SFO SCF INVESTIGATION IS HOTTING UP

And its NBR that the SFO is after. They want all the transcripts, tapes and documents into the dodgy saga over the ownership of the Hyatt Hotel.

Well done them. Media watchers will be taking a huge interest in how NBR plays this. They need to maintain the protection of their sources. However they are also facing some very heavy penalties if they don't comply with the SFO request for info.

And we reckon that the story clearly indicates that there really was something rotten at the core of SCF.

CACTUS'S BEST YET - SOUTH CANTY FINANCE - READ AND WEEP.

Cactus really should take more time off. Everytime she ceases blogging for the while - she comes back with a show stopper....

Todays marathon effort is about South Canterbury Finance.. Read it.. but set aside some time - its a big fulsome read.

Well done her

A BIG JOB

Up on the South Canterbury website -- a position for investor relations manager.. Might be a bridge too far....

HUBBARDS CUPBOARD - PART DEUX

Well we hoped this wouldnt be the case but the more we read the less we like.

We reckoned that Hubbards cupboard might be bareand there might be couple of nice boxes of chockies in there but the rest of the shelves have cheap crap well past their use by date.

We are well aware of the impact that the collapse of this empire could have but we do not want to see the government bail it out.

and now NBR is reporting that Bill English is staying in NZ to keep abreast of Hubbard developments.. Well done Bill.

BANKS ON THE BRINK?

Adam over at Inquiring Mind has a nice take on the announcement of the Deposit guarantee scheme by Cullen today. And it came not a moment too soon and not without some grumping by the banks.

We think the same, the banks were getting mighty tetchy.

Read Adams elegance here

BIG BANKS GANG UP ON TREASURY

The money markets are chattering over the Mexican stand off with the Big Banks who have, in an unprecedented move joined forces to talk turkey with Treasury, over the deposit guarantee scheme. The Banks want some changes. Treasury is staring them down. The banks are staying firm - they want changes to clauses they think could give non banking institutions an advantage.

OUCH!

AXA has frozen three of its mortgage funds for 30 days - $225 million - 5000 investors now have their money tied up and its not allowed to go anywhere. AXA are asking for the Govt to guarantee them as well.
Will the other mortgage fund managers follow suit?

More in the Herald,

MARKETS ARE TANKING AGAIN

From the Guardian - the FTSE, the Hang Seng, Nikkei, all headed south.

Expect more of the same here today.

Am I in the wilderness here, or are we as a nation closing our eyes, saying "dont panic" as the elephant in the room stands on our toes?

OTHERS RECOGNISE DEPOSIT SCHEME A CLUSTER FUCK

Fears rise of deposit plan 'mess' Public fears over the safety of their savings may have been assuaged but the Government's hastily drafted deposit guarantee scheme has stoked fears of a "horrendous mess" in the finance company sector and other investment markets.

The scheme announced on Sunday sees the Goverment guaranteed the deposits of banks, building societies, credit unions, finance companies and other deposit-taking institutions.

By late yesterday all the major banks along with two finance companies had opted into the scheme which is free for companies with less than $5 billion in deposits.

The controversial decision to extend the scheme's coverage to finance companies is widely believed to be intended to prevent a flight of capital from finance companies into government guaranteed bank deposits.

However details, including whether finance companies who have already breached their trust deeds would be eligible if they cleaned up their act, have yet to be released.

A Reserve Bank spokesman yesterday said the bank and Treasury were working on this and other aspects of the scheme but he could not say when further information would be released.

Victoria University professor of economics and finance Roger Bowden said there were a lot of unanswered questions about the scheme, but should it be extended widely to finance companies it would create "a horrendous mess".

With an explicit government guarantee, finance companies who generally make riskier loans and consequently pay higher interest rates "now need pay no more than the banks".

Meanwhile larger banks, including Kiwibank, which have more than $5 billion in deposits will have to pay a fee to participate in the scheme unlike their smaller and riskier finance company counterparts for whom it is free, effectively subsidising them.

"It's screwed the natural pricing to hell and back," said Bowden. "The banks are entitled to very annoyed.

"Of course, there's also going to be a huge backlash among the poor people who have lost money in finance companies in the past."

More here

BOLLARD LOOKS LIKE A NUMPTY

We have been watching the deposit guarantee scandal with a great deal of interest. Bollard has been compromised there is not doubt about that now. He let himself become a puppet of Clark for her political ends and now his name is linked to a scheme that financial pundits are saying will skew the financial markets and may well help prop up the wide boys in the finance sector.

Not good enough -the Guvnor of the Reserve Bank cannot be a puppet. Time to go old boy.

The Hive is also calling for his head here

And Hooton is calling a cullen a liar - we reckon he is a lying weaselly two faced bastard.

SOLID SOUTH EARNS DEPOSITOR RESPECT

The Southland Building Society new banking status and solid reputation has made it the first port of call for depositors who are risk shy.

Good on Acton Smith , Ross Smith and the team

LABOURS DEPOSIT GUARANTEE SCHEME IS A CROCK

Queen Bee at Wellington Hive does some further analysis this morning and it doesnt look good.

It was as Roarprawn expected - a very badly drafted piece of legislation.

Investment guru Chris Lee said on RNZ this morning, that it will be lapped up by the finance companies and skew the market.

We also note that this issue was of so much concern to QB that she got out of bed at sparrow fart to post on the changing face of the Global Credit crisis.

Wellington Hive is a must read for all journalists and investors this morning - read it and weep.

CLUSTER FUCK ANYONE?

DOES ANYONE ELSE GET THE FEELING THAT THE DEPOSIT GUARANTEE SCHEME IS A STUFF UP?

NBR takes a look and its not good news More here

Finance companies should pay for guarantee
by Fiona Robertson | Monday October 13 2008 - 03:51pm
Including finance companies in the government’s deposit guarantee scheme is a boon for the troubled sector but it raises serious questions over the free fee ride for smaller deposit-takers.

Interest.co.nz publisher David Chaston said the guarantee was “manna from heaven” for finance companies, which have suffered full-on investor flight after recent failures in the sector.

KPMG managing partner Andrew Dinsdale said guaranteeing full deposit sums across non-banks was an “unheard of” move. “… It creates a whole series of questions.”

Finance companies could make more money by dropping deposit interest rates, as they might no longer need to offer higher rates to attract investors, Mr Dinsdale said.

SO THE AUSSIE BANKS ARE HELPING FUND THE BANK DEPOSIT GUARANTEE

And they are none too pleased... From the Australian

AUSTRALIAN banks will be hit by a levy that could run into the tens of millions imposed by the New Zealand Government, for participating in its version of the bank deposit guarantee scheme.

The scheme is voluntary, but with the NZ Government-backed Kiwi Bank already opting in, the others have no choice but to do likewise.

The levy will only apply to banks with more than $5 billion in deposits, which just happens to be only the big four Australian banks, and will apply on 10 basis points on “total indebtedness” above that level.

Australian banks contacted this morning were still in talks with the NZ Finance Department to work out exactly how the scheme applies, but were not impressed.

EVEN A FINANCIAL NUMPTYESS LIKE BB GETS THIS

Bernard Hickey sees some major holes in the gov'ts deposit guarantee scheme

and Jenny McManus at the Independent is seeing the same holes.


Thats a hole of a big liability for the Government and again shows that the govt policy machine isn't smart.

so we have

• A badly drafted EFA
• A badly drafted Emissions Trading scheme
• A badly drafted deposit guarantee scheme