EFTA Document EFTA01798039

From: Peter Mandelson < Sent: Sunday, March 20, 2011 8:45 PM To: Jeffrey Epstein Subject: Re: Rent not good. No posses=ion or emotional investment. And nothing permanent for R. </=iv> From: Jeffrey Epstein <[email protected] <mailto:[email protected]> =span style="font- weight:bold">Date: Sun, 20 Mar 2011 13:43:59 +0=00 To: Peter Mandelson < -counsel=co.uk> Subject: Re: Fw:=br> very clever„ but lacks the emotional piece. =. a house is never a good economice investment, ca=ital needs, use of funds except in a fast growing market. = the emotional security it gives you howver lets you make more money than =ou would have otherwise, .. you can always rent, its the best ecxono=ic decision if looked at in a vacuum. just like james buyint the gir= a flat. no good economic reason. however it buys him peace. On Sun, Mar 20, 2011 at 6:35 AM, Peter Man=elson < <mailto:p > wrote: Ignore affectionate language... Original Message From: James Palumbo (MSHK Sent: Sunday, March 20, 2011 08:50 AM To: Peter Mandelson BT Subject: Mr.Grumpy, Mr.Frumpy. Mr. Rumple - Rumple Stiltskin. Grrh, grrh, grrh, let'= take this from the top. There are 3 main points to consider. 1. What's the state of the world? My view continues to be bearish - Japan, Libya, oil price, UK Q4 GDP declin=, US debt and unemployment, global inflation. I think there's now a good c=ance of a double dip recession and another shock of some sort - bank failu=e, sovereign debt crisis - Spain? What would be the result of this? Japan =tyle stagnation on one end of the scale, all the way through to genuine tu=moil on the other - economic collapse, riots. As you know I've built a com=ound in Thailand against the latter possibility. You need to check this vi=w with Natty Nat Nat Nat Nat, Lazards, and others you trust. Generally my =tance would be cautious. 2. How might this effect global property prices? Unclear.The top end of the London market is currently strong because the ci=y is seen as a safe haven against trouble in the middle east. But I don't =hink Candy & Candy are selling much of their Number One Knightsbridge =evelopment. Similarly I bought my pussy cat a flat in a fabulous new devel=pment in Bangkok, the Sukothai residence, EFTA_R1_00135584 EFTA01798039 behind the Sukothai hotel. It co=t £1.5m which is a lot for Thailand and I believe sales are sluggish at =est. I don't know how strong the market is in Rio, what the local factors =re etc. I speculate there's quite a lot of wait and see at the top end of =lobal residential property markets. 3. What's best practice for financing a property purchase? Well obviously buying for cash is best, but if you can't do this I'd be ver= wary about borrowing more than 50% as a point of principle. You then need=to work out in detail how the financing is going to work. What are the mon=hly interest payments? What happens if unforseen circumstances reduce your=income? By how much does your income have to reduce to threaten the paymen=s? What's the sensitivity to UK interest rate rises and currency fluctuati=ns? (Sterling depreciated by 25% against the baht as I was making the stag= payments for the Cat making the property about £250,000 more expensive)= What's the plan for re-paying the capital? What's the absolute downside i= security terms? le can the lending bank foreclose on other assets and wha= would be the effect of this? It's also necessary to be absolutely clear about total costs - ie, taxes on=purchase, agents costs, total realistic refurbishment costs, including con=ingency, on going taxes, service charge and other running costs. These the= need to be bundled into a composite number and the financing flows from t=is. So say in the case of the flat you're looking at the purchase price is £1=7m, and you're all in for £2m. (This feels low but I'm just using it for=example). Let's say you put up E500,000 cash and go to HSBC for E1.5m,=you then need to run all the sensitivities I've referred to above based on=this. It feels like quite a committment. Again, you must take other advice and make up your own mind, but you've see= what happens when people over extend their borrowings against property. T=at's why, irrespective of the attractiveness of the property and the appar=nt security of your current income, I always follow the 50/50 rule of thum=, and even then the detailed financing battle drill needs to be performed.=br> I hope this is helpful. Call if you'd like. Big kiss. Reception: <tel:%2B44%2020°0 0 > Ministry of Sound Group Limited. Registered office: Registered in England & Wales, company number 3299668 ,*** ******** ** ***** **•** ****** The information contained in this communi=ation is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the a=dressee. It is the property of Jeffrey Epstein Unauthorized use, di=closure or copying of this communication or any part thereof is strictl= prohibited and may be unlawful. If you have received this communication in error, p=ease notify us immediately by return e-mail or by e-mail to [email protected], =nd destroy this communication and all copies thereof, including all attachm=nts. copyright -all rights reserved 2 EFTA_R1_00135585 EFTA01798040 3 EFTA_R1_00135586 EFTA01798041