Old Hubbard's cupboard laid bare

Mums and dads and taxpayers going to the dogs

No bones about it

Covered by the govt retail deposits guarantee i hear

$900 million - have we got it?

Despite what we hear in the media our level of debt is not so bad by global standards
Plus, if it's a liability there isn't really any choice

stupid govt guarantee , why the hell did we include finance companies??
it was sort of ok for the main trading banks but the moral hazard with finance companies being guaranteed is bound to get abused.
I know quite a few people have been buying South Canterbury finance debt cheap because they know its guaranteed even though its worthless without that guarantee. Its rational but immoral.
Govt's always create distortion when they meddle in the markets
Taxpayers wear the cost.

I think there needed to be some guarantee or all the finance companies would have collapsed. But It should have been for principle not interest after a certain time or for a ratio, say 85%.

Seems like Hubbard is well meaning but not competent.

over to you rover - pick the bones

Bet those protesters feel a tad silly now.

Allan Hubbard - a working-class boy with big dreams
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10654383

kind of at odds with the media's portrayal of him in recent years pre-crunch

A big fuck you to Cullen for the Deposit garuntee for finance companies (as opposed to banks)

yes, this was controversial at the start, as I recall

http://www.asianinvasion2006.blogspot.com/

blame rests on all

Apparently they are organising a big "THANK YOU AUCKLAND TAXPAYERS" parade in Timaru...


No?


Didn't think so.

oh does it?



http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10670247

jumped the gun it seems and anger coming to fore

so the pro business party is crap at business.... more news at 11

Looks like the government made a bet with our money and we lost because of it

They hadn't even seen audited accounts in April when they gave them the guarantee.

if so it just goes to prove that no government should intervene in business

I don't know about that NR - the govt should intervene in business - for a start they could regulate industries in a manner that protects the average consumer... so that situations like this don't occur

Actually John Key and Bill English were consulted about the scheme and agreed to it.

yeh I think there is general consensus the scheme was needed otherwise all of NZ's investment capital would've left o'seas to where it could gain a guarantee. however the finance co' arrangment was taking it a bit far. i couldnt believe it when I first heard that part of it.

govts do need to intervene in business from a regulatory perspective especially in areas such as banking and insurance - imagine paying life insurance or superannuation contributions all your life and then dying the month after the insurance co went broke - but they need to be as light handed as possible as they generally seem to end up creating distortions as they did when they g'teed the finance co's

Exactly as it seems here. I'm no financier but giving reckless and feckless cunts like these a license to go crazy seems borderline insane to me. Though it would be hell to manage, governmental backing should involve ongoing management (*or more realistically oversight*) as a condition of their guarantee and *only offer* limited coverage, rather than simply giving Boiler Room fucks the freedom to go fkn mental as they would never otherwise do, then get full recompense anyway :/

My feelings exactly.

And smiling John has the audacity to accuse secondary teachers asking for a few more percent and a flu jab of not living in reality? While he's got a billion and a half to throw at some greedy pricks, WITH interest?

It doesn't look well thought out, especially as investors can get back capital AND interest. Moreover, SCF were offereing higher rates of interest than the banks after the scheme came into effect, which created a rush of money in.

I heard this morning that relative the the NZ economy SCF are bigger than Lehmann Bros were to the US.

Lehmann's had massive impact on economies on both sides of the Atlantic though, I was in the UK when it collapsed and that was when the recession panic really began there as 10,000s of the workers got to work to find their jobs didn't exist anymore.

the impact may take longer to filter through in this case Jono because the lending revolves around property mainly farms - the cycle of debt destruction moves slower with land than with pure financials that Lehmanns were involved with.. Sub prime mortgages were involved sure, but they were actually more derivatives at that stage , quite dissociated from the property itself.
whereas here we have farmers owing SCF money and the govt will now be looking at the ways to get that money back and that will invariably involve selling some farms thus putting a heavy lid on the market for farms

we should sell them all to that Wang woman hahah

the average consumer (investor)? or taxpayer? if the former that's kind of what they've done here isn't it?

as to regulations these are meaningless unless they are rigorously upheld and prosecuted, something which appears to have been lacking and I cannot see improving unless well budgeted for

consumer is both taxpayer and possible investor

agree about enforcement... self regulation and the regulatory bodies involved in business seem flawed at best, guess its not in the govts interests to make business honest