Monday, September 22, 2008

Hundreds in HK protests losses in Lehman Minibonds!

"The government should step in. If the government don't pay, the should force the bank to pay," - Marty Chou HK protestor

"In Singapore, we don't need to demand for govt action.

I bet the govt is already squeezing the banks to help Singaporeans" - Lucky Tan

When will the people of HK ever learn? If something goes wrong, you can always leave it to the govt to do the right thing. The same thing that happened in HK also happened in Singapore, but there is no need to organise a protest here in Singapore because MAS is already doing its work demanding answers from the banks who sold these products to retirees. Singaporeans know that they can sit back and everything that can be done for them will be done for them.
These people in HK should learn to trust their regulators and govt. They should be at home watching TV instead of marching under the hot sun demanding the govt do something for them. They should respond to problems the same way Singaporeans respond to problems.
I'm sure MAS is acting right at this very moment - calling in DBS executives and various banks and demanding answers from them for this structured deposit debacle. Although our govt has stakes in banks, they work primarily for the good of the people. We will have our answers soon from our 1st world govt and 1st world civil service. The PAP govt, the People's Action Party, cannot be doing less that what the HK govt is doing for its people.

Hundreds of Lehman investors protest in Hong Kong
The Associated Press
Published: September 21, 2008

HONG KONG: Hundreds of angry Lehman Brothers investors rallied in Hong Kong on Sunday to demand the government help secure their money after the U.S. investment bank collapsed this past week.
The investors, many of them nearing or at retirement age, waved investment papers and chanted slogans outside the territory's government headquarters as they accused regulators of not doing enough to safeguard their interests.
"This is all my money," said Peter Wang, 62, a former furniture store owner who said his entire retirement savings, about 2 million Hong Kong dollars (US$256,000), was tied up in Lehman-backed bonds.
Albert Ho, head of Hong Kong's Democratic Party, which helped organize the rally, criticized the government for not taking more steps to educate investors in Lehman products, including complex bonds tied to the performance of the territory's equities market.
He and other organizers said about 800 people joined the demonstration; police did not offer an estimate.

Billions of dollars in souring debt forced Lehman Brothers Holdings Inc., once the fourth-largest investment bank in the U.S., to file for bankruptcy last Monday amid the world's worst financial crisis in decades.
Responding to growing public ire, Hong Kong regulators contacted Lehman management and met with investors in the bank's bonds over the weekend, the government said in a statement.
Regulators vowed to investigate complaints that local banks which sold Lehman Brothers investment products failed to properly disclose connections to the U.S. company. But they warned investors might recover "substantially less" than the original amount.
A message left with Lehman Brothers in Hong Kong was not immediately returned.
Brian Fong, 45, who works at a private security firm, said he invested about HK$1.3 million (US$167,000) saved over the last 20 years in a Lehman bond purchased through a local bank.
When news of Lehman's bankruptcy broke, he frantically called bank officials for answers. But he said the bank still hasn't said for certain what will become of his investment.
"I feel terrible. I'm afraid I will lose everything," said Fong, adding his wife will have to go back to work instead of caring for their 10-year-old son if they don't recoup their money.
"We never expected this," he said. "I believed it was safe."



Anonymous said...

Just read on the news :

GS and MS are now regulated bank holdings... Who's the biggest winner?

Anonymous said...

Dear Lucky Tan,

I can't agree more with you. HK people after decades of British rule have been Westernised!

HK people have forgotten about CONFUCIUS values a.k.a Asian values. Don't they know that Asian values a.k.a Confucius values are the MOST superior values in this universe. Shame on those Hong Kongers! They are just Bananas.

In Singapore, asian values are all about respecting your elders and leaders. We must respect them because we owe them a living. Our leaders do NOT have to respect us; i.e. the people. That's why we let our leaders and the leaders' family walk on our heads. Without the brilliance of PAP, our mothers and sisters will become maids in other countries.

I hope Singaporeans will never lose their Asian values a.k.a Confucius values even though Confucius is already dead more than 2500 years ago. He is still relevant to Singapore in the 21st century. We do not want our dear leaders to lose face by complaining and whining too much. The poor retirees who lost money in the DBS debacle should just suffer in SILENCE.

Economist with Asian values :)

Anonymous said...

yeah sure.

Reminds me of how DBS bank can bank on the Raffles town club saga, promising a small membership of 5000 and exploding to 19000. Proprietors can draw down millions in fees (I wonder if we ever know how much DBS received in all that)and somehow, all of them, directors, bank promoting the club etc can get away unscathed.
Sure the Singapore government of the day prevented the heartaches and are now doing their best to protect the common citizen.

I love the Singapore Govt. Always there to protect her citizens, with our army, police etc etc

yamizi said...

But if the investors buy investment from Lehman Brothers out of their own greed and not exercise due diligence to check out full details themselves, how can they blame their governments?

Simple logic, ain't sure about something, don't sign it!

Unless you're telling me the HK government forced these people to invest with Lehman Brothers? Cannot be right?

Anonymous said...

Dear Yamizi,

IMHO, the Lehman minibonds was a high risk product marketed/disguise as a safe product.

Bank officers has quota to hit every month. If they can't keep up, they will be out on the streets.

Not all customers got a degree in finance and law to understand the structured products. The brochures were made by professionals but not all the readers are.

The role of the Govt is to act as a referee between 2 antoganists, just like a football match.

It is the Govt's job to lay down the law that is fair for workers and also capitalists.

That is why all the Govts in the world banned Class A drugs.

If cocaine was legalised, then when the country crumbles whose fault is it? The Govt or the people who got addicted or the drug pushers?

Economist with a neutral view :)

Anonymous said...

Dear Lucky,

I beg to differ with you. Don't you think that MAS is reactive to the situation? Did you see the published advice from MAS today - go see your bank if you think you have been mis-represented.
Come on Singaporeans, don't stay within your comfort zone and hoping MAS will settle your problem. In my opinion, it needs prompting too. We need to play an active role to get the attention and the correct perception that we are very concerned. MAS is our financial watchdog and it allowed high risk products to be masked into a "no" risk 'Notes" and "MiniBONDS" product to be marketed in Singapore. Does it have to bear a more substantial amount of responsibility? Whatever action it is taking now, priority goes to how to cover up what it had not done previously. It is plain reactive. Investors brace yourself and help yourself

yamizi said...

Dear Economist,

This is the part I'm not getting it, the people invested willingly, if they are not expert, why commit into it?

They can legalise cocain but it doesn't mean everyone has to have it right?

These are supposedly rich people whom I believe to have rich life experience as well and they are behaving like little children now.

Such is the world.

Daniel Ling said...

Dear yamizi,

I think Economist's point is on the fact that they are prompting a High Risk Product as Low Risk.

Take for example, the young gal who went Lucky Plaza and bought a PSP for 2.6k. Subsequently complained and got back part of the money + complain to CASE, post online to let pple noe of this Bad Selling. CASE also listed the shop as avoid. (I think)

So in current situation,
1) Are the pple complaining? (Yes)
2) Are the pple getting part of the money back? (I think many would get wiped though i sincerely hope not)
3) Got complain to MAS? (Yes)
4) MAS took action? (Reactive, ask u sort it out with bank)
5) Is MAS going to list DBS Bank as a avoid? (LOL, i dun think so)

So base on these, yes, the pple are at their own risk to INVEST, lose money also their own problem. BUT the point here is BAD SELLING, not BAD INVESTMENT.

Read alot but seldom post

yamizi said...

Thanks Daniel, I get the point now.


Anonymous said...

Dear Yamizi,

I'm glad you understand the point that daniel made.

I would just like to clarify something about the concept of "wealth".

Wealth is strongly link to time.

We cannot just say that a person who has $50,000 to invest in lehman minibonds is rich and he should accept his comeuppance.

Case 1:

21 yr old guy invest $50k in lehman bond IS rich.

Case 2:

55 yr old man invest $50k in lehman bond MAY or MAY NOT be rich.

This 55 yr old man earns $2k every month for the past 30 yrs. He leads a frugal life to support his wife and aged parents. This money was part of his retirement sum to support his lifestyle for the next 20 yrs. Bear in mind that this guy is not working anymore, so $50k means alot to him.

It took him 30 YEARS and a LOT of sacrifice to save $50,000.

If this $50,000 is wiped out after 30 years of saving, who is there to lend him a helping hand?

Relevant points:
Sales people love to sell to retirees because
1)got money after years of saving
2)not highly educated
3)easily pressurised


Economist with a heart :)