Now I realise lots of people have endured spectacular losses in the past year, and obviously the larger the investor he greater the loss, but as the Rev. Cornish (one of Sydney’s few - but truly courageous - “good guys”) pointed out in the Sydney Morning Herald, were losses of this magnitude sustained by a secular organisation those responsible would be held accountable. In the Sydney Anglican diocese’s case, however… after all, it’s not as if this is a case of someone wearing a chasuble, or women becoming priests, or anything shocking like that
What I find amusing – if it can be possible to find anything funny about this appalling waste of parishioner’s (and ultimately God’s) money – is that this has got to be the first time it can honestly be said that Mrs. Caliban and I are more conservative than the happy-go-lucky bigshots in the Sydney Diocesan Secretariat. That’s because what they were doing is exactly what some fellows at a merchant bank for whom I did some I.T. contracting a couple of years back tried to talk us into.
The strategy was this: using your existing assets you borrow money which is in turn used to buy shares. The gamble is that the capital gains and dividends paid on the shares exceeds the interest payable on the loans: if it does you make a tidy little profit; if it doesn’t you’ve got to find some way of covering the loan repayments or else lose everything. In the case of the two fellows we knew, their strategy was to invest heavily in U.S. sub-prime mortgage bonds. “Can’t fail” they insisted. “Even the Sydney Anglican church is doing this” one of them urged.
I’ve since lost contact with those two, but I know they’re no longer employed by that bank. Nor do I know if the Diocese really was sinking money into that particular scheme (which was quite possible; it was a blue-chip bank much feted by institutional investors) but if not that scheme then the Diocese was sucked in by one very much like it: they borrowed against church assets (primarily their spectacular property portfolio, I believe) to sink money into high-yield, high-risk shares. The same sort of investments that we looked at and thought were idiotically risky prospects at around the same time the Diocese was diving in head first.
Sure the guys pushing this scheme said it “couldn’t lose”. Then again, didn’t the same sort of people say that about tulips in the 17th century? But the people in Holland back then weren’t playing with money given in good faith over many years by people who expected it to be managed responsibly for the on-going work of the church.
Perhaps the most pertinent comment I’ve heard was made by a local radio talk-show host. A professed agnostic who’s never hidden his distain for the Jensens, his first comment when hearing about the Diocese’s stupid and irresponsible speculation said it all: “Isn’t there something in the Bible about doing that sort of thing?”.