Hi Kin Lian,
Please post the latest valuation (July24)of the following series of Pinnacles Notes. The situation is now very critical for holders of these notes.
Series 9 & 10 are already kaput, 1 & 3 may be gone too, and 2,6 & 7 are almost worthless at 0.3% or less(they were at 2% a fortnight ago!) and Series 5 at 1.8%, barely alive and hanging by their skin.
Only remaining 4 Series are fairly safe at this time.
Yet MAS unlike its HK counterpart is expecting each and every investor to fight it out on a case-by-case basis with his FI distributor when it has already found the FIs guilty of near-systemic or firm-wide errors and faults. MAS is indeed prescribing a slow and painful death for the investors who are the victims in toiling through processes of complaints, FIDREC and/or legal actions, while the guilty are merely given what is effectively an enforced but cost-free and painless holiday.
In the light of the latest empathetic resolution led by HK's authority, I think the Petition ought to updated appropriately to add more punch.
SB
Thursday, July 23, 2009
CPF Life - does it need to be compulsory?
Hi Mr Tan,
Thanks for willing to spend time to write on CPF Life. We all understand the NEED to have CPF Life. But I would like to have an unbiased view on this plan which is made compulsory for everybody.
Our government is taking a significant portion of our hard-earned CPF money and place us on this plan. Is this a reasonable deal for us or simply we have no choice but to swallow this bitter pill?
Among the options available in this CPF Life, is it just choose based on "whether I want to leave some money for our younger generation" and thus opt for "receive minimum payout when I am alive"?
Is it really true that since CPF Board will be administering this annuity plan, it is better and reliable than those offered by insurers which definitely have more experience in this area?
JL
Thanks for willing to spend time to write on CPF Life. We all understand the NEED to have CPF Life. But I would like to have an unbiased view on this plan which is made compulsory for everybody.
Our government is taking a significant portion of our hard-earned CPF money and place us on this plan. Is this a reasonable deal for us or simply we have no choice but to swallow this bitter pill?
Among the options available in this CPF Life, is it just choose based on "whether I want to leave some money for our younger generation" and thus opt for "receive minimum payout when I am alive"?
Is it really true that since CPF Board will be administering this annuity plan, it is better and reliable than those offered by insurers which definitely have more experience in this area?
JL
SCMP:Minibond decision heartens investors similarly burned
24 July 2009
The watershed decision forcing banks to pay more than HK$6 billion compensation to Lehman minibond victims has given hope to thousands of investors burned in meltdowns of similar structured products.
The Securities and Futures Commission (SFC) ordered 16 banks, including Bank of China (Hong Kong) and Bank of East Asia, to return up to 70 per cent of money invested in minibonds to investors because bank staff sold the complex derivatives as low-risk.
The banking regulator, the Hong Kong Monetary Authority, will now deal with 9,000 other complaints of mis-selling of structured products. These are likely to include gripes about worthless Constellation Notes, sold by DBS Bank, and Octave Notes, sold by 17 banks and designed by Morgan Stanley.
"We will investigate if there is any mis-selling in these complaints. Our target is to complete all the cases by March," HKMA executive director Raymond Li Ling-cheung said.
Democratic Party chairman Albert Ho Chun-yan said: "Octave Notes and Constellation investors now have a stronger case for compensation."
Like minibonds, Constellation Notes were derivative products - financial bets - linked to the financial health of Lehman Brothers. Their buyers wagered that no companies in a group that included Lehman would go bust.
Investors were wiped out when the US bank failed last September.
Out of a series of 18 derivative-based Octave Notes, three required buyers to strike similar bets that Lehman would not fail. Buyers lost everything after the bank's demise.
Many investors who attended meetings organised by the Democratic Party claimed they had no idea they were buying derivatives. Instead, they claimed they were told the notes were comparable to time deposits or simple corporate bonds.
Shelley So, a Constellation investor, said DBS staff told her the notes were "for extra income, because we do not earn very much". In 2006, she and her husband poured US$130,000 into the product. The couple had instructed lawyers to try to get their money back.
DBS declined to comment.
About 4,000 Hong Kong people bought HK$2.4 billion worth of Constellation Notes. Octave Notes were sold to more than 8,000 people, who invested HK$1.8 billion.
Meanwhile, dozens of Lehman minibond investors protested outside the SFC yesterday, saying the new payout proposal was not acceptable and they wanted all of their investment principal back.
The watershed decision forcing banks to pay more than HK$6 billion compensation to Lehman minibond victims has given hope to thousands of investors burned in meltdowns of similar structured products.
The Securities and Futures Commission (SFC) ordered 16 banks, including Bank of China (Hong Kong) and Bank of East Asia, to return up to 70 per cent of money invested in minibonds to investors because bank staff sold the complex derivatives as low-risk.
The banking regulator, the Hong Kong Monetary Authority, will now deal with 9,000 other complaints of mis-selling of structured products. These are likely to include gripes about worthless Constellation Notes, sold by DBS Bank, and Octave Notes, sold by 17 banks and designed by Morgan Stanley.
"We will investigate if there is any mis-selling in these complaints. Our target is to complete all the cases by March," HKMA executive director Raymond Li Ling-cheung said.
Democratic Party chairman Albert Ho Chun-yan said: "Octave Notes and Constellation investors now have a stronger case for compensation."
Like minibonds, Constellation Notes were derivative products - financial bets - linked to the financial health of Lehman Brothers. Their buyers wagered that no companies in a group that included Lehman would go bust.
Investors were wiped out when the US bank failed last September.
Out of a series of 18 derivative-based Octave Notes, three required buyers to strike similar bets that Lehman would not fail. Buyers lost everything after the bank's demise.
Many investors who attended meetings organised by the Democratic Party claimed they had no idea they were buying derivatives. Instead, they claimed they were told the notes were comparable to time deposits or simple corporate bonds.
Shelley So, a Constellation investor, said DBS staff told her the notes were "for extra income, because we do not earn very much". In 2006, she and her husband poured US$130,000 into the product. The couple had instructed lawyers to try to get their money back.
DBS declined to comment.
About 4,000 Hong Kong people bought HK$2.4 billion worth of Constellation Notes. Octave Notes were sold to more than 8,000 people, who invested HK$1.8 billion.
Meanwhile, dozens of Lehman minibond investors protested outside the SFC yesterday, saying the new payout proposal was not acceptable and they wanted all of their investment principal back.
The Standard:Protests ease, investors come to terms with offer
24 July 2009
Regular investors started coming to terms with the Lehman minibond compensation offer yesterday, with only a handful of elderly investors protesting outside the Securities and Futures Commission offices.
Some of those protesting said they were inclined to accept the offer, although they held out a sliver of hope that they would get more.
``I have no money to use. My wife and I only have this pension, I can only accept the 60 percent compensation and use it,'' said an investor surnamed Chan.
Another investor said he prefers to reinvest the settlement amount to make more money. ``It's better to get back some money to invest in stocks. As the entanglement goes, chances are you won't be able to get it back some five years later,'' he said. ``Making up for the loss from stocks now is just the same.''
Consumer Council chairman Anthony Cheung Bing-leung advised investors to evaluate their individual situations before deciding whether or not to accept the buyback proposals by the regulators and banks. ``If the investors are willing to accept it, we will be pleased. But we also respect whatever decisions the investors make in the end,'' Cheung said. The council has received about 12,000 complaints from investors so far, including about 50 cases applying to the legal fund.
Customers of DBS Bank (Hong Kong), who bought Constellation credit-linked notes linked to Lehman, are still fighting for more compensation from the bank. They are not covered under the repurchase scheme as what they bought was not minibonds.
Bank shares surged yesterday as investors were relieved that the uncertainty on the minibond compensation plan was removed. Bank of East Asia (0023) jumped 3.3 percent to HK$25.10, while Bank of China (Hong Kong) (2388) rose 2.5 percent to HK$15.54.
Bank of Communications (3328) said yesterday it would have to pay a total of HK$204.54 million in investor compensation. It said the minibond repurchases will have ``minimal impact'' on financial results.
Dah Sing Banking Group (2356) said it would need to pay up to HK$444 million in compensation, plus HK$20 million in ``top-up payments'' and HK$22 million in legal-fund contributions.
Regular investors started coming to terms with the Lehman minibond compensation offer yesterday, with only a handful of elderly investors protesting outside the Securities and Futures Commission offices.
Some of those protesting said they were inclined to accept the offer, although they held out a sliver of hope that they would get more.
``I have no money to use. My wife and I only have this pension, I can only accept the 60 percent compensation and use it,'' said an investor surnamed Chan.
Another investor said he prefers to reinvest the settlement amount to make more money. ``It's better to get back some money to invest in stocks. As the entanglement goes, chances are you won't be able to get it back some five years later,'' he said. ``Making up for the loss from stocks now is just the same.''
Consumer Council chairman Anthony Cheung Bing-leung advised investors to evaluate their individual situations before deciding whether or not to accept the buyback proposals by the regulators and banks. ``If the investors are willing to accept it, we will be pleased. But we also respect whatever decisions the investors make in the end,'' Cheung said. The council has received about 12,000 complaints from investors so far, including about 50 cases applying to the legal fund.
Customers of DBS Bank (Hong Kong), who bought Constellation credit-linked notes linked to Lehman, are still fighting for more compensation from the bank. They are not covered under the repurchase scheme as what they bought was not minibonds.
Bank shares surged yesterday as investors were relieved that the uncertainty on the minibond compensation plan was removed. Bank of East Asia (0023) jumped 3.3 percent to HK$25.10, while Bank of China (Hong Kong) (2388) rose 2.5 percent to HK$15.54.
Bank of Communications (3328) said yesterday it would have to pay a total of HK$204.54 million in investor compensation. It said the minibond repurchases will have ``minimal impact'' on financial results.
Dah Sing Banking Group (2356) said it would need to pay up to HK$444 million in compensation, plus HK$20 million in ``top-up payments'' and HK$22 million in legal-fund contributions.
China Daily:Investors continue minibond fight
24 July 2009
HONG KONG: A complaint arising from the sale of Lehman Brothers minibonds is headed for the courts. At the same time the Consumer Council will continue assisting those hit hard when the minibonds and other dicey financial instruments became worthless.
The watchdog has received about 12,000 related complaints since the US investment bank collapsed last September causing astronomical losses to investors.
Apart from the one case that has been set for litigation, about 50 other cases are under review for possible legal action.
Investors burnt in the minibonds collapse have accused local banks of malpractice and deception in their efforts to sell the complex investment tools. Many of those who were hurt are elderly. Many don't have education sufficient to provide them a clear grasp on what happened to their money.
Speaking at a Consumer Council seminar yesterday, Secretary for Financial Services and the Treasury Chan Ka-keung urged sellers and financial consultants to expound fully the risk of investment products to investors and to assess actual needs in order to protect the consumers' rights.
They should not "hard sell" products, Chan said.
Meanwhile, Consumer Council chairman Anthony Cheung reminded consumers that it is they who must decide whether to accept the buy-back scheme.
Regulators and 16 banks set up the compensation package which was announced on Wednesday. Investors could receive between 60 and 70 percent of the principal they invested. But "experienced" and "professional" investors will not be eligible.
"The package is proposed by the Securities and Futures Commission (SFC), the Hong Kong Monetary Authority and banks. It is up to consumers to make final judgment. Everyone is under different circumstances," he said at a seminar yesterday.
Lawmaker Kam Nai-wai who has helped to champion the cause of investors pressed for the 16 banks to disclose the valuation of minibond collateral for investors in order to help the investors to consider whether they should accept the buy-back package.
Some minibond holders staged a sit-in at the headquarters of the SFC yesterday expressing their dissatisfaction with the compensation package. The protestors demanded full restitution, not partial.
Some said they had no alternative but to accept the offer. They need money to live. Some were confused, saying they had no idea whether they are entitled to compensation.
Local actress Meg Lam Kin-ming invested about HK$10 million in the minibonds and other investment tools. She may not be able to get back the principal, as a "professional investor" is one with over HK$8 million investment portfolio.
"What is the judgment of an investor as 'professional'? Does it mean buying lots of investment products before? I have no idea at all," said Lam.
HONG KONG: A complaint arising from the sale of Lehman Brothers minibonds is headed for the courts. At the same time the Consumer Council will continue assisting those hit hard when the minibonds and other dicey financial instruments became worthless.
The watchdog has received about 12,000 related complaints since the US investment bank collapsed last September causing astronomical losses to investors.
Apart from the one case that has been set for litigation, about 50 other cases are under review for possible legal action.
Investors burnt in the minibonds collapse have accused local banks of malpractice and deception in their efforts to sell the complex investment tools. Many of those who were hurt are elderly. Many don't have education sufficient to provide them a clear grasp on what happened to their money.
Speaking at a Consumer Council seminar yesterday, Secretary for Financial Services and the Treasury Chan Ka-keung urged sellers and financial consultants to expound fully the risk of investment products to investors and to assess actual needs in order to protect the consumers' rights.
They should not "hard sell" products, Chan said.
Meanwhile, Consumer Council chairman Anthony Cheung reminded consumers that it is they who must decide whether to accept the buy-back scheme.
Regulators and 16 banks set up the compensation package which was announced on Wednesday. Investors could receive between 60 and 70 percent of the principal they invested. But "experienced" and "professional" investors will not be eligible.
"The package is proposed by the Securities and Futures Commission (SFC), the Hong Kong Monetary Authority and banks. It is up to consumers to make final judgment. Everyone is under different circumstances," he said at a seminar yesterday.
Lawmaker Kam Nai-wai who has helped to champion the cause of investors pressed for the 16 banks to disclose the valuation of minibond collateral for investors in order to help the investors to consider whether they should accept the buy-back package.
Some minibond holders staged a sit-in at the headquarters of the SFC yesterday expressing their dissatisfaction with the compensation package. The protestors demanded full restitution, not partial.
Some said they had no alternative but to accept the offer. They need money to live. Some were confused, saying they had no idea whether they are entitled to compensation.
Local actress Meg Lam Kin-ming invested about HK$10 million in the minibonds and other investment tools. She may not be able to get back the principal, as a "professional investor" is one with over HK$8 million investment portfolio.
"What is the judgment of an investor as 'professional'? Does it mean buying lots of investment products before? I have no idea at all," said Lam.
Parliament Answers to Lehman Structure Products - 20 July 2009
Dear Mr. Tan,
QUOTE: MAS’ role is not to judge the merits of the product being offered. Rather, MAS checks that the issuer discloses the features and risks of the product, and that there are no false or misleading statements. MAS does so based on the information provided by the issuer and its advisers.
The most significant point from the above statement of the Deputy Chairman is "MAS does so based on information provided by the issuer and its advisers".
If subsequently the court find that the prospectus and pricing statements:
* fail to disclose the features and risks of the product and
* there are false and misleading statements
the investor is able to claim for full recovery of the investment.
QUOTE: MAS’ role is not to judge the merits of the product being offered. Rather, MAS checks that the issuer discloses the features and risks of the product, and that there are no false or misleading statements. MAS does so based on the information provided by the issuer and its advisers.
The most significant point from the above statement of the Deputy Chairman is "MAS does so based on information provided by the issuer and its advisers".
If subsequently the court find that the prospectus and pricing statements:
* fail to disclose the features and risks of the product and
* there are false and misleading statements
the investor is able to claim for full recovery of the investment.
SCMP:Some sympathy for the devils
24 July 2009
It's deeply unfashionable to feel any sympathy for bankers these days.
In Hong Kong, they have been exposed as no better than back-alley thieves, cruelly mugging harmless old grannies, stealing their savings and leaving them with purses stuffed with nothing but worthless Lehman Brothers minibonds.
That's pretty much the narrative as it's been told to us. But you have to wonder how accurate that interpretation of the minibond story is. And you have to doubt whether Wednesday's settlement, in which 16 banks agreed to pay minibond investors back at least 60 cents in the dollar, is really as great a deal as it's been made out.
With minibonds sold to senile, illiterate and mentally handicapped savers, there were clear breaches of the regulations in some cases. Those investors should be paid back at 100 cents in the dollar, not 60, and the offending banks should be hammered with stiff penalties to boot, not allowed to escape additional punishment.
But those cases are in the minority. For the most part, minibonds were bought by people who went into their banks with eyes open and who knew exactly what they were after: higher returns.
As the first chart below shows, interest rates on bank time deposits have collapsed in recent years, falling from double-digit levels in the early 1980s to rates as low as zero in the early years of this decade.
As a result, depositors turned into eager buyers of complex structured instruments that promised a higher rate of return than plain vanilla time deposits.
Yet as anyone who isn't senile, illiterate or mentally handicapped can work out for themselves, a product that offers a yield of 5 per cent or more when interest rates are at zero must come with considerably more risk of loss than a simple time deposit. You don't need to understand one-touch options or credit default swaps to work that one out. It's a clear case of caveat emptor: buyer beware.
There is a strong argument to be made that savers who bought minibonds because they demanded higher returns should have to bear their losses. They invested in risky securities and were unlucky enough to have them blow up in their faces. That's tough. But it is hard to see why one group of investors - the banks' shareholders - should be forced to bail out another - the minibond buyers - simply because the second group made a bad decision.
On the other hand, the banks were hardly blameless. Until the mid-1990s, profits were relatively easy to come by. Demand for loans was brisk, and Hong Kong's loan to deposit ratio rose as high as 180 per cent.
The 1997 Asian crisis changed all that. As the second chart below shows, loan demand dried up even as deposits kept mounting. The loan to deposit ratio tumbled, falling to within a whisker of 50 per cent in recent years, brutally squeezing bank's interest income.
In response, Hong Kong banks ramped up their sales of securities, pushing structured products like minibonds to their depositors in order to capture lucrative commission income. Many went for the hard sell, sacrificing long-term customer relationships to boost short-term profits.
Yet although that's dumb and although many of the instruments sold were wildly unsuitable for ordinary retail investors, what the banks did - for the most part - was perfectly legal. It is unclear why they should be punished for it.
But the real problem with the minibond settlement is not so much its injustice, but the precedent it sets.
Securities and Futures Commission chief Martin Wheatley called Wednesday's deal "a watershed in the regulation of financial services in Hong Kong". He's not kidding. In pushing for a blanket bail-out of minibond investors, the regulators have served notice that from now on investors who lose money will be bailed out if only they make a loud enough noise about it.
So, expect a flood of compensation demands from investors who have taken losses on other structured products, on warrants or hedge funds. The list is endless.
Worse, Wednesday's agreement will only encourage investors to take excessive risks in the future, safe in the knowledge that if they end up out of pocket, they will be able to cry "mis-selling" and force the banks to refund their money. The minibond deal badly skews the balance of risk and reward for investors, introducing a hefty dose of moral hazard that stands to inflict severe damage on Hong Kong's financial services industry.
So although it's not fashionable to feel sorry for bankers, perhaps they do deserve some small sympathy in this case.
It's deeply unfashionable to feel any sympathy for bankers these days.
In Hong Kong, they have been exposed as no better than back-alley thieves, cruelly mugging harmless old grannies, stealing their savings and leaving them with purses stuffed with nothing but worthless Lehman Brothers minibonds.
That's pretty much the narrative as it's been told to us. But you have to wonder how accurate that interpretation of the minibond story is. And you have to doubt whether Wednesday's settlement, in which 16 banks agreed to pay minibond investors back at least 60 cents in the dollar, is really as great a deal as it's been made out.
With minibonds sold to senile, illiterate and mentally handicapped savers, there were clear breaches of the regulations in some cases. Those investors should be paid back at 100 cents in the dollar, not 60, and the offending banks should be hammered with stiff penalties to boot, not allowed to escape additional punishment.
But those cases are in the minority. For the most part, minibonds were bought by people who went into their banks with eyes open and who knew exactly what they were after: higher returns.
As the first chart below shows, interest rates on bank time deposits have collapsed in recent years, falling from double-digit levels in the early 1980s to rates as low as zero in the early years of this decade.
As a result, depositors turned into eager buyers of complex structured instruments that promised a higher rate of return than plain vanilla time deposits.
Yet as anyone who isn't senile, illiterate or mentally handicapped can work out for themselves, a product that offers a yield of 5 per cent or more when interest rates are at zero must come with considerably more risk of loss than a simple time deposit. You don't need to understand one-touch options or credit default swaps to work that one out. It's a clear case of caveat emptor: buyer beware.
There is a strong argument to be made that savers who bought minibonds because they demanded higher returns should have to bear their losses. They invested in risky securities and were unlucky enough to have them blow up in their faces. That's tough. But it is hard to see why one group of investors - the banks' shareholders - should be forced to bail out another - the minibond buyers - simply because the second group made a bad decision.
On the other hand, the banks were hardly blameless. Until the mid-1990s, profits were relatively easy to come by. Demand for loans was brisk, and Hong Kong's loan to deposit ratio rose as high as 180 per cent.
The 1997 Asian crisis changed all that. As the second chart below shows, loan demand dried up even as deposits kept mounting. The loan to deposit ratio tumbled, falling to within a whisker of 50 per cent in recent years, brutally squeezing bank's interest income.
In response, Hong Kong banks ramped up their sales of securities, pushing structured products like minibonds to their depositors in order to capture lucrative commission income. Many went for the hard sell, sacrificing long-term customer relationships to boost short-term profits.
Yet although that's dumb and although many of the instruments sold were wildly unsuitable for ordinary retail investors, what the banks did - for the most part - was perfectly legal. It is unclear why they should be punished for it.
But the real problem with the minibond settlement is not so much its injustice, but the precedent it sets.
Securities and Futures Commission chief Martin Wheatley called Wednesday's deal "a watershed in the regulation of financial services in Hong Kong". He's not kidding. In pushing for a blanket bail-out of minibond investors, the regulators have served notice that from now on investors who lose money will be bailed out if only they make a loud enough noise about it.
So, expect a flood of compensation demands from investors who have taken losses on other structured products, on warrants or hedge funds. The list is endless.
Worse, Wednesday's agreement will only encourage investors to take excessive risks in the future, safe in the knowledge that if they end up out of pocket, they will be able to cry "mis-selling" and force the banks to refund their money. The minibond deal badly skews the balance of risk and reward for investors, introducing a hefty dose of moral hazard that stands to inflict severe damage on Hong Kong's financial services industry.
So although it's not fashionable to feel sorry for bankers, perhaps they do deserve some small sympathy in this case.
CPF Life
There are some comments about CPF Life. I will be doing some research about it and will write my views later. If you have specific offers for CPF Life, please send them to me for analysis.
Coverage of HK settlement
I was surprised that ther was no coverage of the HK settlement of the minibonds in the Straits Times today (Friday). I do not know if there were any coverage during the past two days. What about the other newspapers? Did they cover the HK settlement agreed between the regulators and the 16 banks?
Please help me to check your newspapers (Strait Times, Today, MyPaper, Zaobao, Wanbao) for the past few days and report your findings here.
Please help me to check your newspapers (Strait Times, Today, MyPaper, Zaobao, Wanbao) for the past few days and report your findings here.
The 10 Most Dangerous Foods to Eat While Driving
Drivers who are drinking and stuffing their faces while on the road are a serious problem.
Restraining Orders for Food?
Hagerty Classic Insurance, a provider of classic-car insurance, looked more closely at this issue after a DMV check on an insurance applicant turned up a "restraining order" against anything edible within his reach while driving. The man apparently had several accidents attributed to eating while driving on his record.
Eating while driving is one of the many distracting things you can do, according to a study released by the National Highway Traffic Safety Administration (NHTSA) and the Virginia Tech Transportation Institute. 87% of rear-end crashes in which the driver struck the lead vehicle, and 42% of near-crashes involve some form of driver distraction.
Though NHTSA doesn't track specific information on food-related distraction, it does track general distractions. According to NHTSA, distraction was most likely to be involved in rear-end collisions in which the lead vehicle was stopped and in single-vehicle crashes. What makes distractions like eating such a problem is that they combine with unexpected situations – like a sharp curve or another driver's sudden stop – to cause an accident.
The top 10 food offenders in a car are:
- Coffee – Even in cups with travel lids, somehow the liquid finds its way out of the opening each time you hit a bump.
- Hot soup – Many people drink it like coffee and run the same risks.
- Tacos – Any food that can disassemble itself will leave your car looking like a salad bar.
- Chili Dogs – The potential for drips and slops down the front of clothing is significant.
- Hamburgers – From the grease of the burger to ketchup and mustard, it could all end up on your hands, your clothes, and the steering wheel.
- Barbecued food – Ditto. The sauce may be great, but if you have to lick your fingers, the sauce will end up on whatever you touch – and that wheel will be tough to grip.
- Fried chicken – Another food that leaves you with greasy hands, which means constantly wiping them on something, even if it's your shirt.
- Jelly donuts – Have you eaten a jelly donut without some of the center oozing out? It's simply not possible.
- Soft drinks – Not only are they subject to spills, but also the carbonated kind can fizz as you're drinking if you make sudden movements, and most of us remember cola fizz in the nose from childhood. It isn't any more pleasant now.
- Chocolate – Like greasy foods, chocolate coats the fingers as it melts, leaving its mark anywhere you touch. As you try to clean it off the steering wheel you're likely to end up swerving.
Insurance companies don't track specific information on eating and driving, because it's too difficult to break it down. But every company knows it's a problem. The difficulty in pinning down the exact cause of accidents lies in separating distractions such as cell phone use, talking to passengers, reading the newspaper, and eating, all of which drivers engage in while also trying to operate a two-ton piece of machinery.
How widespread is this food problem?
In a 2001 survey of 1,000 drivers for Exxon, more than 70 percent of drivers say they eat while driving, up from 58 percent in 1995. Eighty-three percent say they drink coffee, juice, or soda while driving and a few even say they'd love a microwave in their car.
While the NHTSA study doesn't mention eating as a driver distraction, food is probably involved in many crashes. Actions that cause distracted driving and lead to vehicle crashes are:
- Using a cell phone. Calling for carry-out?
- Reaching for a moving object. Flying French fries?
- Looking at an object or event outside of the vehicle. Where is Starbucks?
- Reading. Or tweeting for the closest BBQ?
- Applying makeup. Every second counts!
A 2008 national poll conducted by Nationwide Mutual showed that only 3 percent of respondents said "eating" is the most dangerous distraction for people while driving.
But, can you afford to be distracted? Think of this way. If you take your eyes off the road for 5 seconds every 5 minutes you drive, you've lost control of your car for a full minute every hour! And, besides being the right thing to do, cutting back on everyday driving distraction will help you save money on car insurance. Insurance.com's study of accidents and traffic tickets shows that the average auto insurance rate increases 25% following the first accident.
Tips for getting the best insurance quotes
Tips for getting the best insurance quotes.
General insurance tips:
1. Have your current insurance policy with you when requesting your insurance quotes.
2. Consider a higher insurance deductible.
3. Place all of your insurance policies with the same company to qualify for a multiple policy discount.
For car insurance quotes
1. Be sure all vehicle discounts are applied (Anti-lock brakes, Alarm system, daytime running lights, vin-etching, etc.).
2. Take a defensive driving course.
3. Be very accurate about your mileage to and from work.
4. Ask about affinity discounts.
For a homeowners insurance quotes
1. Be sure that your home is insured to its value
2. Be sure all home discounts are applied (Alarm, smoke alarms, fire extinguishers, dead bolt locks, etc.).
3. If your older home has been renovated, tell your agent.
For a life insurance quotes
1. Consider level premium term insurance.
2. If you are a smoker, quit for at least 13 months and request that your insurance company consider you for a nonsmoker insurance rate.
For a health insurance quotes
1. Consider a higher co-payment or deductible.
2. Join a group health insurance plan.
For a long-term insurance quotes
1. Consider a longer elimination (waiting) period.
2. Purchase coverage when you are young (premiums are lower).
3. Pick a daily benefit based on where you live.
General insurance tips:
1. Have your current insurance policy with you when requesting your insurance quotes.
2. Consider a higher insurance deductible.
3. Place all of your insurance policies with the same company to qualify for a multiple policy discount.
For car insurance quotes
1. Be sure all vehicle discounts are applied (Anti-lock brakes, Alarm system, daytime running lights, vin-etching, etc.).
2. Take a defensive driving course.
3. Be very accurate about your mileage to and from work.
4. Ask about affinity discounts.
For a homeowners insurance quotes
1. Be sure that your home is insured to its value
2. Be sure all home discounts are applied (Alarm, smoke alarms, fire extinguishers, dead bolt locks, etc.).
3. If your older home has been renovated, tell your agent.
For a life insurance quotes
1. Consider level premium term insurance.
2. If you are a smoker, quit for at least 13 months and request that your insurance company consider you for a nonsmoker insurance rate.
For a health insurance quotes
1. Consider a higher co-payment or deductible.
2. Join a group health insurance plan.
For a long-term insurance quotes
1. Consider a longer elimination (waiting) period.
2. Purchase coverage when you are young (premiums are lower).
3. Pick a daily benefit based on where you live.
The Emperor's Clothes and Singapore
Read this article.
Share your views about this article and the findings of the survey. Does the survey reflect a small proportion of unhappy Singaporeans, or is a wider reflection of the views of many people?
Share your views about this article and the findings of the survey. Does the survey reflect a small proportion of unhappy Singaporeans, or is a wider reflection of the views of many people?
SCMP:How swift lobbying ended a dispute that had dragged on for 10 months
23 July 2009
A 20-day lobbying effort by government officials and bankers has ended a 10-month dispute between banks and investors over settling the Lehman Brothers minibonds issue.
"The past 10 months have been very tough - especially the last 20 days," a banking source said.
The 16 lenders yesterday sealed the HK$6.3 billion agreement with the Securities and Futures Commission and the Monetary Authority to pay back 29,000 investors.
The SFC, the HKMA and banking sources all denied that political pressure forced the agreement, although the Legislative Council is questioning the heads of both regulatory bodies and bankers over more than 20,000 complaints from investors about the conduct of banks in selling the minibonds.
Shortly after Lehman Brothers collapsed last September, the government proposed that banks buy back minibonds from investors - similar to the current agreement. But it took 10 months for the deal to unfold, as banks were initially concerned that it might attract legal challenges from the liquidators of Lehman Brothers.
Since then, the SFC persuaded two brokers - Sun Hung Kai Financial and KGI Asia - to repay investors fully. But until yesterday, it had yet to clinch a deal with the 16 banks that sold the minibonds.
The turning point came only 20 days ago, after Bank of China (Hong Kong) came up with an agreement similar to the deal agreed yesterday. Then the other 15 banks joined forces to negotiate with the SFC as a group.
Bankers said the sector's legislator, David Li Kwok-po, chairman and chief executive of the Bank of East Asia, was one of the most active in lobbying the SFC and the HKMA to accept the deal.
"This is the best deal possible, with the greatest sincerity from the banks. There is upside and no downside in this deal," one banker said. "We want to leave this all behind us, to move on and look forward."
Secretary for Financial Services and the Treasury Chan Ka-keung said: "I hope the settlement scheme {hellip} will help investors return to their normal lives."
A 20-day lobbying effort by government officials and bankers has ended a 10-month dispute between banks and investors over settling the Lehman Brothers minibonds issue.
"The past 10 months have been very tough - especially the last 20 days," a banking source said.
The 16 lenders yesterday sealed the HK$6.3 billion agreement with the Securities and Futures Commission and the Monetary Authority to pay back 29,000 investors.
The SFC, the HKMA and banking sources all denied that political pressure forced the agreement, although the Legislative Council is questioning the heads of both regulatory bodies and bankers over more than 20,000 complaints from investors about the conduct of banks in selling the minibonds.
Shortly after Lehman Brothers collapsed last September, the government proposed that banks buy back minibonds from investors - similar to the current agreement. But it took 10 months for the deal to unfold, as banks were initially concerned that it might attract legal challenges from the liquidators of Lehman Brothers.
Since then, the SFC persuaded two brokers - Sun Hung Kai Financial and KGI Asia - to repay investors fully. But until yesterday, it had yet to clinch a deal with the 16 banks that sold the minibonds.
The turning point came only 20 days ago, after Bank of China (Hong Kong) came up with an agreement similar to the deal agreed yesterday. Then the other 15 banks joined forces to negotiate with the SFC as a group.
Bankers said the sector's legislator, David Li Kwok-po, chairman and chief executive of the Bank of East Asia, was one of the most active in lobbying the SFC and the HKMA to accept the deal.
"This is the best deal possible, with the greatest sincerity from the banks. There is upside and no downside in this deal," one banker said. "We want to leave this all behind us, to move on and look forward."
Secretary for Financial Services and the Treasury Chan Ka-keung said: "I hope the settlement scheme {hellip} will help investors return to their normal lives."
SCMP:Legco inquiry to proceed despite agreement on compensation
23 July 2009
A proposed deal to settle all investor claims against banks involved in the Lehman Brothers minibond debacle will not derail attempts by the Legislative Council to get to the bottom of the unprecedented case.
Raymond Ho Chung-tai, chairman of the Legco subcommittee investigating the minibond saga, declined to comment on the settlement deal but said the investigation would continue.
The subcommittee was set up to examine issues relating to the way banks sold the structured investments to clients and not to help investors seek compensation, Mr Ho said. He said it would publish its findings in a report by next year at the earliest.
Similarly, the Consumer Council will proceed with its application to the consumer legal action fund to bring a case to court against a financial institution that sold a Lehman-related product to an investor. But a spokesman for the council said investors should seriously consider the settlement deal.
Some lawmakers, including Regina Ip Lau Suk-yee and Jeffery Lam Kin-fung, said the deal was acceptable. "The deal is quite good and covers a lot of the investors," Mrs Ip said. "Banks here are more generous than those in Singapore." On average, investors in Singapore got back only 32.2 per cent of their investment, she said.
But Democrat legislator Kam Nai-wai called on the government to get the banks to first reveal the remaining value of the Lehman products' underlying assets. Mr Kam insisted it was unfair to investors if they had to decide whether or not to accept the deal before knowing what the collateral of their investment was worth.
Minibonds are not corporate bonds, but consist of high-risk credit-linked derivatives. They are marketed as a proxy investment in well-known firms.
A Ms Lau, who sunk US$100,000 of her grandfather's savings into Lehman minibonds, said the settlement offer did not adequately reflect the banks' responsibility to investors. She said she felt the banks were trying to absolve themselves without shouldering responsibility by paying off investors through the settlement deal. "I still haven't told my grandfather that the money is in Lehman minibonds," Ms Lau said. "I'm afraid he wouldn't be able to take the news if I told him."
Kitty Lai, who poured HK$6 million into minibonds, flatly rejected the deal and accused the government and regulators of siding with the banks.
"You cannot trust the government or the Hong Kong Monetary Authority. Sometimes, when I think about this, I just want to kill myself," Ms Lai said.
To Kam-leung, whose 66-year-old father purchased Lehman minibonds from the Bank of Communications, said his family would accept the deal even though they felt it was unreasonable.
"It's because we don't want it to drag on. And we only invested HK$120,000, which is a comparatively small amount," he said. "My father suffers from diabetes and the minibond issue has troubled us for months. We also bear part of the responsibility because my father trusted the bank staff and didn't consult us before signing the documents."
A proposed deal to settle all investor claims against banks involved in the Lehman Brothers minibond debacle will not derail attempts by the Legislative Council to get to the bottom of the unprecedented case.
Raymond Ho Chung-tai, chairman of the Legco subcommittee investigating the minibond saga, declined to comment on the settlement deal but said the investigation would continue.
The subcommittee was set up to examine issues relating to the way banks sold the structured investments to clients and not to help investors seek compensation, Mr Ho said. He said it would publish its findings in a report by next year at the earliest.
Similarly, the Consumer Council will proceed with its application to the consumer legal action fund to bring a case to court against a financial institution that sold a Lehman-related product to an investor. But a spokesman for the council said investors should seriously consider the settlement deal.
Some lawmakers, including Regina Ip Lau Suk-yee and Jeffery Lam Kin-fung, said the deal was acceptable. "The deal is quite good and covers a lot of the investors," Mrs Ip said. "Banks here are more generous than those in Singapore." On average, investors in Singapore got back only 32.2 per cent of their investment, she said.
But Democrat legislator Kam Nai-wai called on the government to get the banks to first reveal the remaining value of the Lehman products' underlying assets. Mr Kam insisted it was unfair to investors if they had to decide whether or not to accept the deal before knowing what the collateral of their investment was worth.
Minibonds are not corporate bonds, but consist of high-risk credit-linked derivatives. They are marketed as a proxy investment in well-known firms.
A Ms Lau, who sunk US$100,000 of her grandfather's savings into Lehman minibonds, said the settlement offer did not adequately reflect the banks' responsibility to investors. She said she felt the banks were trying to absolve themselves without shouldering responsibility by paying off investors through the settlement deal. "I still haven't told my grandfather that the money is in Lehman minibonds," Ms Lau said. "I'm afraid he wouldn't be able to take the news if I told him."
Kitty Lai, who poured HK$6 million into minibonds, flatly rejected the deal and accused the government and regulators of siding with the banks.
"You cannot trust the government or the Hong Kong Monetary Authority. Sometimes, when I think about this, I just want to kill myself," Ms Lai said.
To Kam-leung, whose 66-year-old father purchased Lehman minibonds from the Bank of Communications, said his family would accept the deal even though they felt it was unreasonable.
"It's because we don't want it to drag on. And we only invested HK$120,000, which is a comparatively small amount," he said. "My father suffers from diabetes and the minibond issue has troubled us for months. We also bear part of the responsibility because my father trusted the bank staff and didn't consult us before signing the documents."
SCMP:The right rules, and the facts to invest prudently
23 July 2009
The proposed settlement brokered by the Securities and Futures Commission offers a swift and practical way to resolve the long-running minibond controversy. It will not settle all outstanding claims, but it is a realistic solution that should help most retail investors recover up to 70 per cent of their investments, and possibly more, depending on market conditions. No doubt some will still reject it, having clamoured for a 100 per cent refund. But those who want to put the stressful matter behind them can now do so on generally fair terms.
Banks responsible for selling the complex products stand to lose most. But in return for their agreement to settle, regulators will drop all investigations against them. The banks are more willing to settle now because recent market rallies have pushed up the value of the collateral tied to the products. That should help lessen their losses and recover more money for investors.
The deal, therefore, is a compromise that will hopefully bring this sorry saga to an end. But lessons need to be learned if we are to avoid a repeat. The episode has exposed cracks in the regulatory system and lax monitoring. It turns out that many complex financial products proffered by banks are not regulated by the commission or the Monetary Authority. Financial institutions need to be reined in by closing such loopholes. A strong argument can be made that complicated derivative instruments such as minibonds should not be sold to ordinary investors.
On the other hand, investors cannot be absolved of all responsibility. They cannot plead ignorance and demand a refund every time they lose their shirts. Without doubt, some elderly clients and victims of blatant mis-selling deserve to have all their money back. But the majority of minibond investors simply made a bad investment and should accept some losses. There needs to be more of a culture of risk awareness. If something looks too good to be true, it probably is. The latest offer is, nonetheless, an improvement on banks' original proposal to buy back the minibonds at their market value, which is a fraction of what investors paid for them.
The minibonds are just one of many types of derivative instruments being sold to ordinary investors that have caused catastrophic losses during the market downturn. The notorious "accumulators" have caused much grief, but because most who bought them were high-net-worth individuals, regulators have been unwilling to get involved. Already, buyers of so-called Octave Notes - complex derivatives that have gone bust like the minibonds - are demanding compensation. The minibond settlement may offer a template to resolve their dispute as well, and perhaps others. But the line has to be drawn somewhere. Only where there is evidence of abuses should compensation be paid.
Generally, there should be broader markets and greater choices for investors. However, financial institutions should not use this as a pretext to sell fiendishly complex derivative products to gullible investors. Forcing banks to establish better complaint channels for clients and disclose investment information in simple language are moves in the right direction. A strong regulatory regime must not allow problems to fall through the cracks - and ensure people have the information they need to make appropriate investment choices. Greater transparency needs to be enforced in banks' dealings with clients. The financial crisis has forced many jurisdictions around the world to reform their regulatory systems. Hong Kong too needs to follow suit - and make sure it gets it right this time.
The proposed settlement brokered by the Securities and Futures Commission offers a swift and practical way to resolve the long-running minibond controversy. It will not settle all outstanding claims, but it is a realistic solution that should help most retail investors recover up to 70 per cent of their investments, and possibly more, depending on market conditions. No doubt some will still reject it, having clamoured for a 100 per cent refund. But those who want to put the stressful matter behind them can now do so on generally fair terms.
Banks responsible for selling the complex products stand to lose most. But in return for their agreement to settle, regulators will drop all investigations against them. The banks are more willing to settle now because recent market rallies have pushed up the value of the collateral tied to the products. That should help lessen their losses and recover more money for investors.
The deal, therefore, is a compromise that will hopefully bring this sorry saga to an end. But lessons need to be learned if we are to avoid a repeat. The episode has exposed cracks in the regulatory system and lax monitoring. It turns out that many complex financial products proffered by banks are not regulated by the commission or the Monetary Authority. Financial institutions need to be reined in by closing such loopholes. A strong argument can be made that complicated derivative instruments such as minibonds should not be sold to ordinary investors.
On the other hand, investors cannot be absolved of all responsibility. They cannot plead ignorance and demand a refund every time they lose their shirts. Without doubt, some elderly clients and victims of blatant mis-selling deserve to have all their money back. But the majority of minibond investors simply made a bad investment and should accept some losses. There needs to be more of a culture of risk awareness. If something looks too good to be true, it probably is. The latest offer is, nonetheless, an improvement on banks' original proposal to buy back the minibonds at their market value, which is a fraction of what investors paid for them.
The minibonds are just one of many types of derivative instruments being sold to ordinary investors that have caused catastrophic losses during the market downturn. The notorious "accumulators" have caused much grief, but because most who bought them were high-net-worth individuals, regulators have been unwilling to get involved. Already, buyers of so-called Octave Notes - complex derivatives that have gone bust like the minibonds - are demanding compensation. The minibond settlement may offer a template to resolve their dispute as well, and perhaps others. But the line has to be drawn somewhere. Only where there is evidence of abuses should compensation be paid.
Generally, there should be broader markets and greater choices for investors. However, financial institutions should not use this as a pretext to sell fiendishly complex derivative products to gullible investors. Forcing banks to establish better complaint channels for clients and disclose investment information in simple language are moves in the right direction. A strong regulatory regime must not allow problems to fall through the cracks - and ensure people have the information they need to make appropriate investment choices. Greater transparency needs to be enforced in banks' dealings with clients. The financial crisis has forced many jurisdictions around the world to reform their regulatory systems. Hong Kong too needs to follow suit - and make sure it gets it right this time.
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