Monday, August 30, 2010

More Lies From The Herald

Here's the headline:-

Deadline looms on $1.5b collapse bill for taxpayers

Here's the truth, buried deep in the text:-

Sources close to the company last week tipped a deal with overseas investors that could require as much as $600 million in taxpayer-funded sweeteners and would result in losses of about $250 million.
So, now that we've established that the true tax payer exposure is closer to $250 mil can we ask the Herald and any of it's idiot correspondents if they seriously believe the crap they write?

Do they seriously think for just one moment that the assets of South Canterbury Finance are worth a big fat ZERO?

What a guttersnipe worthless rag is this daily embarrassment to Auckland.


KG said...

Never mind dickering over the numbers--why the fuck should the taxpayer pick up one cent of the tab?

Anonymous said...

How's all that love for Hubbard looking right now, down Timaru way. He's clearly more "lost it" than corrupt and devious, which are far as finance companies go in this country, makes a change. KG, there does exist a deposit guarantee scheme which this company did pay for. No mention of the fact the fees collected over the last two years will close to sub this current mess.

KG said...

aah, thanks Anonymous. That makes things a little clearer.

Tinman said...

My understanding is that Hubbard hasn't had anything to do with the running of SCF for quite some time.

What I do wonder however is how much damage the revenge-motivated attacks on Hubbard and his trial-by-media have done to SCF.

Anonymous said...

What exactly is the revenge about? Revenge for what? Explain...

KG said...

Not PC has a good post up on this:
"Expect instead to see South Canterbury Finance effectively nationalised, using the money you were thinking of using on home improvements, debt repayment and educating your children to be used instead to prop up a zombie company that was doing moderately well until the jackboots came through the door."

Anonymous said...

$1.5B is a much better headline than 250M (which would be just a weeks no worries bra, your kids can pay that off)

In all honesty tho, the chickens are coming home to roost on this one. If it weren't for the statutory management imposed on Hubbarb then would SCF be having the issues it is having now with regards to finding roll over capitalisation? in so far as the actual loan book is concerned, IIRC there is 250m in the so called bad bank/ dodgy side with a further 500m in the low-lower risk loan profile. So assuming that they can get 95% of the good, and 50% of the bad their loan book is still worth 600m back. Effectively the Gnats get to Nationalise hubbards $500m wealth for 100-150m. LOL and to think we voted in a supposedly Capitalist government!

The Veteran said...

Anonymous 1.05 .... sooooooooooo, if SCF was a really good bet why arn't institutional finaciers lining up for a bit of the action.

Seems to me SCGF is another finance company that overextended itself by believing in its own bullshit.

Govt involvement should be limited to that under the deposit guarantee scheme (for which protection SCF has paid a hefty premium).

But the issue also highlights NZs poor saving record and our reliance on o'seas capital for investment.

Anonymous said...

SCF did not pay a hefty fee. In fact they paid nothing - only coys with assets over 5bn had to pay a fee.

Hubbard may be charged with fraud yet.

Adolf Fiinkensein said...

When push comes to shove I suspect SCF may well find it has forfeited its rights to any gummint guarantee, either by way on incomplete initial disclosure or by way of failure to adhere to the ongoing conditions of the guarantee.

Any gummint involvement will be political rather than commercial.

No wonder Blenglish is sticking around at home for a few days.

Anonymous said...

SCFs depositor book previously was bereft of Insto cash, so why the sudden urge to say that they are only viable if an insto wants to buy in?
Previously they had sufficient quantities of small to medium size depositors who flocked to the company, and essentially because of the goodwill built up over the years, essentially based on the name of it's chairman. The very name that was trodden into the dirt because Simon Power and the SFO/ Comcom needed to look like they would intervene in something, even though the horse had long since bolted with the likes of Lombard, Hanover etc. The fact that there was a slightly higher than usual standard risk profile used as support for increasing the production of South Canterbury seems to have been the catalyst.
How many times have we seen AMP/ ING/ BNZ type blow-ups previously? The mere fact a company is of insto size and accreditation doesn't make them immune to financial misfortune either, in fact Sir Bob Jones has stated previously that if the insto's are selling, then its time to start buying (at least in the comercial property stakes that is)

Anonymous said...


1. Nobody really knows anything.
2. Institutional investors are not rushing because of (1).
3. In general it probably failed because it borrowed short and lent long.
4. Placing SCF under stat mgnt would probably enable an orderly assessment and subsequent liquidation of its assets.
5. Last time a govnt let a major financial institution go bankrupt out of principle it was Lehmans.
6. If SCF does go down then many SME and farms in the rural sectors reliant on its funding will go down too. But don't worry we can always sell them to the chinese at a huge discount.