Cliffs should choose another number

        An article in today’s New York Times by Ken Belson about The Cliffs Communities and Tiger Woods ends on a strangely ironic note.

        “I can’t find 12 percent guaranteed income in any other thing these

If the income is truly guaranteed, there should be no worries about "capitalist vultures."

days,” the article quotes Don Tucker, a resident at the Cliffs at Glassy who is on the finance advisory committee there.  He is referencing the loan rate Cliffs founder Jim Anthony is offering residents if they raise $60 million to help him finish the golf course Woods is designing, and other promised amenities. 

        Mr. Tucker goes on to say that, “It [the loan] also provides me with an insurance policy that I will not all of a sudden be placed in a position where the country club is managed by some capitalist vulture who washes out my equity.”  If residents don't come up with the $60 million in financing, Anthony has indicated he will have to seek the money from external sources, and at higher rates, with the prospect of losing his impressive roster of amenities to an investment bank in case of default.

        It strikes us that if the income is truly “guaranteed,” then worries about “capitalist vultures” are unwarranted.  But the greater faux pas is the reference to “12 percent guaranteed” which has become one of the most infamous numbers in the history of finance.  It was precisely the return Bernie Madoff guaranteed his clients.

Like what you see?

Hit the buttons below to follow us, you won't regret it...