Thursday, October 30, 2008

Minibonds..and finally a few words from PM Lee....

"It cannot be that I invested and it turned out well, then I'm happy, but if I invested and it turned out badly, then I am entitled to compensation" - PM Lee
"Sir, nobody is asking for compensation simply because it turned out bad. They are asking for compensation because of mis-selling" - Lucky Tan
"Treasury markets have also stayed buoyant, as Singapore remains one of the established leading global FX trading centres. The creation and hedging of structured products have boosted turnover in derivative markets. Singapore now ranks 6th globally, in OTC FX and interest rate derivatives"
- PM Lee, 2004 Speech on Liberalisation of Financial
PM Lee's interview with the Straits Times can be found here. You should read it thoroughly.
When Low Thia Kiang asked in parliament if the financial sector liberalisation resulted in a lack of regulation that allowed these products to enter Singapore and be sold to retail investors, he did not really get an answer from Lim Hng Kiang. If you want to know the answer, it is YES. In his interview with the Straits Times published yesterday, PM Lee reiterated his view that it is basically "Caveat emptor" ..." government should not be making decisions for individuals". His view is there is no need for more regulation for these structured products and it was okay that they were allowed into Singapore and that there is no need for further regulation is necessary to control these products. If you recall, many of these structured products were linked to CDS and CDOs the type of derivatives that caused the current financial meltdown - collapsing stock markets, severe recession, credit crunch, near collapse of the financial system and hundreds of billions of tax payers money around the world to bailout the system. Here we have the Prime Minister saying that there is no need to regulate these products that almost caused the collapse of the financial system and wiped out the lifesavings of thousands of Singaporeans. I wonder how high is his ivory tower is to give a view like that!? It took the HK govt a few days to realise they have blundered and that regulation has to be tightened to further protect investors [Link]. Many countries have regulation that prevented the minibonds from entering their market. Even Malaysian regulators managed to sieve out these products preventing them from causing harm to Malaysians. It is not hindsight to realise that these products were bad...
It took PM Lee one whole month to say something about this matter and what he said was simply disappointing. Again what we see is denial, 'do nothingness', 'can't do better' ....and for that we paid the this govt the highest salary in the world.


Salary said...

A practical and fair way to deal with the issue
This is an edited transcript of the interview Prime Minister Lee Hsien Loong gave journalists on Oct 26 on structured products

a kind of chicken said...

wednesday's papers. Number of taxis have gone down significantly. Lol. We pay more for taxis which are just as hard to get and a large number of cab drivers are driven into unempolyment in the middle of a recession. Great action for the people by the peoples action party.

Pay rise for ordinary ppl will cause inflation, rise in electrical tariff apparently does not.=)

Anonymous said...

of course lah -

liberalise financial markets, more toxic products are sold, then GDP is higher, then all ministers in cabinet will get higher bonuses as top civil servants, their bonus are tied to GDP growth.

Minister Mah has said as much - do we bring in foreign workers (vis a vis Serangoon Garden fiasco) - answer - yes we do, and resolve housing problems after that! - let the GDP grow first - let the social issues take care of itself later on.

Anonymous said...

Yes, he is world class, just like the CEO's of the world class banks, in terms of salary. In terms of wisdom, same same also. I love our gahman's benchmarking class act.

Anonymous said...

MAS is runned by idiots who have little idea of making money without overcharging and raising taxes.

Buy investment products from HK. Consumer protection there is much better over in HK. The govt also has little vested interets to side with businesses that mis-sell products.

Anonymous said...

All sales of financial products should be treated qully. MAS should also deregulate the insurance industry. Let the insurance companies employ, Tom, Dick or Har**,whoever can sell their products as agent without any pre qualifications, why make insurance agents take so many exams? anyway whoever buy a insurance policy, "caveat emptor".

Kaffein said...

Well, since this tragedy began, I did not think the government will do otherwise. So far, their stand is "As long as money still pours into the coffers, you are on your own. Contemplating suicide? I'll give you a nudge too."

Actually, what is the likelihood of people disgruntled and closing their DBS/POSB accounts and moving to another bank? Or having a mass protest like HK did for the government and bank to act?

But then again, it is hard because S'poreans are so brain-washed with their rights removed that it will be hard for them to think otherwise.

It is very disappointing actually.


Anonymous said...

Is there a way to buy HK investment products in SG? This way i will be protected by regulators who place public interest over corporate interest.

Anonymous said...

For the millions dollar salary that we tax payers are paying our PM, is that all he can say after one month of silence ? And only utter useless words ?? He doesn't even know the crux of the problem (ie. mis-selling)and went barking up the wrong tree.

HELLO Mr. PM, time to wake up !! Please justify the world's top PM salary that we are paying you !! Do you have a conscience or is there a big hole in your chest (where the heart is supposed to be) ???

AlphavilleSG said...
This comment has been removed by the author.
Anonymous said...

When there is no competition, no substitute to replace these lifetime positions, the government officials believe that they are entitled to say whatever they want - to protect the way they have acted, behaved.. without consideration on how it impacts on the ordinary Singaporeans.

The arrogance from the government in handling this situation is simply appalling and it shows that they have no hearts for the people.. and still do not understand what is driving these investors to demand for fair compensation.

The government are out of touch with the people on the ground,how they feel, the difficulty with coping with the increasingly high standard of living in SG and shrinking wages/disappearing jobs for the locals. The ministers are only keen to keep the banks/corporates/MNCs happy to keep the economy growing - keep GDP up, so that they can continue to justify their high pay.

Anonymous said...

Should I set up a bank account in HK, just in case?

Do I need to fly to HK personally in order to set up a bank account there?

Daniel Ling said...

Things go bad, he says,
"government should not be making decisions for individuals"

But for the other things that are good for them bad for else. What's the stand? Can we the public decide?

Maybe we should petition for Their Pay to be Reduced, Cost to be Reduced, etc. TBT ah~~

Anonymous said...

Seriously i suggest PM to go for a IQ test to revaluate his salary. I dare him to have that speech in front of the investors