Tan Kin Lian's Blog: Investors should not be compensated

Tuesday, October 21, 2008

Investors should not be compensated

Dear Mr. Tan Kin Lian

I would have never drive in a F1 vehicle unless I make sure that I am thoroughly trained in the mechanics and the operation of the specialized automobile.

I wouldn't dare to tread into a dense forestry unless I am well equipped with navigational tools and go though training in advanced topographical skills.

I wouldn't also dare to swim in the deep sea, choppy waters unless I am well sheltered within a shark cage.

Why would any one in the first place, invest in a financial instrument when they have no idea of the underlying principles and functionality of the product?

I can probably think of one word, however harsh it may be - greed. The greed of potential high returns, and indeed this greed has returned to haunt those who have no idea what they were buying in the first place.

Never mind what the bankers says, never mind if there were any misrepresentations, I wouldn't even place a cent of my hard earned money (and I shudder to think of those retirees who placed in their entire life savings) into something that I do not understand.

Please do not get me wrong. My eyes wept for those whom I read in the newspapers who have lost a huge chunk of their life savings into the Minibonds, DBS high notes series etc. They have worked hard to save their money and its almost gone following the collapse of financial institutions in the United States. Some of them, though hard they may slog for the rest of their lives, will not see this kind of money, again.

While I feel nothing but pity for these poor souls, is it fair to ask the rest of us who did not invest, to support this petition and ask DBS, whom all Singaporeans have a stake in, to compensate the investors? I ask in reverse that if the US financial institutions did not fail, the sun shining brightly as ever - when these minibonds investors collect their quarterly payouts and high returns, how will it benefit the rest of us?

While our views may differ, I applaud your efforts in raising the awareness of mis-selling that are so rampantly found in our banks, and providing a voice for Singaporeans when it matters.

My views as a man on the street

Simon Chan

REPLY
Dear Simon Chan

I suggest that you read the views of the investors expressecd in:

www.tankinlian.blogspot.com
www.theonlinecitizen.com

I also suggest that you attend my meetings in Speakers' Corner, Hong Lim Green, on Saturdays 5 to 7 pm.

Can you tell me your age? and occupation?

48 comments:

Anonymous said...: Dear Simon,
I think you should watch the show GETREAL on 20 Oct 08, ask mediacorp for date of rerun. For your information even professionals are affected let alone the ignorant layman. The whole FI inclusive of independant FA need to be shaken up. Most of these companies are profit driven and when it comes to profit, it is quotas for the 'poor RMs'. You don't hit target 'out' you go, just like in the insurance industry. So what to do as RMs, forced or 'missell'. Simon, by now you should be aware how the industry works.
Mr Tan, you will be getting more emails/comments about your action. Just ignore them and move on. Singaporeans are backing you all the way in this course of action. As we can see even in Parliament, opposition MPs cannot do much. Maybe should proposed to the Bank, pay-up 100% we close case and let MAS clean their own mess.; October 21, 2008 5:58 AM
Anonymous said...: Dear Simon,
lease do not state that your view is "as a man on the street" as you are no man lah!

Which part of the word mis representation that you dont understand?; October 21, 2008 6:12 AM
Anonymous said...: Simon,

Despite all you seem to know, trust appears to be absent in your live and you must learn pretty fast that there are certain times we just need to trust someone.

So are you saying that you won't travel in an aeroplane unless you know how to fly one?; October 21, 2008 7:29 AM
Anonymous said...: Mr Tan, will you be at Hong Lim this coming Saturday again? Or have I missed all of the talks?; October 21, 2008 7:39 AM
Monsoon said...: I hope Simon is for real - For those of us who goes into the stock market, with or without full understanding, everyone who lost during this crisis, lots of money, I have not heard of a single one investor asking the government for help for full or partial refund. Does Simon understand this minibond is different, there is obviously misrepresentation, and for a slightly higher return, the unwary investors are suddenly faced with a big or complete loss of his principal. Those highly paid government ministers, scholar mandarins are not stepping in to help, just wash their hands off by saying they have run some moneysense program to educate the investors already, so they are not responsible?

It is very easy for MAS or our MP and now Mr Simon to try to highlight these investor "Greed" - this is adding insult to injury.; October 21, 2008 7:54 AM
Anonymous said...: Hello! Who are you? Please tell us what work you do, age, financial background. Do not pass idle remarks. I think you are a well-fed, armchair critic. I think you are one of those driving a Ferrari or Poche, well-fed by a rich father or mother. Show your face and background and we can then take what you say more seriously. Mr. Tan, you do not need to publish words from smart Alec if he or she doesn't identify himself.

For all you know, he is working for the FIs as RM or CEO and are under stress right now. He is trying to white wash his misdeeds with one broad brush.; October 21, 2008 7:59 AM
Anonymous said...: Simon Chan, It seems that you are either stupid or ignorance and donot read newspapers.
- Do you know that many married women found out that their spouse are actually married???
- Do you know that there are one room/house that are rented to many people and end up none of them get to stay in after paying the deposit??
- Do you know what is the meaning of "hanging got head but selling dog's meats"??
- Do you know how many people especially babies die due to the milk scandal??
The above are example that betray the word trust and if you do not have trust, I do not know how you can survive. If you go to hawker centre and order a plate of fried rice, do you actually see how the hawker fry the rice????; October 21, 2008 8:02 AM
Anonymous said...: Simon, We are now just like trapped in the snow storm, if you want to help, please send us charcoal and do not send us ice !!!! How heartless are you !!; October 21, 2008 8:18 AM
Anonymous said...: Many people still do not fully understand what we faced unless they go through samenthing.

We are CHEATED!

IT is not a correct or wrong investment decision. To buy milk powder for baby is nothing wrong. IF the milk powder is toxic, do buyers need to take responsibility for babies death? Simple as that, but when it come to financial products, people who are not involved even can not understand the whole story, how could we exepct they make any correct opinions?; October 21, 2008 8:38 AM
Anonymous said...: If simon chan is right only 1-2% of Singaporean will be able to invest and probably includes simon himself.
Probably simon doesn't have insurance too because I don't think he knows enough insurance to go in by himself.
He probably may not see a doctor because he doesn't know enough to trust the doctor.
He has to be an all rounder in order for him to access the amenities he needs with confidence.
Lastly , he is talking cock.; October 21, 2008 8:51 AM
Anonymous said...: I don't think those investors invested in Lehman relateds notes are greedy.

But it is also hard to believe that they are not aware that there are risks (no matter how remote it was).

I urged Mr. Tan to consider also the MORAL HAZARD by bailing out these investors.

These issues should be settled fairly to both parties.

We should prevent MORAL HAZARD by bailing out investors.; October 21, 2008 8:52 AM
Anonymous said...: Dear Simon,
I believe you are a DBS shareholder. Perhaps you are sad that the price of DBS shares has gone down. Well, since you are such a careful investor, I am sure you are aware that buying shares is even more risky than in buying bonds.; October 21, 2008 8:53 AM
Anonymous said...: If we are "GREEDY", will we placed our whole life savings for just a 5% return ? Please use your BRAIN to think before you pass such uncompassionate remarks! I also buy shares that have higher risks but also may comes with higher returns. But at least we are aware of the RISKS and willing to take responsiblities. Are you aware that those put their hard earned $$ in Jubliee Series 3 were informed the redemption value is ZERO ? So is the 5% against the 100% of the principal sum invested not consider all these TOXIC products as HIGHER RISK than shares ???; October 21, 2008 9:02 AM
Unknown said...: I was one of the original recipient of Simon's email which was BCC to me. In his email, he was wondering aloud if we should support the petition and if more prudence could be exercised on any investor's side before they place in their money.

So by changing the originator's subject from "Should we support the Hong Lim Petition?" to TKL's "Investors should not be compensated". Aren't you Mr Tan, equally guilty of misleading your readers?

PY; October 21, 2008 9:03 AM
Unknown said...: This isn't really a comment on this specific post, but the entire issue.

It's really interesting. Bear Sterns was allowed to be bailed out. AIG was considered to be "too big to fail" but Lehman Brothers was allowed to fail as an example. I think it was partly allowed to fail due to the personality of the chief (from what I've read his a bit unpleasant, to say it politely).

I think allowing Lehman Brothers to fail has really demonstrated how the world is flat and how interconnected we all are. The regulations in the USA have affected the auntie & uncle investors in Singapore. Due to lax regulation in the US, all this shifting of funny money took place.

I'll admit it. I never would have thought Lehman Brothers would fail, and considering it was called a miniBOND, with a relatively low rate of return, I would have considered it a safe investment.

So is the US government and regulator part of this debacle? I think so. Too bad we can't get them to give the investors some money.

I hope to in the future, that regulation will be in place that if a company fails, it is seen from afar and can happen gently. We need to stop privatizing profits and nationalizing losses.; October 21, 2008 9:31 AM
Anonymous said...: Simon:

If you are right, then we should not send the rapist to court, or put a robber in jail. Because if they did not rape or rob, the victims would be fine, but that does not help you in any shape and form.

Your have a twisted view on life, to say the least.; October 21, 2008 10:00 AM
Anonymous said...: I believe this guy is a bank investor.

As a Bank Investor, it is your own responsibility to assess the bank's business practise and the bank's management team to see if they are doing things rightly and making their fees/money correctly.

If the bank did something wrong and need to refund to clients, as investor you can only blame yourself for not taking these operational risk into consideration. You shld never blindly trust the glossy reports put up by the management without looking at their character/desire.

Anyway that is not to say anyone has did anything wrong. But your premise of investment is completely haywire!

DT; October 21, 2008 10:16 AM
Parka said...: Here we have another guy who doesn't understand the context of the situation. Those basic general investing tips I can also write a few pages. I'm tired of people dispensing general investing knowledge like they are in the industry.

What we have here is not just mis-selling, it's misrepresentation. People had invested in not what they were led to believe it was, a bond.

And what is greed? Is it 1% more interest more than CPF returns considered greed? How about 2%? 3%?; October 21, 2008 10:25 AM
Anonymous said...: Simon, I agreed with your view. Greed is the main cause of the whole problem. It will be a lesson for all.

Tan CC; October 21, 2008 10:28 AM
Anonymous said...: Good on you Simon, you have my support. These bellyachers simply want to cover their own losses. Buyers beware. Obviously, they have not done their homework so now they want others to give them a distinction when they have not earned it.

As MM Lee once said, NOTHING IS FREE. So why should we give them a free pass for their own ignorance?

Mis-representation is only the convenient excuse they give for 'not doing your homework'. I hope MAS stop this meddling in free capital markets as it will send a wrong signal to financial institutions.

People tell you something and you are foolhardy enough to believe in it without doing your own homework yet you want to get your moeny back. Then can everyone who have lost money in a flat sale or stock market trade as for money back because there was 'mis-representation' by the market data? If the answer is yes, then let these bellyachers get their money back - but MAS be prepared to fork out money to reimburse all those who have made opportunity loss in flat sales and stock trades.

Equality for all Singaporeans and not only the ignorant and vocal ones.; October 21, 2008 10:33 AM
Anonymous said...: Hi Simon, Please show your identities before we guess you are either working in the FI and RM or a senior staff trying to pull our legs. Please show your heart. 5% interest for 5 & 1/2 years deposit you considered us "greed". Please use your brain before you write it again.

From SC; October 21, 2008 10:40 AM
Anonymous said...: Hi Simon,

So we are on a sole factor - GREED. U logic suggest that the product wi 5% return vs the FD 2% is driven by the 'GREED'. How about putting your money under the pillow vs 2% FD, it is also 'GREED'.

Not surprised to read your article as it was also appeared in 19 Oct ZaoPao's article by a lady reporter - Blamed on a sole factor 'GREED". How she was misled by her sole perception on 'GREED' to sum up the whole saga.

U citied FI, but did U see the crew behind the driver. In Massa's accident at Singapore FI. U forget about the 'RISK'. The 'RISK' that the crew failed in that incident.

Do U know about the product? DO U know the the 5% which is proclaimed to be deceived by one's GREED is actually a small part of pie in which the bigger pie is enjoyed by the arranger/issuer and distributor? Until now do U understand what I say?

If the full risk is disclosed and the alleged 'GREED' still drive you to take the risk, I will rest my case. The actual fact is that it is not? Buying a bond become selling protection? In the nutshell how do U link them?

If U do not know the extreme high risk attached to these product, go back to LHK's answer to the population.

Btw, it's pointless to educate U? Hope that U can maintain the virtue U claimd to have possess - not GREEDY.

Rgds!; October 21, 2008 11:01 AM
Anonymous said...: Dear Simon,

I am compelled to write to ask that you do some soul searching before you pass any further comments on this issue.

Like many of the investors who were burnt by this debacle, it was not "greed" that drove me to invest in the minibonds. It was not the so called high interest that drove me to invest in the minibonds.

It was the decision to take a longer view of investments and not short term gains (capital gains) that made me decide to put my money (6 figures) in the minibonds after the RMs, whom many, many people trust as competent and acting in good faith, give a rosy picture of these investments.

Like many educated people, I asked relevant questions, even questions like whether the investment was capital protected/guaranteed as all I wanted was an investment like a fixed deposit or an insurance policy like an endowment policy. If RMs, acting for reputable banks tells you that it is and give you assurances by making reference to the Reference Entities, who were big and established companies, are you going to doubt them. On hindsight it is now very easy to say we should have evaluated the investment much more before putting our money down.

Yes, if Lehman Brothers had not gone under, all investors should still be enjoying their interest and receive their capital at the end of the day. Simon, isn't this what was intended when the investors put their hard earned money in long term investments?; October 21, 2008 11:16 AM
Anonymous said...: Simon,

I agree with you no one should invest if they are not familiar with the high-risk and complexity of structured product. Problem is this is sold as a safe bond. Is this simple enough for you to understand?

If you do, I take it that you will be man enough to apologise.; October 21, 2008 11:18 AM
Anonymous said...: Hi Simon,

U cited DBS. Do U know that these sturctured product are linked to DBS investment? DBS is exposed to CDOs. In order to protect the risk it is exposed to CDOs, it insures in an insurance policy and with the talent called in to make it very technically and sophistically structured the product go to the retail investors. The largest benfits go to FIs and the retail investors get the bone.
If there is 'GREED', the big picture is that it drives the authority to permit the sophistical product and it drives the FIs to sell them for high return, but the end result is that only the retail investors are assocoated with it - GREED as what U see.

Be objective and be more reserved unless and until U know what U are writing.; October 21, 2008 11:22 AM
Anonymous said...: Once upon a time, the saying "all man must smoke" and smoking cigarettes are common sight in Singapore. Many peoples do die due to the illnesses from smoking. After investigation, the cigarette boxes are required, by the authority, to put up a warning that smoking is bad for health. The authority learn from the experience to finally put a warning for the public. Will people still smoke ?? Yes, but now they have nobody to blame if they die of smoking related illnesses.
Similarly, the uglyness of these toxic products that have misled many people surfaces and people now aware what they are. If you are are bitten, you will not learn the lesson. So I am sure that in future, the authority will require the FI to put up the phrase "you could lose your entire capital" in bold and red. This is the future.
Now, Lehman brothers has collapse, and according to the RM, the product is diversify, so the loss of 1 entities out of 8 will only results in the loss of 12.5% and not the 100% as the FI demanded. I am prepared for the loss due to the collapse of Lehman but am not satisfy for them to take away all my capital. To me it is cheating. According to some of you, nodoby could be trusted, let me ask you. When you vote for your MP, do you know the credential of the MP himself or you put your trust in the related party ?? When you visit a Doctor, do you really demand to see his paper qualification before you allow him to diagnose you. LAstly, if your girl friend tell you that she is a virgin, do you need to verify before marrying her ?????; October 21, 2008 11:44 AM
Anonymous said...: Which will prevail - GREED or RISK? Read this:
"....Mr Lim also addressed Mr Low’s question on whether structured products were low-risk or safe.
The Minister said that the product’s prospectus would have outlined the risks: ‘These are explained in the first page or second page , that these are structured products and it’s in bold print, that you can lose everything....."
If U are properly advised, will the GREED > RISK that U will wish to enjoy the risk by holding a bomb?
One area which is left out is about the return to the investment? High risk yield high return? 'YES'. But is there a disclosure on the high return to the arranger/issuer and distributors of the product? Who gets the high return? Retail investors?; October 21, 2008 11:47 AM
Anonymous said...: Please do not criticize Simon. I thought what he said was a fair comment.; October 21, 2008 11:59 AM
Anonymous said...: dear simon, can i safely deduce that base on your logic in investment and life - you are also trying to imply that every rape victims unless they have wore a chasity belt before they step out of their room - they do not deserved a fair hearing in court.; October 21, 2008 12:04 PM
Anonymous said...: 10.28 and 10.33 must be RM. So no point try to persuade you and you are just trying to ensure that you dont go to jail if the investors appeal get the backing of MAS eventually.; October 21, 2008 12:08 PM
Anonymous said...: The "SIMON SAYS SYNDROME".

Let me put it another way. Goh Chok Tong made a clear cut comment "That's life, you want high rewards you pay high risks". If the man at the very very top says that, everyone working under him, or who respects him, had better fall in line, that's life. Simon says, put you hand in your head, you do. Simon says, swing your feet to the left, you must do so, or else you are out.

So i won't blame this "Simon Chan" here who is echoing the Master of all Simons, a safe thing to do. I wouldnt blame the MAS, the Lim Hng Kiang and everyone else. Because in this world we play the game Simon says. (to survive).

Personally i don't think it is just greed, because, actually these aunties and uncles, they have not too much money anyway, and they are just following common sense to earn a teeny weeny litte bit more. Greed means asking beyond what you need, but in the first place many (maybe not all)these uncle aunties genuinely don't even have quite enuff so to say they are greeder across the board is an exagerration. That is why it is very complicated. Simon is correct in some ways but wrong also in some ways!

I like the song very much. It was a popular tune in the 1960's.

REX; October 21, 2008 1:00 PM
Joshc said...: Hi Simon,

Have you ever been sweet-talked into buying something that you don't really need, and after buying you don't even know why? Well, that's what happened to many of the investors. They didn't go looking to buy Minibonds. They were sweet-talked into it. Just like how many people were pressured into buying gym membership. It's not so much as greed, as the RMs preying on the inability of people to think clearly under such situations. The only greed i see here is the way banks are doing businesses now.; October 21, 2008 2:05 PM
Anonymous said...: Simon and 10:33am,

I think you are savvy investors. How much homework should a investors do depend on what kind investment they are doing.

If a person choose to make fixed deposit or invest in products with fixed, averaged return, he is deomonstrating to the FIs that he is not good at doing investing homework, or do not have time to do homework, or simple think he is playing safe, replying on the FIs to do homework for them.

So, I have to say the issuers really do not have any conscience to bury bombs under such product with fixed coupon.; October 21, 2008 2:43 PM
Anonymous said...: Simon,
Are you ethically bankrupt?; October 21, 2008 2:52 PM
Anonymous said...: Do you know that there are people who got burn and lost big sum of money in the past are wiser now and never invest in dbs high note or min bond. It now the older and retired investors are affected.; October 21, 2008 3:30 PM
Anonymous said...: oh BTW, it is also someone up there that told the citizen that they have to take care of their retirement needs and look for professional managers to help them manage their savings ....

seems everything take a big round back here

DT; October 21, 2008 3:45 PM
Anonymous said...: Hi Simon,

Do U know about the product? U do not seem to know. U don't bother to know but U bother to write something U don't know. U convienently attributed the debacle to 'GREED'.
Similarly, the lady reporter wrote the article on 19 Oct apparently without undertanding the issue but put the blame on 'GREED' in the retail investors. If she bother to read the article published on 18 Oct Zaobao by her supposely finacial expert collegue she would not have written the article that caused severe damage to the justice for that she was completely misled in the whole saga.
With resources available via the sage U all could write something that U all don't understand or don't bother to understand but can put blame on the victims of the 'GREED', how do U explain that the investors who went to the FI to buy the product could ask questions they had no knowledge at all. In analogy, it is just like you are attempting Olympics mathematics question that U don't know what to ask? U need an efficient teacher to attempt to make U understand knowing that U have no clues at all. At the end U may still don't understand. Similarly the FI's FA has to make U understand what U are buying even with lengthy explaination U still don't understand. It is for the FIs to make U understand what is the end product U buy from them matters the most. However, the end result was even worse as the investors were completed misled - Buying a bond become selling protection. Can U tell me that Buying a stock become Selling the stock, are they the same?
So far do u know what I say?
If U still think there is GREED in it, please bother to write more about it.; October 21, 2008 4:13 PM
Anonymous said...: Simon Chan please upload your full disclosure. Personally, I guess you must be one of the DBS Bank share holders who are worried your share price may crash due to this PR nightmare, which the banks brought on themselves by failing to exercise due diligence. To me, you are a waste product of the Singapore education system. If you are indeed a Singaporean, we all are grieved by your lack of compassion for your fellow countrymen.

By RTA; October 21, 2008 4:14 PM
Kevin said...: Simon Said,"....I ask in reverse that if the US financial institutions did not fail, the sun shining brightly as ever - when these minibonds investors collect their quarterly payouts and high returns, how will it benefit the rest of us?....."
Certainly Simon don't understand the saga at all and the lady reporter wrote the samething. Do they know that all these US financial institutions are so exposed to CDOS that the stuctured products are designed by them to deceive the innocent retail investors to buy into them as safe product. The US fanancial institutions eg. Lehman Brother receives the high return as issuer of the minibond and insure against the risk on CDOs exposure as an entity to the minibond and many other more to make clear to U. If they continue to live with the CDOs and the like, it is a matter of time they will go bust. Right now, U see only Lehman minibond, ML Jubilee and DBS HNs in obvious troubles, U have not yet thought the likely failure in other structured product eg. Pinnacle Credit-link notes as the hidden dangers are not known to many investors putting money in them. If Pinnacle notes are to fail, U will see the loss of double the amounts of Lehman Br. and x 2 investors at Speaker's corner.
Simon, in Pinnacle Notes, there is MS the issuers and the reference entities are: City Corp, BAC, DBS, UOB, OCBC & SingTel. Isn't it better that they don't fail so that U as a DBS shareholder will not lose your stake it in.; October 21, 2008 5:28 PM
Richard Goh said...: Sad, very sad ...

The views are obviously too simplistic for us to comprehend.

The argument, with one stroke smearing the investors with the word "greed" and with the other hand wiping crocodile tears in sympathy.

A wonderful actor if real - only point worth mentioning.

The thoughts are stained with hypocrisy. Twisted logic seems to have affected any grey matter that is left.

There is no point to elaborate further on the key issues of "mis-selling and misrepresentation" under such circumstances.; October 21, 2008 9:51 PM
nhyone said...: The negative comments show that there are people who do not think that mis-selling and mis-representation are clear cut.

Most people do keep their thoughts to themselves, due to the negative feedback after they posted.

Let's imagine a generic so-called safe product that failed. Everyone who bought it would make any claim to get their money back. How does the regulator know if the claims are valid or not?

I really don't want to make this comment because I'm not involved in this in any way.; October 22, 2008 8:26 AM
manson said...: Simon, you did point out the true fact that investors will have to bear responsibility for the lost of their investment. The FI and MAS can only provide guardline and advice. After all it their money that put into high risk investment.
Lost or gain are their owm making.; October 22, 2008 10:39 AM
Kevin said...: I went back to read the article written by the lady reporter on 19 Oct Zaopao pg 16 and found the fallacy of Simon's view as a man on the street in her. She said that she pity the victim in the beginning but felt that the 'Greed' of 1 or 2% extra over the FD interest drive them to buying the high risk structured product. She is another Simon or Simon is influenced by her that they conveniently attributed the whole saga to 'GREED". As a reporter, she should know the impact of her writing when there are so many readers attempting to comprehend the fact of minibond debacle. She should know that she shouldn't write something that she had no knowledge at all. The subject - the structured product - Does she know what it is? She said that,"...if the minibonds do not fail, these minibonds investors collect their high returns which even exceed the expectation, will they complain?...It is unfair that they ask for compensation when things go wrong and the tax payers has to shoulder their mistake..."
We compare it with what Simon wrote," ...While I feel nothing but pity for these poor souls, is it fair to ask the rest of us who did not invest, to support this petition and ask DBS, whom all Singaporeans have a stake in, to compensate the investors? I ask in reverse that if the US financial institutions did not fail, the sun shining brightly as ever - when these minibonds investors collect their quarterly payouts and high returns, how will it benefit the rest of us?.." You realise the same fallacies in them. It is reasonally that the bond is said to be safe investment 1 to 2% higher than the FD. It is not reasonable that the interst rate of the structure product is only 1 to 2% higher than FD. If the structured product which is a high risk product requires high return the retail investors get only a low 4 to 5%, Did she ask that where did the high return go to - the retail investors or the issuer & distributor (in short FIs)? I mean, one must write something that he/she really know and in minibond - what this structure product is? - before U concluded that the 10,000 victims are 'Greedy men/women'.
More fallacies in the article:
1. over-reliance on Govt;
2. "Caveat emptor" is the underlying philosophy and conduct of the FIs;
3....
Is she also a man on the street?; October 22, 2008 11:14 AM
Man-on-the-Street said...: Hi Simon Chan,
You mentioned "My eyes wept for those..", please stop shedding your crocodile's tear.

You think we will believe you? What do you understand by the word - GREED? Tell me, have you ever put your money in the bank before to earn a little interests? Isn't that greed(y) for you to do so, in your own definition of 'greed'? Come on! You know very well these victims were just simply INVESTING (just like you invest your money in bank) in a product that they were told by their RM/FI that it was very safe with their capital protected, and in the end it turned out that it was not so.

You are lucky that your money is still safe in your bank. But, someday, you will never know that it may just happen to you as well of not getting any single dollar back when the money you put in the bank you most trusted has collapsed. Then, when someone comment on your mishap, by saying that "I can probably think of one word, however harsh it may be - greed.", how will you feel by then? Is always easy to comment/judge on someone without first putting yourself into their shoes.

Btw, please remember to stop using "My views as a man on the street" next time as you simply cannot represent me, at the very least.; October 22, 2008 2:07 PM
Anonymous said...: U have a headache and went to see a doctor. knowing that "AAA pill" will ease the pain, u asked the doctor to prescribe it. The doctor tell u that there is actually a pill "BBB" which is slightly better. The doctor gave you the "prospectus" of the pill and tell u that it is a safe medicine. The doctor then point to the box containing the pill which printed "YYY" company. The doctor tell u that see "YYY", the biggest pharmatical company manufacture the pill.
Will u doubt the doctor and read the "proepectus"? Even if you read the "prospectus", will u understand the medical terms in it?; October 23, 2008 12:04 AM
WY said...: To Mr. Simon Chan,

In my opinion, using your analogy, low-risk tolerant investors who are misrepresented to buy Minibond as bond are like:
1. Being sold a normal Toyota with F1 engine inside and have accident.
2. Being lead to forest with dangerous beasts but was told it’s a safe park and eaten by beasts.
3. Being lead to swim in ocean but was told it’s a safe lake and eaten by sharks.

There are peoples who will be thrilled by the experience (high profit expectations) of driving F1, exploring forest, swim with shark (high risk tolerance). For these peoples, it is their choice.

The case now is whether there is misrepresentation for the low risk tolerance group.; October 23, 2008 11:53 AM
Anonymous said...: To Simon Chan,

Your analogy of F1 driver, forest tracker and deep sea diver does not make sense with the financial crisis afflicting Singapore. You should know that these people do not aspire to be F1 racers, jungle trackers or divers ie. they are not high risk takers. They just want better yields with capital protection like FDs.
This is the most serious case of gross misrepresentation and mis-selling by financial institutions I have ever seen. Customers were herded like sheep by FIs, RMs from safe FDs into risky structured investment products without them understanding the risks involved. Even those who think they understand the risks, do you think that they are fully aware of the fine details behind these products. I don't think so. Do you know what are CDOs and credit default swaps - the 2 instruments that brought the whole credit market down?
In times of war, do you rally behind your fellow citizens or claimed that as you have no involvement, you should not support the war cause ie. the petition. If there are many people that think like you in Singapore, we would lost the war even before fighting!
BTW, not every Singaporean has a stake in DBS (I don't). I would not shed any tears if DBS collapsed tomorrow.

To PeiYing
You said that by changing "Should we support the Hong Lim Petition?" to "Investors should not be compensated" - Mr Tan is guilty of misleading the readers of Simon's article. Whatever it is, the main argument here is whether banks are guilty of mis-selling high risk products to people who cannot fathom the risks involved. And, whether we should agitate for action against the banks for this!
I have come across many case of relatives, acquaintances and friends who were affected by this financial crisis. Even if we are not directly affected, we should support & rally behind the cause. Or are you as they say, a fence sitter like Simon Chan!; October 24, 2008 3:07 PM
Anonymous said...: I felt that what Simon have mentioned is completely wrong in the sense that most of the people here wanted to make their money grow a bit more that's why they invested in high notes that might potentially give them a higher return .

However , to be misrepresented by any RM to say that this product is low risk , something that is similar to fixed deposit is totally unethical and wrong .

This have nothing to do with the word greed . People who invested in high notes and etc only merely wanted to grow their money slightly more that's why they rely on fixed deposits . This is not greed . Most of us do that and it's merely because we wanted our money to hedge against the inflation , save more for our children and etc .

Instead of push the blame to the consumer and saying that it's greed , it's their fault for not reading the fine prints , I should say shouldn't have the RM been the one who have read through everything and explained to the consumer ? If the consumer is agreedable , then proceed with the sales .

To sum it up , I just felt that it's the high threshold target that the bank sets that forces most RMs to sell certain product negliently .; October 25, 2008 5:17 AM

Tuesday, October 21, 2008

Investors should not be compensated

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