And another financial fund

A subsidiary of AXA this time, but only affecting major institutional investors so far, although they warn that small investor moneys may be frozen at a later date...

www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10525226

Having announced that, what exactly do they think people will now do? Sit back and say 'oh well, we'll see what happens, shall we?'

I do wonder at what school of human nature they have studied when they come out with comments like: "These are difficult times for investors. Unfortunately as investors come under stress they naturally seek security of mind, which at times may prompt them to make hasty, short-term decisions at odds with their longer-term interests."

Ummm....yup! Most people don't have an unlimited pool of other peoples' money to play with, buddy. It's more than an abstract game for them when they lose their life savings...[!]

One of the reasons we got caught with Hanover was because we didn't think signs were there, but we also thought, 'if we and everyone else take out the money, everyone will be in trouble.' I say good on those who are taking stuff out now! But then doing that on rumours is what brought the banks down in the depression too!

[!]

Our Aussie financial year ended in June, and we still haven't been advised formally of what our super funds are worth....

I thank our stars that SOH and I decided years ago to withdraw our super and put it into our land in NZ. At least we can still grow our fruit, veg, and meat for our lifestyle when push comes to shove for our retirement years.

We have family looking at extending their working lives to support themselves, at a stage when they have carefully managed their funds to give them "that bit extra" in later life.

I feel for everyone in that same boat because you have all worked very hard to get something put "by"...... my thoughts are with you who are affected.

The news tonight incorrectly reported it, which no doubt will be causing more panic. They said just that AXA had frozen $140million.

I never have been, and never will be, the last of the great financiers and I'm rather pleased about that. I'm boring with money. I budget, don't take risks with it, invest in things that are not going to disappear, I don't get wooed by companies paying high rates of interest. Our money is invested in land, some of it freehold, some of it mortgaged, all of it solvent. Savings are limited, the rest of it is "under the mattress".

I can't say that I feel sorry for people who invest their money at high rates of interest and then don't read the writing on the wall. The American housing market started to collapse what, a year ago, a little more? and it followed that we were going to follow - and we did. And now people are paying the price for greed. I can't believe that people are so naive that they roll on thinking that what occurs in the rest of the world isn't going to affect them.

So be it. The little old lady with $1,000 hidden in the toilet cistern still has $1,000.[^]

Cheers,
Ronnie

Uh, Ronnie, may I use the loo? []

I still don't think its greed to make an investment (after taking advice) which may earn you some interest. Money in the bank earns interest. Most of the funds getting frozen at the moment were only paying 7 or 8 percent. Not the big double your money type things that you used to hear about. I don't think trying to take care of you future and old age is being greedy.

If people didn't invest money there would be no funds available for things like mortgages. We all expect the banks or lending places to have funds available to lend out, well the wouldn't have any without the 'greedy' investors.

I don't think these sort of conservative (relatively) funds are greedy either, but unfortunately they have been hit by the impact of the fall of funds which were...but I do agree with Ronnie that there was always going to be an international impact from the subprime mess in the USA - unfortunately our media is so poor at reporting this stuff that you had to go looking to get an idea of what was going on...

But its sad to see finger pointing at hard working "everyday" people as being greedy, when its the fund managers who chased the higher investment rate returns for their portfolios.... that are more about stroking their own ego than anything else.

About 6 months ago or so in Sydney's "Sydney Morning Herald" Good Weekend supplement, there was an interview in USA with a Gent who was one of the leaders of the idea behind the sub prime mortgage market setup, went around trying to "sell" his investment package and originally no one wanted it.

However it didn't take long for 1 or 2 fund managers to hop on board and he is making millions out of the fall out now from the sub prime lending.

I too am not "up with" the tricks of the investment trade, but the package he put together for the fund managers was very much a form of gambling, or hedging bets on the chances of mortgages being defaulted on. Fine if it was his money to begin with, but it wasn't....

As some of these people (fund managers) are playing with our superannuation money (remember Aussie employers have to put a minimum 9% into a super fund for employees) we don't have much of a detailed choice as to the ins and out of where our money is invested, just a broad outline of past performance.

Superannuation funds will not give you "real time" earnings, yet I know what my bank is charging on our mortgages at any given time.

There are lots of people in this circumstance now because of the financial institutions playing with their money.

Its criminal in my book and they should be behind bars, unless they can re-pay their debts to the people whose money they have played monopoly with....[}][!]

I agree TKP, about greed, hell my Govt. superfund is with AXA, how many others are out there, with a recommended super fund , now are we thought of as greedy..... is anyone who saves a little seen as greedy.... can we suspend our fortnightly super payments, I bet not.
This is why we are seriously thinking of going to a bigger property, and "save" for our future by having a bigger mortgage to go along with a bigger property...

Pru2,

i dont think of people who are trying to save as greedy, but it is like anything the higher return the greater the risk.
the sad fact is the big fish usually swim away to live another day and the small fry get swallowed up.

swaggie;188724 wrote: I too am not "up with" the tricks of the investment trade, but the package he put together for the fund managers was very much a form of gambling, or hedging bets on the chances of mortgages being defaulted on.

The technical term is "short selling" i.e. selling stocks you don't own in the hope of buying them back later at a cheaper price. In this case it has worked brilliantly for the various fund managers involved. They have made an absolute fortune at the expense of Mum & Dad investors in the other funds which provided the "sub prime" mortgages.

Some would say that the fund managers who have profitted hugely at other's expense are low-life or scum of the earth.

Personally, I wouldn't be so harsh. There are winners and losers in many different investments, and in some ways the sub-prime issue is no different.

However, bringing it down to a personal level:

- Would I be happy to have profitted at other's expense in this way?

No, definitely not. A clear conscience is worth much more than money in my book.

swaggie;188724 wrote: Superannuation funds will not give you "real time" earnings, yet I know what my bank is charging on our mortgages at any given time.

No, that's not necessarily true. I give you an example to back this up:

- Inger and I have chosen the Gareth Morgan Kiwisaver Fund as our retirement saving provider. Every month, we get detailed reports showing exactly which companies our money is invested in, right down to the cent.

While I don't know what all the named companies do, the majority of them are familiar, and if there were any that we were uncomfortable with such as Tobacco companies, we would switch to another fund.

Gareth Morgan is a very ethical guy and his company is run along the same lines. Remember, he was the one who gave $47M to charity which resulted from his son Sam's sale of Trade Me to the Aussies. That is a very hard act to follow and for this reason, we are very happy to be invested in his Kiwisaver fund.

My statement was very generalised so you are quite right to point out Grant that not all superannuation plans are not in "real time".

However as of yesterday, our Aussie industry super plan (supposedly one of the better ones) were still not releasing figures for their June performance, and thus the final tally for the 07/08 financial year....[!]

They are not the first and won't be the last. Perhaps its only those that have to comply with Aussie employment superannuation law that are dragging their heels, but ours isn't the only one to keep "mum" as to the final EOFY earnings.