So, South Canterbury.
No, me neither.
I suppose you want to know what we have bought. It is difficult to tell at this early stage, but I fear we might now own Timaru.
If only it were that simple. No, it seems what we have bought is a pig in a poke. Or rather, our government (led by a man who frankly is a sad git) looked inside the poke, saw its contents did not include the promised pig, and yet still guaranteed it.
The phrase being put around by the men in suits was "too big to fail."Hey, guess what? It wasn't. It did. Don't trust me on this; trust Liam Dann:
A lot was already wrong with South Canterbury when it had its public guarantee extended. For a start it was effectively in breach of its trust deed and had failed to file audited accounts. Having a look at the numbers is usually considered important when assessing a business decision. The Treasury - which officially makes the call on who gets in to the scheme - could have waited months before accepting the finance company. But it didn't. It rushed South Canterbury in to safety because the Government knew it was a goner without the guarantee - although in the end it was a goner anyway.So, what do we get? Apparently, this:
South Canterbury Finance is one of New Zealand’s largest & most successful finance companies, providing finance, loans & solid investment opportunities for over 80 years. With a strong regional presence throughout New Zealand, you can trust the team at South Canterbury Finance to provide outstanding customer service and sound advice.In short: on Internet, nobody knows you are a dog. And it helps if you have investors who are too stupid to read the small print:
South Canterbury Finance have a Standard & Poor's Short-term credit rating of C (CreditWatch Negative) and Long-term credit rating of B- (CreditWatch Negative)
In a particularly pernicious disclosure statement in the small print of its prospectus, SCF revealed how 37 per cent of its loan book was secured "by a second or subsequent ranking mortgage".It helps further if you have a government which has the same reading difficulty. And that government is helped in its turn by a Chief Political Commentator who was taught by Dr Pangloss.So, there you are. The people of South Auckland will now be helping out the people of money in South Canterbury. When the people of South Auckland make a bad financial decision, they have to go to loan sharks, because they don't have anything to offer as collateral for a loan. The people of money (who at least had something to invest) don't have this problem; they paid for a government which will guarantee their bad decisions with its own.
Straight outta Canterbury: