Friday, February 02, 2007

Liberty World Series

I was watching a TV show about the Waffen SS and how the defeat of the axis left the survivors of that army with nothing. Indoctrinated into the beliefs of the Nazi war machine, left with nothing when defeated, realizing in fact that they were the baddies. I have also been reading the Constitution of Liberty by Hayek.

The fight for freedom.

Liberty the freedom from arbitrary coercion.

The prize fight of history
In the blue corner is liberty in the red corner arbitrary rule.

1788 - US vs British - in the form of Imperialist Monarch
1815 - Allies vs France - in the form of Imperialist Emperor
1914-18 - Allies vs Germany, Austrian Hungarian and Turkey. - in the form of Imperialist Kaiser
1939-45 - Allies vs Axis. - in the form of Dictatorship
1945-90 - NATO et al vs Soviet Bloc - in the form of Dictatorship
1970-? - West et al vs Islamic Jihadist - in the form of theocracy dictatorship.
1970-? - Man vs Greens - Destruction of modern society, the removal of human environmental impact.

In between we have countries decimated by various forms of dictatorship taking the form of
1) People's dictatorship - reign of terror France
2) Communist dictatorship - Russia, China, Vietnam, Cambodia, North Korea

The underlining theme is the fight against coercion.

It is a fight against a romantic ideal in the form of
1) People's utopia
2) Good and Just Kingdom utopia
3) Imperial Rome utopia
4) Some distant legend time utopia
5) Man as beast utopia
6) Garden of Eden Utopia
7) Heaven Utopia.

Do you get the drift. The aggressor is always looking at the past or the perceived or mythical past. Sometimes quoting holy books as evidence.
The defender (liberty) is looking forward what can I do now with liberty.

Have Fun

Paul

Thursday, February 01, 2007

Dangerous precedence Shareholders are not creditors

I am not sure this ruling on shareholders getting equal share with creditors will last long. The banks and any business will be lobbying hard for this to be legislated away.

Sorry shareholders are taking the most risk so get last piece of any cake after everyone else.

Look at the balance sheet of any company, where does the equity (which is where the shareholders are) come into the equation. This ruling means that equity is now some kind of liability!!!

Creditors are not just banks and other lenders, this includes any business which provides method of payment other than cash on delivery (COD).

The subjective rubbery nature of this requirement
""A person who buys shares in a company in reliance upon misleading or deceptive information from the company, or is misled as to the company's worth by its failure to make disclosures required by law, may have a claim for damages against the company which ranks equally with claims of other creditors," the court held."

Is this misleading?, our biggest creditor pulled the plug on us (to try and recover some money) and the company reports "We are in negotiation with creditors to refinance". This is exactly what Sons of Gwalia were trying to do. It is the exact reason why the creditors pulled the plug.
They had had enough and wanted to recover some portion of their money which they had loaned.

At what point does this become misleading?
Is the value of development properties deceptive?
Knowing that the company has one third of the cash required to pay current liabilities?

There are websites, books, magazines and newsletters dedicated to this stuff.

Bring on the nanny state... whoops you invest your all your life savings trying to pick the bottom in a stock like Sons of Gwalia and then to turn around and ask for your money back when the gamble doesn't pay off.
Does the bookmaker provide you are refund your bet when the favourite runs last?

Here is a good lesson, one which I have learned from as well.

When you read this in financial report (this from Sons of Gwalia 18th February 2004) and it specifically mentions something like this. It is time to ask why?

"Operating Cashflow:
During the half year ended 31 December 2003 the Company’s operating cashflow and its closing
reported cash balance were reduced by a sizeable decrease in its trade creditors balance."

Some trade creditor (Payables on the balance sheet) demanded their cash!

Have Fun

Paul