into a weak market or allowing foreclosure, but let me dig deeper and I will get back to you.GGP has been cut deeper into junk territory by S&P, with a negative outlook on top of it. This will make financing that much harder. Hey, even MBIA, AMBAC and subprime CDOs can get AAA ratings. Okay, I'll admit that was a low blow. I take that back... 

From Marketwatch:

GGP corporate credit rating [cut] to BB+ from BBB-. The rating agency also cut General Growth's unsecured debt rating to BB- from BB+. "The downgrades reflect General Growth's weakened financial profile, given the company's lower-than-anticipated total debt and dividend coverage metrics as well as fairly significant refinancing and development funding needs over the next few years," said Standard & Poor's credit analyst Linda Phelps. According to S&P's rating system, companies rated at BB or below are categorized as non-investment grade. The outlook on the ratings is negative.

Do you think these guys read my blog??? 

More news...

    A director of General Growth Properties Inc. sold 10,000 shares of common stock, according to a Securities and Exchange Commission filing Tuesday.

In a Form 4 filed with the SEC, Beth Stewart reported she sold the shares Tuesday for $34.07 to $34.15 apiece.

For anybody who is new to the blog, I have done a lot of work on CRE and GGP.  In addition, a snippet from a private conversation concerning their conference call .