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Investment Failures

Finance Company Outcomes

During the past week several significant events occurred relating to the blurry past of the demise of finance companies. The finance company sector collapse debacle seems to have gone on for years, over four years in fact and therefore it predates the so called global financial crisis.

2010 The Year in Review

This past year has been a real mixture. Most of this has been because of market uncertainty. The big question has been will any of the PIGS (Portugal, Ireland, Greece and Spain) default on their sovereign debt obligations. Thanks to big bail outs by other countries in the European Union, no governmental defaults eventuated.

Live for Today, the Estate Pays Later

It seems that there must be some demand for Reverse Mortgages as one of the largest trading banks has just started to offer them. The market for these must have been reasonably attractive in the mid 2000’s, as several players were active. There was television advertising for at least two of the products that were on the market at that time.

Investors Saved by the Taxpayers

This week, the Crown Guarantee has been severely tested with the receivership of South Canterbury Finance. No one will know the final cost to the tax payer until the receivership is completed. This is likely to take years, as the Government will not want to put undue pressure on borrowers who most likely are already under significant financial stress.

Dealing with Risk

All investments carry a degree of risk, as many investors have learned the hard way over the last few years.  Even bank deposits are not risk-free. Hundreds of millions of dollars were lost in these in the United States over the past few years, and banks are still collapsing there.

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