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Federal Government

RUN: Fairfax lies may spark finance crisis

VEXNEWS has learned that The Age’s assertion that a leading building society is invested in dodgy sub-prime debt instruments is wrong.

Finance insiders say Michael West has misunderstood and misrepresented leaked data about those who had invested in products marketed by Lehman Bros.

The spreadsheet apparently relied on in the report did not distinguish between risky debt and debt rated as very safe.

The consequences of the error could be catastrophic for the newspaper if there is a ‘run’ on the financial institution with depositors withdrawing their funds after being panicked by the false report.

UPDATE: Interesting to see one of the financial institutions defamed by The Age has put out a media release explaining exactly how The Age had it wrong.



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  1. The article states that Victoria Teachers Credit Union has $17 million in CDOs. this would be a massive amount for a Credit union to swallow. If this is incorrect, wait for legal action.

    Posted by anon | August 16, 2008, 14:56
  2. Victoria Savings & Loan Equity Trustees are also listed.

    We need to know which Building Societies are safe, and which will collapse, so we can get our money out.

    Please let us know!

    Posted by Anon | August 16, 2008, 15:00
  3. Don’t wait to find out who – just put your money under the bed!

    Posted by Bed Head | August 16, 2008, 15:56
  4. The Victoria Teachers Credit Union Annual Report indicates that they have Total Equity of $85 Million and an annual profit of $7.9 million:


    When NAB discovered that it had CDO’s they were written down to 10 cents in the dollar.

    If Victoria Teachers Credit Union has $17 million in CDOs, then if they wrote them down to 10c in the dollar, it would be $15.3 million dollar hit twice their annual profit for 2007.

    Alternatively, if Fairfax are wrong, then even a small run will have huge legal implications.

    We need to know.

    Posted by Vic Teacher | August 16, 2008, 16:47
    16 August, 2008


    Mr William Wolke, Chief Executive Officer of the Victoria Teachers Credit Union, said today that The Age and The Sydney Morning Herald newspapers today had incorrectly reported that Victoria Teachers Credit Union had $17m in CDO laden assets with Lehman Brothers.

    “This is totally incorrect.”

    “Victoria Teachers Credit Union has never purchased investment products known as collateralised debt obligations (CDO’s) from Lehman Brothers, nor has it ever invested in CDO type products.”

    “Victoria Teachers Credit Union does use Lehman Bros as a broker for the placing of funds with other banks and financial institutions. Those funds are held directly with the banks and financial institutions, not with Lehman Brothers.”

    “Victoria Teachers Credit Union adheres to a prudent and low risk investment policy and continues to be a strong and profitable financial institution,” Mr Wolke said.

    Marten Touw, Managing Director, Head of Fixed Income, Lehman Brothers, confirmed that Victoria Teachers Credit Union had never invested in CDO type products with Lehman Brothers.

    “Victoria Teachers Credit Union is a valued client of Lehman Brothers and as with all of our clients we treat our relationship with complete confidentiality. We are extremely concerned that The Age/ Sydney Morning Herald printed this incorrect information about our business and that of our client,” Mr Touw said.

    Posted by Vic Teacher | August 16, 2008, 17:51
  6. I’ve already taken my money out online. I won’t be caught out.

    Posted by worry | August 16, 2008, 17:52
  7. Posted by Vic Teacher | August 16, 2008, 17:53
  8. Oops!


    16 August 2008

    The Age Gets it Wrong

    The Age Newspaper has reported today (16 August 2008) that mecu has an exposure to a CDO product through investment bank Lehman Brothers.

    The Age report is wrong.

    mecu has no exposure to CDO products with Lehman Brothers. mecu has briefed its Communications Advisors to request The Age newspaper retract this statement. Furthermore mecu can assure all members that it has no exposure to any sub prime related investments including CDO products.

    mecu is the only credit union in Australia to have been issued with an investment grade credit rating from international rating agency Standard&Poors.

    Questions on this matter can be referred to Phylip Doughty CEO on 98544646 or Rowan Dowland General Manager Development on 98544644 or 0418508718

    Posted by Concerned in Kew | August 16, 2008, 17:56
  9. It is now clear that Fairfax have made an gross error.

    Are they in breach of any securities market rules regarding market manipulation through “false rumours”?

    Will ASIC take them on?

    Posted by Anon | August 16, 2008, 18:06
  10. After all the Age’s attacks on “McMansions” and “Affluenza” and “CUBs” this almost looks as though the Age are actually attempting to CAUSE a financial meltdown in Australia…

    Posted by Hun | August 16, 2008, 19:04
  11. Make the Age pay.

    Such irresponsible journalism and from a”respected” major daily!!!

    I for one will be suing the Age and its board if any shares and investments dropped in value as a result of their negligence.

    I wonder if Slater and Gordon will initiate a class action law suit against the Age.

    Posted by Its the economy stupid | August 17, 2008, 7:29
  12. The Age must be doing something right. They’ve paid Kenneth Davidson shedloads to write the same article, twice a week, for the fast four months

    Posted by Pop Fan | August 18, 2008, 11:18