Lehman Brothers Saga Continues

Sarah Tan — Fri, 24 Oct 2008 01:28:35 +0000

Regarding the Lehman Brothers saga, and the High Notes and Minibonds issues, one word that stood out was ‘greed’.

When I watched the news last night, one woman admitted that it was greed that led her to put her money there. She was attracted by the 5% interest rate, instead of the less than 1% offered by Singapore fixed deposits. True, many were retirees and some were not highly educated. However, there is no such thing as free lunches in the world. The risks would have been considerably higher if the interest rate was higher.

Of course, it is sad to read about a cobbler in his 70s who had invested his life savings into the funds. I have heard of younger people who invested $100000. The positive thing is the younger professionals still have the ability to earn the amount again.

What DBS, Maybank and Hong Leong are doing now is to look at the profile of the investors, to decide who should get help. Maybank is looking at retirees and those with primary education or less. Hong Leong will look at ‘vulnerable investors’ while DBS is not coming forward with their criteria.

One costly lesson I’ve learnt is that you should know what you are buying into, and not what other people tell you to. You have to take responsibility.

Financial Meltdown and Rally

Sarah Tan — Sat, 20 Sep 2008 04:06:32 +0000

What a rollercoaster week it had been for the financial markets. First, Lehman Brothers take a hit, sending the markets into a tailspin, followed by Merrill Lynch and AIG. Bank stocks in Singapore plunged before bouncing back.
Some of the events affect us. If you have AIA insurance policies, you may have been feeling very worried whether your policies are safe. Those who bought DBS High Notes 5, would be thinking whether their entire investment would be gone, as so long one of the companies went belly-up, the structured notes would be terminated.
With the huge bailout from the US government that is supposed to be hundreds of billions, Asian stocks rose on Friday. At this point, I still feel they are at an extremely volatile stage. Enter the market at your own risk. Oil prices and gold prices moved up again.

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Lehman Brothers Saga Continues

Financial Meltdown and Rally