Tan Kin Lian's Blog: Lehman Brother bond

Monday, October 27, 2008

Lehman Brother bond

My friend invested $100,000 in the mini-bond, introduced to him by his stockbroker. He thought that he was investing in the Lehman Brother bond (which was A-rated at that time).

He said, "If I have actually bought the Lehman Brother bond, I would have lost my entire investment anyway. It is not fair for me to lodge a complaint about the mini-bond. It is just my bad luck".

I salute him for his honorable decision.

12 comments:

ym said...: he must have quite a fw 100ks...; October 27, 2008 7:00 PM
Anonymous said...: when i bought mine, i had no idea who lehman brothers was!; October 27, 2008 7:56 PM
Anonymous said...: Yes, in his case, he should accept the loss because he thought he has invested in Lehman brothers bond.

I have invested in GM bonds and its value is now 1/3 of the original cost and I too accepted the loss. But the minibond is different as it is mis selling!; October 27, 2008 8:29 PM
Anonymous said...: i salute him too. unfortunately, there would be many not so honorable others who would/have probably jump/jumped on the bandwagon to demand for compensation.; October 27, 2008 9:46 PM
Anonymous said...: ya he is only one of the rare ones who is honourable. Not like the typical singaporeans, when things go foul or wrong, they only complaint.; October 27, 2008 10:07 PM
Anonymous said...: But this case may not be real!; October 27, 2008 10:48 PM
Anonymous said...: He did not see 6 BIG names of RE.That is very strange.; October 27, 2008 11:29 PM
Anonymous said...: i have had heard of pple claiming losses in bad times

but i have also heard from pple who know these pple saying so, so that they can tell their wifes, their families, their friends its their bad luck, when they could have gambled away, paid off some debts or simply fed off a mistress (or two), buying an apartment somewhere. the Loss would NEVER be questioned.

so its true in the Chinese Saying, Crisis (Wei Ji) is both a Bad Time and an Opportune Time.; October 28, 2008 1:09 AM
Anonymous said...: GE had S$9.2 bil of CDOs, is your 1/3 remaining holding CDOs from L. BROS, which is not know to you?
Wake up bros.; October 28, 2008 8:01 AM
Anonymous said...: This may be a make-up story submitted by RM

Either your friend is a blind or the RM did not give him the brochure .
the 6 reference entities is so obvious and your friend never notice .

If your friend is trully buying Lehman Brothers bond.
Whos says he get nothing back.
I know that if a company goes bankrupt, bondholders is creditors , they are entitled to payment before the ordinary shareholders from the balance networth of Leh Bro.; October 28, 2008 11:17 AM
WY said...: Lehman Brothers filed for Chapter 11 bankruptcy.

Flowchart for bankruptcy: Chapter 11 included.
http://www.bankruptcyvisuals.com/viewcharts.html

I think bondholder is considered creditor.
The assets of Lehman Brothers can be sold and the cash will then be used to pay according to priority of claims (for e.g secured creditor, unsecured creditor….. the list goes on).

For bond, you may still have something. For Minibond, it will be nothing.; October 28, 2008 4:38 PM
dC said...: Mr Tan

When I was cheated to place my deposit in to the Minibond Series 5, there was no indication or mention of Lehman Brothers and I have not heard of it till the saga surfaced.

I am still asking the same questions:

1) How can the 6 reputable & sound FIs/banks (exclude Lehman) allow the use of their names to promote the product, to give the impression that the product is sound & safe?

2) On hindsight, it's just a facade to deceive? Have the 6 FIs/banks not read the green brochure how their names were linked, published & rated.

That's why I can never accept the fact now that the collapse of Lehman Brothers can wipe out my deposit.; October 28, 2008 7:27 PM