Meeting at Speaker's Corner 18 Oct, 6-7 pm

[Ah Hai]

Re: Offer of assistance

Sunday, December 14, 2008
Offer of assistance
Mr. Paul Smith wishes to offer assistance to anyone who needs help in the following areas:

> writing complaints to banks
> writing complaints to FIDREC
> give moral support
> attend meetings at banks with complainants
> take notes
> ensure the investigative process is impartial, fair, free from intimidation and oppression

If you need his help, you can e-mail him at [email protected]
Posted by Tan Kin Lian at 5:01 PM :oIo:

BACKGROUND
Mr. Smith's wife invested in a credit linked note. She had a difficult time to making the complaint to the bank. Mr. Smith helped her during the process. He finds that the bank did not treat the customer fairly. He now wishes to offer his voluntary assistance to other customers who faced similar difficulty.

Mr. Smith is willing to help the investor in the interview with the bank or FIDREC, but he needs the investor to sign a mandate for him to attend the interview.
Posted by Tan Kin Lian at 5:01 PM

 

[Ah Hai]

Re: Offer of assistance

2 Comments

Anonymous Anonymous said...

A BIG THANK YOU to Mr. Tan and all the volunteers. You guys made this world a better place to live.

Thanks many many.

9:56 PM
Blogger singaporeshortstories.blogspot.com said...

Sorry, Mr Tan, can you enlighten me on the background of Mr Paul Smith?

10:16 PM

 

[Ah Hai]

Mental depression and suicide

Sunday, December 14, 2008
Mental depression and suicide
Dear Mr Tan KL,

I refer to the following comments in your post
http://tankinlian.blogspot.com/2008/12/hk-mom-suiside-because-bank-refuse-to.html

Anonymous said...
I have thought of suicide as well. The way MAS and government have acted in not helping me, I feel really depressed. Each time I see the words UOB Kay Hian I have much resentment and depression that I have lost the family's life savings. If it goes on this way and I do not get back the money, I can't face the family and subject them to difficult life ahead. Worst, I have no regular job now. It only takes me some courage to kill the children and end my life with my wife. Never felt so miserable in my life. Now I understand what depressing life a 40+ has when there's no job and money but full of life stress.
If we end our life, I will make it clear we will return to haunt UOB Kay Hian and those responsible for minibond.

Anonymous said...
I can feel how you are feeling now, as I am also in the same situation. However,if you are gone now, the FIs won't feel bad. You must transform your anguish into energy to fight. Not only for yourself and your family, but against your enemy who had put you in this agony.

I'm concerned that these two victims are so depressed as they've been pushed to a dead end and may resort to some foolish act. If you have volunteers who are well trained in counselling pls help them to overcome this difficult period.

tkh

REPLY
For those who need conselling help, please refer to any of the organisations shown in the attached blog:
http://tankinlian.blogspot.com/2008/12/helplines-for-managing-mental-stress.html
Posted by Tan Kin Lian at 11:04 PM
4 comments:

Concerned said...

Anonymous

Please don't be so upset over these investment. Life have its ups and downs. Although you are 40plus, surely you and your wife would be able to find some kind of employment in the future. Cherish what you have now, your wife and children. They are the fruits of your labour. Banish the thought of suicide from your mind. I feel very miserable on reading your message, particularly your depression and thoughts of suicide.
Please don't do that.
11:45 PM
Parka said...

If you believe you cannot overcome these obstacles, then you won't even make an effort to overcome them.

The trick is to belief in yourself and persevere. Do something positive. Think positive.

By the way, if you end your life, there won't be any haunting. I wish there can be haunting but there just isn't going to be. Fact.

Also another fact, those FI could not care less if you die. It's just another opponent wiped off the face of the earth, which is good news for them. Sorry, people in the FI don't have feelings, evident from day 1 of Lehmann collapse.

For those feeling depress, do seek professional conselling.
12:24 AM
Anonymous said...

There are many more desparate investors like them. The best medicine for them is to seek justice and help them get back their life savings.
12:50 AM
ArtBoon said...

My thoughts about life and death:-

http://arthurboon.blogspot.com/2008/12/euthanasia-may-get-me-murdered.html
12:52 AM

 

[Ah Hai]

Coping with rising health care cost in Singapore

Sunday, December 14, 2008
Coping with rising health care cost in Singapore
Read this article:
http://www.tankinlian.com/articles/health.html

And the discussion in The Online Citizen
http://theonlinecitizen.com/2008/12/dont-save-face-go-to-c-class-wards-says-tan-kin-lian/#comments
Posted by Tan Kin Lian at 11:13 PM
1 comments:

Wayangnologist said...

for anyone saying health care is expensive


mental care is MUCH MUCH MUCH more expensive!!



only a madman would pay (IRONY)
12:45 AM

 

[Ah Hai]

Helplines - for managing mental stress

Sunday, December 14, 2008
Helplines - for managing mental stress
Samaritans of Singapore (SOS. 24 hrs) 1800-221-4444
Singapore Association for Mental Health Helpline 1800-283-7019
Care Corner 800 Hotline (in Mandarin, 10am-10pm daily) 1800-353-5800
Touchline Mon-Sat (10am-10pm)(for 13 to 25 year olds) 1800-377-2252
BABES (For teenage girls facing pregnancy crisis) 1800-833-6666
Pregnancy Crisis Service Mon-Fri (9am-5pm), Sat (9am-1pm) 6339-9770
Association of Women for Action and Research Helpline (AWARE) Mon-Fri (4pm-10pm) 1800-774-5935
National Family Service Centre (FSC) Helpline 1800-2255-372
SENIORS helpline (for older persons and their care-givers) 1800-555-5555
TOUCH Caregivers Centre 1800-352-1622
SAGE helpline Mon-Fri (9am-5pm), Sat (9am-1pm) 1800-3538633
Alcoholics Anonymous 6475-0890
Eating Disorders Helpline - Tel: 6345-3435 (10:00am - 4:00pm Phone Mail Mon-Fri
Source : http://www.giftoflistening.com/resources.html
Posted by Tan Kin Lian at 11:16 PM

 

[Ah Hai]

Re: Helplines - for managing mental stress

2 Comments

Blogger Wayangnologist said...

someone can try to call ALL of them, but the moment the phase 'investments fail' is uttered, the caller will feel an increasing onset of prompts to cut the conversation short


these are set up for OTHER purposes


try it and report your 'revelations' back here, just pls dont say there was NO warning!

12:41 AM
Anonymous A Tan said...

As depression is linked to a lack of certain chemicals in the brain, see yr doctor first and ask if Prozac or something like it can help.

If he refuses, or if Prozac doesn't help, then try one of the above.

6:57 AM

 

[Ah Hai]

A crooked product or a crooked system?

Monday, December 15, 2008
A crooked product or a crooked system?
Read this blog:
http://victorkoo.blogspot.com/2008/12/crooked-product-or-crooked-system.html

A tongue-in-cheek poem:
http://victorkoo.blogspot.com/2008/10/effects-of-current-financial-turmoil-2.html
Posted by Tan Kin Lian at 7:37 AM

 

[Ah Hai]

Re: A crooked product or a crooked system?

5 Comments

Anonymous Anonymous said...

In the equation if one component is crooked the rest will be crooked too.
If the product is crooked the result is crooked.
If the RM is crooked the result is crooked .
If both the product and RM are crooked the result is collapse

8:48 AM
Blogger Everlearning said...

A crooked system that allows a crooked product to exist in the financial markets!

Only "with eyes closed" that such crooked structured products have allowed and are flooding our so-called finanical hubs.

My confidence in matters that surfaced in our tiny little red-dot is utterly wiped-out by the careless attitude of people in power.

REMEMBER and LEARN this painful experience WELL not to fall into its manipulations again.

9:06 AM
Anonymous Anonymous said...

I think this scenario was more or less repeated 10,000 times or more. That is only for those who will lose something or all, not counting many others who also bought but status OK or loss not confirmed.

Thank god, I was in similar scenario many times when I visit the bank but I never sign the dotted line. Because I am like a tortoise, slow and steady through FDs only. Although FD rates are low, if it is compounded and you save and top it regularly, it can be substantial after 5 years. Of course you also must earn enough and be frugal in order to save a good percentage.

I think this is the best and prudent way for ordinary folks to be financially secure. Forget about all other ways.

9:09 AM
Blogger Everlearning said...

Just read about the Madoff's hedgefund scandal. Is our financial hub spared from such scams? It is grossly devastating the western banks, what about our local banks? Anyone knows how safe are our hedgefunds sold here ?

It seems bad news are taking on cue.

11:22 AM
Anonymous Anonymous said...

Any news from the Sunshine Empire?
Has CAD completed their finding?
There are so many uncles and unties kanna con by them,what happen now?Any updates?

Cheers!

Sunshine Empire - Too Good To Be True?
Click:
http://www.firstmillionchallenge.com/sunshine-empire-too-good-to-be-true/


newbie here

3:57 PM

 

[Ah Hai]

Reply to Ho Yew Kee Sent to Straits Times on 13 December 2008, but not publised.

Monday, December 15, 2008
Reply to Ho Yew Kee
Sent to Straits Times on 13 December 2008, but not publised.

Editor
Forum Page
Straits Times

I refer to the letter by Mr. Ho Yew Kee entitled “A mistake to overreact” (ST, 13 Dec 2008).

Mr. Ho said, “It would be imprudent for the stewards of town council funds to play it safe and place their reserves in fixed deposits or government bonds, as the returns would not even offset the inflation rate.” He also said, “Corporate bonds provided a yield of 4 to 6 percent, but the corporate have different credit ratings”.

In my view, it would be prudent for the town councils to invest in corporate bonds, provided that the investments are spread over several corporate bonds to reduce the impact of the failure of some of these bonds.

In fact, over 10,000 people were sold the credit linked notes. They were misled into believing that they were investing in a basket of 5 to 8 of the entities, which were financially strong companies or sovereign governments.

They were told that if one entity should fail, they would only lose their invested sum on a proportionate basis. If 1 of 8 entities failed, their loss would be 12.5%.

They were shocked to learn later that they were actually selling credit insurance against the failure of any of these entities. If any single entity failed, their entire principal would be lost. Instead of spreading the risk proportionately over 8 entities, they were taking 8 times of the risk of any single bond!

In addition, their principal was actually invested in a portfolio of 100 to 150 underlying securities, which could comprise of collateralised debt obligations of lower rating. This has additional risk to the investors.

The combined risk of failure of “toxic” credit-linked notes is very high. This explains why many of these notes have failed totally, compared to bond funds.

The stewards of the town councils, who have access to professional advisers, should explain if they were aware about the nature of the credit-linked notes and if the return of 5% is insufficient to match the risk. If the town councils were also misled about the nature of these products, it is their fiduciary duty to take appropriate action to recover their loss.

Several local government bodies in the UK were also misled into investing in similar high-risk products. They took legal action and were able to obtain a court decision to rescind the contracts. I urge our town councils in Singapore to do the same.

Tan Kin Lian
Posted by Tan Kin Lian at 2:00 PM
6 comments:

Chan J C said...

Dear Mr. Tan

Thanks for sharing.

You mentioned that

"... Several local government bodies in the UK were also misled into investing in similar high-risk products. They took legal action and were able to obtain a court decision to rescind the contracts..."

Could you kindly post such cases for our reference?

Thank you sir.
JC
3:15 PM
Wayangnologist said...

"Sent to Straits Times on 13 December 2008, but not publised."


There, THATS the response.
3:28 PM
Anonymous said...

Mr Tan,

I can understand why ST didn't publish it.

Because you describe the issues so clearly and simply and it hurts the other side because they cannot rebut it.

That's why it is good to turn to alternative media like the blogs and internet.

I hope the gahmen linked ST should be aware that this is not the past, but the internet age. Their policy on this is behaving like an ostrich.
3:33 PM
Anonymous said...

The 2% or any return rate published by the town council, does it factor in inflation?

If not, that could be a negative return rate and it is not worth keep the fund?
4:33 PM
Anonymous said...

Did they have the knowledge to keep and grow the fund ?
Were they misled into buying the products ?

They are in a Catch 22 position, but they are still not giving the public and residents a good answer !

It is so easy, answer A or B !
A) They are not competent enough.
B) They are also victims in the saga.
Sorry no choice "C".

We are still waiting for the truth.

Hope the MPs will follow up the issue.
5:49 PM
vertigoer said...

The thing is why does Town council have to horde our money?

http://www.channelnewsasia.com/stories/singaporelocalnews/view/390407/1/.html

S$4 million is 2.6 percent of Pasir Ris-Punggol.

That means they have a fund of S$153 million.

Do we need to spend S$153 million in a year for simple services?
http://www.prpg-tc.org.sg/cms/services.php

http://www.punggol.sg/forum/communi...hman_brothers-t18993.0.html;msg64195#msg64195

From here, 80,000 household. means, TC is holding around $1912 of my money!

If not why, do they need to keep collecting so much of our cash?
6:16 PM

 

[Ah Hai]

AsiaOne: Slip sliding into depression

Monday, December 15, 2008
AsiaOne: Slip sliding into depression
BY DHANY OSMAN

..'With the economic downturn, it's important to help people keep things in perspective and not catastrophise,' he said.

That is what Ms Tan (not her real name), a communications executive, 50, has been doing.

She lost $50,000 in investments in DBS High Notes 5.
She said she kept the news from her husband for fear of starting a fight and lost a lot of sleep wondering how she would pay for her younger child's university education.

Ms Tan said she felt worse when she realised that she might either have to borrow money or delay retirement to make up for the loss.

Being in control of the family finances made it easier for her to keep her worries to herself although she felt the stress each time her husband talked about money.
It left her feeling mentally weary and constantly distracted. However, with support from relatives who lent a listening ear and by making a concerted effort to think positive, she has since recovered her spirits.

'I certainly was upset at first. But after a point, I felt it was time to move on and not dwell on the loss,' she said.

http://health.asiaone.com/Health/Wellness+%40+Work/Story/A1Story20081212-107323.html
Posted by Tan Kin Lian at 2:17 PM

 

[Ah Hai]

Re: AsiaOne: Slip sliding into depression

Monday, December 15, 2008
Offer of compensation
Some investors are getting offers from the distributor (financial institution) to compensate at 30% of the invested sum. They are given a deadline to accept the offer. If they do not accept, the offer expires and they get a rejection letter from the distributor.

They ask my views on whether to accept this offer. It is difficult for me to give this advice. My advise is that a fair offer is 50% of the amount of loss (i.e. difference between the invested sum and the current market value).

Some investors feel that 50% is inadequate and wish to fight for a higher compensation. Other investors feel that they should accept the offer of 30%, as this is the best under the circumstances.

What is your view? Please reply to this survey:
http://www.surveymonkey.com/s.aspx?sm=_2b2e2PBMeL_2bR3lqPs9dmcBQ_3d_3d
Posted by Tan Kin Lian at 9:47 PM
3 comments:

Anonymous said...

I think the FIs may estimated that the current value is at the range of 30% of the invested sum to form the basis for the proposed compensation.

To me , I will agree to 50% of the amount of loss (i.e. difference between the invested sum and the current market value).

The probelm is when can we know the actual amount of loss at the rate MAS work on it.

In this case, I would settle with 30% + 35%(50% of 70% loss) = 65% of the invested sum to close the case NOW and move on and will not trust any FI, RM , US ever after.
10:09 PM
Anonymous said...

You have to tread this carefully in case you will be accused of poor advice in the future. Money is an evil and when it is not enough it can make people say and do all sort of things.
10:12 PM
Wayangnologist said...

lets summise

30% of 10k is 3k

30% of 50k is 15k

30% of 100k is 30k

3k is enough for starters to join a strong class action, IF THERE WILL BE A CLASS ACTION, recommended by lawyers to be about 500 congregated, earliest news if its even possible in end Jan

30k is STILL not enough for an individual suit estimated at around 50 to 80k LEAST, actual duration, counter-sues, counter-claims AND psychological trauma notwithstanding.


I'd say its well worth a consideration.


I have one further suggestion, get EVERYONE in your group to co-write a jointly signed letter (or petition as now its frequently called), preferably drafted or even witnessed by some laywers ASKING (by asking, i mean INSISTING) for an extension of this duration. and lets see their reply to that (IF ANY), shouldnt costs much more than 50bucks each if numbers gather, well worth isnt it, even a month mobile bill cost more than that these days

AGAIN PLEASE PLEASE PLEASE ASK TO TAKE BACK FOR TIME TO GO THRU AND READ WHAT YOU ARE ABOUT TO SIGN.

Dont make the same mistake twice..whats the point of 30% compensation by what, Dec 2019?? in Investment Vouchers!?
11:03 PM

 

[Ah Hai]

Re: AsiaOne: Slip sliding into depression

Monday, December 15, 2008
Distributor can recover the compensation from the issurer of the credit linked notes
Some investors asked me if they can expect the distributor to compensate for 50% of the loss, when they only earn 3% to 5% as commission to distribute the product. Perhaps 30% is adequate.

I suggest that the distributor should compensate 50% and get the subrogation rights to recover their loss from the issuer of the credit notes. Apart from Lehman Brothers, the other issurers are still in business and are able to compensate the distributors. The distributors can also seek to recover their loss from the receiver of Lehman Brothers.

By acting in this manner, the distributors will be able to win back the trust of their customers, and also reduce their actual loss.
Posted by Tan Kin Lian at 10:12 PM
4 comments:

Wayangnologist said...

immediately coming to mind are two possible responses to that scenario


1st, there are no ONE single insurer (in the right frame of financial stability AND MIND) whos able to cover that large scale of sums, just like the distributors situation now, EVERYONE IS WAITING FOR EVERYONE TO MAKE THE FIRST MOVE (refer to those cross replies from the different distributors you'd know)


2nd, even if there IS one big insurer and a few others 'co-sponsors', they will TAKE FOREVER to 'investigate' claims proceedings, IF THEY ARE EVEN ADMISSIBLE, at worst they will claim they are awaitng the outcome of the bankruptcy proceedings by Big Brother whoever that is, as long as there is.


You get the picture.
10:51 PM
Anonymous said...

They will not do this.
They will take the easy way out bec we are easy to bully.

Many hv rec'd wriiten notice that no compensation, not even a single cent at all!!!!!!!!!!!!!!!!!!!!!!

Why shd they take the trouble when we are so easy to bully?????
Dream on!!! Wait long long!!!
10:52 PM
Parka said...

Trust is cheap.
11:35 PM
Anonymous said...

50% compensation is fair. The FIs should now work with MAS to seek legal redress to recover the loss from the receivers of Lehman. The FIs & the Gate-keepers need to nail those chow angmo swindlers/scammers!!
12:28 AM

 

[Ah Hai]

Re: AsiaOne: Slip sliding into depression

Tuesday, December 16, 2008
Offer of voluntary assistance
Mr. Paul Smith wishes to offer voluntary assistance to anyone who needs help in the following areas:

> writing complaints to banks
> writing complaints to FIDREC
> give moral support
> attend interview with bank or FIDREC

If you need his help, you can e-mail him at [email protected]

BACKGROUND
Mr. Smith's wife invested in a credit linked note. She had a difficult time to making the complaint to the bank. Mr. Smith helped her during the process. He finds that the bank did not treat the customer fairly. He now wishes to offer his voluntary assistance to other customers who faced similar difficulty.

Mr. Smith is willing to help the investor in the interview with the bank or FIDREC, but he needs the investor to sign a mandate for him to attend the interview.
Posted by Tan Kin Lian at 5:01 AM
2 comments:

Anonymous said...

A BIG THANK YOU to Mr. Tan and all the volunteers. You guys made this world a better place to live.

Thanks many many.
9:56 PM
singaporeshortstories.blogspot.com said...

Sorry, Mr Tan, can you enlighten me on the background of Mr Paul Smith?
10:16 PM

 

[Ah Hai]

Search for a private property

Tuesday, December 16, 2008
Search for a private property
I started to search for a private property, as the property prices must have corrected. I went to StreetSine and found it to be very useful. Here is the link:
http://www.streetsine.com

I looked for new condominium projects in districts 1, 2 and 3 and saved them in MyOrganiser. I looked at each project, to see the price trends and the properties available for sale. Several of the projects have shown a 20% reduction in price in recent months. The price may fall another 10% to 20% more, but it is time to understand the market.

There is a useful SQI index which gives points for the amenities in the nearby areas. Most importantly, I could see the map and the distance to the MRT station.

I was able to view "List Nearby Properties" to see the properties that are available for sale. I was able to send a SMS to the advertiser, which is usually a property agent. This is a convenient way to search for a property.
Posted by Tan Kin Lian at 7:13 AM

 

[Ah Hai]

Fair compensation from insurance companies

Tuesday, December 16, 2008
Fair compensation from insurance companies
Dear Kin Lian,

Here are two articles from Bloomberg News. They illustrated the tactic employed by insurers in U.S, as taught by Mckinsey.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=auNrNZBzb1NE
http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=aIOpZROwhvNI

One paragraph said: "State Farm changed its approach to settling claims after
McKinsey & Co., a New York-based consulting firm, told the insurer it could increase profits by paying out less in auto accident claims and home disasters, according to evidence presented in civil court cases."

Another paragraph said: " When a policyholder files a claim, first make a low offer,
McKinsey advised Allstate. If a client accepts the low amount, Allstate should treat the person with good hands, McKinsey said. If the customer protests or hires a lawyer, Allstate should fight back."

I hope local insurers won't adopt the same approach for more profit. Please take good care of yourself.

Dennis

REPLY
I will explore giving the proposed Financial Services Consumer Association (FISCA) a role to help members get fair compensation for their insurance claims. This will make it more valuable for members to join FISCA. This service will be available for existing members only, in respect of a claim that arises after they have joined FISCA.

 

[Ah Hai]

Fair charges on life insurance policy

Tuesday, December 16, 2008
Fair charges on life insurance policy
If a policyholder save $500 a month for 20 years and earn 5% per annum, the gross gain for the period will be $76,000. However, the total deduction to cover the various charges is likely to take away about 45% of this gain. This will leave a net gain of about $41,000 only. This reduces the yield to 2.8%. The reduction in yield is 2.2% (which is rather high).

A fair deduction should be about 25% of the gross gain. This will give a better return to the policyholder, about 4.1%. The reduction in yield is 0.9% (which is quite fair). This reduction is to cover the cost of life insurance, expenses and profit margin.

During the time that I headed a life insurance company, I was able to give a better return to the policyholder by keeping the expenses low and giving a larger share of the profit to the policyholders. They were able to get a better return. The reduction of yield for an endowment policy is about 1%.

Here is a rule of thumb, if you are buying a life insurance policy:

> look at the assumed yield
> look at the net yield, after deducing the charges
> calculate the reduction in yield
> if the reduction is 1% for an endowment policy or 1.5% for a whole life policy, the yield is fair.
> if the reduction in yield exceed these benchmarks, the charges are probably too high.

You can ask the insurance agents to point out these figures that should be shown in the benefit illustration for the policy.
Posted by Tan Kin Lian at 10:08 AM

 

[Porfirio Rubirosa]

Re: Reply to Ho Yew Kee Sent to Straits Times on 13 December 2008, but not publised.

There has been no legal precedent in Singapore for investors to rely on. If it is of any comfort to investors, in a recent case in England involving precipice bonds, Lloyds TSB was handed a record £100-million ($240-million) fine and compensation by the City regulator for mis-selling high-risk investment bonds by the Financial Services Authority (FSA).
.
The precipice bonds offered investors high levels of income but their capital was at risk if stock markets fell. Scottish Widows provided the bond to the Lloyds branches. The FSA fined the bank £1.9 million for failings in its sales process, the largest fine the regulator has imposed for product mis-selling, and ordered it to pay £98 million to 2,250 customers.
.
The FSA also found that nearly half of all sales were to customers for whom it was an unsuitable product. Lloyds was found to have been selling the products to unwitting investors who had little or no experience of the stock market and its risks. But in that case, the authority had issued repeated warnings on the danger of precipice bonds to investors, and the group had a poor mis-selling record. .
.
.
David Gerald, SIAS’ president and CEO, is writing in his personal capacity.His commentary should not be takenas legal advice.
Today - What can small investors do when legalese favours financial institutions?

If I am not mistaken I recall there was also a reference to the UK County Council legal case in a letter in the BT Forum page alittle while ago and a reply by MND.

Monday, December 15, 2008
Reply to Ho Yew Kee
Sent to Straits Times on 13 December 2008, but not publised.

Editor
Forum Page
Straits Times

I refer to the letter by Mr. Ho Yew Kee entitled “A mistake to overreact” (ST, 13 Dec 2008).

Mr. Ho said, “It would be imprudent for the stewards of town council funds to play it safe and place their reserves in fixed deposits or government bonds, as the returns would not even offset the inflation rate.” He also said, “Corporate bonds provided a yield of 4 to 6 percent, but the corporate have different credit ratings”.

In my view, it would be prudent for the town councils to invest in corporate bonds, provided that the investments are spread over several corporate bonds to reduce the impact of the failure of some of these bonds.

In fact, over 10,000 people were sold the credit linked notes. They were misled into believing that they were investing in a basket of 5 to 8 of the entities, which were financially strong companies or sovereign governments.

They were told that if one entity should fail, they would only lose their invested sum on a proportionate basis. If 1 of 8 entities failed, their loss would be 12.5%.

They were shocked to learn later that they were actually selling credit insurance against the failure of any of these entities. If any single entity failed, their entire principal would be lost. Instead of spreading the risk proportionately over 8 entities, they were taking 8 times of the risk of any single bond!

In addition, their principal was actually invested in a portfolio of 100 to 150 underlying securities, which could comprise of collateralised debt obligations of lower rating. This has additional risk to the investors.

The combined risk of failure of “toxic” credit-linked notes is very high. This explains why many of these notes have failed totally, compared to bond funds.

The stewards of the town councils, who have access to professional advisers, should explain if they were aware about the nature of the credit-linked notes and if the return of 5% is insufficient to match the risk. If the town councils were also misled about the nature of these products, it is their fiduciary duty to take appropriate action to recover their loss.

Several local government bodies in the UK were also misled into investing in similar high-risk products. They took legal action and were able to obtain a court decision to rescind the contracts. I urge our town councils in Singapore to do the same.

Tan Kin Lian
Posted by Tan Kin Lian at 2:00 PM
6 comments:

Chan J C said...

Dear Mr. Tan

Thanks for sharing.

You mentioned that

"... Several local government bodies in the UK were also misled into investing in similar high-risk products. They took legal action and were able to obtain a court decision to rescind the contracts..."

Could you kindly post such cases for our reference?
Thank you sir.
JC
3:15 PM
/QUOTE]

 

[Ah Hai]

11 Comments

Blogger Chan J C said...

Dear Mr. Tan

Thanks for sharing.

You mentioned that

"... Several local government bodies in the UK were also misled into investing in similar high-risk products. They took legal action and were able to obtain a court decision to rescind the contracts..."

Could you kindly post such cases for our reference?

Thank you sir.
JC

3:15 PM
Blogger Wayangnologist said...

"Sent to Straits Times on 13 December 2008, but not publised."


There, THATS the response.

3:28 PM
Anonymous Anonymous said...

Mr Tan,

I can understand why ST didn't publish it.

Because you describe the issues so clearly and simply and it hurts the other side because they cannot rebut it.

That's why it is good to turn to alternative media like the blogs and internet.

I hope the gahmen linked ST should be aware that this is not the past, but the internet age. Their policy on this is behaving like an ostrich.

3:33 PM
Anonymous Anonymous said...

The 2% or any return rate published by the town council, does it factor in inflation?

If not, that could be a negative return rate and it is not worth keep the fund?

4:33 PM
Anonymous Anonymous said...

Did they have the knowledge to keep and grow the fund ?
Were they misled into buying the products ?

They are in a Catch 22 position, but they are still not giving the public and residents a good answer !

It is so easy, answer A or B !
A) They are not competent enough.
B) They are also victims in the saga.
Sorry no choice "C".

We are still waiting for the truth.

Hope the MPs will follow up the issue.

5:49 PM
Blogger vertigoer said...

The thing is why does Town council have to horde our money?

http://www.channelnewsasia.com/stories/singaporelocalnews/view/390407/1/.html

S$4 million is 2.6 percent of Pasir Ris-Punggol.

That means they have a fund of S$153 million.

Do we need to spend S$153 million in a year for simple services?
http://www.prpg-tc.org.sg/cms/services.php

http://www.punggol.sg/forum/communi...hman_brothers-t18993.0.html;msg64195#msg64195

From here, 80,000 household. means, TC is holding around $1912 of my money!

If not why, do they need to keep collecting so much of our cash?

6:16 PM
Anonymous BondGone said...

Just like the Town councils who thought they are buying a bucket of Corporate Bonds, we bought these MiniBond, High Notes and Pinnacle Notes because they sold them using the big name Corporations with AA+ ratings as "Bait" but they do not operate like Corporate Bond at all. If this is like corporate Bond that pays 5% interest, I am suppose to have the other Bonds in my Bucket even with one or two collapsed.

9:01 PM
Anonymous Anonymous said...

The Straits Times is controlling information to the masses. This is dangerous as it is manipulating information to its ends. This has no place in a democratic society.

9:44 PM
Anonymous Anonymous said...

Maybe the best approach is a super huge class action, unprecedented in the Singapore history of consumer protection. The key defendants shall include everyone who had a hand in perpetrating this debacle, from the sales people to the distributors and product originators.
The CEOs and senior managements of bankrupted corporations must be investigated and the guilty ones charged and punished for their sins.
After all, the long arm of the law is indeed long and unyielding, if only the governments have the resolve and spirit of co-operation in combating these frauds.

By RTA

10:22 PM
Anonymous Anonymous said...

Mr. Tan

ST may have lost your mail.

Just try to send to them again and CC to MND. Mr. Mah will know what to do.

If ST really refuse to publish, you got no choice, but to seek help from TOC to put at their headline, more and more people are reading TOC now.

10:22 PM
Anonymous Anonymous said...

Our Town Councils with deeper pockets, financial & legal advice at their disposal should in the first place initiate legal proceedings if they had been misled. Why are they so quiet?? Millions of dollars of tax-payers' monies are at stake!! Where is the transparency & accountability!!!

12:37 AM

 

[Ah Hai]

Re: Fair charges on life insurance policy

Tuesday, December 16, 2008
Fair charges on life insurance policy
If a policyholder save $500 a month for 20 years and earn 5% per annum, the gross gain for the period will be $76,000. However, the total deduction to cover the various charges is likely to take away about 45% of this gain. This will leave a net gain of about $41,000 only. This reduces the yield to 2.8%. The reduction in yield is 2.2% (which is rather high).

A fair deduction should be about 25% of the gross gain. This will give a better return to the policyholder, about 4.1%. The reduction in yield is 0.9% (which is quite fair). This reduction is to cover the cost of life insurance, expenses and profit margin.

During the time that I headed a life insurance company, I was able to give a better return to the policyholder by keeping the expenses low and giving a larger share of the profit to the policyholders. They were able to get a better return. The reduction of yield for an endowment policy is about 1%.

Here is a rule of thumb, if you are buying a life insurance policy:

> look at the assumed yield
> look at the net yield, after deducing the charges
> calculate the reduction in yield
> if the reduction is 1% for an endowment policy or 1.5% for a whole life policy, the yield is fair.
> if the reduction in yield exceed these benchmarks, the charges are probably too high.

You can ask the insurance agents to point out these figures that should be shown in the benefit illustration for the policy.
Posted by Tan Kin Lian at 10:08 AM

4 Comments

Blogger Falcon said...

Mr Tan,
This is the reason why I bought all my policies from NTUC Income when you were the CEO. It was really unfortunate for policyholders who are now left holding less than ideal policies. We miss those regular anniversary bonuses that you were able to declare because of your prudent and thrifty running of NTUC Income.
Yesterday I went to pay up my monthly premiums and cringe when I see the vision statements of NTUC Income being flashed across the big screen. It looked so ridiculously false as everything that is being flashed seem so untrue now. What "peace of Mind", the opposite is true with the new management. What "fairness in dealing with you" my experience the last 18 months were horrendous let alone fair.
But what to do, but to gradually exit quietly from my policies when they mature or surrender them come April 09.

12:12 PM
Blogger siewkhim said...

Kin Lian,

Your illustration may be true for policies covering death/TPD and for investment-linked without strings of attaching riders.

Policies covering dread disease are not likely to achieve such return because at age over 40, the cost of insurannce would escalate and a huge chunk of the premiums would be eaten up by the insurance cost.

1:02 PM
Anonymous Anonymous said...

Slowly insurance companies will adopt the ponzi model to survive if they keep on selling whole life products and endowment. Why? Cost is going up. The ceos and senior managers want high salaries. The insurance only will sell whole life and endowment or products that give high commission. Where to get these monies? From Consumers, lah, stupid.
But consumers want high protection and high return,. How ?
Reduce annual and bluff consumers that money pushed to specail bonus will give "higher" return. Is this a promise? gauranteed ? No, of course .The insurance companies are gambling with the consumers' money in the hope they can make good return. If they they make good return they keep to the projection or benefit illustration . And if not, they will tell "i didn't guarantee you , right?" That is why recently one cooperative resorted to this so called "'best industry practice."
Why it is resorting? It is easier to manipulate and to cover up the increasing cost. Don't believe , see next year.
Ponzi school of business awaits these ceos.

4:00 PM
Anonymous Anonymous said...

Hi Mr Tan,

I reckon buying term insurance and keep the rest of the money for my own investment is a better deal. I can use the extra money to clear the mortgage or invest them. This is better than having someone managing your funds in the insurance funds. More flexibility and more control. Pple should learn to invest and so away with these financial institute if possible. Education is the best investment for yourself.

4:17 PM

 

[Ah Hai]

Re: Fair charges on life insurance policy

Tuesday, December 16, 2008
Downgrade to Medishield
I wish to downgrade from a private Shield to Medishield. I have a lot of trouble with this request.

My enquiry to the insurance company was not properly answered. I was given a form to cancel my private Shield, but there was no mention about the downgrade to Medishield. I have to ask again for them to answer this question.

I search the CPF website. They said that the member can downgrade from a private Shield to Medishield at any time, but did not indicate how this can be done. I have to write to them for instructions - as I am not able to find the instructions in the website.

I prefer to be self-insured and pay out-of-pocket for my hospital charges. However, if the medical charges are very expensive, I can opt to be treated in a subsidised ward.
http://www.tankinlian.com/articles/health.html
Posted by Tan Kin Lian at 2:13 PM