Cavalcade of Risk, February 28th edition

We're honoured to host this edition of the Cavalcade of Risk blog carnival. In light of yesterday's stock market meltdown, we feel risk analysis is quite timely and we've decided to split the submissions up into different categories namely

• Investor & Economic Risk,
• Political & Regulatory Risk, and
• Personal & Professional Risk

Investor & Economic

Made to Be Great submits: "Risk Taking - Living life to the fullest", differentiating between risk taking and irresponsible behavior:

Irresponsible people take risks without ever paying attention to the dangers the risk brings, and take action out of “impulse” instead of preparation and careful thought. For example, suppose someone gets a suggestion from a friend to invest his money on a certain stock, and lets suppose this person doesn’t really have any investing experience, then out of sheer excitement he goes out and invests all of his money on that stock hoping he will have a great return. This wouldn’t be risk taking, this would just be acting irresponsibly. If this man would have taken the time to study the friends suggestion properly and with the help of capable people, and determined that it would be best to invest only a portion of his money, he would still be taking a risk while investing, but he couldn’t possibly be accused of acting irresponsibly. with some sound advice

The Digerati Life warns investors to "Know Thyself" by analyzing your "investor profile":

Investing is a way to make your money work for you so that you can take calculated risks for the promise of a better reward relative to simply stuffing your money in a hidden nook somewhere in your house. The more you know about risk and how it can affect you and your situation, the better off you will be. Bottom-line: there is a law that states that your returns are directly proportional to the risk you take.

Israeli Speculator submits a definition of Arbitrage financing

Arbitrage is basically in simple terms “making money out of nothing”. There is no risk involved. But sometimes people abuse this term or are not aware of a hidden risk.

Over at Calculated Risk, a WSJ report is analyzed, concerning sub-prime lenders "less than stellar risk assessment on loans", which many are blaming for the current volatile conditions on the stock market:

Slowly but surely, people are starting to get it, and slowly but surely, I am starting to think that the tipping point in credit -- via a subprime-generated shambles in CDO (collateralized debt obligation) land -- is closer than anybody imagines.

Political & Regulatory

Over at Sox First, former Citigroup CEO Sandy Weill argues that unregulated hedge funds should be willing to "open their books to regulators":

There is a lot of leverage in the business which means they don't just use the money they have but borrow money, so they use multiples of their own capital. The risk is what the size of the positions are and what happens in those positions if all of a sudden something outside impacts on the market to change it or if the liquidity begins to dry out. That changes the ability to get in and out of markets .

Lynch Ryan at Workers Comp blog highlights the way different states approach workers compensation:

there are 51 US jurisdictions involved in workers’ compensation, each with a different law. That’s 51 opportunities to get it right, or 51 opportunities to get it wrong.

Roth & Company Tax Updates looks at the Bush administration's health insurance proposals with a rather favorable assessment:

The proposal will almost certainly encourage some people who currently lack insurance, particularly middle-income families, to get it. And the core of the new proposal is not biased towards the provision of favored forms of insurance (e.g., high deductible policies) over other forms of insurance that could reduce spending (e.g., managed care or plans with higher copayments).

Political Calculations examines the French tax and social security system:

What do a seemingly unending stream of car burnings and the French Social Security program have in common? The answer may be that the more Renaults, Peugeots and Citroëns that go up in flames, the better the finances for France's social safety net becomes.

Personal & Professional

• In honour of Black History Month, Black Male Appreciation submits Black male teens and their efforts to follow positive role models. The article highlights The Kappa League from Tuscaloosa, an organization reaching out to Black male youth who, many say, are looking for models beyond the thug image prevalent in rap music and other entertainment media.

• Wenchypoo submits 10 things your hospital won't tell you. You can pretty much guarantee that "Oops, wrong kidney" is one of them

• Rita Schwab exposes the tricks to being a good boss with this insightful post:

Being bossy is easy; being a good boss is hard work. Being a great boss takes a combination of talent, emotional intelligence, and wisdom.

Alas, much easier said than done Rita!

• Simple Trading System offers a Review of "The Rich Jerk", plus the offer to get it free with a $1 cashback

• New York attorney Eric Turkewitz submits Like A Good Neighbor, State Farm Runs Away, arguing that the insurance giant is "baling out of the Mississippi market. Their motto, 'Like a good neighbor, State Farm is there,' apparently no longer applies in that storm damaged state."

• Matthew Paulson wonders whether Payday Loans Ever a Good Idea arguing that finance companies and banks have now figured out viable ways to loan money to people who won’t always pay the money back; but is advising that is not always such a good idea.

• Insurance Help : asks whether you should ever consider buying auto insurance online, as well as advice on lowering your car insurance premiums

That's it for this weeks edition of the Cavalcade. We want to especially thank Henry Stern of the Award Winning Insureblog for giving us the opportunity to host, and of course all those who submitted posts and made this a truly great experience!

Bank issues credit card to cat

An Australian bank has issued a credit card to a cat. The Bank of Queensland gave Messiah the moggy a credit limit of £1,660. Messiah's owner, Katherine Campbell, applied for the card in her cat's name to test bank security. Ms Campbell told reporters that the bank requested identification from the cat but later sent a credit card without receiving any proof of ID.

"I just couldn't believe it, people need to be aware of this and banks need to have better security."

[more]

Mapwing launches (officially)

We've being playing around with Mapwing, ever since developer/CEO Andrew Hagenbuch told us about it a few weeks ago. This afternoon, they announced their official release after being in beta for the past few months. Essentially Mapwing offers a service that enables anyone to build, share, and explore virtual tours created from digital photos and maps which can be shared via email or embedded into other Web sites. While not exclusively for real estate, its applications are there (see this example). In fact, we found one agent from Coldwell Banker that's already using the service.
Mapwing is not free but does offer "a solid basic service" where you can create virtual tours, share and add comments. For $39/year Mapwing Plus enables you to build larger virtual tours and embed them into your website; as well as an "advertisement free experience" on Mapwing.

Anna Nicole: "life (and money) after death"

Well, it had to happen; apparently her developer "boyfriend" whose house she "occupied" while "residing" in the Bahamas, has now put the property back on the market for a cool $10 million according to TMZ.com. Impressive, given that he bought the property last October for less than $1 million, and proof that there is indeed life (and money) after death.

3i eying Foxtons?

After loosing the opportunity to buy out Countrywide PLC, the private equity group is now apparently chasing Foxtons.


[the infamous Foxtons mini]

Dr J buys Atlanta golf club

Basketball legend Julius "Dr J" Erving has purchased the Heritage Golf Club in Atlanta, with longtime business partner Chuck Watkins. The club was bought for an undisclosed price.
[not such a "hot" story i know, I was just looking for an excuse to publish this picture]

Lennox does Miami

This weekend, boxing legend Lennox Lewis turned down a reported £15 million to come out of retirement and fight Ukrainian slugger Vitali Klitschko, stating he was "flattered" the boxing community wanted him back in the ring, but being a "man of his word," LL unequivocally has "no plans to return" to the ring.
And why should he?
Haute Living's latest edition gives a glimpse of LL's current lifestyle, chillin on the beach in Miami; and when not hanging out in Coconut Grove or Pinecrest, LL heads for the hills in Jamaica. The article also revealed that LL recently sold his pad in London (smart move) and is currently shuttling residencies between Canada, Miami and Jamrock (aka Jamaica)

The Sheikh backing Candy&Candy

It's been recently revealed that Sheikh Hamad bin Jassim bin Jaber al-Thani, the foreign minister of Qatar is the principle funder behind Candy & Candy's One Hyde Park, rumored to be the most expensive apartments in the world, with average prices starting at £4,000/square foot.
Sheikh Hamad also made local business news recently, when it was announced that his property investment vehicle spent £90m on Sainsbury’s shares on the day that private equity groups launched a takeover bid for Britain's second largest supermarket chain .

$300 million for A380 "Flying Palace"

The superrich are launching the next wave in air travel luxury accomadation: the wide-body private jet.

With 10,000 private jets flying in the U.S., a few billionaires are signing up for something roomier -- jumbo jets that can be outfitted as mobile mansions. WSJ's Wealth Report highlights on one such client, a Middle Eastern head of state, who shelled out $300 million on the notorious Airbus 380, an aircraft which is running waay behind in its production schedule. The unidentified buyer, will spend an extra $100 million to turn the craft into a more exclusive conveyance which Airbus eloquently calls "The Flying Palace".
But why such opulence? according to New York based "jet-interior designer" Edése Doret; "You can host an elegant dinner party on the ground in a third-world country, after you bid your guests a fond farewell, you close the door and head home."
Yep, sounds perfect

Officebroker.com brokers £3 million deal with Regus

Online office space broker Officebroker.com is celebrating after Sales Manager Dan Murphy brokered a £3m deal for FTSE traded Regus - the UK’s leading supplier of outsourced workplaces. The £3m contract, has been named the single biggest transaction secured by Regus in the second half of 2006, and was recognised at the Regus awards ceremony which took place in London last week.
Dan, who works at Officebroker.com’s Staffordshire office, picked up the award for the contract between Regus and a communications business that took just under 10,000 square feet of space at a Regus’ business centres in Bracknell.
Officebroker.com was also named ‘Brokerage of the Year 2006’ at the ceremony reflecting the company’s phenomenal growth since launching five years ago.

Exclusive opportunity in Dubai Sports City

The 18 storey "Universal Tower", a 5 star residential development in the heart of Dubai Sports City has just launched with prices ranging from 90,000 euro (£60,000) for a one bed apartment and 285,000 euro (£190,000) for a duplex penthouse apartment. The developer is offering exclusively via Renthusiast:

• Guaranteed 7.5% NET rental income for 3 years (buy-to-let investors only)
• Guaranteed 10% equity increase by March 2007
• Guaranteed fixed exchange rate
• Free car parking space (worth £7,500 euro)
• Free 42” plasma Television

email today to reserve your apartment or skype us for more details

STATEMENT FROM NATIONWIDE RE FSA FINE

The Financial Services Authority (FSA) has today fined Nationwide Building Society (Nationwide) £980,000 for failing to have effective systems and controls to manage its information security risks. The failings came to light following the theft of a laptop from a Nationwide employee's home last year. (FSA Statement).
This afternoon, Nationwide issued the following statement in response to the fine:

The FSA has today announced that it has imposed a fine on Nationwide as a result of an investigation following the theft of a laptop computer from an employee's home in August last year.
Philip Williamson, Nationwide's chief executive, said: "We have extensive security procedures in place, but in this isolated incident our systems of control were found wanting. We have made changes to fill the gap and improve our procedures further.

"Towards the end of last year I sent a letter to every one of our members telling them about this matter and apologising for any concern it may have caused them. I would like to reiterate that apology to our members and assure them that we have taken action to tighten our already high security procedures.

"To set people's minds at rest I wish to emphasise that there has been no loss of money from our customers' accounts as a result of this incident. Our customers have the additional assurance that they are protected by the Society's customer promise that 'If you are the innocent victim of fraud, you will not lose out.'"

* The laptop was stolen in a domestic burglary from an employee's home, in August of last year
* We and the police believe it was stolen for its intrinsic value as a laptop, rather than for the information it contained
* The laptop was security protected and the information on it, which was to be used for marketing purposes, cannot be used on its own to commit identity fraud
* There were no PINs, passwords, account balance information or memorable data relating to any customers

The police, the FSA and the Information Commissioner were informed of the theft at the time and Nationwide has been co-operating with them since.

Nationwide welcomes the fact that the FSA acknowledges that the Society has:
* Taken a range of additional measures to increase security around accounts
* Informed customers of the loss of the information
* Affirmed its existing policy of reimbursing customers who are innocent victims of fraud
* Commissioned a comprehensive review of information security procedures and controls

Mumbai Workshop on Real Estate Capitalisation and IPO Procedures

Overview : After the successful Initial Public Offer (IPOs) of many Indian builders (DS Kulkarni, Akruti and others), IPO's have now become the ultimate capitalisation tool. Instead of getting finance for construction, many real estate business groups are opting for Public Issues on which no interest is to be paid.
Listing shares on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) gives an advantage for not only investors but for the promoter as well, who can now give the advantage of an exit option.
The work shop will highlight the procedures and advantages of IPO and listing on various stock exchanges in India.

Day and Date : Monday, 19th February 2007
Venue : J P Naik Bhavan, University of Mumbai, Kalina, Santacruz East, Mumbai.
Time : 3 pm onwards

Speakers :
Mr. Rajkumar Adukia, Eminent C.A.
Central Council Member of Institute of Chartered Accountants of India
Author of Twenty two books
Chairman of International Trade Law & WTO

Mr. Sundar Rangan
Head - Merchant Banking, Arihant Capital Markets Limited & Ex Can Bank

More prominent Speakers confirmation awaited.

Send in your registration to
ATIREM
Anmol, 1st Lane, 7th Road, Santacruz E, Mumbai 400055.
Ph : 022- 26173827, 65703470
Fax: 022- 26114221

Cost : Rs.1200/-
Last date for Registration 16th February 2007The Cheque should be in favour of "Accommodation Times Institute of Real Estate Management"

It's Official ...

London property search engine Zoomf.com has secured a major round of funding from venture capitalists HOWZAT Media LLP; although there's currently no indication of how much money HOWZAT is actually putting into Zoomf, it is indeed a great achievement for a company that's been around for just a little over 6 months. We've asked Zoomf executives for an indication of figures; so far no response; but we do know that HOWZAT is a group of private investors specializing in Internet investment, currently boasting US$10 million in investment capital. The group is headed by Hugo Burge and David Soskin, both of Cheapflights Ltd and Burge is also slated to join Zoomf's board of directors, which is currently made up of

• CEO Rod Dowler a former KPMG partner;
• "technology wizard" Dr David Romano-Critchley formerly of Espotting;
• Business Development director Mike Carter, a veteran online advertising executive, having worked for MIVA, Ask Jeeves, Touch local and others;
• and of course Product Director Ivailo Jordanov, also formerly with Espotting Media.

From the release:

HOWZAT co-founder and Vice-Chairman of Cheapflights Ltd., Hugo Burge
“We were attracted to investing in Zoomf not only because of their cutting edge product but also because of the wealth of experience in the founding team. The Zoomf team has a raft of experience in online media, pan-European roll-out, search engine technology and the management of growth organisations. We are confident that they will use the funds raised further to innovate and introduce new products to meet the needs of both consumers and the property sector."
Rod Dowler, Zoomf Chief Executive added, “HOWZAT is an ideal source of funding for us. Not only is HOWZAT focused on dotcoms such as ours, its management has had hands-on experience of developing and growing Cheapflights - one of the UK's most successful vertical search sites, both in the UK and in the USA. They are a perfect partner for us."
He added," Our goal is to create something that’s both agent and consumer-centric, providing a superb service in one of the most economically important sectors in the UK. At present, Zoomf is available only to London agents, but we intend to roll it out nationwide later this year. Zoomf will eventually provide the opportunity for free property listings to every estate agent office in the UK”.
David Soskin, the CEO of Cheapflights and co-founder of HOWZAT, concluded by adding: “We very much look forward to working with this 'dream team' and helping them move from beta start-up to successful international company. All the ingredients feel right; now begins the hard work to make it happen."

Job well done and in the words of Ivailo Jordanov "Game on!"

Big news from Zoomf

We can exclusively reveal that London based Zoomf.com has some really big news coming soon, unfortunately we're under embargo to reveal just what that big news is; but it's really big ... and it's coming in the next few days or hours,

Extate - now with live video

As Mike Butcher revealed last week, Extate is now live with a snazzy video upload feature, with one excited commenter claiming it to be the "Youtube of property!" The service features the ability to add video directly from mobile using MMS, or to upload from a PC.

Quite exciting, but my humble perspective is that they may have jumped the gun a little bit on this one. So far, Extate's impressive algorithms only crawl estate agency websites and at the moment, there is no feature to permit a vendor to directly upload his property, which would truly be revolutionary, but would more than likely piss off the estate agents if this were to happen.
With the video upload service, Extate is inviting vendors to directly upload their own video, which may or may not directly or indirectly conflict with the agents marketing strategy. It doesn't take much to add a bit of text to the video footage with a mobile number, email address or some other contact details for the vendor directly. How agents will react to this is quite obvious and given that Extate only crawls agency sites, no doubt poses a serious dilemma for them, if this feature were to seriously take off. So far Knightsbridge based Brompton Property appear to be the only agency embracing or at least using Extate's video service. However the footage appears to be shot by Brompton, with their contact details prominently displayed over the video footage.
Perhaps a more useful feature would be for Extate to create a tool, giving vendors the option to upload their own property details including the option to upload video. But then again this comes at a risk of pissing off the estate agents, whose data they're currently using to build their database. Interesting dilemma, one that may not necessarily be so easy to fix.

"Bomb explodes" at Congestion Charge office

Wasn't me, I swear it ...

A letter bomb has exploded at the London HQ of congestion charge firm Capita. A female employee at the office in Victoria Street was slightly injured - she is understood to have opened the envelope.
Victoria Street has been sealed off from Westminster Abbey to just beyond Scotland Yard, with an inner cordon preventing members of the public accessing the building where the incident took place.
All six floors of the office were evacuated.
Capita manages a number of high-profile government IT services including the London congestion charge, the Criminal Records Bureau and revenue collection from TV licensing.
In March last year Rod Aldridge quit as chairman after claims he donated £1m to Labour resulting in the firm receiving Government contracts.

Gherkin sold

Reports are that London's iconic Gherkin (aka Swiss Re building) has just been sold for £600m, making it the largest ever sale of a single property asset in the U.K.

From FT:

In its early months the tower was often portrayed as something of a folly, having struggled to attract tenants because of the awkward nature of its floor plates.
Now, however, it is fully let, with Swiss Re occupying the first 16 out of 34 office floors and an array of other occupiers on the other floors. These include Hypo Real Estate, a German mortgage lender, Allianz, the German insurer, and Cardinal Asset Management, an investment firm.
The Gherkin’s sale shows there is still a strong appetite for commercial property investments in the UK despite fears that rising borrowing costs could restrain the market’s interest.