Monday, 30 August 2010


We think that bailing out South Canterbury Finance is a crock. Then again we thing the whole deposit guarantee scheme is a crock. No-one has yet adequately explained why we as a taxpayer are forced to subsidise a bunch of people who took risk with their money for higher returns.

Its like the government paying out everyone this week who doesn't get a lotto payout.

We realise that if South Canterbury Finance and Hubbards associated interests go belly up, and its looking increasingly like that, that the impact on the South Island economy will be substantive.

But that is no reason for a bail out.


LAMBCUT said...

You are a Veuve bubble headed pop tart at times BB. It’s all very well for you, living in your government funded, non-productive ivory tower. FYI, the loans extended by South Canterbury Finance are mainly to the productive sector, and are focussed on city folk’s rural glamour girl, the dairy sector. Foreign currency returns from the primary sector provide the bulk of the funds to government that pay your salary. If SCF was allowed to collapse with the resulting dairy land fire sales, the ramifications for land prices, primary industry generally and NZ’s GDP would be significant indeed (bugger about what this might mean for your future salary increases). Further to this, most investors in CF, invested with sure and certain knowledge of the government’s guarantee. That makes them prudent, not greedy. They could have gotten better returns from higher risk investments. Tax payers stump up with funds for less vital things than this. Hmmm, let me think, over paid government comms experts and the like. Even if one were to set aside government’s legal undertaking, in this case, pragmatism must supersede ill considered political dogma.

Cactus Kate said...

So Lambcut that means that farming is "too big to fail" as well? Will the government have to next bailout farmers who over-extend their lending? The Crafars for example?

The "productive sector" can't be too productive now can it ifit needs bailing out?

It's "only" a billion. Your buddy Bill English borrows that in how many days?

Surely the guarantees were provided only if certain circumstances were met. Old Mother Hubbard appears to have presented a bullshit South Island view of the world. And peopel are going to have to pay.

Cactus Kate said...

Also Lambcut, don't you want prices for dairying to drop so NZers can afford to buy the land?

"Productive" land at the moment isn't from produce returns (milk isn't as golden as it is made out), it is simple capital gain which is why the rural dwellers are all upset - they can see their capital gains (the only reason they are in farming) disappearing.

LAMBCUT said...

My Dear Kate

Never mind the broader ramifications for NZ’s economy. It is not the primary sector that is too big to fail; it is the banking sector – if and only if we confine the conversation to that wee part of the world. The confinement is the pragmatist bit.

I wrote the following on the wider topic in March 2009 So Catty little Cactus we are not way off the same page, but, the current situation occurs in a micro-economic paradigm where the primary earner sells into and competes with heavily subsidised markets. Notwithstanding that, it does ok generally, and, doesn’t ask for too much by way of favours. But, it shouldn’t have to cope with shonkey dealings in the finance sector as well.

LAMBCUT said...

Also Kate

It may be that FOC (Father of Cate) is or was in it only for the capital gain, but let me tell you, Lambcut made a fair old living out of sheep and cattle farming in days gone by - and that living was further to any capital gain, (which was to be fair realised with exquisite market timeing, subsequent to an unforseen divorce).

LAMBCUT said...

Actually, Lamcut's man, Duke Round Em Up and Nuke Em, has come home. And after fierce debate has convinced the Lamb that her support for a bailout is based on emotion and loyalty to farmers and farming.

Never let it be said that the Lamb can't be swayed by good argument.

Cactus Kate said...


Have you stolen and started on Busted Blonde's Veuve because pretty much that was incomprehensible? Read it tomorrow when you sober up then we may have lift-off.

Cactus Kate said...

"Never let it be said that the Lamb can't be swayed by good argument".

....or the back of a farmer's hand.