Originally posted by walesa:
(will not quote your whole post. it's too lengthy )PS : On a sidenote, all investment banks (well, think Goldman Sachs, Morgan Stanley, Merrill Lynch and Lehman Brothers and Bear Stearns before the subprime debacle unfolded which has since claimed 3 of these as independent entities) are highly-leveraged - Lehman was no exception. In fact, the same could be said for other commercial banks with a strong IB presence (i.e. citi, DB, CS, UBS, etc) although they had stronger access to liquidity on virtue of the fact they were deposit-taking institutions (through its other non-IB operations). Clearly, on that very basis, being highly-leveraged is hardly a good enough reason for any reasonable investor to cast aspersions on the way Lehman ran business. After all, was it not what propelled such firms to the pinnacle of the industry (which would have benefitted shareholders and other corporate bondholders prior to the crisis) to begin with?
i will make no effort to change your mentality. you have decided that Lehmen is of no fault, and i will not dispute that anymore, it is of no relevant consequence to do so. This will be my last post but before i end off, i'd like to address some issues you brought up.
Let me first say that with the benefit of hindsight, alot of issues become clear and this one is no different. This particular firm which has 158 years of history, which has lived through the Great Depression, no one expected it to fail. But it will seem to me that the directors and senior executives, in their bid to increase shareholder value, and their pay packet in the process, resorted to scamming tactics in the form of, in this case, 'MiniBonds'. In my opinion, calling the product MiniBonds is in itself a fallacy because it gives the impression of safety, of conservativeness, reliability.
Then you brought up the issue of rating agencies. I agree these rating agencies exist for a reason. That reason was to give investors an indication of how safe these (in this case) 'MiniBongs' are. But you forget that these rating agencies are renumerated by the firm who created the Bongs themselves. As i've said, at that time, no one expected this to happen.
My opinion of the proxies? They deserve whatever is happening to them now. The papers are reporting that DBS is going to have to fork out $80M and I certainly have no qualms with that. I am of the impression that they need to learn (just like everyone else) that everything that glitters is not gold. Exotic deriviatives like this one can be very very complex and although i'm sure that the bankers understood what these Bongs were, i'm not so sure they understood the risks and leverage involved. Why would they care? Their job was to sell a Bong yielding 5%, not understand it.
On a sidenote, i must say that i am impressed with MayBank's prompt service attitude. They were the first to come out and say they will be looking into the needs of the old and uneducated, and look at possible full compensation. But i digress.
The price matter is irrelevant. At that time, 5% per annum on a safe Bong that seemed safe was probably the way to go, but it has been proven wrong now, and the 158 year old firm that existed just 1 month ago has ceased to exist. Even right now, it is being demonstrated that these Bongs are impossible to value by mathematical formulae other than by way of auction.
You claim that it is because of leverage that propelled these firms to the pinnacle of the industry. The question is, how much of these profts belong to retail owners of the products like Bongs? Ethics is not something i want to go into here though, this post is long enough.
In a year, would pure vanilla investment banks still continue to exist? I don't know. hopefully ... but would they still make obscene profits from products like Minibongs, hopefully not.
Originally posted by tinuviel07:
if it's misrepresentation, then you are just unlucky to be duped or whatever.. you can complain all you want and seek avenues for redress.. what i'm saying is a lot of people expect people to clean up the mess for them whenever they get into a sticky situation be it misrepresentation or not..
LOL.. oh yah... go tell this to the old grandpa and grandma who lost their savings.
Tell them in their face.. "oh you so deserve it.. now go collect some cola cans !!"
tsk tsk...
Disgusting lah you... just because you are not affected ... does not means you should spit at their plight.
Originally posted by maxtor:i will make no effort to change your mentality. you have decided that Lehmen is of no fault, and i will not dispute that anymore, it is of no relevant consequence to do so. This will be my last post but before i end off, i'd like to address some issues you brought up.
Let me first say that with the benefit of hindsight, alot of issues become clear and this one is no different. This particular firm which has 158 years of history, which has lived through the Great Depression, no one expected it to fail. But it will seem to me that the directors and senior executives, in their bid to increase shareholder value, and their pay packet in the process, resorted to scamming tactics in the form of, in this case, 'MiniBonds'. In my opinion, calling the product MiniBonds is in itself a fallacy because it gives the impression of safety, of conservativeness, reliability.
Then you brought up the issue of rating agencies. I agree these rating agencies exist for a reason. That reason was to give investors an indication of how safe these (in this case) 'MiniBongs' are. But you forget that these rating agencies are renumerated by the firm who created the Bongs themselves. As i've said, at that time, no one expected this to happen.
My opinion of the proxies? They deserve whatever is happening to them now. The papers are reporting that DBS is going to have to fork out $80M and I certainly have no qualms with that. I am of the impression that they need to learn (just like everyone else) that everything that glitters is not gold. Exotic deriviatives like this one can be very very complex and although i'm sure that the bankers understood what these Bongs were, i'm not so sure they understood the risks and leverage involved. Why would they care? Their job was to sell a Bong yielding 5%, not understand it.
On a sidenote, i must say that i am impressed with MayBank's prompt service attitude. They were the first to come out and say they will be looking into the needs of the old and uneducated, and look at possible full compensation. But i digress.
The price matter is irrelevant. At that time, 5% per annum on a safe Bong that seemed safe was probably the way to go, but it has been proven wrong now, and the 158 year old firm that existed just 1 month ago has ceased to exist. Even right now, it is being demonstrated that these Bongs are impossible to value by mathematical formulae other than by way of auction.
You claim that it is because of leverage that propelled these firms to the pinnacle of the industry. The question is, how much of these profts belong to retail owners of the products like Bongs? Ethics is not something i want to go into here though, this post is long enough.
In a year, would pure vanilla investment banks still continue to exist? I don't know. hopefully ... but would they still make obscene profits from products like Minibongs, hopefully not.
5% yield ah ? haiz...no wonder Singaporeans investors jump on the shaky wagon...
In Singapore 5% yield is big deal.. in USA.. it's chicken feed...
Go compare the CD rates of banks in Singapore and USA.
Originally posted by jojobeach:5% yield ah ? haiz...no wonder Singaporeans investors jump on the shaky wagon...
In Singapore 5% yield is big deal.. in USA.. it's chicken feed...
Go compare the CD rates of banks in Singapore and USA.
ya lor. merrill lynch also made an offer thru UOB not too long ago. 3.5% fixed payout, principal protected. Sold like hotcakes.
Originally posted by maxtor:i will make no effort to change your mentality. you have decided that Lehmen is of no fault, and i will not dispute that anymore, it is of no relevant consequence to do so. This will be my last post but before i end off, i'd like to address some issues you brought up.
Let me first say that with the benefit of hindsight, alot of issues become clear and this one is no different. This particular firm which has 158 years of history, which has lived through the Great Depression, no one expected it to fail. But it will seem to me that the directors and senior executives, in their bid to increase shareholder value, and their pay packet in the process, resorted to scamming tactics in the form of, in this case, 'MiniBonds'. In my opinion, calling the product MiniBonds is in itself a fallacy because it gives the impression of safety, of conservativeness, reliability.
Then you brought up the issue of rating agencies. I agree these rating agencies exist for a reason. That reason was to give investors an indication of how safe these (in this case) 'MiniBongs' are. But you forget that these rating agencies are renumerated by the firm who created the Bongs themselves. As i've said, at that time, no one expected this to happen.
I'd stand by what I said in an earlier post - you're nothing short of being misguided.
Let's set the record straight - whether you think the senior executives are overpaid and underworked is quite another matter altogether. That hardly comes into the picture (if we're going to start a discussion on issues pertaining to the reforms the financial system should undergo, we'd still be here at Christmas).
Another record which you obviously aren't entirely familiar with - Lehman Bros (the firm we're talking about) has only existed as an independent entity for 14 years. While its heritage goes back a long way, the present entity is effectively a spinoff from American Express in 1994. Either way, that's academic and unimportant.
Obviously, I don't think you're remotely familiar with Lehman as a firm and your understanding of its operations is negligible if your posts are anything to go by.
If you need any help in understanding the economies of scale in this entire debacle, the minibonds helped Lehman raise some $500million. Lehman's credit default swap (CDS) settlements are expected to stand in excess of $365 billion (http://www.washingtonpost.com/wp-dyn/content/article/2008/10/10/AR2008101003050.html) and filed for a bankruptcy to the tune of $639 billion - the largest bankruptcy in US history by some distance. So, would your rational mind actually suggest it makes sense to "scam" $500 million and file a $639 billion bankruptcy?
To compound your argument, aren't you being self-contradictory? If even you concede that nobody would "expect this to happen", then how was this actually a "scam"? Your entire argument is hopelessly incoherent to begin with.
For the record, I'm not sure if you're entirely familiar with the modus operandi of rating agencies either. If your conspiracy theories were true and your insinuation (that rating agencies are remunerated by the financial institutions themselves) holds, you might wish to review how Moody's mooted plan to downgrade Morgan Stanley's standings actually impacted the latter's share price. If you haven't got a clue about this matter, http://www.foxbusiness.com/story/markets/industries/finance/moodys-reviews-morgan-stanley-unit-downgrade/ is a good start.
My opinion of the proxies? They deserve whatever is happening to them now. The papers are reporting that DBS is going to have to fork out $80M and I certainly have no qualms with that. I am of the impression that they need to learn (just like everyone else) that everything that glitters is not gold. Exotic deriviatives like this one can be very very complex and although i'm sure that the bankers understood what these Bongs were, i'm not so sure they understood the risks and leverage involved. Why would they care? Their job was to sell a Bong yielding 5%, not understand it.
On a sidenote, i must say that i am impressed with MayBank's prompt service attitude. They were the first to come out and say they will be looking into the needs of the old and uneducated, and look at possible full compensation. But i digress.
This is entirely irrelevant to Lehman itself. It's a matter between them and the retail investors. Doesn't address whether Lehman is culpable.
The price matter is irrelevant. At that time, 5% per annum on a safe Bong that seemed safe was probably the way to go, but it has been proven wrong now, and the 158 year old firm that existed just 1 month ago has ceased to exist. Even right now, it is being demonstrated that these Bongs are impossible to value by mathematical formulae other than by way of auction.
You claim that it is because of leverage that propelled these firms to the pinnacle of the industry. The question is, how much of these profts belong to retail owners of the products like Bongs? Ethics is not something i want to go into here though, this post is long enough.
In a year, would pure vanilla investment banks still continue to exist? I don't know. hopefully ... but would they still make obscene profits from products like Minibongs, hopefully not.
What incoherent garb is this? If the price matter is irrelevant, what exactly are you investing in? What financial product is tangibly valued by strict mathematical calculations and financial models without taking into consideration market demands? By your logic, aren't all forms of financial investments (including equities) effectively scams since these prices too could be artificially driven to levels that do not accurately reflect the real value of the entities they represent?
Isn't the whole chunk a self-contradictory piece of delusional masterpiece? Any sane, rational investor buys a stake in the relevant financial product (in this case, the financial institutions since they dealt with Lehman) in the understanding that they're acting in the best interests, understanding the risks they're exposed to - insolvency notwithstanding.
To illustrate the lunacy of your argument, Lehman profitted from the minibonds as much as any firm's ability to raise capital through launching IPOs. So, are IPOs scams as well?
Perhaps, your interest would be better served if you had a more thorough understanding of the products you're talking about as opposed to simply babbling about some nonsensical garb fuelled by news delivered by a questionable press.
Originally posted by maxtor:ya lor. merrill lynch also made an offer thru UOB not too long ago. 3.5% fixed payout, principal protected. Sold like hotcakes.
You're kidding right ?.. geesh.. that's such a rip off.
It's like ML just collect money from SGreans and put them in a CD bank in USA..
Then instead of returning the full CD rate.. they pocket part of the interest..
Principal guarantee is actually FDIC ... issit ?
What crap leh ???
wah lao.. now I want to vomit.....
Originally posted by jojobeach:LOL.. oh yah... go tell this to the old grandpa and grandma who lost their savings.
Tell them in their face.. "oh you so deserve it.. now go collect some cola cans !!"
tsk tsk...
Disgusting lah you... just because you are not affected ... does not means you should spit at their plight.
Just because they are in very poor plight, does not mean they earn the rights to compensation. Take note the difference between rights and empathy, which I believe is the basis of our argument. =)
Originally posted by dinky1409:
Just because they are in very poor plight, does not mean they earn the rights to compensation. Take note the difference between rights and empathy, which I believe is the basis of our argument. =)
Ah ?.. LOL.. so even if it is misrepresentation.. they also not entitle to compensation ah ???LOL..
Harlow.. I hope you are not an aspiring lawyer.. ..if not.. cham liao lorr....
Originally posted by jojobeach:Ah ?.. LOL.. so even if it is misrepresentation.. they also not entitle to compensation ah ???LOL..
Harlow.. I hope you are not an aspiring lawyer.. ..if not.. cham liao lorr....
Yes, if it is misrep, they earn the rights. I never said they don't. Read my previous posts. But misrep is not as easy as you can establish. Just because they are elderly and retired, it does not become an automatic case of misrep. It still has to be proved. Other than that, what entitlement are you talking about?
Oh no, I'm not an aspiring lawyer.. Would appreciate it if we can discuss this in proper manner as maxtor and walesa had done so. Don't think there's a need for arrogance, imo. =)
Originally posted by dinky1409:Yes, if it is misrep, they earn the rights. I never said they don't. Read my previous posts. But misrep is not as easy as you can establish. Just because they are elderly and retired, it does not become an automatic case of misrep. It still has to be proved. Other than that, what entitlement are you talking about?
Oh no, I'm not an aspiring lawyer.. Would appreciate it if we can discuss this in proper manner as maxtor and walesa had done so. Don't think there's a need for arrogance, imo. =)
LOL... where got time for arrogance..
Let me tell you this lah...Singaporeans are being treated like sheep ok?
Not only the gov are sacrificing them.. even financial institutions are taking advantage of them.
If you don't mind.. my response was to Tinuviel's postings.. about people expecting others to clean their shit.
Showing a little bit of empathy ain't gonna kill ya.
If you think Tinuviel's posting ain't reeking of arrogance.. then dude.. you're doing double standards.
I would suggest you sit through at least one presentation by a sales person.. then you will understand what this is all about.
Ofcors.. if you are just a student.. I doubt those well heeled .. suited sales people will even bother wasting their time on ya.
Originally posted by jojobeach:LOL... where got time for arrogance..
Let me tell you this lah...Singaporeans are being treated like sheep ok?
Not only the gov are sacrificing them.. even financial institutions are taking advantage of them.
If you don't mind.. my response was to Tinuviel's postings.. about people expecting others to clean their shit.
Showing a little bit of empathy ain't gonna kill ya.
If you think Tinuviel's posting ain't reeking of arrogance.. then dude.. you're doing double standards.
I would suggest you sit through at least one presentation by a sales person.. then you will understand what this is all about.
Ofcors.. if you are just a student.. I doubt those well heeled .. suited sales people will even bother wasting their time on ya.
Yeah yeah, the arrogance part wasn't suppose to be aimed at you only. Meant to be for everyone in general, perhaps I phrased it badly.. =P
Well, I know where your coming from. Unfortunately, that happens almost everywhere. That is sales. Asymetrical information is inevitable, and the educated and knowledgable ones would probably be not spared as they are presumed to know what they are dealing with. But nevertheless, we can't really say every transaction that sales people do are misreps transactions. But as I said, if the court says so, then rights are established and I rest my case. Otherwise, empathy does not count for an entitlement. On that note, I do support empathy. Sure why not, a kind gesture of goodwill from banks. But don't act like you are entitled to it if your not. That's basically my point. =)
Originally posted by dinky1409:Yeah yeah, the arrogance part wasn't suppose to be aimed at you only. Meant to be for everyone in general, perhaps I phrased it badly.. =P
Well, I know where your coming from. Unfortunately, that happens almost everywhere. That is sales. Asymetrical information is inevitable, and the educated and knowledgable ones would probably be not spared as they are presumed to know what they are dealing with. But nevertheless, we can't really say every transaction that sales people do are misreps transactions. But as I said, if the court says so, then rights are established and I rest my case. Otherwise, empathy does not count for an entitlement. On that note, I do support empathy. Sure why not, a kind gesture of goodwill from banks. But don't act like you are entitled to it if your not. That's basically my point. =)
So is "entitlement" a chicken or an egg ?
Do you pursue a recourse before or after you feel entitled to it ? LOL...
Originally posted by jojobeach:So is "entitlement" a chicken or an egg ?
Do you pursue a recourse before or after you feel entitled to it ? LOL...
If it is proven not to be a case of misrep, I don't see where the entitlement comes from if there is still any.
Originally posted by dinky1409:If it is proven not to be a case of misrep, I don't see where the entitlement comes from if there is still any.
LOL....go figure it out yourself lah.
Originally posted by jojobeach:LOL....go figure it out yourself lah.
ok =P lawls~