Australia & NZ face worse crisis than America

by Ambrose Evans-Pritchard from The Telegraph 31 July 2008 The world's financial storm has swept through Australia and New Zealand this week amid mounting signs of contagion across the Pacific region. Many fear the economic party in Australia will end badly Financial shares were pummelled in Sydney on Tuesday after investor flight forced National Australia Bank (NAB) to slash a £400m bond sale by two thirds. The retreat comes days after the Melbourne lender shocked the markets by announcing a 90pc write-down on its £550m holdings of US mortgage debt, an admission that it AAA-rated securities are virtually worthless. In New Zealand, Guardian Trust said it was suspending withdrawals from its mortgage fund owing to "liquidity difficulties in the market". Hanover Finance - the country' third biggest operator - last week froze repayments to investors. The company said its "industry model has collapsed" as the housing market goes into a nose dive. Some 23 finance companies have gone bankrupt in New Zealand over the last year. It is now clear that the Antipodes are tipping into a serious downturn. Continue at http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/30/cnoz130.xml