When the Finance Minister postpones an overseas trip to deal with a finance company investors it will not be to deliver good news.
High returns in investments are almost always matched by high risks.
People investing in South Canterbury Finance, Hubbard Management Funds and Aorangi Securities have had very good returns, now they’re being faced with the realisation that their investments were also high risk.
Apropos of this, Scott at Imperator Fish writes:
… I predict that many of Alan Hubbard’s supporters will turn on him, like sharks who’ve scented the blood of one of their own. He may be a well-meaning old gentleman, but nothing is quite as educational as the pain of losing one’s life-savings.
… we must remember to blame the Government. They acted too slowly. Or did they act too fast in putting Hubbard into statutory management? Does it matter? All this market stuff is confusificating me. . .
It will be more than confusificating for the the people who are concerned about losing money.
Depositers are covered by the deposit guarantee scheme but they are not the only ones with something to lose if SCF falls over.
The uncertainty over SCF, HMF and AS has shown just how the threads of the various Hubbard entities are woven through rural and provincial South Island. There are valid concerns that if one thread is pulled a lot more will unravel.