A little while ago, when the full horror of Allan Hubbard's affairs was beginning to emerge from the statutory managers' reports, I asked a senior business journalist what he thought was going on. This was surely, I said, not a Madoff-style Ponzi scheme.
No," he said. "It's not that. But the guy is a menace and he had to be removed from his business."
Neither, I suspect, is Allan Hubbard of the same species as the pondlife who ran the crash-and-burn finance companies that disappeared with the retirement savings of thousands of people like my mother. But he has been as feckless in his own ways.
The charity in extending interest-free loans to struggling farmers evaporates when you're doing it with someone else's money. For so long as he could meet his daily obligations it might not have mattered in a practical sense that his investors' funds were not, as they had thought, fully backed by assets. But only for so long.
And now, thanks to the credit guarantee scheme, Allan Hubbard's unfunded liabilities may belong to all of us. The government faces the choice of bailing out South Canterbury Finance – paying $600 million and eventually recouping less than half of that – or allowing SCF to fail and assuming liability for $1.55 billion in investors' deposits. It's a big enough hit that it could actually affect New Zealand's international credit rating.
The key question is: is this thing worth saving? This isn't simply, as the Air New Zealand bailout was, a matter of rescuing a trading airline business from the captains of industry who had flown it into the ground: it's a matter of whether Hubbard's businesses will ever have credibility again.
Bernard Hickey is clear: he thinks SCF should be put into receivership.
On the other hand, SCF's CEO says there are three potential private investors in the business. But the same story suggests he despairs of the public statements of SCF's largest shareholder, Hubbard (who is making unhelpful claims about Treasury's attitude) and the local cult that has formed around him. It looks like an awful mess – and that's before this week's statement from the Serious Fraud Office.
The pressure on all concerned is enormous, and I think Bill English did a good and appropriate job of saying nothing until he has something concrete to say.
I'm inclined towards receivership, but either way, this won't end well. But out the other side perhaps we'll finally take our leave of myths about old duffers who mean well with others' money.