Here We Go Again!

I remember when the 1987 crash hit. I was working for a Wellington-based finance company/merchant bank. We pestered our credit department head for years about letting us do property deals but he would wag his ancient, grey head and tell us "More fortunes have been lost in property lending than any other game in town." He was ex-BNZ and at 60-ish had seen it all. Shame the BNZ had forgotten all he had tried to teach them. We survived because we had very little exposure to property lending - thanks to him.

Shame I didn't remember his advice in time as I worked in the property field again (this time in development) right up until the company went into liquidation in July this year. Regardless of the quality of our developments, the finance companies all went tits up from about August 2007 and lending similarly dried up. No money to finish despite pre-sales; no credit from anyone. What a mess us and the finance boys have got ourselves into again.

The writing was on the wall years ago. In 1994 I was told by a business acquaintance who headed one of the big investment houses in Asia that he was getting out because he didn't understand the derivatives they were all busy selling and no one anywhere had a good idea of the overall liability position of the finance sector anymore. He warned it would all turn to mush one day.

Shit, I'm really smart with hindsight. Wish I had remembered these warnings earlier.