Pay of bosses in banks and insurance companies pay is too high. Article.
Sunday, April 12, 2009
Saturday, April 11, 2009
A sense of loss as a Singapore (2)
Hi Mr Tan,
I have visited your blog again and have read the comments to my email. I'm not upset, don't worry.
I respect what you are doing. But I do not know whether it will succeed. Singapore has changed. The younger Singaporeans are pleasure-loving and hedonistic, the older ones are too busy struggling. And all of us are struggling in this over-populated country and intimidated by a government that can do whatever they like and manipulate whatever law they want. The worst is seeing younger Singaporeans sell out their countrymen for the love of money.
I empathesize with those who are poor and suffering. I would not mind contributing if you have any schemes to help them. under the present government, they are reduced to getting scraps " qiu sheng bu si, qiu si bu neng" (seeking life is difficult, seeking death is not possible). Perhaps it is possible to set up some sort of recruitment co that matches these people to employers who are willing to pay them fair wages and not exploit them.
As for me, I am thinking of leaving the country next time. I am tired Mr Tan. I am quite well educated, but I still have some integrity. I don't want to sell my soul for money like what some people are doing.
I have visited your blog again and have read the comments to my email. I'm not upset, don't worry.
I respect what you are doing. But I do not know whether it will succeed. Singapore has changed. The younger Singaporeans are pleasure-loving and hedonistic, the older ones are too busy struggling. And all of us are struggling in this over-populated country and intimidated by a government that can do whatever they like and manipulate whatever law they want. The worst is seeing younger Singaporeans sell out their countrymen for the love of money.
I empathesize with those who are poor and suffering. I would not mind contributing if you have any schemes to help them. under the present government, they are reduced to getting scraps " qiu sheng bu si, qiu si bu neng" (seeking life is difficult, seeking death is not possible). Perhaps it is possible to set up some sort of recruitment co that matches these people to employers who are willing to pay them fair wages and not exploit them.
As for me, I am thinking of leaving the country next time. I am tired Mr Tan. I am quite well educated, but I still have some integrity. I don't want to sell my soul for money like what some people are doing.
Friday, April 10, 2009
Equity Linked Notes - are the terms fair?
I was given the Security Purchase Contract Note for an Equity Linked Note. The contract note is very difficult to read, even for an expert like me. The Note was issued by bank X and distributed by bank Y to a Chinese educated elderly person (who does not understand English).
After reading the contract note, I was able to analyse the terms as follows:
a) The note is linked to two shares, A and B
b) Interest is payable at an annual rate of 12% for each day that both shares stay above the trigger price (which is 85% of the reference price). If any share fall below the trigger price, interest is not payable for that day
c) At the end of each observation period (about two months), if both shares are above the trigger price, the Note is redeemed at par, plus accrued interest.
d) On the maturity date (18 months), if any share falls below 70% of the reference price, the investor is given the shares and has to bear the capital loss (of more than 30%).
e) The Notes are principal protected at maturity (provided the Knock-in event has not occurred). There is no mention of the party providing the guarantee, but a statement as follows: "the notebolder is exposed to the credit risk of the issuer or the third party guarantor".
I find this product to be unsatisfactory in the following respects:
1) The "interest payment" is not really "interest". It is actually a risk premium given for providing the insurance against a 30% drop in any of the shares in the basket.
2) It is impossible for the investor to know if the risk premium is fair, given the unknown extent of the risk?
3) The contract is designed by bank X, which stands to gain from the margin between the true cost of the risk and the so called "interest" payable to the noteholder. This can be to the disadvantage of the retail investor, and can in an extreme case, be considered as "cheating" the investor.
There are laws against creating gambling contracts, without approval of the authority. Does this type of equity linked note fall within the definition of a gambling contract? This law was written to prevent the public from being cheated.
Outcome: The issuing bank X went bankrupt. The investor lost the entire principal, amounting to several hundred thousand dollars. The distributing bank Y was negligent in exposing the investor to a large risk - without proper diversification.
If you are in a similar situation, with a similar product, you can write to me at kinlian@gmail.com.
After reading the contract note, I was able to analyse the terms as follows:
a) The note is linked to two shares, A and B
b) Interest is payable at an annual rate of 12% for each day that both shares stay above the trigger price (which is 85% of the reference price). If any share fall below the trigger price, interest is not payable for that day
c) At the end of each observation period (about two months), if both shares are above the trigger price, the Note is redeemed at par, plus accrued interest.
d) On the maturity date (18 months), if any share falls below 70% of the reference price, the investor is given the shares and has to bear the capital loss (of more than 30%).
e) The Notes are principal protected at maturity (provided the Knock-in event has not occurred). There is no mention of the party providing the guarantee, but a statement as follows: "the notebolder is exposed to the credit risk of the issuer or the third party guarantor".
I find this product to be unsatisfactory in the following respects:
1) The "interest payment" is not really "interest". It is actually a risk premium given for providing the insurance against a 30% drop in any of the shares in the basket.
2) It is impossible for the investor to know if the risk premium is fair, given the unknown extent of the risk?
3) The contract is designed by bank X, which stands to gain from the margin between the true cost of the risk and the so called "interest" payable to the noteholder. This can be to the disadvantage of the retail investor, and can in an extreme case, be considered as "cheating" the investor.
There are laws against creating gambling contracts, without approval of the authority. Does this type of equity linked note fall within the definition of a gambling contract? This law was written to prevent the public from being cheated.
Outcome: The issuing bank X went bankrupt. The investor lost the entire principal, amounting to several hundred thousand dollars. The distributing bank Y was negligent in exposing the investor to a large risk - without proper diversification.
If you are in a similar situation, with a similar product, you can write to me at kinlian@gmail.com.
Build MRT internechange stations closer together
At Dhoby Ghaut MRT station, there is a long walk to change from the NS Line to the NE Line, and vice versa.
The NE Line was built many years after the NS Line was operational. It was not possible to build the new station closer to the old station, as it might cause engineering and safety problems.
is there a solution? Give your views here.
The NE Line was built many years after the NS Line was operational. It was not possible to build the new station closer to the old station, as it might cause engineering and safety problems.
is there a solution? Give your views here.
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