Weekly Wrap: A one trillion dollar week

"Ok then," Dr Evil announces in the first Austin Powers movie after being told by his sidekick that $1 million wasn't a lot of money these days, "we hold the world ransom for $100 billion."

Friday, March 20th 2009, 4:28PM

Following the Dr Evil logic, this week the US Federal Reserve went nuclear on its money-printing threat by foisting 'one trillion dollars' on the world, surprising the markets and putting the US currency into a dive with even the NZ dollar rising on the news.

While the macro news was very big indeed, Good Returns also uncovered some interesting micro developments in the New Zealand market.

On Tuesday we revealed that the KiwiSaver consolidation process was well underway with the Australian-owned Eosaver scheme tipped as the first to bow to the inevitable. Sam Stubbs, head of Tower Investments, suggested the number of providers could shrink to about 10 relatively soon - down from the current level of 54 schemes and 30-odd providers.

Also this week, the Northplan-Vestar-Gould-Spicers transition saga took another turn with the announcement that George Gould would join the AXA-owned Spicers board.

As part of AXA's takeover of the Gould Wealth Management (GWM) business, Spicers has also mooted the idea of a 'Distressed Debt Support Team' to deal with the messy finance company legacy left behind by Northplan-Vestar.

Gould remains "committed to the business", GWM said on its website.

Likewise Hanover this week confirmed its commitment to debenture-holders while making its first principal payment to investors in both the Hanover and United offers.

Despite the prospect of long-term "challenging" conditions, Hanover said "we also believe that our repayment program has been set to succeed within such conditions and we remain confident that we will be able to achieve it".

The current market challenges were also apparent in the ASB Bank profit figures for the last quarter of 2008. In a story reported in the Good Returns mortgage section ASB's profits were flat compared to the same period in 2007 but included a whopping increase in provisions for impaired loans.

According to the report, ASB had set aside only $5 million for impaired loans in the first six months of 2008 but, in a Dr Evil moment, revised the provisions upwards in the final half - "ok then, let's make it $67 million".

In our People section Diversified expands by two and Hanover gets a new Chair.

Don't forget to keep up to date with industry events in our Diary. Email Amy@goodreturns.co.nz if you have an event you would like included.

Have a great weekend.
David Chaplin
Guest Wrapper &
editor ASSET Magazine