Thursday, 11 June 2009

Serving two masters...

It’s a bit of a worry when Father Christian is quicker off the mark to discuss issues in Sydney diocese than Caliban’s Dream, but since I’m on a roll (by my tragic standards, at least ;-) when it comes to blogging I thought some local perspective on the Diocesan machinery’s spectacular loss of 100 million dollars wouldn’t go astray.

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?”.


Lapinbizarre said...

The Holy Spirit doing its bit for GAFCON, perhaps?

Lapinbizarre said...

What I actually wanted, but couldn't find earlier in the week, was this clip of the Holy Spirit doing its work among the Fundiegelicals.

Anonymous said...

>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.


Swear that's fair dinkum Caliban? or just artistic flourish?

Alcibiades said...

It's fair dinkum, sunshine. Would you like me to sign an affidavit?

There's no need to exaggerate anything when it comes to Sydney Diocese's former investment strategy. Losing 100 million makes anything else insignificant.

As for the two fellows I'm referring to: I said I'd been contracting to the bank they worked for - don't think they hadn't snooped around enough to get pretty good idea of my background before giving me the necessary access - believe it or some of my referees were (& still are) clergy struggling to minister inside the machine.

Nor do I ever make any secret of my faith - not even in these kind of interviews. So I've no doubt they thought dropping a religious reference would make their proposition seem more attractive.

Call me personally - +61 0425 112290 - if you'd really like their names and bank. You (& the Diocesan investment geniuses) will be familiar with the latter.

Now: if these guys were wrong - and it's not beyond the realms of possibility they were - how about you tell us were the Diocese powerbrokers were sinking people's money? And any chance of an explanation as to why Jensen won't provide any further details about that? Or why it's taken more than 6 months for any kind of an admission of how much they've blown?