Warren Buffett’s Berkshire Hathaway Inc. is providing a lifeline to Home Capital Group Inc., the embattled Canadian alternative lender whose near collapse sparked intense scrutiny of the country’s fraught housing market.
Berkshire agreed to indirectly acquire C$400 million ($300 million) of the firm’s shares for a 38.4 percent stake and provide a C$2 billion credit line to subsidiary Home Trust Co., Home Capital said late Wednesday in Toronto.
“Home Capital’s strong assets, its ability to originate and underwrite well-performing mortgages, and its leading position in a growing market sector make this a very attractive investment,” Buffett said in the statement.
Related previous link to the above (from the end of April): Home Capital Group - it is time for the Canadian regulator to act -- by John Hempton
Related video to the above: Marc Cohodes at the Grant's Fall 2016 Conference [short pitch on Home Capital Group starts around the 27:26 mark]
Canada's Housing Bubble Will Burst - by Ben Carlson (LINK)
Related to the above, from the Almost Daily Grant's commentary yesterday:
"Preliminary home price data in the formerly hot Toronto housing market is little short of shocking. According to the Toronto Real Estate Board, the average transaction for the first half of June dropped below CAD $809,000, from CAD $863,910 in May and CAD $919,614 in April. The reversal coincides with the introduction of a 15% foreign buyer’s tax at the end of April."Jeff Bezos has advice for the news business: 'Ask people to pay. They will pay' (video plays) (LINK)
Bezos delivered some of this advice at the Future of Newspapers conference in Turin, Italy, on Wednesday. Here are the highlights:RIGGED: Forced into debt. Worked past exhaustion. Left with nothing. [H/T @AlexRubalcava] (LINK)
- Focus on readers first, not advertisers.
- You can't shrink your way to relevance.
- Don't look for a patron or expect charity.
- Use technology, but don't be a slave to it.
- Advertising alone will not support investigative journalism.
- "When you're writing, be riveting, be right and ask people to pay. They will pay."
A yearlong investigation by the USA TODAY Network found that port trucking companies in southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford. Companies then used that debt as leverage to extract forced labor and trap drivers in jobs that left them destitute.John Mackey: "The Whole Foods Diet" | Talks at Google (LINK)
Uber's Bad, Awful, Horrible Week: Doomsday Scenario or Business Reset? - by Aswath Damodaran (LINK)
Malcolm Gladwell's Revisionist History podcast: "The Road to Damascus" (LINK)
In this week's episode, I track down a former CIA employee to hear the whole story, the true story, about a masterful spy and a terrorist who had a change of heart. What happened to them? And was it fair?Freakonomics Radio (podcast): Why Hate the Koch Brothers? (Part 1) (LINK)
Charles Koch, the mega-billionaire CEO of Koch Industries and half of the infamous political machine, sees himself as a classical liberal. So why do most Democrats hate him so much? In a rare series of interviews, he explains his political awakening, his management philosophy and why he supports legislation that goes against his self-interest.From Boardroom To Locker Room, How Joe Moglia Shocked Wall Street And College Football (podcast) (LINK)
Related book: 4th and Goal: One Man's Quest to Recapture His DreamTony Robbins: The 6 Human Needs (LINK)