The Dim-Post

September 28, 2011

No longer a national treasure

Filed under: finance — danylmc @ 12:59 pm

There’s a useful point to be made in the Terry Serepisios saga, and that’s that this is how our economy works. We have booms and busts and speculative bubbles, and some risk-takers make large fortunes during these cycles while some go bankrupt, and some fortunes are lost on the down-turn, and some aren’t.

But for various reasons, our society idolises risk-takers like Serepisios when they’re at the top of the cycle. They have all that money! They must possess superhuman wisdom! They must know the answers to all of societies problems! And, famously, Serepisios was the star of a reality TV show screened by TVNZ called The Apprentice, which was based on the premise that he was a financial genius instead of a risk-taker who managed to stay on the right-hand side of the wealth curve for several years during a speculative property bubble.

Which is not to deride speculators – the economy needs them – just the popular view that the (temporarily) successful ones are gods amongst us, we should structure our entire economy around their whims, they shouldn’t have to pay any tax, etc.

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41 Comments »

  1. “Which is not to deride speculators – the economy needs them – just the popular view that they’re gods amongst us, we should structure our entire economy around their whims, they shouldn’t have to pay any tax, etc.”

    Yar. I don’t know anyone that wouldn’t agree with that, expect for some of the speculators themselves ;)

    Comment by Matt Nolan — September 28, 2011 @ 1:09 pm

  2. I’m thinking of the NBR and the Herald’s ‘mood of the boardroom’ surveys.

    Comment by danylmc — September 28, 2011 @ 1:10 pm

  3. He was popular with the media and local pollies for the copy/photo ops he gave them and Phoenix fans for subsidising their entertainment – almost as good as offering free drinks every Sunday.

    I’m not sure TS was much of a hero amongst Wellington businesspeople. Most I know refused to work for him. I wonder if Morgan, Morrison et al’s refusal to discuss what they were doing with him was a symptom of that.

    Comment by insider — September 28, 2011 @ 1:17 pm

  4. “…But for various reasons, our society idolises risk-takers like Serepisios…”

    I wish we did have a society that idolised risk takers. Serepisios is speculator, a shooting star on borrowed money that looks good as long as everything is a one way bet. We idolise flashy consumers because, hell, we all know we are no longer just ‘labourers’ – we’re human capital, or, to put it another way: people aren’t poor, they just haven’t made their first million like Terry yet. Watching Serepisios is like imaging what you are going to do when you win lotto on Saturday.

    A risk taker has an idea, an invention, or sees a gap and takes a risk. We don’t idolise those people. Hell, our banks won’t even give them a loan.

    Comment by Sanctuary — September 28, 2011 @ 1:19 pm

  5. This is my problem with Key. “He made all that money, he must know what he’s doing with the economy”. No, he made his money gambling with other people’s money, during a financial bubble, working for a large company in which he was a small cog. He never managed the enterprise, he was never responsible for anything beyond his small role, and he got out before the whole Ponzi scheme started collapsing. A national economy is not like a business – businesses do go bust, and that affects the people who work for them, but not a whole country. For him to smile and wave and say that the situation in Europe will have no effect on us is unbelievable and show that he really has no understanding of economics at all.

    Comment by Mark Harris — September 28, 2011 @ 1:20 pm

  6. For a little more insight into Serepisos, I found this article interesting:

    http://www.stuff.co.nz/business/industries/5694567/Serepisos-files-found-abandoned

    He comes across as much more of a care-free playboy than a serious businessman. Possibly because that is the image he cultivates, but probably because that is the reality of the situation.

    I am reminded of the ‘big swinging dicks’ in Boiler Room – all bravado, no substance.

    Comment by Simon Poole — September 28, 2011 @ 1:25 pm

  7. I’m thinking of the NBR and the Herald’s ‘mood of the boardroom’ surveys.

    Wouldn’t you see those guys (CEOs and the like) and Serepisos as fairly different ‘entities’ here though? Nationwide businesses with hundreds or thousands of employees nominally have to be in tune with many facets of the economy and how the government regulates it. Serepisos is a gambler, who I suppose does try to minimise risk but it’s still usually fairly high. The former would probably have more useful things to say about how the economy works. I’m fairly business illiterate as some can perhaps tell, but hey, c’mon. C’moooon.

    Comment by StephenR — September 28, 2011 @ 1:30 pm

  8. “the popular view that the (temporarily) successful ones are gods amongst us, we should structure our entire economy around their whims, they shouldn’t have to pay any tax, etc.”

    Is this really a popular view?

    Comment by Hugh — September 28, 2011 @ 1:32 pm

  9. The other reason why Terry Serepisos is so high-profile is that he used to keep complaining that the public didn’t worship him enough. This inevitably makes him better media copy than the more modest business people who don’t say this.

    Comment by Kahikatea — September 28, 2011 @ 1:35 pm

  10. And, famously, Serepisios was the star of a reality TV show screened by TVNZ called The Apprentice, which was based on the premise that he was a financial genius…

    Was Trump picked for the US Apprentice on the back of his sparkling record of financial success or just that he was high profile, rich and made for good TV?

    Comment by StephenR — September 28, 2011 @ 1:37 pm

  11. “…Most I know refused to work for him…”

    I suspect there is another observation to made about the nature of our business class here. Terry Serepisios’s behaviour is that of an outsider to the prevailing dominant business elite – there will be no Auckland Grammar or Whanganui Collegiate old boys mafia to make sure his landing is oh so, so so soft.

    Comment by Sanctuary — September 28, 2011 @ 1:49 pm

  12. @StephenR – also, how many times has Trump been bankrupt? Isn’t bankruptcy a pre-requisite to hosting something like The Apprentice?

    Comment by kyotolaw — September 28, 2011 @ 1:51 pm

  13. Actually Danyl I object to you saying “our society”. I don’t think our society does. It’s the corrupt little society that is “TVNZ” and its bizarre ideas of what constitutes celebrity that loves people like Terry.

    Terry is infamous in Wellington for not paying his bills and living off other people’s glory. I’m sure the real truth is that people are happy that that particular tall poppy has been lopped.

    I don’t think anyone is surprised, in practically every interview with Sir Bob Jones, he says you can’t make money building buildings.

    Comment by R Singers — September 28, 2011 @ 1:55 pm

  14. kyotolaw: I don’t believe that Trump himself has ever been declared bankrupt, just several of his companies. Contrastingly, Serepisos now has his personal financial affairs under statutory management.

    He clearly didn’t take notes from the Don on how to structure his corporate debt.

    Comment by Simon Poole — September 28, 2011 @ 2:02 pm

  15. For property people the test of their acumen is their ability to remain in the business across the large fluctuations in value that happen reasonably regularly. But standing next to a large pile of money generated by your own activity it is easy to think you possess superhuman skills and a series of unique insights that the world would benefit from hearing. Most suppress this urge – as do other successful people – aware that the poorhouse is just around the corner no matter what school you went to. On rare occasions – and this is true of most walks of life – they do have the ability to contribute to debates and make a difference. Bob Jones is the best example from the business world.

    Comment by Tinakori — September 28, 2011 @ 2:24 pm

  16. @ sanctuary

    These are all tradespeople and it was about non payment of bills not school ties.

    Comment by insider — September 28, 2011 @ 2:30 pm

  17. > For him to smile and wave and say that the situation in Europe will have no effect on us is unbelievable and show that he really has no understanding of economics at all.

    Key doesn’t need to understand economics to get elected. He just needs to know more than the people who vote for him and I’m guessing he does.

    Comment by Ross — September 28, 2011 @ 2:42 pm

  18. I feel most sorry for the contestant who won his show. He went through all that shit to become the apprentice of someone on the verge of bankruptcy.

    Comment by Ben Wilson — September 28, 2011 @ 2:55 pm

  19. Terry is infamous in Wellington for not paying his bills and living off other people’s glory

    Amongst other, less salubrious, activities.

    Comment by Hugo Drax — September 28, 2011 @ 3:38 pm

  20. You’d know, wouldn’t you Msr Drax?

    Got that export permit you were after yet?

    Comment by Hugh — September 28, 2011 @ 4:03 pm

  21. You must excuse me, gentlemen, not being English, I sometimes find your sense of humor rather difficult to follow.

    Comment by Hugo Drax — September 28, 2011 @ 4:37 pm

  22. You persist in denying my efforts to provide an amusing death for this thread.

    Comment by Hugh — September 28, 2011 @ 5:10 pm

  23. A bit random I know but does anyone else remember Clayton Crowe?I’d love to know where he is now after he went all Serepisos in the 1987 crash, the media seemed to love him at the time too.

    Comment by Raumatibeach — September 28, 2011 @ 6:52 pm

  24. I was of the opinion of many of your contributors until quite recently someone reminded me of a certain person who died from swallowing a quantity of drugs during or shortly after a police chase along the Wellington waterfront. You need a long memory to recall this particular moment, and the names mentioned in connection with that death. I’m not mentioning any names here but a certain someone found a big bit of cash at that time which went into property. Years later …… we forget how criminal activity funded more legal ventures. And yes, Sanctuary, many good tradesmen produced quality workmanship for TS and never got paid. Or paid on a drip so slow it barely registered in the accounts. His profile turned positive when he embraced the Phoenix. Bet publicity money could buy.

    Comment by Spitfire — September 28, 2011 @ 7:07 pm

  25. You could say, the torch was passed…

    Comment by Mark Harris — September 28, 2011 @ 7:37 pm

  26. WOOOHOOOOOOO

    Comment by Theo Steel — September 28, 2011 @ 8:46 pm

  27. Which is not to deride speculators – the economy needs them

    No, it doesn’t. It most certainly doesn’t.

    What they do is divert useful capital away from productive investments. Banks lend to them because they can get a higher rate of return. Even in a capital flush, it’s still hard for a lot of New Zealand businesses to get capital – I’ve heard of NZ businesses financing overseas because they can’t find a bank to lend. And then when it all crashes down, banks are overleveraged, and won’t lend because they need to clear their books. They’re certainly not going to lend to businesses, when they know that if they wait til the bottom of the cycle the property market will float again. I’m not saying bank lending is impossible. But it’s harder than it needs to be, and this man is part of the reason why.

    Speculators strangle economies. What’s worse, while they’re doing it everything looks rosy.

    Comment by George D — September 28, 2011 @ 9:33 pm

  28. Don’t cha hate them dirty wop speculators, bet they never voted Labour or green.

    Comment by little_stevie — September 28, 2011 @ 9:44 pm

  29. Serepisos got rich only because he didnt want to pay his bills….

    Comment by millsy — September 28, 2011 @ 11:46 pm

  30. “What they do is divert useful capital away from productive investments”

    “Productive” being defined as…?

    Comment by Hugh — September 29, 2011 @ 4:04 am

  31. “bet they never voted Labour or green.”

    Probably not. I doubt Serepisos bothered with such nonsense.

    You sound a little upset stevie. Don’t worry, there’ll be another season of the Apprentice. Perhaps Stephen Jennings this time.

    Comment by Guy Smiley — September 29, 2011 @ 7:28 am

  32. Don’t cha hate them dirty wop speculators, bet they never voted Labour or green.

    Wops are Italian. Terry is a Wog.
    At least denigrate people accurately, you fucking troglodyte.

    Comment by Gregor W — September 29, 2011 @ 9:54 am

  33. The “proper” way to build a block of flats involves working out what the flats will sell for, deducting the cost of building, which tells you what you can afford to pay for the land.

    The way property spivs work in a boom is to pay way over the odds in the expectation that inflation will send the resale price up and make their bets come right. This relies on having dodgy lenders like SCF around that will loan money on that sort of proposition.

    Once this is going on, it’s impossible to operate on a sensible basis, because the price of land is inflated. The downside of bankrupcy is pretty minimal – you can live well off family trusts and by calling in favours until the three years are up, so it makes sense to be a dodgy dealer.

    One answer to this would bake to make bankruptcy contagious – if a person or trust is found to be supporting a bankrupt’s lifestyle, they get bankrupted/liquidated. Or you could just jail anyone who goes bust for more than a million until they prove there wasn’t fraud involved.

    Comment by Rich — September 29, 2011 @ 12:02 pm

  34. “One answer to this would bake to make bankruptcy contagious – if a person or trust is found to be supporting a bankrupt’s lifestyle, they get bankrupted/liquidated. Or you could just jail anyone who goes bust for more than a million until they prove there wasn’t fraud involved.”

    Whoa, that proposal has got it all! Making it immoral to support those in need, and a presumption of guilt until innocence is proven!

    A lot of bankruptcies are just due to rotten luck. Even if we agree with everything you’ve said about speculators, what % of bankruptcies involve them?

    Comment by Hugh — September 29, 2011 @ 12:58 pm

  35. Bring back debtors prisons I say… :-)

    Also the Pavelitich case seems to be showing that the trust dodge is not as risk free as assumed.

    Comment by insider — September 29, 2011 @ 1:09 pm

  36. Aw, little Guy and Gregor getting their little cotton panties all bunched up :(

    Comment by little_stevie — September 29, 2011 @ 10:07 pm

  37. Gregor W wrote: “At least denigrate people accurately, you fucking troglodyte.”

    great line!

    Comment by Kahikatea — September 29, 2011 @ 10:36 pm

  38. It would be a great line if I was actually denigrating Seripisos and not slighting the retarded commentary that was actually denigrating Seripisos but it isn’t because I wasn’t and they know it and they chose to revert to their usual dick head narrative.

    Comment by little_stevie — September 30, 2011 @ 6:47 am

  39. I could tell when the mdeia billeted him as New Zealand’s answer to Donald Trump that he wasn’t all he was made out to be. Does this country actually have miniature Donalds? I think not.

    Comment by Betty — October 3, 2011 @ 2:30 pm

  40. In note in the above posts the name Clayton Crowe. Who is Clayton Crowe And what did he do?

    Comment by Jason — April 2, 2013 @ 6:04 pm

  41. @raumatibrach a bit late but was just surfing and found this! Very funny if you know his history

    http://www.allhomes.com.au/ah/other/agents/clayton-crowe-re-max-sunstate-realty-paradise-point/1720055711

    Comment by Brendon — January 20, 2014 @ 10:34 am


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