Found an interesting article (below).
What a way to put it. Hope things will cool down a little now that DBS has offered to compensate the holders.
In spite of my initial misgivings of the government’s handling of the Lehman minibond fiasco, I must applaud them for bringing about a faster than expected closure with the latest announcement by Hong Leong Finance, Maybank and DBS to compensate “vulnerable” buyers for their losses.
If the outcome was expected, the government certainly did not betray its intention during the last parliamentary sitting in which Deputy Trade and Industry Minister Mr Lim Hng Kiang defended MAS’s approach to the fiasco so far and urge the investors to be patient.
What makes the banks come to such a collective decision in double-quick time when they have been dragging their feet during the past 2 weeks is anybody’s guess.
Is it due to a possible class action suit mooted by some investors or the endless brickbats hurled by netizens and bloggers at MAS for its impotence and inaction in comparison to the Hong Kong Monetary Authority ?
Irregardless of the real reasons behind this sudden reversal of fortunes, the affected minibond investors, especially retirees who lost their entire life-savings should heave a sigh of relief by now.
Read rest of article here:
I disagree with the banks' decision to buy back the minibonds. If I'm a share holder of the banks involved, I would initiate a legal suit against eroding shareholder's interested; buying back means that the bank are taking on the losses as a result of bad investment turnout.
Low Risk does not mean No Risk. The investors should understand this. The prospectus are printed in 4 languages. Upon signing the agreement, the bank managers will call up the investor and confirm their decision. There is not mis-presentation here. A year ago, if you would say that Lehman would be bankrupt, you would be crazy. Lehman was bigger than all the banks in Singapore put together.
The decision to buy back minibonds now opens the floodgate to many other issues. How about other investors who lost money during this economic downturn? Are the banks going to compensate them too? Lehman is not the only bank or company that went bust.
With the banks taking on the losses up to the tune of $53million USD, where is this money going to come from? The bank's profit? Then who is going to compensate investors for their losses in earning per share?
What about the legal aspect? This goes to further proof that in Singapore, legal rights will always give way to public outcry.
This is a sad day for Singapore.
the winners is Lehman Bros.
u will never know who is the mastermind behind all
this.....
When u know it will be too late
you will be left with nothing
MBA will teach u how and why
initially i strongly supported the people when i heard that many of them lost their life savings. this money is hard earned through years of blood and sweat, and the government should do something to help.
however now when i start thinking of it, i am of the opinion that these people should not be bailed out. why? because this will create an incentive for everyone to invest into products that promise the highest yield. should the organisations fail, there will be a bailout anyway.
there should always be a balance struck between risk/reward. fixed deposits don't give you low interest rates for any reason other than the fact that they offer low risk (and liquidity). taking the risk means you bear the consequence. if we bailout these people who have invested in the minibonds, getting 5% p.a. for the past few years, and getting their principal sum back, we are not sending a good message to the people. neither are we being fair to the people who have believed in fixed deposits.
Originally posted by anonymous_dickhead:I disagree with the banks' decision to buy back the minibonds. If I'm a share holder of the banks involved, I would initiate a legal suit against eroding shareholder's interested; buying back means that the bank are taking on the losses as a result of bad investment turnout.
Low Risk does not mean No Risk. The investors should understand this. The prospectus are printed in 4 languages. Upon signing the agreement, the bank managers will call up the investor and confirm their decision. There is not mis-presentation here. A year ago, if you would say that Lehman would be bankrupt, you would be crazy. Lehman was bigger than all the banks in Singapore put together.
The decision to buy back minibonds now opens the floodgate to many other issues. How about other investors who lost money during this economic downturn? Are the banks going to compensate them too? Lehman is not the only bank or company that went bust.
With the banks taking on the losses up to the tune of $53million USD, where is this money going to come from? The bank's profit? Then who is going to compensate investors for their losses in earning per share?
What about the legal aspect? This goes to further proof that in Singapore, legal rights will always give way to public outcry.
This is a sad day for Singapore.
you should go and talk to those investors before you sprout your nonsense here.
"in sg, legal rights will always give way to public outcry" you must be hallucinating! just give us an example.
Do you not understand basic English or are you a complete idiot?? The bank's decision to buy back the Lehman minibonds is already proof that the Banks are giving way to public outcry.
Why don't you proof to us that the investors are really being con into buying Lehman before sprouting your nonsense here?
Originally posted by noahnoah:
u will never know who is the mastermind behind all
this.....
When u know it will be too late
you will be left with nothing
MBA will teach u how and why
Depend, some got MBA but still very stupid, there are already some examples here. Some MBA peoples are argueing over a empty vessel, spilled milk and disposed rubbish.
FYI, Most of the Uncles who visit my pub are MBA peoples
i will be real surprised if the banks decide to pay back the losses.
Originally posted by angel7030:
Depend, some got MBA but still very stupid, there are already some examples here. Some MBA peoples are argueing over a empty vessel, spilled milk and disposed rubbish.
FYI, Most of the Uncles who visit my pub are MBA peoples
George Bush graduated from Yale and has a MBA from Harvard.
Originally posted by anonymous_dickhead:George Bush graduated from Yale and has a MBA from Harvard.
My Uncle Noah also graduate from Harvest, he holds an MBA
i.e. Married But Available title
I still feel the retirees such as the granny who lost S$400K should be compensated partially at least, otherwise what are they going to live on ?
Originally posted by Ramseth:I still feel the retirees such as the granny who lost S$400K should be compensated partially at least, otherwise what are they going to live on ?
Really interesting points mentioned by the forumners here that highlight some of the concerns that has been going on for the past few weeks..
Ramseth, your concerns for the retirees are without a doubt a notable one. But nevertheless, what kind of consideration are we giving here in trying to establish a decision? Should empathy dominate in decision making?
Some argued that retirees don't know what they are really getting themselves into when signing the contract. But were they forced at gun-point? Were they sourced out and then force to sign? Perhaps, maybe with their marketing gimmicks, they manage to 'psycho' these retirees even though they don't know much. But if it is according to the law, then it is plain bad luck on business grounds right? On the worst note, if the retirees feel they have been tricked, then it is a different case altogether. It could be a case of con. But no right? What is the point of having the law and a contract if, empathy overrides them in the case of cumulative outcry? If the retirees would have made huge huge profits out of their investment instead, would they be forced to give away some of their profits to the bank?
Compensation by the banks if need to be should be given on the basis of corporate social responsibility and not something out of blame.
Sympathize with them we can and we should, but to the extent of saying that they deserve something back in the form of compensation should be frowned upon in my opinion.
Mere sympathy alone is scant consolation for these retirees.
Imagine if you lose your entire life-savings over night ? Concrete actions need to be taken like compensation. Even the investors themselves admit that they will be relieved to be able to get part of their savings back. Not many are expecting to get their principal sums intact.
To me, this boo boo proved :
. about 10,000 Singaporeans TRUST Blindly, in this case. How many more who trust blindly are undiscovered because they do not invest?
Lesson learnt : From now onwards , all of us must learn and practice QUESTIONING. ALWAYS question. I notice singaporeans no gutsy enough to question. no no why. fear? Never TRUST anyone when he cannot give you a black and white of what he said. Some may think this is too much. But then maybe they have not suffered like these investors before. Also, no one owes businessmen a living. No Free Lunch, remember?
Eg. when some tom dick or harry promise you rebates if you buy his product, you make sure he can write it down in the contract and sign on it. If he says he promise you More Good Products, you ask him to prove this by signing on a contract containing this statement. If he says no more price hikes, you may sure he can produce a contract that indicates that clearly and signs it.
If everyone cooperates and practise the above, I am sure businesses will be pissed but they cannot do anything about it if all consumers play it smart. We need a Union-like organization for Consumers.
They throw you a thick Prospectus filled with bombastic words and legal or contractual or accounting or finance terminologies and you sign on the dotted line? When you sign, you are actually admitting that you understand everything and accept all that is said in the contract!
If a consumer has to bare so much responsibility, then I think many would need to engage lawyers, accountants, finance experts and english-chinese translators BEFORE they can purchase any financial product - this means businesses will die.
So, I believe consumers should be protected more. Else, people should be told clearly the worst case scenario before any sale can be allowed by law. The system appears to me to be slightly biased to protect the businessmen, don't you think?
Rich becomes richer?
Originally posted by Ramseth:I still feel the retirees such as the granny who lost S$400K should be compensated partially at least, otherwise what are they going to live on ?
I don't know about you but I do not know many old people who have $400k to invest. These people are not your ordinary weak and helpless retirees. They probably live in a landed property with a lot more money elsewhere.
Life experience has taught me it is dead wrong to stereotype old people as nice, pitiful and helpless.
i am not sure about this, but i've heard that the minibonds were offered to DBS treasures customers, = people with more than $200K assets under management. can anyone clarify? cos if it's true, it means that these people are actually quite rich in the first place.
now that this kind of thing has happened, it is normal for people to feign ignorance and absolve themselves from responsibility. im not saying that all of the people who lost their money in this fiasco are like that, but the smart thing to do would be to say you didn't know anything and that the bank relationship manager didn't explain everything to you.
Originally posted by Ramseth:Mere sympathy alone is scant consolation for these retirees.
Imagine if you lose your entire life-savings over night ? Concrete actions need to be taken like compensation. Even the investors themselves admit that they will be relieved to be able to get part of their savings back. Not many are expecting to get their principal sums intact.
What rights do they have to deserve such compensation? They should not be, by right, entitled to compensations. If need to be, it will be on the goodwill from the banks. That's my opinion.
Originally posted by dinky1409:What rights do they have to deserve such compensation? They should not be, by right, not entitled to compensations. If need to be, it will be on the goodwill from the banks. That's my opinion.
totally agree..
life is never fair, if you haven't learnt it by now. it doesn't differentiate between losing 10K or losing 400K of your money. if you have someone to fight for you, good for you.. if not, it's perfectly normal.. it's not a right for people to compensate you whenever you are in a losing position..
Originally posted by maxtor:i am not sure about this, but i've heard that the minibonds were offered to DBS treasures customers, = people with more than $200K assets under management. can anyone clarify? cos if it's true, it means that these people are actually quite rich in the first place.
now that this kind of thing has happened, it is normal for people to feign ignorance and absolve themselves from responsibility. im not saying that all of the people who lost their money in this fiasco are like that, but the smart thing to do would be to say you didn't know anything and that the bank relationship manager didn't explain everything to you.
So.. you're saying it's ok for the poor to feign ignorance and absolve themselves from responsibility ?
Dude.. do you know that the product may be marketed to people with bigger assets..
There's also the small time investors buying up the products ? These people are your grannies and grandpa with more than 200K RETIREMENT MONEY .... so they are not deserving of compensation ????????
What kinda screwed up logic is this ?
So punish the rich and save the poor... ? Hope you'd never ever get rich then dude.
Originally posted by tinuviel07:life is never fair, if you haven't learnt it by now. it doesn't differentiate between losing 10K or losing 400K of your money. if you have someone to fight for you, good for you.. if not, it's perfectly normal.. it's not a right for people to compensate you whenever you are in a losing position..
Excwees mee... you know what is the meaning of misrepresentation ?
If a salesman convinced you that you are getting a cow.. instead you end up with a donkey at your door.. are you going to say you shouldn't be compensated for a refund?..
Wow wee... our world is a strange place to live..
Originally posted by jojobeach:So.. you're saying it's ok for the poor to feign ignorance and absolve themselves from responsibility ?
Dude.. do you know that the product may be marketed to people with bigger assets..
There's also the small time investors buying up the products ? These people are your grannies and grandpa with more than 200K RETIREMENT MONEY .... so they are not deserving of compensation ????????
What kinda screwed up logic is this ?
So punish the rich and save the poor... ? Hope you'd never ever get rich then dude.
no. what im saying is that the richer people should have a higher sense of financial literacy and understand that there is no free lunch in the world. im still not sure if it was marketed to DBS treasures customers, that's what i've heard.
and when situations like this happen, the way to go is to feign ignorance and say that you didn't know this, you didn't know that. again, im not saying this applies across the board, but i would say its typical.
i've said that there is always a risk/reward ratio in investments. people tend to use at interest returns and tenure of investment as considerations, without considering the risk. on hindsight it would definitely seem 5% was not worth the risk taken, but 1 year ago no one would have expected a 158 year old investment bank to file for bankcruptcy.
i think essentially here, if it is a case of misrepresentation, then perhaps, it is to be brought to the court and hence, it becomes a matter of rights. But right now, many people are putting across the point that retirees with life savings are at a loss and that they should be compensated, but on what grounds? It seems to me it is mere empathy and if empathy is good enough to earn you compensations in times of loss, wow, we just found a new way of hedging our risks.
However, if it is prove to be a case of misrepresentation, then its a different case altogether. The retirees might have a right to compensation.
i agree that there definitely would be cases of misrepresentation and mis-selling. alot of the time bank relationship managers have their own interests at heart, not perfectly understand the product they r selling, etc. etc. but now EVERYONE is playing the same tune, claiming to have no knowledge about this product and it's risk. don't you smell a rat?