Blue Chip and other dodgy investments

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14 years 4 months ago #183843 by max2

organicltd;155701 wrote: "There's no fool like an old fool"
Once again the poor taxpayer is being looked at to try and bail out these "greedies"
Anybody who gets a mortgage to try and make money at their age deserves all thats coming to them.


The Taxpayer gets looked at time and time again to bail out all types, yet it seems politically incorrect if we point the figure at certain groups receiving regular long term public funding to support their lifestyle, expenses and decisions.

Perhaps I should mention here the example of a long term unemployed (working cash income though) who have since bankrupted herself to strip herself of debt so she could "start" again, who deliberately set up a trust fund to hide money that could have paid out her bankrupcy and creditors. [}:)]

I cannot speak for the people involved in the scheme, however I wouldn't mind betting that the majority of those people affected have probably received less public benefit throughout their lives than what is made available today.

But I do think if the Govts (both in Aussie and NZ) actually bothered to tidy up the lose laws that allow these sorts of schemes, then the losses suffered would not be of the size they are today.

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14 years 4 months ago #183845 by max2

tigger;155750 wrote: As is always the case, it seems [:(!]. No doubt they are also in trust or in his wife's name so they can't be touched...

It amazes me too that people will sign away hundreds of thousands of dollars just like that but won't spend a few hundred on an accountant or a lawyer to give them advice on it/check it out for them.


Usually in those sort of schemes Tigger its all kept "in" house and sorted out for the Client, so they receive a certain amount of peace of mind thinking that a Solicitor is still acting on their best interests and wouldn't dare do otherwise.:rolleyes:

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14 years 4 months ago #183846 by reggit

swaggie;155775 wrote: Usually in those sort of schemes Tigger its all kept "in" house and sorted out for the Client, so they receive a certain amount of peace of mind thinking that a Solicitor is still acting on their best interests and wouldn't dare do otherwise.:rolleyes:


Blow that! [:0] Never trust a lawyer or accountant who's not being paid directly by you to act in your best interests!!

Take a break...while I take care of your home, your block, your pets, your stock! [;)] PM me...

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14 years 4 months ago #183851 by max2

eelcat;155757 wrote: would have to agree with the general sentiments above - never invest more than you can afford to lose and never borrow to invest!!!!!! Sadly though this doesn't always work - my brother in law is a "financial planner" and he invested money belonging to my MIL in ING without her really understanding what he was doing, nor knowing until afterwards. She had not long been widowed, this was her son advising her, she at that stage was almost completely deaf (OH and I have now got her proper hearing aids), I was not in their lives (I have just ended 14 years at a Univ lecturing economics and financial maths so know a bit about this sort of stuff), she has only been my MIL for 2.5 years and OH didn't know of the investments being made. Fortunately she only has about $13,000 invested with them but she is almost 82 and can't understand why she can't just have her money back. There is a huge (misplaced) trust issue (long long story, BIL was ripping her off big-time) as well. As the investements were not made on the advice of the ANZ but rather the son (we don't have anything to do with him any longer after he retained the funds from MIL's house sale a couple of years ago) and he appears to be self-employed. At the time he had EPA as the elder son. MIL has subsequently changed this so that my OH now has EPA, but what does one do here? Who can we complain to (if anyone)?


Eelcat if it helps any, we went through the very same thing 3 years ago, power of attorney was taken out over my MIL bank account, she was highly medicated and didn't know (fully understand) what was going on.

To a point she was looked after we agree with that, but the person continued to feather their own nest during and after MIL departed removing cash via the ATM card weeks after MIL died.

I took the issue up with aged care (or services I think) spoke with a lovely Lady for our NZ area and she told me about the regularity of this happening.
She said they had made representations to politicans to have laws changed to protect the sick and elderly from family members, however very few (der no surprises there) pollies were interested.

We were quoted approx $15,000 legal fees to start to chase the case in court.
You might remember about 4 years ago there was a case before the Courts in NZ, I think from memory the applicant was charged around $110K and won $40,000 or so, but he said in the Herald that he only did it to make a point and that it shouldn't have happened in the first place.

Well he is jolly well right and I am sure my MIL & FIL would be fuming if they knew what actually occured with their money and that it was not equally distributed as it should have been.

Personally the Solicitors that were used should be disbarred from practising and sued, but our understanding that the cost to get this matter and their conduct reviewed separately is not within our ability to do.

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14 years 4 months ago #183853 by max2

tigger;155776 wrote: Blow that! [:0] Never trust a lawyer or accountant who's not being paid directly by you to act in your best interests!!


Its very sly Tigger how they do it, because they "build" those costs into the loan value, so technically you are paying for it. Trouble is, people think the law protects them somewhat and it doesn't.

One day I will tell you the situation with insurance companies and how they get their ratings. I went into it just after our house fire, because no one in officialdom would tell me what and how the "payout" ratings are worked out, which is supposed to be a guide for consumers when they select their policies.

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14 years 4 months ago #183854 by Isla

swaggie;155773 wrote: ...Perhaps I should mention here ...

With respect, I request that we do not go down that particular track in this discussion. People with their own large resources who choose to risk them and then complain when they lose, are not in the same boat as those whom, for whatever reason, start with nothing and are provided with help, whether or not they may be regarded as "deserving" or not.

Tigger, I'm not sure that I meant to argue for legislation, more getting to the point of realising it probably wouldn't make any difference. Besides, there is protective legislation in place already for those who cannot be expected to know better: you can't do such deals before you're 18.

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14 years 4 months ago #183859 by max2

Isla;155784 wrote: People with their own large resources who choose to risk them and then complain when they lose, are not in the same boat as those whom, for whatever reason, start with nothing and are provided with help, whether or not they may be regarded as "deserving" or not.

.


Isla, I value your opinion, but you cannot assume either Blue chip investors are all people with large resources to begin with, and the person who I am referring to did not "start with nothing" indeed she sold a considerable asset earlier in the piece and had a jolly good time, has sinced received years of public funding assistance, regardless of being offered work by WINZ within their own offices, which she declined.

To my mind, each case is deserving on its own merits up to a certain point and to my mind the media reporting does nothing but divide and typecast certain people in the community unnecessarily and unfairly. Both to the recipient and to the community generally because it misinforms and manipulates public thinking.

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14 years 4 months ago #183863 by Isla

swaggie;155789 wrote: ... but you cannot assume either Blue chip investors are all people with large resources to begin with...

I acknowledge your point, but I am meaning generally and relatively. Someone with the resources to enable them to raise a mortgage to take the punt, has a significant resource base compared to someone who simply couldn't do that.

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14 years 4 months ago #183869 by wino

tigger;155750 wrote:
It amazes me too that people will sign away hundreds of thousands of dollars just like that but won't spend a few hundred on an accountant or a lawyer to give them advice on it/check it out for them.


I am ongoingly amazed at how often people buying their own home - the biggest asset they are likely to own - try to avoid getting a Registered Valuation on it to save $500. And if they actually get a Registered Valuation that is lower than the agreement price and they therefore can't borrow enough to buy the property they blame the valuer for being too low (instead of thanking them for saving them from a bad deal).

I guess that attitude carries on into legal advice and financial advice. (mind you I know some financial advisors I wouldn't trust with my money)

Never have a hangover - stay drunk

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14 years 4 months ago #183870 by max2

Isla;155796 wrote: I acknowledge your point, but I am meaning generally and relatively. Someone with the resources to enable them to raise a mortgage to take the punt, has a significant resource base compared to someone who simply couldn't do that.


Ok, I understand where you are coming from...

perhaps I need to clarify my position.

I don't agree that the taxpayer should "reimburse" any financial losses either, whether it be on the stockmarket (which I have done before) or instances such as this issue over blue chip.
The people who have lost will be offsetting taxable incomes (or is it only other financial profits in NZ?) with the losses and pay less tax anyhow in the following tax years so the other taxpayers are footing the bill indirectly anyhow.

What I expect of our Govts (and therefore tax payers) is to fund quick and proper investigation into how the Directors managed to get away with this as they have, what resources have they drained from the business and return to the creditors, and for it to be done swiftly before any money can disappear off shore or into family court proceedings by spouses of directors.

Then I expect our Govts to ensure regulations are in place so it never happens again. I know its been going on for years, and the first ones I know about were up in Brisbane, and I believe those Directors then went across to NZ and did the same there. I believe now the younger generation of those Directors are returning to Australia and "some" might be doing the same in Fiji, flogging them back home. :(

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14 years 4 months ago #183874 by reggit
It makes you sick to see what the financial whizzkids have done with regards to the the sub-prime debacle in the US which is having so many ripples worldwide and so many people losing their houses. Now I hear that (probably the same) whizzkids have found a way to turn peoples' bankruptcies through the subprime mess to their advantage and are now making millions out of that!

The worst is that banks and brokers with seemingly good reputations jumped on the bandwagon and got themselves involved in it all as well, leading to so many repercussions along the way.

Chickens are certainly coming home to roost, but unfortunately they are roosting on the houses of those probably least to blame in this all, while the architects of it remain clear of cr*p :(

Take a break...while I take care of your home, your block, your pets, your stock! [;)] PM me...

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14 years 4 months ago #183875 by Isla
Which is really just the contuing stamping out of general lawlessness, which is the job of elected Governments. - In this and the other area you mention. [;)]

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14 years 4 months ago #183877 by max2
Yep, hear hear!

I have been doing a bit of reading over that sub prime stuff, and one article was about a lesser known fund manager in the US who branched away from his Employer and went out on his own doing the trading.

The interview said he had become extremely wealthy over the last 12 months or so by trading in the sub prime market "futures" (or something like that, they lost me a bit in the description of how the trading worked).

Anyhow there is a very good email cartoon doing the rounds in PP presentation, which ironicly explains it all. If you receive it, take the time to flick through it.

I just cannot get my head around how laws are allowing this sort of "business" to occur anyhow. And I cannot get my head around how our local NSW Council has lost so many thousands of dollars investing in the scheme, when they are too broke to provide basic council services to us ratepayers.[}:)][}:)]

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14 years 4 months ago #183881 by reggit
Laws can't keep up because the whizzkids keep finding legal loopholes in them. By the time law changes have caught up with that loophole, a new one has been found - a bit like hackers and computer security systems, really! [}:)]

Swaggie, my head is reeling from trying to understand it all too, what with the bundling and onselling of mortgages, hedge funds etc etc - sounds a bit too close to gambling with other peoples money/lives to me, but apparently all perfectly legal. One day soon someone will bring out a 'dummies guide to' and I will manage to make head or tail of it! :(

IN the meantime, this is the next best thing:

en.wikipedia.org/wiki/Subprime_lending

Take a break...while I take care of your home, your block, your pets, your stock! [;)] PM me...

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14 years 4 months ago #183912 by max2
I love wikipedia, always a good reference point.

yes Tigger I think its gambling as well, what gets me though, and I understand your point re loopholes being found, is why aren't the bods employed by Govts finding them as well?

Surely as soon as something starts up, consumer protection laws can be (should be) brought in to curtail the growth of that activity, esp as you say it affects the mortgage holder.

I am all for businesses and people being to make a profit, but I can't see that the sub prime saga has been honestly done.

If One wants to gamble, then buy a lotto ticket or pop across to the casino, but for Banks and investment firms to do this using other people's money, well, its got me beat.

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