The Dim-Post

August 30, 2010

Or, maybe Lehman Aotearoa

Filed under: finance — danylmc @ 6:53 am

Reading the (very muted) signals from the Finance Minister yesterday it sounds as if they’re leaning towards letting South Canterbury Finance go into receivership, with English distancing himself from the company’s problems. It would be nice to know if this was:

  • A negotiating tactic
  • A least worse-case scenario arrived at after very careful consideration
  • The Prime Minister continuing to exercise his ‘do-nothing and hope that it all somehow works out’ philosophy of government

No doubt TVNZ will be putting the hard questions to the PM on his Breakfast TV interview this morning.

Update: Oh my – I’ve never actually switched on the TV to watch Paul Henry interview Key before. Really makes the term ‘state owned broadcaster’ come alive, doesn’t it?

The PM was very cagey about South Canterbury Finance but frank and transparent about his daughters upcoming trip to France and his fondness for the Royal family. Television New Zealand, ladies and gentlemen!


  1. It is more savings & loans crisis circa 1998 when all those US finance companies were bailed out by the government.

    Government bailout generosity during the 1990s so humbled the banking industry it help create the stable efficient functioning of the industry during the 2000s.

    Comment by Simon — August 30, 2010 @ 7:50 am

  2. Sounds like they are leaning towards bailing them out to me.

    Comment by dribble — August 30, 2010 @ 8:12 am

  3. I don’t know the legalities, but I imagine that any evolution of the company bar receivership for the company will require some form of consent from Hubbard.. and that might be a major problem before the Govt can act constructively.


    Comment by JC — August 30, 2010 @ 9:13 am

  4. As a NZ citizen I was so pleased to hear about the things that make a difference to us kiwis…the really really important keys kid going shopping in paris!!!!

    Next week I understand they will be grilling key on his choice of underpants!!!

    Get rid of breakfast….and while they are at it good morning can go also!

    Comment by kerry — August 30, 2010 @ 10:10 am

  5. This is bad for Phil Goff..

    Comment by andy (the other one) — August 30, 2010 @ 10:16 am

  6. Putting the snark aside, Danyl, perhaps it’s wise for English and Key to STFU until they’ve actually got something to say? But I guess you’d also bitch Key for conducting delicate and complex negotiation through the media in soundbites. Damned if you do, damned if you don’t, shat on from a great height no matter what.

    Comment by Craig Ranapia — August 30, 2010 @ 11:34 am

  7. If I put my snark aside there really isn’t a lot left.

    Comment by danylmc — August 30, 2010 @ 12:01 pm

  8. “If I put my snark aside there really isn’t a lot left.”

    How true 🙂


    Comment by JC — August 30, 2010 @ 12:06 pm

  9. I have been pondering your comment about “do nothing”.

    If you think about it, so many politicians have the immediate reaction to do SOMETHING, ANYTHING, so that they appear to be actively engaged. And so often the result ends up doing more harm than good.

    Perhaps the “do nothing” does the least harm.

    Just a thought for a cold wet end of winter day.

    Comment by David in Chch — August 30, 2010 @ 12:19 pm

  10. “No doubt TVNZ will be putting the hard questions to the PM on his Breakfast TV interview this morning”

    Wasn’t that satire when you wrote that? because i certainly laughed! I’m surprised you haven’t ever seen Paul interview Key. It’s a joke and it’s an embrassment to our nation really… The low IQ, Un PC brigade is what keeps this embrasment alive and rating!

    Comment by K2 — August 30, 2010 @ 12:26 pm

  11. It occurs to me that many of the PC crowd I know… have Macs.

    Comment by Clunking Fist — August 30, 2010 @ 12:48 pm

  12. How did SCF get a deposit guarantee in the first place? I thought that was only sposed to be for co’s that wouldn’t need it..

    Comment by gazzaj — August 30, 2010 @ 12:54 pm

  13. advertising for finance companies should be regulated like for the tobacco industry. Every glossy brochure should be required to have a large photo of a starving elderly couple living in a tent.

    Comment by NeilM — August 30, 2010 @ 1:05 pm

  14. Gazzaj, if you had been following the conventional wisdom, you would know that SCF DIDN’T need a deposit guarantee scheme because it was different from all the others 😉

    Comment by kahikatea — August 30, 2010 @ 3:16 pm

  15. Its a perfect storm, I’m afraid. The SCF loans to farmers will usually be on second mortgage behind a bank, and since farm values have plummeted there is no-one to buy the farms (except Chinese) and no chance of refinancing the second mortgage (since the Banks aren’t lending). So the long-haul way Statutory Management looks the only feasible way to allow for the farming borrowers to trade their way out of things, and maintain interest payments to investors.

    Maybe a cash injection from the government could be used to help stricken investors on a case-by-case basis, but I’m not sure why SCF investors would warrant special treatment amongst the casualty list of the finance sector.

    Aorangi looks dire, and one of the first priorities will be to get many of the farming borrowers, while they still love Hubbard so much, to sign some loan dcouments and get the loans registered, instead of Hubbards back of the envelope hand-shake system.

    Comment by Pat — August 30, 2010 @ 4:27 pm

  16. Keeping TVNZ state-owned is the kind of thing I’d normally be in favour of, but in this case I can’t see how selling it off to the highest bidder could make it any worse.

    Comment by Helenalex — August 30, 2010 @ 4:53 pm

  17. I can’t see how selling it off to the highest bidder could make it any worse

    To be honest, you’re all starting to sound a little bit like those religous leaders that get so very angry about pornography; they have to watch every “film” just to see for themselves how terrible it is, and warn their friends/neighbours/parishoners about its evilness.

    The haughty liberal elite might huff and puff at the Big Bad Henry-Wolf, but the plebs seem to like his unique brand of offensiveness. Selling TVNZ might mean All Paul, All Day, Every Day.

    Comment by Phil — August 30, 2010 @ 6:30 pm

  18. Phil, that kinda reminds me of the arguments about Holmes was awesome and his critics were all snobby snobitty snob snobs who were jealous of his dosh and he’d show us just you watch him and Prime believed it and hahaha.

    Not that ever seen him (henry) except for on youtube and shit.

    Comment by Pascal's bookie — August 30, 2010 @ 8:20 pm

  19. It was “Do something” that got Labour into trouble.
    They were doing something about everything.

    Mind you Key has made this a problem for English. Key can just shrug, smile and wave………..

    Comment by peterlepaysan — August 30, 2010 @ 9:33 pm

  20. peterlepaysan@19: Actually, it might be in order to ask “do nothing” Labour why they spent nine years ignoring remarkably prescient warnings that outfits like this were a shit tsunami waiting to happen…

    Comment by Craig Ranapia — August 31, 2010 @ 10:02 am

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at

%d bloggers like this: