Lehman Brothers Saga Continues
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.
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as much as i feel sorry for them, i feel gahmen should do a better job to help out with the retirees as much as possible. And 5% ain’t really a lot as compared to our inflation rate