Today we examine a couple of recent stories from Fantasyland - otherwise known as Wall Street. Seven of America’s largest banks repaid their TARP borrowings to the US Treasury yesterday, in the process providing one more occasion for hopeful investors to proclaim the end of the credit crisis.

The details of the repayments were as follows:

• Morgan Stanley (NYSE:MS) repaid $10 billion

• Goldman Sachs (NYSE:GS) - $10 billion

• BB&T (NYSE:BBT) - $3.1 billion

• US Bancorp (NYSE:USB) - $6.6 billion

• Bank of New York Mellon (NYSE:BK) - $3 billion

• Capital One (NYSE:COF) - $3.57 billion

• American Express (NYSE:AXP) - $3.39 billion.

Lost in the euphoric brouhaha over the TARP repayments was the dispiriting news that Standard & Poor’s had downgraded the credit ratings of 18 large American banks, including one of the seven that repaid its TARP loan!

Incredibly, the US Treasury deemed Capital One sufficiently healthy

Worldwide indexes reclaim that losing feeling,  The skinny on those TARP repayments and two curiously conflicting assessments,Four factories for one McMinimum Wage house and plenty more…

“Are things getting worse or are things getting better?” we wondered aloud in yesterday’s edition of the Rude Awakening.

In today’s edition, we provide a few answers – well, not answers, really…just observations from you, the Rude readership. In the column below, we present a few real-world anecdotes from Rude Awakening readers. This narrow sampling of economic observations is hardly scientific, but it may be illuminating nonetheless.

Before we get into these real-world stories, let’s examine a couple of recent stories from Fantasyland - otherwise known as Wall Street. Seven of America’s largest banks repaid their TARP borrowings to the US Treasury yesterday, in the process providing one more occasion for hopeful investors to proclaim the end of the credit crisis.

Shareholders Association Chairman Bruce Sheppard has lashed out at the wrong target as far as the Hanover Finance debacle is concerned.

In today’s Dominion Post he called Hanover Finance investors “dumb wits”, “idiots” and “stupid lunatics” for supporting the debt restructuring proposal.

Sheppard should have directed his outburst against independent Chairman Greg Muir, PricewaterhouseCoopers, the Securities Commission and the company’s auditors. Maybe he is peeved because Hanover’s investors voted against him asking more than one question at Tuesday’s meeting.

Investors voted in support of the debt restructuring because it was recommended by Muir and PricewaterhouseCoopers. It was also effectively endorsed by KordaMentha and the trustee, Guardian Trust.

Investors usually comply with the recommendations of independent directors and their advisors while Hanover Finance investors were also attracted by the proposed repayment schedule shown below. No repayment programme was offered under the receivership alternative.

The difficulties at Hanover Finance and United Finance highlight once again the problems associated with poor corporate governance, related party loans and inadequate investor protection.

Hanover has always had a large amount of related party loans, some of which are to companies within the group and others to external organisations owned by Mark Hotchin and Eric Watson.

Five years ago Hanover Finance had $66.4 million or 15.5% of its total loans and advances outstanding to external property companies owned by Hotchin and Watson. These large related party exposures have made sophisticated investors wary of the group, particularly as investors in Watson’s NZX listed companies have not performed well.

When Greg Muir joined the Hanover Finance board in February 2006 it looked as if these related party loans would be slashed. This was true in the short term but related party loans