Give me my money back

acotrel says:

10:08pm | 08/10/10

The welfare couch isn’t that cushy these days.  If you are a self-funded retiree, you probably lost a bundle due to the GFC.  And Centrelink isn’t really trying to take that into account, and adjust your pension because of your reduced assets.  It’s always about paying out as little as possible, as far as the y’re concerned.  They’re paranoid about being defrauded, so pensioners become victims. The only reason I ever got involved with Centrelink, was because I wanted a concession card to buy my medication that I need to treat my industrial disease.  Something for which I’ve never sought compensation.  Only people on a Centrelink pension get the concession card!!  Self-funded retirees can go jump in the lake!

persephone says:

07:33am | 08/10/10

Which is why the use of the still from ‘It’s a Wonderful Life” is so apt.

The firm portrayed in the film is a mortgage investment bank - for it to pay out its investors would have meant calling in the mortgages it held.

Which would have caused the biggest disaster - banks foreclosing on mortgages, as they did en masse in the US, in an effort to pay out their investors, or a few investors not having access to their funds for a couple of years?

The former would have seen us descend into recession very quickly and caused on going hardship for the thousands of people who would have lost their principle lifetime investment, their home.

The latter sees a few peoplle undergoing some small financial hardships, whcih are temporary in nature.

MarK says:

12:12pm | 08/10/10

“The latter sees a few peoplle undergoing some small financial hardships, whcih are temporary in nature. “

Ask the investors in Momentum Mortgages or in DOH Mortages how they are feeling for a start.

The insensitivity and naivety of that statement is astounding. They are merely two local firms in Port Macquarie.

You are so ill informed it is scary.

AdamC says:

12:33pm | 08/10/10

Michael is right, mortgage funds are not, and never were, equivalent to bank deposits. They are actually (in effect) equity investments in a pool of mortgages; more like buying shares than making a bank deposit. The problem is, they looked and smelt (in the good times) quite a bit like bank deposits, which probably made them susceptible to being marketed as such.

Wayne Fehlhaber says:

01:32pm | 08/10/10

Michael :  Contrary to the line you are pushing in your post , i was always able to access my account with the Colonial First Mortgage Income Fund . Just a few days notice and the funds requested were in my bank .
The Rudd/Swan bank deposit guarantee announcement caused a run on the fund account as people understandably panicked . This resulted in the government required level of liquidity in the fund to be dangerously depleted . Colonial First then took the action of freezing investments to protect the interests of all members capital invested with the fund.
Yes , there were some bad accounts in the lending side of the fund but they did not affect the day to day business being conducted by the fund until the run was started by Rudd/Swan’s irresponsible and callous announcement.
Make no mistake , the government was fully responsible for what happenned and thousands of people are in difficulties as a result of their incompetence.

Wayne Fehlhaber says:

08:04am | 08/10/10

Rudd and Swan are the connection pers , their announcement of a bank deposit guarantee in the first place , excluding investment firms ,
was the catalyst that created a run on Mortgage Investment Funds .

Your very first sentence says it all . The effects of a bank deposit guarantee on investment houses was not given one iota of thought by Wayne Swan and Rudd simply did not give two hoots about investors.
My own investment is still frozen as a result of a callous decision by the Rudd govternment , made without any consideration for superannuants
whose savings were invested in fund accounts.

At the time of the announcement , the various funds screamed loud and long but were totally ignored by the Treasurer .
The Rudd Labor government was irresponsible in failing to take into consideration the effect such a guarantee announcement , at the height of the G.F.C., would have on investors funds.

Those frozen investments no longer earn or attract interest , it is simply dead money ( the original principal capital ) which will be dribbled back to investors over a period of 4 years .
Investors should demand compensation for loss of earnings and hardship experienced as a result of Labor’s uncaring and callous mismanagement.

Tim says:

09:10am | 08/10/10

OR Wayne,
you could have understood the investment you made (see Michael’s comment above).
Trying to blame the Rudd government for your own poor investments is drawing a long bow, even for you.

Fiddlesticks says:

12:14pm | 11/10/10

Fehlhaber has started with a fundamental error. It’s not the first time. Not good enough.

In point of fact, as various observers of finance noted at the time and since, it is quite untrue to claim that the bank deposit guarantee *caused* a run on term investment funds.

In actual fact, money was *already* pouring into the retail banking sector from other financial institutions, including term investment funds.

Indeed, major retail banks were already concerned about liquidity, and *themselves* approached the government with their concerns about liquidiity and funding their wholesale and retail operations.

Speed was indeed important, but it is quite untrue to claim that the bank deposit etc guarantee was either rushed, ill-considered, or incompetent.

Had retail (normal deposit) banking collapsed or been frozen, the majority of working people would have been unable to get their pay or pay their bills - let alone any investment funds.

Term investment funds are certainly important but in the main they aren’t at call accounts, and Mum and Dad investors are broadly well aware of that. At the end of the day, the value of their funds has in fact been protected by the freezes (rather than blown away by a domino-collapse of large parts of the banking and investment sector).

It’s really mischiveous to make up a case and then blame the other fellow for it.  Others have noticed before that Fehlhaber is a prolific poster, who is long on opinion, but far too often far too short on fact.  Here, once gain, he’s plain wrong.

Bit of a pattern, then. He’s either chronically “badly informed” or just too cute to be true. 

As his “mistakes” invariably favour the case he tries to assert,  anyone reading a Fehlhaber post would be well advised to check the facts for themselves. It’s not hard to find the more informed comments of the time.

T.Chong says:

07:06am | 08/10/10

Christian; Hell experiencing a cold front is more likely than a Liberal having the honesty to directly criticise anything to do with the financial industry.
Jamies staff would already have drafted a “Hands off the banks"type post if the govt were to make such demands.
After all their future leader Turnbull ( soon to replace poor old jet lagged rust man) is banking / finance personified.
Remember the LNPs hysteria at the thought that ‘big miners ‘should pay their way?

Aitch B says:

07:08am | 08/10/10

*sigh*

It’s hardly a diatribe, Christian. He’s simply stated facts and suggested that Wayne Swan step in to assist those who are struggling. I see no direct criticism at all of Swan or the government’s decision to introduce and remove the guarantee. He’s aiming it fairly and squarely at the institutions that continue to freeze funds.

Read “If conditions have improved, which they have, then investment firms should start operating that way and stop this freeze.” again.

Nowhere in the article has the author accused the Government of being responsible for the funds but of course you’ll always read something other than what is actually written and take the opportunity to bash the Libs and protect your precious ALP, won’t you?

TimB says:

07:14am | 08/10/10

Where has he accused the government of anything Christian? He puts this on the investment firms. All he’s asking the government to do is to pressure them into releasing the funds, he hasn’t blamed them for anything.

Victim mentality much?

OT- Why does everyone keep bringing up that stupid Born to Rule phrase? What the hell does that even mean in an Australian context? We have no inherited political positions here, no House of Lords. I don’t recall having ever heard a Liberal politician claim, or even imply that they deserve their position simply because of some birthright.

Even more perplexing is when it’s used in the context of describing Liberal voters.

T.Chong says:

08:15am | 08/10/10

TimB the “born to rule “mantra is exactly the same as “union fat cats”
Both sides need a rallying cry.

Wayne Fehlhaber says:

10:37am | 08/10/10

Christian Real :  I see your comment as being exactly what you have described Jamie Brigg’s column as being , a blatant attempt to score points and smear the Opposition who had nothing to do with Labor’s bank deposit guarantee farce.
Labor created the catalyst for a run on the investors Mortgage Investment Fund by excluding investors ( mainly superannuants ) from the guarantee.
Neither Rudd nor Swan gave one hoot in hell of a care for those whose retirement funds were invested within financial houses such as Colonial First State. My own funds are still frozen within a Mortgage Income Fund which was forced to do so to protect all member’s funds from a panic run on investment monies.
Labor’s announcement was made without any thought or consideration of the effect of the exclusion of financial institutions from a government guarantee , would have for many thousands of investors who are still waiting for their money.
Those monies are not in any earning capacity ( no interest or earnings )
and the original investment capital is being dribbled back to investors over a period of four years.
I was sickened to note that you used the misfortune of investors to incorrectly blame the Opposition for smearing Labor over the issue. What you should be doing is demanding the government reimburse those investors for all lost earnings and hardship.
Take this one on the chin Christian as it was the Labor government that caused the crisis with it’s mismanaged bank guarantee announcement.

iansand says:

10:54am | 08/10/10

One thing that we can be sure of is that no banks failed.  I think Canada and New Zealand are the only other western countries that can make that claim.

I would have thought that, if the funds are due and payable, a quick court action would concentrate the minds of the fund managers.  If that option is not available people are the victims of the fine print.  That is not the government’s fault.

Tim says:

11:48am | 08/10/10

Exactly Iansand,
I can’t believe the amount of people who want to complain about their own investment decisions.
Mortgage funds have never been cash at-call accounts.

Wayne Fehlhaber says:

01:17pm | 08/10/10

iansand :  The run on fund accounts would not have occurred in the first place if Rudd and Swan had used a bit of common sense and included those funds within the bank deposit guarantee.
” That ” is the governmnts fault , they caused the problem and thousands of people are still sufferring .  If there is to be any court action , it should be against the government for full compensation to those who have lost the earning power of their retirement capital.

Tim   :  I was able to request , at a few days notice , any of my funds invested with Colonial First Mortgage Investment fund , which is contrary to the impression you are trying to apply here.
My funds and everybody elses funds would have been quite safe if Rudd and Swan had not mismanaged the bank deposit guarantee.

iansand says:

02:05pm | 08/10/10

Wayne - Because you were able to get your funds does not mean that Colonial were obliged to give them to you.

Why haven’t you sued the buggers to get your money out?  If you are in NSW I can give you the name of a barrister who hates banks with a passion and will take your case for the fun of it (and a reasonable fee).

Tim says:

03:34pm | 08/10/10

Wayne,
you obviously have no idea about the accounts your money was invested in then.
Did you even read the PDS?
Of course in the good times you were able to request your funds at a few days notice. That means nothing because there was enough liquidity in the fund to handle small amounts.
If these were good investments then the freeze would mean nothing other than you would be unable to access the money for a period of time. If you are “suffering” as a result of the freeze then you obviously didn’t diversify your investment portfolio enough.
Stop trying to blame others for your poor investment decisions.
I thought conservatives were all about personal responsibility?

acotrel says:

06:30am | 09/10/10

‘As rates rise, people will start losing their homes to foreclosure in record numbers.’

I suggest you are twisting the story in an attempt to make the ALP look bad!You must mean ‘as the rates move towards previous levels’? The same levels which existed when they took out their mortgages in the first place.Without the stimulus, under the belt-tightening Libs stupidity, the mortgage crash would already have come! Most Australians still have their jobs, why would a rate increase cause foreclosures, more now than at any other time?

Wayne Fehlhaber says:

08:42am | 09/10/10

Tim :  You don’t get it do you Tim ?  I had been conducting my Mortgage Income Fund account with Colonial First for years , including withdrawal transactions from the account whenever i required funds. You are so obsessed with your knowledge of funds that you are unable to focus on what i have told you.
There was always sufficient liquidity in the fund for all members to transact their requirements . That liquidity was destroyed by Labor’s announcement of a bank deposit guarantee , excluding the investment funds . Labor irresponsibly panicked investors whose retirement funds were tied up in these type of accounts. Labor incompetence caused the problem , no one else , black and white . Do you understand Tim , or is that too much for you all at once. ?
Incidently , i did not say * i * was sufferring , i said thousands of people were sufferring . My portfolio is well diversified and proffessionally managed day by day , and i have not blamed anybody for my decision to invest in these fund accounts.
Try to look past your Labor obsession for a few moments and place your focus on the facts.

Wayne Fehlhaber says:

08:52am | 09/10/10

Iansand :  I am more than satisfied with the Colonial First’s handling of the matter . They acted quickly and proffessionally when Labor caused the run on fund accounts . Their quick action in freezing the funds protected all members investments . It was the correct move , but it was forced on Colonial First by the incompetent actions of the Rudd / Swan Labor government.

PaulB says:

07:37am | 09/10/10

Shilling though you are (as usual), you’ve still begged this question:  why did Labor (or those within its myriad, uncontrolled factions) feel the need to dump him so hard if he was truly doing such a great job?  What you said above would have parlayed into a political campaign of considerable force, and I suspect Rudd would have won a comfortable majority once the election process got underway running a campaign based largely on the above.  So what happened?  Who did Rudd upset?  I don’t think we’ll ever really know because we would learn too much about who really controls our Government.