This Post is about an article from the News within the last week.
Now it’s not just the Northern Hemisphere which are playing these dodgy games.
Apparently we just aren’t happy either unless we can get to play just like the big boys.
‘South Canterbury Finance’ is a regional Finance Company in the South Island of New Zealand.
The thing that really gets me steamed, is that none of this is unpredictable or otherwise surprising. As the story continues to unfold, the depressing thing is just how much of this is exactly the sort of things we have always know to be problematic. And yet we still manage to get “surprised” by it. Give me a break. It is the same shyster scam, ponzi scheme, and crooked shuffling that has been going on forever, and wherever, the crooks can get away with it.
And why do you suppose that is? How come this same crap just keep coming up and repeating over and over again.
Could it be that if you actually cracked down on all this stuff then there would be too many of the Rich and Powerful that would also be caught out?
The Bail-out is the means by which the old boys network looks after their own interests. Not necessarily directly, but cant let the house of cards start wobbling can we – you never know where that might end up. And that would be just tragic wouldn’t it. Imagine all those rich people losing all ‘their’ money – the horror!
(that’s sarcasm in case you didn’t get it)
… anyway, on with the story – or in this case the article.
~ By GREG NINNESS 29/08/2010
Allan Hubbard is likely to get nothing from a government-backed restructuring of South Canterbury Finance expected to be announced in the next few days.
The loss of the company, in which the Timaru businessman is ultimately the major shareholder, will wipe out most of his wealth, estimated at $550 million in last year’s NBR Rich List.
(So far so good)
Although the final details of a rescue package to save South Canterbury from collapse are still being finalised, they are likely to include an arrangement for the government to take over more than $500m of the company’s impaired loans.
(Hmmm… sorry… what?)
The Sunday Star-Times understands the amount of bad loans on South Canterbury’s books has been a sticking point in negotiations to find new investors willing to pump urgently needed capital into the company.
Its accounts to December 31 show it had total loans of $1.5 billion, of which nearly $600m was impaired.
(Hmmm… over a third…)
The government has been looking at a plan whereby it will take over the troubled loan portfolio, probably at its face value.
(SAY WHAT? FACE VALUE??? Have these clown, at the very least, ever heard of the concept of a “Hair-cut”)
South Canterbury has already taken steps to facilitate this, putting its impaired loans under the control of a separate administrative unit which has been nicknamed “the bad bank”. (You bad, bad bank… OR, is that… you bad, bad Wan Bankers)
Last month the company said the bad bank was administering about $500m of loans.
(OK, so we have up to a $500m problem then? Huh, no wait, you said just previously $600m…? So what is it?)
Under the proposal, the government would effectively buy those loans from South Canterbury, immediately giving the company a $500m cash injection.
(And we want to do this …why? They have already proven they can’t be trusted with money)
A new owner could then take 100% control of the remainder of the company by injecting another $200m or so of cash into it, although it is believed negotiations are continuing around those numbers.
That would leave South Canterbury with around $700m in new cash and about $900m to $1 billion in “good” loans, significantly allaying concerns about the company’s ability to repay investors as its debentures fall due.
(OK… so new owners then, and we avoid the possible knock on effects from a complete collapse. I guess if we run the numbers and that all stacks up and we have some guarantees, then that may be a good solution. Assuming the numbers ARE correct etc. Although – I am still wondering about that whole “Haircut” issue)
However, in the medium term, additional cash could come from the sale of various assets which Hubbard sold into South Canterbury in a desperate attempt to shore up its balance sheet. These include Helicopters NZ, a majority stake in Scales Corp and various property assets.
(well Duh… Yes, at least.)
The sale of those assets might release another $200m in cash. The company would also have the cashflows from the interest and capital repayments from its good loans. If more cash was needed in a hurry, the better-quality loans should be readily saleable to other financial institutions.
The advantages of the plan are that it would not only solve South Canterbury’s pressing cashflow crisis, it would also leave the company sufficiently well capitalised to begin writing significant amounts of new business.
(Say what? What planet are these clown living on. Dumb lending was what created this whole problem in the first place. In case you haven’t noticed, there is a recession going on caused by an overload of debt, widespread defaults and a general lack of interest in borrowing money. That old cashcow economic model is gone and it ain’t coming back. It was rotten to the core and now that it has finally failed from its own internal flaws, what do they want to do… they want to rev it up for yet another dash around the track. Everything about SCF’s business plan was rubbish – you can’t save it. The best you can do is give it a mercy killing and a decent burial for gods sake)
And new owners, particularly if they were part of a larger group, perhaps with overseas connections, might be able to source institutional funding, making the company less reliant on the mum and dad investors the company has traditionally depended on.
(Good grief… So now they want to attract the ‘Hot Money’ crowd from oversea’s, and the big money Multinationals. They will be raped and pillaged without mercy. What exactly do they think is the Raison D’etre of those institutions? They live for this sort of turkey shoot.)
The controversial part of the plan is the initial $500m or so the government will need to stump up, although the ultimate cost to taxpayers would be less than that because the government would eventually recover some of the money from the bad loans, possibly as much as half.
(Ohh no, I assure that is not the controversial part, the controversial part is even thinking about going there in the first place. After that, it is just so much cheating and lies. The ultimate cost would be less would it? Can I have that in writing and signed please – and do I get to put you up against the wall and execute you if that turns out not to be true afterall? Because as it happens, within the week we have been told that the costs have already gone up. Hmmm… so that would mean you would be DEAD by now, if some-one actually ever held you to account for your crap. But the prize has to go to that last statement “possibly as much as half” Whoo, as much as ‘Half…’ wow. I’m sorry, was I supposed to be impressed by that or something. Anywhere else, that would be called a disaster)
But if South Canterbury is not recapitalised and is eventually tipped into receivership, the government could be liable for $250m anyway under the Deposit Guarantee Scheme. The proposal may not be any more expensive, and, as well as protecting retail investors, would prevent the possible contagion effect from a major financial institution’s failure, while ensuring the economic benefits of having a substantial finance company lending into the business sector.
(Ohh boy, where to start with that little gem of a paragraph. How about here – within a week of this article being published, the government has decided to put not $500m into this lemon, but $1.6 BILLION. Hey if something is worth doing, it is worth doing RIGHT, huh? Yeah, I would say that is more expensive, how about you? Then we go onto my absolute favourite, “protecting retail investors”. Ohh I so want to shoot somebody right now. Can we all spell ‘moral hazard’? Do you clowns even vaguely know what that term means? Let me explain, it means doing something really, really stupid when you should be doing the exact opposite, because otherwise you get people doing what you don’t want them doing. You actually end up paying them to do the wrong thing because when their stupid scams and schemes come undone, you bail them out. I have a saying about the definition of insanity, going around and around in my head about now.)
I think I already covered the issue of “continuing to lend into the business sector” didn’t I?
Let me let you in on another little home truth here – New Zealand already has an over-abundance of lending institutions. We have got banks out the whazoo. The only reason and way you can run a scam Finance Company, is if you are lending on terms that a reputable and prudent institution wouldn’t touch with a barge pole. And surprise, surprise, in the end everyone gets screwed.
So, where are the cops and the regulators? Nowhere to be seen… as usual. While there was money being scammed made, everyone turned a blind eye. And when it all goes tits-up, everyone implicated runs for the hills and covers their butt. It’s just poor old ‘muggings’ the taxpayer who gets reamed, again, while their elected representatives “work hard to do the right thing”. Hmmm, funny how the profits get privatized and the losses get socialized isn’t it.
Ohh… and just in case you imagined this might be some sort of aberration, think again. Look around, this is the standard operating procedure and it is happening all around the world as we speak. This is power, politics and money par-exellence – running the exact same scam for the umpteenth time, and we just sit back and let it happen, again.
If “the people” don’t rise up and put a stop to this now, then they deserve to be raped repeatedly. Why would the crooks stop now, when it pays so damn well.
And if only the press and the journalist weren’t so pathetic – or a bunch of Shills