DBS high notes , Lehman Saga: What is your view?

january SG

I was swayed by opinions from several people. Currently my view is that, for those people who knew about the risk that credit event can wipe out their savings. Its seems that this is a fair deal.

To me, the product is indeed low risk given the history of banks involved. Low risk does not mean that their prinicipal is protected. That is my knowledge. Its just means that chances your prinicpal may be gone is very low.

For example, Manchester United vs Derby County in Old trafford. The pay rate is 1.05 for Man U to win. The principal is not protected, but punter still bet Man U, though there is an rare chance they may lose all.

Anyway, back to topic, I feel that those victims are sacrifices of our society. Because of them, we non-affected now will learn that saving money in deposit with super low interest earning is not such a bad idea after all.

january SG

For seller who gives wrong information to investors. How do govt or in charge deal with them?

First, there is the intentional miselling, then there is ignorance miselling, which is different. Intentional of course warrants a heavier penalty for seller.

january SG

Those DBS saga buyers or minibonds buyer.

I wonder if they got ask their managers whether the principal is guaranteed. I mean, when you buy financial product, its a basic question to ask if you can lose the money.

Ya, the prospectus is complex, but the question of whether there is some risk involve which can lose all the money is a basic questions.

Every investor with certain education has to know this basic questions. If the manager at this point tell them that the investment is safe and low risk, then they did not do anything wrong, the burden lies with investor. Safe does not really mean no risk. its just mean low risk.

If the manager tell them that the money is principally protected, which is not true, then in this case the bank and the relationship manager has to bear the cost.

So this is the simple way of looking at this misselling issue. Or they need to do is to see whether the Relationship manager got tell them the correct information or not.

Pushing of investment products is expected for many sales processes. The investors has to blame themselves if they are taken in by the notion that is safe investment without realizing that the principal is not protected fully. and that safe does not mean that it is no risk. Money can be wiped out.