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Akram's Razor
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Akram is a Director at Suhail Capital.
  • "The Unemployed Shareholder goes to Mykonos" 0 comments
    Nov 18, 2011 3:54 PM

    Somewhere inside the Unemployed Shareholder's favorite Greek restaurant………The Last Great Gyro………(Originally published June 26, 2011)

     

     

    Icarus: So, what brings you to the greek islands this time of year, you on vacation?

     

    Unemployed Shareholder: Well, not exactly Icarus , I'm here to make an investment. I want to buy an island.

     

    Ic: Ahh, you sneaky devil you. You know the parliamentary vote is tomorrow, and you are trying to make a play on the greek islands before the austerity measures go through. Anything it for me?

     

    US: Becarefu Icarus, you might get your wings clipped if you mess with markets. Stick to brokering its what you do best. I'm looking to diversify. How much for Mykonos?

     

    IC: Mykonos is not for sale, but how about Patroklos?

     

    US: What's the asking price?

     

    IC: 300mln euros.

     

    US: Ok, i'll take it. Who do i cut the check to?

     

    IC: Well you can make the 30mln euro check out to cash.

     

    US: Thirty Million? You said 300 million?

     

    IC: Ah, Mr. Unemployed i need to explain a few things to you. This is not America. We work a little differently here. Your island is valued by the land office at thirty million. So, you will need to pay a 9% tax to the government on the sale..

     

    US: But the island asking price is 300 million?

     

    IC: Yes. We will draw up a contract for sale at 30 million, but then we will do the transaction at 300 million. This happens all the time.

     

    US: Ok. And that's it?

     

    IC: Well, not exactly. First we need to find out who owns the island.

     

    US: What do you mean who owns the island? I thought it was selling for $300million?

     

    IC: Well, yes. But we don't really know who owns it. It could be stvros, or nikos, or the the church, or even papandreu. Since we have no land registry , it could be just about anyone.

     

    US: ( looking quite perplexed)You have a land office but no land registry? I thought you created one ten years ago to solve this very problem.

     

    IC: Ahh, what you are referring to is a 60 million EU grant to create a registry. That didn't really work as we had some cost overruns.

     

    US: Cost overruns?

     

    IC: Yes. The cost of the project went from 1300 euros per square kilometer to 30,000 euros.

     

    US: That's insane.

     

    IC: Yea, the boys at the EU told us the same thing. But you have to understand things tend to come up here that  you cant account for off the bat.

     

    US: So, what do we do?

     

    IC: Its really quite simple. If you give me about 10million euros i can clear the red tape needed to be cleared to find out who owns the island. At that point if he is comfortable with the 300 million asking price we can proceed. But you are very lucky as this island has a very nice 20 million euro penthouse on it.

     

    US: Finally some good news. Maybe i will move in there and work on my tan while i wait for the sale to go through.

     

    IC: No, no that;s not possible. Its rented. 

     

    US: What do you mean its rented? You just told me nobody knows who owns the island.

     

    IC: Yes, that is true, but the minister of traffic moved in after the last sale; we just don't know who it was to yet since the documentation has not been found,

     

    US: How does a minister of traffic afford to live in a 20million euro penthouse. 

     

    IC: Oh, its quite affordable. His rent is only 350 euros a month.

     

    US: 350 euros? Are you mad? What happens when i own the property…how do i get him out?

     

    IC: Well, you can file a request for proposal for rental increase at the office of tenancy. Once that is processed he has 12 months to respond as to why he does not think his rent should be raised. 

     

    US: 12 months?

     

    IC: Yes, but you can file an inquiry of objection if you think his proposal is unreasonable or without merit. After about 18 months you should have a hearing.

     

     

     

    US: Ok, i give up, this is madness.

    ( Unemployed stands up and gets ready to leave befre a strange man with white towel approaches him)

     

    Eurozone Hitchhiker:Before you go Mr Unemployed Shareholder; I suggest you read the chapter on the greeks in the Hitchhikers Guide to the Eurozone.

     

    (the hitchhiker hands the Unemployed Shareholder a Guidebook to the Eurozone which he promptly opens to the section on Greece)

     

    Greeks: The most bureaucratic members of the eurozone. They wouldn't even lift a finger to save their own grandmothers from a Turkish invasion without orders signed in triplicate, sent in, sent back, queried, lost, found, subjected to public inquiry, lost again, protested, and finally refiled. On no account should you ever allow a greek to negotiate with you.

     

     

    US: Wow, this is pretty handy stuff, wish i had one of these before i came here.

    (Unemployed picks up his phone)

     

    Tell the boys at the squid we are back on!

     

    IC: What are you doing?

     

    US: What i should have done a long time ago…..shorting this bureaucratic bubble.

     

    IC: But the bailout is tomorrow, you will lose money.

     

    Umm, i don't care. These people have been living in a bubble. Austerity will never be accepted. And if it was accepted it would never work as getting something done here is virtually impossible. I may lose money for a day or two or even a few months, but one way or another they will default. There is no getting around that.

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