Monday 13th of July 2009

I was having a good weekend until Sunday night when I read two politicians publicly getting into the ING CDO debate and arguing the offer made to investors was unfair. To get straight to the point, this posturing from Peter Dunne and Lianne Dalziel is absolute cheap, political garbage. I have publicly stated before, and I will say it again: Good on ING and ANZ for fronting up and putting up to $400 million of their own money into this problem. Show me another similar company who has been prepared to do something like this? You can’t because there isn’t one. The closest is Hanover. If the politicians had any interest in investor protection they would have made and enforced rules to stop some of the shonky finance companies even getting off the ground. If they did their job some of the directors of these shonky companies would be in jail now – for a long time. Jeez the US has already locked Madoff up for the rest of his life. His ponzi scheme came to light well after some of ours fell over. Dalziel and Dunne have been lawmakers for a long time. One is, and has been, Revenue Minister for some time and the other Commerce Minister. They could have made a difference. They didn’t. Today’s announcement makes them look silly. Around 95% of investors have accepted the ING offer. They knew what they were getting into as there has been ample publicity around the offer and the indemnity. If it was such a bad deal they had the chance to say no. They haven’t. They had the choice. As an aside there seems to be some great irony here. If the Frozen Funds group thought it was so bad then they shouldn’t have accepted it. Seems to me the bulk of them have (the only other conclusion is the group’s membership isn’t that big). Let’s get this argument straight. While the indemnity bit of the offer leaves a lump in the throat, it’s not an unusual offer. If I was the one stumping up with the money I would do the same thing – wouldn’t you? If you look at all the other carnage out there in the past few years this is the best and the most generous offer put on the table. These blokes running finance companies still have their flash houses and cars and haven’t offered diddly squat to their debenture holders. Let’s have a reality check, get politicians to do important things, and move on (and never-ever make a CDO fund again).