I didn't want to buy a finance company

[shrub]

It's very nice that Uncle John and Brother Bill have bailed out SCF using our money, but I'm not sure I wanted to buy a finance company. I didn't mind a rail network because that's useful, but we already have Kiwibank, so we don't need a finance company.

Oh well, it's ours now and the property developers and elderly investors have had their bacon saved, so it's all good.:yes::2thumbsup

[mashman]

yup, good news all round... I know I'm really pleased to be part owner of 2 financial institutions and am absolutely ecstatic about bailing out a bunch of people that gambled and put their money into failed investments :shit:... can't wait to start receiving my dividends :shifty:

[shrub]

yup, good news all round... I know I'm really pleased to be part owner of 2 financial institutions and am absolutely ecstatic about bailing out a bunch of people that gambled and put their money into failed investments :shit:... can't wait to start receiving my dividends :shifty:

I wonder how much of my money went towards Dave Henderson? Maybe you and I should stake a claim on his Mig for our share? I'd be happy to share it with you - do you want the pointy end of the noisy end?

[doc]

I'm going to wait till they have finished "Fluffing" it up and privatise it. Then I'm going to jump in and buy my share. :sick:

[mashman]

I wonder how much of my money went towards Dave Henderson? Maybe you and I should stake a claim on his Mig for our share? I'd be happy to share it with you - do you want the pointy end of the noisy end?

if it's fully loaded, the pointy end please :) luckily they had all of their money insured by the government... do we own an insurance scheme too?

[MikeL]

Further evidence of the capitalist creed: "Privatize the profits, socialize the losses."

My guess is that the government will recover no more than 700-800 million. That amount, invested in health or education, would still have made a real difference to the average kiwi.

Instead, it goes to protect the stupid, the greedy and the devious.

The stupid, who believed others who told them that their risky investments were safe.
The greedy, who put an extra few percent of return above any other consideration.
The devious, who, once their gamble was government-guaranteed, went ahead knowing that either way they couldn't lose.

And not only do they get their capital back, but with interest!!!

Shame on everyone associated with this scandal.

[Swoop]

Another big "thank you" for Labour's scheme (http://beehive.govt.nz/release/deposit+guarantee+scheme+introduced).

[Littleman]

We financed their roads and their return on their investments.

You would think people down south would be a bit more grateful and show less animosity to people not from their little homogenous society.

[mashman]

I'm going to wait till they have finished "Fluffing" it up and privatise it. Then I'm going to jump in and buy my share. :sick:

that's certainly a concern... Key and English, on TV, look like the cats who've got the cream... I hope you're wrong

[shrub]

Further evidence of the capitalist creed: "Privatize the profits, socialize the losses."

My guess is that the government will recover no more than 700-800 million. That amount, invested in health or education, would still have made a real difference to the average kiwi.

On the bright side, if Brother Bill cuts the jobs of a few thousand government employees and cuts expenditure in services it won't affect the balance sheet. Much. Meanwhile Mr and Mrs Jones of Timaru who wanted to get a 9.5% return in a low interest environment, and invested with that nice Mr Hubbard rather than the risky sharemarket will get all their money and all their interest back.

Hurrah for you and I! We're so generous and kind.

[aprilia_RS250]

It's very nice that Uncle John and Brother Bill have bailed out SCF using our money, but I'm not sure I wanted to buy a finance company. I didn't mind a rail network because that's useful, but we already have Kiwibank, so we don't need a finance company.

Oh well, it's ours now and the property developers and elderly investors have had their bacon saved, so it's all good.:yes::2thumbsup

I am no SCF supporter but you'll find most of that money is invested in Dairy Farms.
Also I can guarantee you there would not have been any "property developer" type investors in there as clients. They'd be the ones on the lending book side who can't pay. SCF merely acts as a middleman, clipping the ticket between investor and borrower.

If you were smart you would have bough the SCF junk bonds 2 weeks ago, and now made a 30% return, given it's all guaranteed.

[Banditbandit]

What I can't believe is that the Government keeps telling us that we do not save enough ... but when Mom and Pop savrs put their hard earned money into corporations and groups liekt his . it all falls over and they lose everything (except in this case they won't) ..

Why the fuck should we save money if the banks and investment groups handling our savings just fuck it all up ... lose all our money and walk away scot free (see Cullen Investments)

How stupid do they (Government and capitalist overlords) think we are ? Telling us to Save Save Save and give them all our money so they can live off the hog and waste our money ...

And when it all turns to shit and the economy crashes us poor people put out of work are "collateral damage" ... while the rich fatcats are stilling living in their flash Paretai Drive homes ...

Post-script .. sorry the Above should read Hanover finance not Cullen Finance ..

[shrub]

Another bit "thank you" for Labour's scheme (http://beehive.govt.nz/release/deposit+guarantee+scheme+introduced).

of course, I forgot that this was all Labour's fault, and I bet the Greens had a part in it too, evil mongrels with their obesession with tofu and hemp.

One question, how did Labour manage to rush SCF into the guarantee scheme in April when it was effectively in breach of its trust deed and had failed to file audited accounts.? I thought National were in power then?

[mashman]

Another bit "thank you" for Labour's scheme (http://beehive.govt.nz/release/deposit+guarantee+scheme+introduced).

I wonder what new clients joined SCF on the day that that went through? I'd dearly love to know that...

[shrub]

I am no SCF supporter but you'll find most of that money is invested in Dairy Farms.
Also I can guarantee you there would not have been any "property developer" type investors in there as clients.

Not really, did you know that its single biggest loan was a huge $42.3 million "for a large commercial hotel refurbishment and redevelopment"? (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10670235)

[Banditbandit]

Another bit "thank you" for Labour's scheme (http://beehive.govt.nz/release/deposit+guarantee+scheme+introduced).

Don't you think the Nats would have done the same or more ? The USA certainly did ... and it's the fatcat coporates who are the Nats natural supporters ... That was very a foreign thing for a supposed Laboru Party to do ..

[avgas]

217357 I imagine this one would cost a bit to maintain.




Pity its not in South Canterbury........ oh wait have I let too much slip :shifty:

[Usarka]

Are there any other companies currently in the scheme offering good returns?


Sounds like a good way to invest some $$$. No risk, high returns.

[avgas]

Why the fuck should we save money if the banks and investment groups handling our savings just fuck it all up ... lose all our money and walk away scot free (see Cullen Investments)
errr the banks here are fine. I am not saying they are the best things ever.
But banks in NZ are very secure. So putting money into term deposits is quite safe.
Likewise they have been brought over hot coals enough here to know not to fuck with the public.

US banks are completely different kettle of fish. As they are their own authority.

[Banditbandit]

errr the banks here are fine. I am not saying they are the best things ever.
But banks in NZ are very secure. So putting money into term deposits is quite safe.
Likewise they have been brought over hot coals enough here to know not to fuck with the public.

US banks are completely different kettle of fish. As they are their own authority.

Err .. how many times has the BNZ been bailed out or bought up? And at what cost?

"Our" banks may be "safe" but they have borrowed from banks that are not safe .. and loaned to dodgey people ... and the whole system is so inter-locked none of it is safe ...

[justaddwatertomix]

some people would say that buy out was a BARGIN at 1.6 billion

[Banditbandit]

some people would say that buy out was a BARGIN at 1.6 billion

If so, why coudn't they sell it on the open market and save the taxpayers heaps of money ?

[MisterD]

some people would say that buy out was a BARGIN at 1.6 billion

$1.6 billion is the total investment that have been paid out...less the assets will come to about $600million, total payments in to the government guarantee scheme to date are about $250 million.

So, I'd have to say for a net $350million this is probably the least crap option for the gummint. Walking away would have had other costs that the country would have had to suck up, one way or another.

[MisterD]

If so, why coudn't they sell it on the open market and save the taxpayers heaps of money ?

One of the major contributory factors in SCF's demise is that Hanover, Blue Chip etc etc had turned people off putting money into anything with "Finance" in it's name...

[avgas]

Err .. how many times has the BNZ been bailed out or bought up? And at what cost?

"Our" banks may be "safe" but they have borrowed from banks that are not safe .. and loaned to dodgey people ... and the whole system is so inter-locked none of it is safe ...
BNZ was sold out. So I am not sure as to how you are referring to them being bailed out.

Banks in NZ/Aus are not borrowing large amounts from the likes of US. They are doing balanced investments in industry, emerging markets, overseas developments and solid (low gain, low risk) investments (Europe, Russia....).

So while they could be dealing with dodgy people - unless you opt for their high return accounts, you are not exposed to this risk.

It might be worth noting that our Government invest more in the US than most banks do.

[avgas]

One of the major contributory factors in SCF's demise is that Hanover, Blue Chip etc etc had turned people off putting money into anything with "Finance" in it's name...
Tis also difficult to do a PO after SecCom have looked at your books, and found errors.

Case and point was NZFSU with their "Fudge this" comment.

[shrub]

One of the major contributory factors in SCF's demise is that Hanover, Blue Chip etc etc had turned people off putting money into anything with "Finance" in it's name...

Not quite. As I understand it, investing in Auckland's Hyatt hotel/apartment project was the biggest single contributing factor, but overall it was investment in risky and speculative property that was the problem, and because Kiwis think "bricks n mortar" are the best and safestest deal of all time, when told that their 9.5% was secured against mortgages they pulled their wallets out as fast as they could.

Their demise was because these investors wanted their money back and the money was secured against depreciating and illiquid assets. If people had been happy to leave their money in SCF for the duration, in 3 to 5 years the market would have recovered enough to allow them to repay the investors, but people weren't.

Our obsession with property and hunger to buy it at all cost has caused the evolution and growth of organisations like SCF, and our paranoia over investing in equities has meant people prefer to invest in debentures than shares. As a result business owners seeking investment to grow are either unable to access funds or are forced to look offshore for equity partners and our business sector stagnates while property and finance companies boom.

[Banditbandit]

BNZ was sold out. So I am not sure as to how you are referring to them being bailed out.



In 1989 the Government reduces its share to 51% by selling 34%; with 30% sold to Capital Markets Ltd, and the remainder to the general public - In 1990 the Government then had to bail out the bank to the tune of $350million to avoid the bank collapsing ... then in 1992 the National Australia Banking Group became the owners ...

It's the $350 million 1990 bail out I was referring to ...

[Banditbandit]

One of the major contributory factors in SCF's demise is that Hanover, Blue Chip etc etc had turned people off putting money into anything with "Finance" in it's name...

Yeah that's true .. but why could they have not sold it to one of the corporations ? Perhaps because none of them saw it as a good deal ...

[phill-k]

I wonder what new clients joined SCF on the day that that went through? I'd dearly love to know that...

Everyone with half a brain who wanted 3 - 4% more interest than the banks were giving and also a Government guaranteed deposit. You would have to be a Dick to leave money on a low interest deposit with the main Banks when the Government effectively removes the risk of a higher returning investment.
The Scheme as introduced by Labour but with the "behind the scenes" support from National was designed only to give short term support to the Finance and Banking Industry - why I'm not sure.

The real Question is why when we supposedly were over the crisis did Key extend it, especially when National supposedly had information showing that the biggest Finance Company left was in serious trouble, and not meeting its Statutory & trustee requirements. Then just to really rub salt into the wounds they not only return capital but pay interest as well - That for me is the egg turned Key and Bill whilst they remain in National lose my vote.

[mashman]

Everyone with half a brain who wanted 3 - 4% more interest than the banks were giving and also a Government guaranteed deposit. You would have to be a Dick to leave money on a low interest deposit with the main Banks when the Government effectively removes the risk of a higher returning investment.
The Scheme as introduced by Labour but with the "behind the scenes" support from National was designed only to give short term support to the Finance and Banking Industry - why I'm not sure.

The real Question is why when we supposedly were over the crisis did Key extend it, especially when National supposedly had information showing that the biggest Finance Company left was in serious trouble, and not meeting its Statutory & trustee requirements. Then just to really rub salt into the wounds they not only return capital but pay interest as well - That for me is the egg turned Key and Bill whilst they remain in National lose my vote.

I must be a dick with the wrong half of brain :)... or really not give a shit about making VAST sums of money, or not go looking for the loopholes to exploit etc... nah, let's stick with the half brained dick theory :)...

There are shitloads of questions i'd like answered... but those who invested heavily after Cullens intervention need to be dealt with seperately and not in a positive way... because those clever Dicks, the ones with the good half of the brain, actually did nothing but knowingly rip the tax payer off... The government may be responsible for the guarantee, but those "new investors" should not be covered by that guarantee... they deserve none of my money and I SHOULD be entitled to know who they are, after all I bailed them out... bet there's a politician or 2 in there with a few BRT boys thrown in for good measure...

[MisterD]

The government may be responsible for the guarantee, but those "new investors" should not be covered by that guarantee... they deserve none of my money and I SHOULD be entitled to know who they are, after all I bailed them out... bet there's a politician or 2 in there with a few BRT boys thrown in for good measure...

That's a toughy though isn't it? The guarantee is aimed specifically at getting people to continue investing in the company, and allowing it to keep trading. Where do you draw the line?

I'd rather that all that was guaranteed was the invested sum plus a nominal interest rate, say 4%. Actually, a better idea, don't pay out cash, pay out in government bonds.

[mashman]

That's a toughy though isn't it? The guarantee is aimed specifically at getting people to continue investing in the company, and allowing it to keep trading. Where do you draw the line?

I'd rather that all that was guaranteed was the invested sum plus a nominal interest rate, say 4%. Actually, a better idea, don't pay out cash, pay out in government bonds.

Nice idea in regards to the bonds... but they should receive no interest at all... it's a failed investment, you gotta be lucky to get any money back...

[AllanB]

My Honda is a great investment - hours of fun has been and will be had in the future :love:

I wonder if I can claim my Rego costs as a loss?

[avgas]

In 1989 the Government reduces its share to 51% by selling 34%; with 30% sold to Capital Markets Ltd, and the remainder to the general public - In 1990 the Government then had to bail out the bank to the tune of $350million to avoid the bank collapsing ... then in 1992 the National Australia Banking Group became the owners ...

It's the $350 million 1990 bail out I was referring to ...
Ah yes, but compare that to Post Office/Post Bank/NZ Post......Kiwi Bank

Also there was the Auckland Airport which I swear we bought 3 times over.

Air NZ....

NZ Rail, bought twice.....

Govt are full of dumb people whom make bad investments. They are just fortunate that some pay off.

Note however that there hasn't been a bail out from a bank since then. In-fact they have been fined more than bailed out. So assume from now on, whenever I refer to a bank, I am not referring to a "Govt deposit scheme".
Shame we don't have a govt official named "Ponzi".

[karla]

It kind of makes some sense to me - the rich few (ones with capital to invest) stay rich and the majority poor (taxpayers like us) get poorer. It's the only way a government can keep all it's people under control, by having them working hard all day - it keeps the masses from having time to stop and think, and worse, God forbid, say "this is not ok".

[HenryDorsetCase]

I wonder how much of my money went towards Dave Henderson? Maybe you and I should stake a claim on his Mig for our share? I'd be happy to share it with you - do you want the pointy end of the noisy end?

talking to someone yesterday about the MiG he said no one serious would buy it now. apparently it wasnt lifted properly when the receivers or whoever lifted it (imagine a couple of barely shaved chimps chucking a couple straps round it and lifting it up - you dont have to: thats what happened). Problem is its now slightly bent. If you dont do shit like that properly, its REAL BAD for the airframe. Bet your ass they didnt use proper techs to put the wings on again either. Imagine a couple of work experience chumps with a Warehouse brand socket set and no idea.

As for Hendo, that $17M deal still rankles me. Bloody council could have and should have got all that stuff for half that money off the mortgagee if we as ratepayers wanted it. The ONLY building with any merit at all is the Odeon theatre which they DIDNT buy and which deteriorates daily. Utter incompetency and the core reason I wont vote for parker. I wont vote for Comrade Jim either. All that motherucker needs is a big fat 'tache and "Oh look - Stalin lives"

Oh, and bailing SCF: Its not 1.6Bn: the toxic debt is around $600m, so while we have fronted $372 each, we'll get most of it back. And doing it now rather than six months ago means that Alan Hubbard has chucked all of his personal wealth (which was quite considerable) into SCF, rather than having it quarantined off.

I am interested in the exposure of the management practices etc: some interesting stuff already. Hubbard is without question as honest as the day is long, but maybe a bit past it? We'll see.

[HenryDorsetCase]

Are there any other companies currently in the scheme offering good returns?


Sounds like a good way to invest some $$$. No risk, high returns.

it ends in October (I think, or 30 September?)

[tamarillo]

We financed their roads and their return on their investments.

You would think people down south would be a bit more grateful and show less animosity to people not from their little homogenous society.

what on earth are you talking about? One problem was that whilst they had an image as a local lender they were actaully funding all kinds of crap everywhere...

[shrub]

talking to someone yesterday about the MiG he said no one serious would buy it now.

It's been display only for some time now, even converting the instruments from Russian to English was going to cost brazillans, and high tech jets don't much like sitting around in sheds for decades. My hope is Ashburton museum gets it - it would look nice beside the Harrier.

[Number One]

yup, good news all round... I know I'm really pleased to be part owner of 2 financial institutions and am absolutely ecstatic about bailing out a bunch of people that gambled and put their money into failed investments :shit:... can't wait to start receiving my dividends :shifty:

My thoughts also! So my taxes will pay to bail out a bunch of people that can actually afford to have investment/s...sucks

[HenryDorsetCase]

what on earth are you talking about? One problem was that whilst they had an image as a local lender they were actaully funding all kinds of crap everywhere...

Um, if you ever read one of their annual reports they did have a pretty good breakdown of their loans by geography, sector etc.

the "Bad" ones seem to be developer/property related in Queenstown and Orklind.

the "good" ones seem to be the farmer/small business/industrial sector.

Im not pointing the finger at you, particularly, but there seems to be a LOT of shit being talked in the media generally about this. Its not that complicated really, except for the interplay between the various organisations.

No one has mentioned that $7M they have in the bank. First thing that will happen is that the receivers will trouser that. They'll be the ones making the serious coin here. Really.

[shrub]

Um, if you ever read one of their annual reports they did have a pretty good breakdown of their loans by geography, sector etc.

the "Bad" ones seem to be developer/property related in Queenstown and Orklind.

the "good" ones seem to be the farmer/small business/industrial sector.

It seems they liked bars and hotels - some of their bad debts:

* Lenin Bar, Princes Wharf
* Dakota Bar, wharf
* Minus 5, wharf
* O'Carrolls Irish Bar, Vulcan Lane
* Hyatt Hotel, Auckland
* Leefield Vineyards, Marlborough (yet another yuppie vineyard producing average grapes in a glut)
* Hotel So, Christchurch (brought to you by the legendary Dave Henderson)
* Oakridge Resort, Wanaka

Investing in a bar is very high risk, and I really resent more money being spent on rescuing the money of people who were foolish enough to invest in bars than is spent on the police or ACC - both of whom have received significant sums of money from me lately.

[HenryDorsetCase]

It seems they liked bars and hotels - some of their bad debts:

* Lenin Bar, Princes Wharf
* Dakota Bar, wharf
* Minus 5, wharf
* O'Carrolls Irish Bar, Vulcan Lane
* Hyatt Hotel, Auckland
* Leefield Vineyards, Marlborough (yet another yuppie vineyard producing average grapes in a glut)
* Hotel So, Christchurch (brought to you by the legendary Dave Henderson)
* Oakridge Resort, Wanaka

Investing in a bar is very high risk, and I really resent more money being spent on rescuing the money of people who were foolish enough to invest in bars than is spent on the police or ACC - both of whom have received significant sums of money from me lately.


I agree with you I think: Ive had some involvement peripherally with Oakridge (I assisted with some due diligence for a client looking at buying some units there at wait for it: mortgagee sale). And I know more than I care to about some of those others you've listed also.

my biggest concern is the debt loading of the primary production centres, and the use of resources we all own (water, mainly) for private profit. socialising the losses and privatising the profits.

Big picture though: once the gubblemunt said "We guarantee" then when it went tits up as it appears (now with hindsight) that it inevitably would, then the gubblemunt had to pay. Which they did using your and my money. But, the $1.7 sticker price is not total loss.

Meh, I've hot heaps of money, if J Kizzle needs some more from me, all he needs to do is sing out.

[Number One]

Meh, I've hot heaps of money, if J Kizzle needs some more from me, all he needs to do is sing out.

Brown girl in the ring...fa la la la...there's a brown girl in the ring...fa lalalalllaaaaaaaaaaaa
That enough singing? I can do other songs too! Contemporary, rap, blues you hummm it I'll sing it ;)

[shrub]

my biggest concern is the debt loading of the primary production centres, and the use of resources we all own (water, mainly) for private profit. socialising the losses and privatising the profits.

Ah yes, water. I have a friend who is something of an expert in this area and he is very concerned about the sustainability of the water supply in canterbury, which will leave a lot of farmers a little stressed when their irrigation runs dry.

A huge part of our financial problems are our boom/bust short term thinking. Ever since Charles Ring found gold in the Coromandel we've had gold rush after gold rush after gold rush. In my lifetime we've had Kiwifruit, the sharemarket, apples, residential property, inner city apartments, debentures in finance companies, vineyards; and probably the king of them all, dairy. The moment someone makes money, the unthinking masses dive in and dump every spare cent they can beg, borrow or steal into whatever is flavour of the moment. Then inevitably the golden goose turns out to be a chook, and they all go broke again. Only this time our loving gubbermint have saved their bacon (excuse the mixing of metaphors), and they get to keep their silly interest rates.

When I was a financial planner (another minor boom) I learned that risk equals rewards, and that all investments have a typical real rate of return. Fixed interest is 0 - 1.5% above inflation, not 6 - 7%, and I just couldn't see how it was sustainable and resisted the temptation to dive in, preferring a carefully diversified portfolio of good old equities. Something I am very glad of, as the investment that was being pushed to me was Bridgecorp.

[aprilia_RS250]

Not really, did you know that its single biggest loan was a huge $42.3 million "for a large commercial hotel refurbishment and redevelopment"? (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10670235)

oh look out, surprise, the rich are being blamed now

http://www.stuff.co.nz/business/personal-finance/4085964/The-rich-blamed-for-SCFs-fall

anyway, whos gota 30% return on SCF junk bonds? off to check out the S1000RR in kingsland this weekend :Punk:

[Forest]

I am interested in the exposure of the management practices etc: some interesting stuff already. Hubbard is without question as honest as the day is long, but maybe a bit past it? We'll see.

Hubbard may be honest, but he's proved to be about as useless at running a business as the Crafars.

[rustyrobot]

It seems fair enough that we bail them out. After all, if all of their investments had turned out successful I'm sure they would have paid out to us... Right?

[Banditbandit]

It seems fair enough that we bail them out. After all, if all of their investments had turned out successful I'm sure they would have paid out to us... Right?

:rofl::rofl::rofl::rofl::rofl::rofl:

I'll bet you can't say that twice with a straight face ...

[mashman]

Hubbard may be honest, but he's proved to be about as useless at running a business as the Crafars.

there were banks falling all over the world and needing to be being bailed out left, right and centre (plenty without changing the personnel). The govt were watching... and Hubbard was useless???? small potatoes... but fuck him, he's local :blink: bit harsh forest...

[avgas]

whos gota 30% return on SCF junk bonds?
That figure is a little low for a bond return.
Using a standard deviation of 10% I can get a share return on NZSX50 for nearly that (26% last time a checked). Not taking into account dividend payments.
To take the same punt in high risk bonds, you should expect a much higher return for the risk.

[aprilia_RS250]

That figure is a little low for a bond return.
Using a standard deviation of 10% I can get a share return on NZSX50 for nearly that (26% last time a checked). Not taking into account dividend payments.
To take the same punt in high risk bonds, you should expect a much higher return for the risk.

??????????

I don't recall the NZ50 returning more than 30%, even in year, you'd have to borrow money in order to get anywhere near that return.

Maybe a couple of stocks like Restaurant Brands, but not the index.

Also 30% return in 2 weeks..... Say you annualized it would be over 900% return p.a. That's better than any stock in the 50

[Forest]

there were banks falling all over the world and needing to be being bailed out left, right and centre (plenty without changing the personnel). The govt were watching... and Hubbard was useless???? small potatoes... but fuck him, he's local :blink: bit harsh forest...

It may seem like a harsh comparison, but the failure of the Crafars and SCF both stem from a failure of governance.

If you're interested in finding out more, there's a lot of good reporting going on at interest.co.nz

Here's a soundbite from the SCF CEO:


The collapse into receivership of South Canterbury Finance (SCF) resulted from its own actions, poor choices and lax governance, with the blame ultimately going back to its beleaguered owner Allan Hubbard, CEO Sandy Maier says.

http://www.interest.co.nz/news/sandy-maier-says-demise-south-canterbury-finance-ultimately-traces-back-allan-hubbard

[mashman]

It may seem like a harsh comparison, but the failure of the Crafars and SCF both stem from a failure of governance.

If you're interested in finding out more, there's a lot of good reporting going on at interest.co.nz

Here's a soundbite from the SCF CEO:

http://www.interest.co.nz/news/sandy-maier-says-demise-south-canterbury-finance-ultimately-traces-back-allan-hubbard

I do agree with you, to a certain extent, in regards to the governance... but the governance isn't just 1 person, it takes a management team, and I reckon it's a overly brutal to steam roller Hubbard the way they keep doing (the guy had 45 years at the top FFS)... A global recession hit and the world's biggest and brightest failed to stave off the collapse, but made sure they go their golden $$$ million hand shake... at least Hubbard threw in a shitload of personal money, I didn't see anyone else doing that, they all stood their with their hands out...
just a tad unfair methinks... the management team have a lot to answer for and I bet they didn't chuck in their own personal wealth :)...

cheers for the extra stuff, will have a quick peruse at home tonight if I get time

[shrub]

oh look out, surprise, the rich are being blamed now
:

So someone's blaming me? How did that happen?

[avgas]

??????????
I don't recall the NZ50 returning more than 30%, even in year, you'd have to borrow money in order to get anywhere near that return.
Maybe a couple of stocks like Restaurant Brands, but not the index.
Also 30% return in 2 weeks..... Say you annualized it would be over 900% return p.a. That's better than any stock in the 50
Ah sorry - mabey I didn't read the article properly. 2 weeks sounds extreme.
Was there early termination?

[avgas]

I do agree with you, to a certain extent, in regards to the governance... but the governance isn't just 1 person, it takes a management team, and I reckon it's a overly brutal to steam roller Hubbard the way they keep doing (the guy had 45 years at the top FFS)... A global recession hit and the world's biggest and brightest failed to stave off the collapse, but made sure they go their golden $$$ million hand shake... at least Hubbard threw in a shitload of personal money, I didn't see anyone else doing that, they all stood their with their hands out...
just a tad unfair methinks... the management team have a lot to answer for and I bet they didn't chuck in their own personal wealth :)...
cheers for the extra stuff, will have a quick peruse at home tonight if I get time
Perhaps he poured in the money, to buy his own management.
Who dares wins and all that

[Winston001]

Instead, it goes to protect the stupid, the greedy and the devious.....

Shame on everyone associated with this scandal.

But No. Its much more prosaic. The investors in SCF were mainly retired folk, mums and dads, ordinary New Zealanders who had life's savings they had to place somewhere. SCF was throughout its 70 year history a solid unremarkable finance company.

When finance investments became popular in the late 1990s SCF stood out for not being flashy, paying good but not high interest, and making sound investments.

Weird as it now seems, SCFs success was its downfall. In 2002 it had $350 million invested but recently that stood at $2.4 billion. Too much flowed in for Alan Hubbard to manage and risky lending resulted with one or two managers.

If we had Chapter 11 bankruptcy as in the USA, SCF could have sought statutory protection and waited out the storm. Instead we have receivership which can be rapacious.

Alan Hubbard stands alone among finance company owners. He has put $3-400 million himself into SCF. Contrast that with Hotchins and Watson of Hanover Finance who extracted $90 million in the years before it fell over.

[Winston001]

Just FYI the Government Guarantee covers about 100 financial institutions. SCF is but one.

http://www.treasury.govt.nz/economy/guarantee/retail/approved

[Winston001]

As for all SCF investors being covered and repaid their money - not true. My daughter's future university fees are gone. :sick: Preference shares instead of bonds. Now wallpaper. Who knew....:mellow:

[aprilia_RS250]

Ah sorry - mabey I didn't read the article properly. 2 weeks sounds extreme.
Was there early termination?

Nope, you could have bought them at ~70 cents and now the old trustworthy tax payer will pay you back $1.00! Proven you're not a habitual investor of course :innocent:

[davereid]

Weird as it now seems, SCFs success was its downfall. In 2002 it had $350 million invested but recently that stood at $2.4 billion. Too much flowed in for Alan Hubbard to manage and risky lending resulted with one or two managers...Alan Hubbard stands alone among finance company owners. He has put $3-400 million himself into SCF. Contrast that with Hotchins and Watson of Hanover Finance who extracted $90 million in the years before it fell over.

Absolutely.

Mr. Hubbards company had to loan the money investors placed with it, if it was to return them with a profit.

SCF as a result made some poor loan decisions. But so did every other bank and finance company.

Mr Hubbard stands alone in attempting (against the odds and with his own money) to rectify the situation.

Paradoxically, the Government Guarantee may have helped SCF to collapse. It meant they kept on getting new mom-and-pop investors, who didn't bother checking out the company - they had no need to as it was government guaranteed. It meant they could keep on making shaky loans. And the cap on protection at $250,000 meant they lost overnight all their big corporate investors.

[avgas]

Nope, you could have bought them at ~70 cents and now the old trustworthy tax payer will pay you back $1.00! Proven you're not a habitual investor of course :innocent:
Bloody hell, 42% return. Nice.
Sell motherfucker SELL.

[Forest]

As for all SCF investors being covered and repaid their money - not true. My daughter's future university fees are gone. :sick: Preference shares instead of bonds. Now wallpaper. Who knew....:mellow:

Most of the SCF preference shares were placed through Forsyth Barr.

You're not the first person to get shafted by the tartan mafia.

[mashman]

pfff... give them the money and stop fucking about... no i'm not happy about it... but keep to the script and tell whichever pack of wankers that are looking for loopholes to back the fuck off and let's not waste any more money eh!!! Anyone know who's asking the question "Did SCF observe terms of scheme?" (http://nz.news.yahoo.com/a/-/top-stories/7874305/did-scf-observe-terms-of-scheme/)

[HenryDorsetCase]

As for all SCF investors being covered and repaid their money - not true. My daughter's future university fees are gone. :sick: Preference shares instead of bonds. Now wallpaper. Who knew....:mellow:

:( suck.

my sympathy.

[avgas]

pfff... give them the money and stop fucking about... no i'm not happy about it... but keep to the script and tell whichever pack of wankers that are looking for loopholes to back the fuck off and let's not waste any more money eh!!! Anyone know who's asking the question "Did SCF observe terms of scheme?" (http://nz.news.yahoo.com/a/-/top-stories/7874305/did-scf-observe-terms-of-scheme/)
Most likely.
But the view was so good from the top that they were distracted.

image removed by avgas due to me finding it in poor taste during this time - no one has complained. But I have family in Chch too

[Banditbandit]

"My name is Ozymandias, king of kings:
Look upon my works, ye Mighty, and despair!"

Percy Bysshe Shelley


"Put not your trust in the Princes of this world, for they will frig thee up, and so shalt their Governments, even unto the ends of the Earth."
Stephen King

[Okey Dokey]

But No. Its much more prosaic. The investors in SCF were mainly retired folk, mums and dads, ordinary New Zealanders who had life's savings they had to place somewhere. SCF was throughout its 70 year history a solid unremarkable finance company.

When finance investments became popular in the late 1990s SCF stood out for not being flashy, paying good but not high interest, and making sound investments.

Weird as it now seems, SCFs success was its downfall. In 2002 it had $350 million invested but recently that stood at $2.4 billion. Too much flowed in for Alan Hubbard to manage and risky lending resulted with one or two managers.

If we had Chapter 11 bankruptcy as in the USA, SCF could have sought statutory protection and waited out the storm. Instead we have receivership which can be rapacious.

Alan Hubbard stands alone among finance company owners. He has put $3-400 million himself into SCF. Contrast that with Hotchins and Watson of Hanover Finance who extracted $90 million in the years before it fell over.

Well said. It sounds as if some of the inflow of investments was due to the gvmt's guarantee scheme. Mr Hubbard is in his eighties, and took on managers to help while he was battling cancer, and diabetes. He really doesn't deserve to be tarred with the same brush as so many other finance company owners. If he is guilty of not better organising a succession plan, he has certainly paid the price (millions of dollars of his own) and it seems he endeavoured to look after his investors as well as the business es SCF had loaned money to.

[schrodingers cat]

Annoying but I can see the wider need to our economy to prevent this company from totally tanking.
What bugs me is the bill I'll be footing next year to have a bunch of thugs chase an oval ball.

The coverage at present is attaining mythical proportions - trickle down benefits blah blah

[Winston001]

Most of the SCF preference shares were placed through Forsyth Barr.

You're not the first person to get shafted by the tartan mafia.

Yes I think you are right and I tend to agree with your opinion :D although SCF was very stable all the years that I watched it.


:( suck.

my sympathy.

Cheers. Who needs university anyway, she can just progress directly to being a checkout chick! :shifty:

[JimO]

It's very nice that Uncle John and Brother Bill have bailed out SCF using our money, but I'm not sure I wanted to buy a finance company. I didn't mind a rail network because that's useful, but we already have Kiwibank, so we don't need a finance company.

Oh well, it's ours now and the property developers and elderly investors have had their bacon saved, so it's all good.:yes::2thumbsup

id rather they spent my taxes on that than on long term dole bludgers

[shrub]

id rather they spent my taxes on that than on long term dole bludgers

I'd rather they spent it growing the country and turning NZ into what we should be and could be. But we have a bland and unimaginative government of accountants and softcocks, so I'm not holding my breath.