The risks were clearly highlighted

Investors of High Notes and Minibonds are in for a tough time. The risks were clearly highlighted in the front page of the brochures with copies printed in the Straits Times. In the High Notes case, it states 'investors may lose their entire investment and may nor receive any principal amount on the Notes.' In the case of Minibonds, 'There will be no guarantee from any entity to you that you will recover any amount payable under the Notes and you could lose all or a substantial part of your investment in the Notes.' Given the above, it would be better if these were in big black bold letters, it is difficult for the investors to say they don't know or did not read. For those who cannot read English, there can still be an escape route. For the rest, jiat lat liao. The only thing now is whether such an important point has been carefully explained to the investors and they went in with their eyes wide shut. The other point is that indeed the products are highly dangerous and the issuers knew of this risk. The regulators who approved the products too must know of the risk. So it is not a case of nobody knows what they are selling. They are really toxic stuff. For the kind of returns, they should not be sold at all.

Don't forget personal responsibility

We espoused 'a financial system of free will and flexibility instead of a paternalistic one where the govt decides for the consumer what's risky and what's not.' Said David Gerald in the Today paper. 'Let people make their own choices and decisions, but within a proper system, and with appropriate safeguards.' He added. This is the crux of the matter. A proper system that is fair and transparent. And regulations got to be fair, consistent, transparent and not arbitrary. Gerald ended by saying, 'I expect the financial instututions to be fair to investors because they're going to them with trust.' When we have a fair and proper system, personal responsibility makes a lot of sense. The investors to the minibonds, or investors investing in the stock market must bear personal responsibility when this is the case. If the system is not proper, if the products are found wanting, it is not a simple case of personal responsibility. When you eat in a restaurant, you don't expect foreign objects or poisonous material in your food. Put it in another way, people going into a boxing match will expect that the rules are fair and to fight in their same weight. When a 50kg boxer goes into the ring to fight against a 100kg boxer, and has his eyes blindfolded, it is not fair and unacceptable. Or if the bigger boxer is armed with a pair of gloves with metal inserts, then it is not alright. Under such circumstances, caveat emptor and personal responsibility will not do. The administrators and regulators need to be hanged.

Will head roll?

MAS is still conducting its inquiry into the minibond fiasco. It has assured the public that if there are misdeeds, mis sellings etc, disciplinary actions will be taken. Will we see any heads roll? It's only $500 million under the bridge.

Selling water to Malaysia

The Marina Barrage is hailed as an engineering marvel, one of its kind and the first in the world. It delivers a number of direct benefit to the country. With its completion we should be self sufficient in our water needs and no longer be dependent on Malaysia. The Barrage is also one of the biggest land or water reclamation from the sea. It provides leisure and sporting activities as well as preventing tidal floods. And many things can be built around it. It is time that we negotiate to sell our water treatment plant to Malaysia and also to negotiate to sell them quality water when our water agreement expires in the near future. Now this will be a bigger feat.

Japan banned short selling

Nikkei has been up strongly for two consecutive days after short selling is imposed. SGX is still happily allowing short sellers to destroy the value of stocks. Today's hit is OCBC with the news or rumour that it may be affected by Great Eastern's lower profit forcast. And it got whacked all the way. This is how our market works. World class market. Shit market as far as I am concerned. As the way the game is being played, any stock that has value, especially blue chips, will be bashed down. SGX has a provision to take to task people who cornered a stock. Would they wake up from their sleep and take these manipulators to task?