SCMP: Former chief of HK monetary authority reprimanded

http://www.lbv.org.hk/content/pages/posts/ex-hkma-chief-may-face-censure-over-minibonds14408.php

6 Jun 2012

The former chief of the Hong Kong Monetary Authority (HKMA) Joseph Yam Chi-kong is likely to be reprimanded in an investigation report to be released by lawmakers today on the Lehman Brothers minibond scandal.

The report, to be tabled to the Legislative Council this morning after a probe into the saga that has lasted more than three years, is also expected to criticise major government figures including Financial Secretary John Tsang Chun-wah and Secretary for Financial Services Chan Ka-keung, as well as former Securities and Futures Commission chief executive Martin Wheatley.

But at least three lawmakers, including Jeffery Lam Kin-fung, Philip Wong Yu-hong and Abraham Shek Lai-him who are supporters of Yam, are said to have refused to sign the report and have vowed to table a minority report on the findings. All three did not return calls last night.

The lawmakers' minibond investigation was launched after Lehman Brothers collapsed in September 2008, leaving more than 43,000 Hong Kong investors facing losses after buying the product through local financial institutions.

Despite the name, minibonds are not corporate bonds, but risky derivatives linked to the credit of listed companies. Over 30,000 investors complained to the HKMA and Securities and Futures Commission, accusing the banks of not telling them about the risks.

A source familiar with the probe cited the report as saying that Yam had to bear the greatest responsibility. He mostly paid heed to maintaining the stability of the financial system and did not consider protecting small investors as one of his main tasks, a source said.

Many lawmakers disagreed with his paying so little heed to small investors.

The source said Wheatley was also blamed as the securities watchdog should have better regulated the financial institutions.

Tsang and Chan faced less severe criticism as the government was not the direct regulator.

Motor insurance premiums continue to increase

Why are motor insurance premiums so high in Singapore and increasing year after year? What can be done about it? http://tankinlian.com/FramePDF.aspx?ID=656

Shoebox units

I agree with Conrad Raj that the Government should not interfere in the market for small size apartments, also called shoebox units. Article. The purchasers are fully aware about what they are buying and they have their reason to buy small units, which in most cases is all they can afford, giving the high property prices in Singapore.

The Government should intervene in the right areas, for example, when consumers are being cheated or bullied by the big businesses. 

High cost of motor repairs

I understand that the average repair cost for a car damaged in a collision is $4,000 in Singapore.

An insurance company in Jakarta told me that their average repair cost is $300 and that an insurance company is able to repair a car at a lower cost than consumers, due to their volume of business.

In Singapore, the insurance company pays more than 2 times of the cost  paid for consumers for the same repair. The average repair cost in Singapore is 10 times of the cost in Jakarta. There is something seriously wrong with the business model in Singapore, leading to high cost for motor insurance repairs and premiums.

This has been a problem that our authority and the insurance company had been unable, or reluctant, to address for several decades.  It is another factor contributing to the high cost of living in Singapore.

Danger of speeding

The recent two traffic accidents in Bugis showed the danger of speeding, especially to beat the red light at a road junction. In both cases, the speeding vehicle did not have the right of way.

Even if they had the right of way, it is important that they should be able to stop in time, if the other vehicle had made a mistake in getting into their path. This is called defensive driving - i.e. to avoid an accident even if the other vehicle had infringed on our right of way.

I find that many vehicles are driven too fast on our roads and the driver may not be able to stop on time, if there is an unexpected obstruction or if the vehicle in front needed to change lanes. We need drivers to be patient and to drive more slowly to avoid road accidents.

Learning about compound interest

Many consumers do not realize the importance of understanding compound interest. This may change their perception! 
http://tankinlian.com/FramePDF.aspx?ID=646

Understanding Singapore's reserves

Here are some important questions to be asked about Singapore's reserves.
http://singaporemind.blogspot.sg/2012/06/issues-raised-by-christopher-balding-on.html

Practice defensive driving

An edited version of tThis letter is published in the Straits Times Online on 4 June 2012.

27 May 2012
Editor, Forum Page
Straits Times

The One Motoring website stated that, unless otherwise indicated, 
the speed limit on our roads is 50 km. This may not be widely known, as it is 
quite common to see many vehicles be driven at a faster speed on our roads.

I suggest that more publicity should be given on the speed limit, especially as 
many foreigners are now allowed driving on our Singapore roads.

Recently, there were fatal and serious accidents involving fast and reckless

driving, especially in the early morning. I urge the authority to take action 

against these drivers. With modern technology, it should be easy to identify

these cases and follow up with prosecution.
There should also be exhortation on the need for defensive driving. Even if 
a vehicle has the right of way, a prudent driver should be ready to stop a vehicle 
in time to prevent a collision.

Many drivers are impatient and in a rush. They are unwilling to give way to a 
vehicle in front that signals an intent to change lane. 

Singapore is a small place and our roads are getting more congested. There is 
no need for cars to be driven at a fast speed.

Avoid strange business or investment

Hi Mr Tan
I thought of sharing with you what my school friend had shared with me. He resigned from his research assistant job and go full time in this business. Of course this will be the ideal job if it works but as a practical person, I'm not really convinced how this business will work because it is a MLM concept.  I believe you have come across this business concept and most times, it will never work out. What are your views on this? (The e-mail contains several videos and weblink on a MLM selling scheme).

REPLY
Sorry, it is too much for me to read, and I don't have the time to spend to analyse this. You should avoid being drawn into any "business" or "investment" that sound strange.

Financial Tips for Consumers

Dear Mr Tan,
I chanced upon your blog and saw many posts related to insurance. I was approached recently by an insurance agent promoting me a ILP. I am only 20 this year, awaiting for ns and university. 


I understand that you urge young people to not get ILP so early due to the effective returns calculated in the future after deducting the premium allocation. It would be more economical to get a savings plan and a life time term plan for illness or death coverage.


Although it is a good practice to cultivate a habit of saving. Is it even necessary for me to get a ILP in the future? I may have more financial knowledge when I grow older and may be able to manage my own basket of investments. Will an ILP be required when I grow older? 


My objective of an insurance at this stage will be to save for about 10years to create a substantial amount of savings for future investment use when I grow older. My second objective will be to cover a plan for death or critical illness or disability as I'm about to enlist soon.


REPLY
It is better for you to invest in an ETF, rather than an ILP. REad this article
http://tankinlian.com/FramePDF.aspx?ID=643

Captcha!

Several internet websites have introduced Captcha as a security measure. Some of the messages are bizarre. I wonder if they are effective in fooling the robots, but they certainly do give a lot of stress to human beings.

Reporting by the MSM

We need fair reporting by the MSM (main stream media).

http://feedmetothefish.blogspot.sg/2012/06/subtle-filth.html

Should you invest in stocks now?

The answer is, ironically, "yes" for the long term investor. Forget about individual stocks, but the market (i.e. a fund invested in many stocks representing the index). Forget about past returns - focus on cost. This is the same message given by FISCA.
http://money.cnn.com//2012/06/01/pf/expert/stock-investing.moneymag/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

High COE prices and impact on taxis

http://www.todayonline.com/Singapore/EDC120602-0000059/Taxis-could-become-harder-to-flag-down

Challenge of integrating foreigners

Read this article on the issues involved:
http://singaporemind.blogspot.sg/2012/06/irresponsible-framing-of-our.html

Here is another article
http://www.tremeritus.com/2012/06/03/comfortdelgro-replied-on-trolley-on-bus-incident-prc-driver-just-being-helpful/

And a response from a Minister
http://www.tremeritus.com/2012/06/02/vivian-to-youth-leaders-please-stand-up-against-anti-foreigner-tirades-on-the-net/

Avoid investing in too many funds

Investors should avoid investing in too many funds. This article in the FISCA website explains why:
http://easyapps.sg/assn/Org/Information.aspx?id=5

Yielding to panic

Interest rate around the world are at a record low rate. An article posted in FISCA website explains the historical significance. http://easyapps.sg/assn/Org/Information.aspx?id=5

Mis-understanding on the terms of a life insurance policy

A mother bought an AIA Guardian Basic policy for each of her three children in 1992. She was told, or led to understand, that each policy would mature when her child reached 21 years old. After 20 years, she was shocked to learn that the actual maturity date for each child was on they reach aged 101.

She could not remember what had happened. She did sign the papers in 1992 but did not make any change to the policy. She remembered that during the financial crisis, she might have blindly signed some papers provided by the insurance company. Her son asked me for my views.

REPLY

From your description, it seemed that your mother had bought a whole life policy for each of the children.  If you do not wish to pay the premium, you can ask for the policy to be made paid-up for a reduced sum assured, or to be terminated for a cash value.

I do not have any comment about any possible misunderstanding between your mother and the agent on the duration of the policy. It is quite risky for consumers to commit to a long term contract, such as a life insurance policy, without proper understanding of the terms of the contract, relying only on the vague explanation of the agent.

You should write to the insurance comapny to ask if the policy was issued on these terms, or had been changed during the past 20 years. It is quite likely that the policy was kept at the original terms, and that your mother had misunderstood the maturity date.  The agent might have told her that she can stop paying the premium at age 21, by using the accumulated bonus to fund future premiums. But, as the bonus was cut during the financial crisis, the accumulated premium was not able to fund the future premium.

Praise for Prof Lim, query for NTUC

  

... why the NTUC, a union that is supposed to represent Singapore workers,

did not take a more proactive approach to bargain for better wages

and help improve the plight of poor Singaporean workers

until Prof Lim stepped in.

http://www.straitstimes.com/STForum/OnlineStory/STIStory_805130.html

Losing the competitive edge

Singapore has now dropped to fourth position. At one time, we were the top or number 2. More worrisome is the "high cost of living" which impact the people more. We fared very badly.
http://www.todayonline.com/Singapore/EDC120531-0000086/Is-Spore-losing-its-edge