Friday, February 12, 2010

Risky new financial product

A new financial product has been created that could cause systemic risk. Read about it here.
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6 comments:

A Goat said...

Sounds like some financial institutions never learn their lesson or is it because of greed. Investors should be smarten up by now and not be influenced by some creative selling rep/organisation otherwise its another crisis waiting to repeat itself. History is an excellent teacher. Regulators should perform their role without fear or prejudice. As a famous investor once said " Derivatives are weapons of mass destruction".

February 12, 2010 9:38 AM
Anonymous said...

Citi never sleeps, except for its risk mgmt dept, which is on permanent holiday in Tahiti.

February 12, 2010 6:04 PM
Anonymous said...

What a waste of brains and talents. Focusing on things that don't improve the human condition.

It's a pity teachers are not paid more for the jobs they do.

February 12, 2010 6:55 PM
Anonymous said...

It's human nature, greed will always be the motivating factor to push people to devise ways to reap as much $$$$ with just a little bit of work. Banks, insurers, property developers, related salesmen all take advantage of this trait.

Just reported on CNA on 12 Feb 2010:-
Darren Thomson, president, Life Insurance Association, said: "We've seen a big switch from 2008 where 70 per cent of all policies sales were unit-linked. That's almost reversed in 2009 where 70 per cent were power products with more guarantees and structure.

"Consumers are looking for something that will produce a guarantee rather than leaving it to the volatility of the market. But going into 2010 and 2011, we'll probably see that switch around again."

Ha ha, consumers buying high and selling low again. The dismal cycle turns again. And insurance agents are all too willing facilitators of this.

February 13, 2010 2:57 AM
Anonymous said...

The insurance companies don't add value but impoverish you and the insurance agents are the stock brokers giving tips freely.
How on earth people can trust insurance agents with their investment? They are salesmen who don't even know about insurance let alone investment.They are the koyok man

February 14, 2010 1:22 PM
symmetrix said...

FIs must be thinking:-

"There is a sucker born every day".

With this in mind, FIs will continue to devise complicated, non value-added products hoping that someone, somewhere, at sometime will be conned into buying it.

This is a disgusting biz practice that has to be stopped by the authorities. I doubt that regulators in many parts of the world have the gumption to ban such activities.

February 14, 2010 6:48 PM

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