Tan Kin Lian's Blog: Global financial crisis is getting out of control

Friday, October 24, 2008

Global financial crisis is getting out of control

I wish to ask investors to be aware that the global financial crisis is getting out of control. Since the lodging of the Petition 3 weeks ago, the stockmarkets have dropped by 30%.

The timing may be bad for the investors to press the claims at this time. The financial institutions will be quite busy managing their other issues, including the solvency of their main business.

14 comments:

ym said...: the reason for this is :
- the central banks control of interest and forex rates...

- the private banks allowed to print money out of thin air via fractional reserve banking

- the gahmen's itchy fingers of banking bailouts, propping up prices of assets and guiding economic policies; October 24, 2008 2:33 PM
Anonymous said...: The grredy high flyer in wall st should shoulder the major blame for it.
The renumeration pattern encourage those so called "high-flyer" to indulged in high risk, high profit transaction, such as sub-prime, because of their bonus are tied to their earning.
The mooto is "High Risk is not important to me business because the money lost belonged to share holder, what they are interested is the high gain because of the high bonuses"; October 24, 2008 3:07 PM
ym said...: behind the financial market crisis is a damaged real economy...

the real economy was damaged by the policies of the global central banks and private banks..

think of all the residential/commercial property bubbles, business bubbles, shopping-mall bubbles, casino bubbles, palmoil plantation bubbles, luxury collectible bubbles, chinese art bubbles,

think of the misallocated real resources like iron, copper, oil, land, machinery and plant, human capital (ie bright young minds diverted to ponzi-banks to run a charade using voodoo finance)..

we are a poor and subprime economy...; October 24, 2008 3:08 PM
Anonymous said...: I reckon we are only about halfway through this crisis. This is something that the world has never seen before and will not know how to react appropriately. Think that the STI is low at 1800? Think the STI is now low at 1600? A word of caution, investing now is like catching a falling knife. There are still people standing by waiting to enter the markets and no bottom will be reached till these people are also burnt.; October 24, 2008 3:29 PM
Anonymous said...: wait till STI does to 850 (1606 currently)and look at things again..haha has my friends in Farrer Court eblock each got their S$2.1m ?; October 24, 2008 3:54 PM
Anonymous said...: fellow investors, be realistic, be serious on Mr. Tan 's worry (recession),do not expect high % compensation.

Let's hope the 2 institutions come out the offer fast , so enable us to have choice and close the matter.

Let's pray hard the share market recover a bit and the party can give reasonable offer; October 24, 2008 4:28 PM
Anonymous said...: mention here once again

whichever group offered the compensatory package will have to agree NOT to pursue the matter thereafter, meaning the banks will formalise a backend claims to their insurance and to them that is full and final settlement. they consider the entire episode closed, with or without compensation to the rest of the mob, with or without the rest of the mob's agreement. whatever the mob would wish to do is their business, seek legal avenues, seek illegal avenues, they are basically leaving the mob to scream, shout, kick - they are turning their attention to survivability.

With Mr Tan cautionary advice, i am even way more certain, they WONT pay up, possibly even to those they promise to compensate. getting these people signatures is good enough render the mob's case entirely open, if not already void.; October 24, 2008 7:20 PM
Anonymous said...: My personal opinion is since the regulator MAS which is staffed with highly paid talented managers and financial experts failed to take proactive action and control the banks' push into these toxic financial instruments, the government should consider cutting their compensation this year and next year.
Also, it should consider giving secured loans to the affected banks to assist in 100 percent compensation to all bank customers if required, and allow the losses to be partially deducted from future corporate tax, depending on the degree of their negligence.

A commission should be set up to investigate who is responsible for all these mess, and how the banks fell into this pit. Bottom line is to find the causes, to punish the culprits of this debacle, and prevent re-occurrence.

Ultimately, the image of Singapore as a financial centre, the reputation of our financial institutions, the Singapore premium branding, the rights of consumers and the protection of customers' interest are all at stake. We must do better than HongKong, Taiwan and South Korea under such circumstances.

By RTA; October 24, 2008 8:47 PM
C H Yak said...: Precisely, this is also what I perceive the Government is trying to present itself in this crisis. Instead of letting Minibond debacle takes imminent centre-stage, they are portraying to be busy with other issues or aspects of this financial crisis.; October 24, 2008 10:08 PM
Anonymous said...: If the timing is bad, then it is even much worse us for us poor victims!!!!
We hv loss a big sum of money, now harder to find jobs, lower salary, and loss of big sum of principal and interest income.
So how are we going to survive?????
Any one pity us????

Only Mr tan and similar kind heart people are helping us to at least get back some of our hard earned money.
Is it right for us to do so????; October 24, 2008 10:50 PM
bbq said...: I agree with this post fully. Although I would like to clarify that the 2nd sentence in the post seems to insinuate that the markets have declined 30% due to the petition - highly unlikely bah.

Firstly, I do feel sorry for those who have lost money in their investments. Nonetheless, the money is already lost. So investors start on ground zero. My analogy would be:
Imagine you are in epidemic. There's a diesease that is being spread by a certain company, and people have died from it. The company promises to look into the issue, and conduct post-mortems of individuals who have consumed their products, and compensate if necessary.

So people find dead bodies, and try to get the company to do the post-mortem to see if they really died because of that diesease, so that they can get compensation for losing their loved ones.

But truth is, the root of the diesease had long manifested itself in many other forms. And there could be more casualties if this is left unchecked.

Is it more important to stem the diesease, or to do the post mortem?

I keep wondering, what if some other bank fails, despite all the bailouts? Yes deposits are protected, but... In an extreme case, if DBS fails, all those who are still holding on to their high-notes 1, 2, 3, 4 etc are in trouble. High-note 5 investors will not get their compensation either... Then how? I really dunno.

I really am sorry if this is a poor example... Again, I do feel sorry for those who have lost so much, and I understand that the sum of money may be significant enough to warrant many sleepless nights... but perhaps this is the time where we overlook our individual selves, and understand that there is a bigger, and worse picture out there than Lehman...

I hope I do not offend anyone with this comment. It is just meant to be my view...; October 25, 2008 12:16 AM
Raymond T said...: In bad times, everybody loses. Best to wait for the economy to improve before pressing on.; October 25, 2008 1:50 AM
Anonymous said...: If u invest in shares, u set aside that money. By holding it, the share prices would recover sooner or later.
The poor victims need the interest to survive! Now they even lost their principal. That is a different story.
Now many victims are struggled for survival, but many otehrs are more concerned abt "over-reg".
Which one is more important?
why worried abt timing when many are more concern abt "over reg"??; October 25, 2008 7:57 AM
Anonymous said...: The bankers of this era bet that if things go wrong, ah gong (i.e. govt) will have no choice but come to rescue. Also, they can offload the junk mortgages to a greater fool (i.e. retail investors who bought structured investment products).; October 25, 2008 10:57 PM