The Shame On HSBC Pictures

Kings happened to be passing through Central and took these pictures of the current protest where people are camped outside the main HSBC branch... I think this one is directly related to Lehman Minibonds (succinctly put, the fact they were very much not "bonds") and usually such protests are by individual investors (at retail level instead of say, institutional)...

It was just a little sense of deja vu because though I'd never touched the product, the general Minibond structure (there are actually many tranches) was a job interview question I encountered when I was pregnant with Rockstar

(Yes, really - I quit my previous place because in the wake of the massive equity (and therefore flow derivative) run and corresponding short-handedness on the desk I wasn't sure I could hold on to an early pregnancy when many days it felt like blood was going to pour out of my nose and ears just from the pressure in my head to do the (fairly simple but requiring a lot of speed) calculations and pricing and executions and stuff all the trades in before market close - I took in a massive number of calories but was losing a lot of weight anyway - I quit at a BMI of about 16... Somehow it just never occurred to me not to work when I had Rockstar - I got myself hired pregnant at a different shop and was in the dealing room til 2 days before my late-scheduled C-section... Some Annoying People have quipped how my battling Legal & Compliance and certain i-bank sales (being stuck in between the 2 parties) during the startup of the new desk is why my son came out a monster of a difficult grouchy baby (pediatrician's words, not mine).

Well idly I do wonder if that's why Rockstar loves solving puzzles so much - I used to sweat over umpteen different derivative product term sheets figuring out what the structures did, and the baby would just kick and kick...)

Anyway. I was digressing, all that happened so long ago in another life... Today, the pictures speak for themselves (and I hope you don't think I mean the text in the pictures) and it's like there's just nothing more you can say, there are just no words.

In the next generation no one will want to be in banking anymore...

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About Aileen

I blog about living and raising my son in Hong Kong - where toddlers have entrance interviews, parents keep test score spreadsheets, private school debentures can trade for more than half a million USD. Raising Rockstar's the most important thing I'll ever do. We show our true colors by the choices we make in bringing up our children. My blog is a message to my toddler son, about what the world and his parents are like today - for when he becomes a teenager and knows everything.
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  • Aileen

    Oops sorry forgot to add, “capital guarantee” is only as good as the entity guarantee-ing the product.. Also, capital guaranteed products in a low interest rate environment can be like “slow death” – the general way they create the product is similar to you placing a fixed deposit with a bank (thereby the bank “guarantees” your capital), and then with the FD “interest” you buy options to enhance yr return. So when yr FD is paying next to nothing, the option u can afford in the structure is not very attractive. So then you think Ok, I need more FD – so you place FD for longer. Which means u lock in yr money longer…… Hence just whether u want slow death or fast death…

    • zmun2

      Many thanks Aileen for an in-depth explanation of the situation. Haha, you are so right, the little savings that I have in FD are experiencing slow death when inflation is so much higher.

      Since you are so experienced in investments, do you plan to offer personal investment advice for a fee or even set up your own investment funds or build your own hedge fund?

      • Aileen

        Wah Paisay.. To clarify,
        1) more like offer advice for fun, not a fee… I used to love teaching RMs in “plain simple language” – if they couldn’t understand me in 5 mins, I wouldn’t recommend they try n sell it
        2) the first thing I pine for is a home. Kings and I have bot n sold apartments twice and are currently “homeless” ie renting while we hope property prices continue to drop… I “kind of cared” when we were younger, but now with Rockstar and all I REALLY care, just badly want a home we can call our own. The thing about “slow death” products (other than FD) is that you’re really not supposed to go unwinding em in the middle of the investment because it really costs you. Hence u understand y I don’t like to lock in money, having to go longer and longer dated to get any meat in a lo interest environment – because it means you’re locked in when rates go back up or you want the money to buy a home or whatever..
        3) Hedge fund guys I find are usually very technical, I’m actually not, having not received the training in Uni. “All” I have are some measure of street smarts/ common sense and a fairly good gut – and lots of luck. God has really been with me in times when there was just no way we could’ve predicted some of the carnage and happened to avoid it due to various “technicalities”. Besides, I don’t like management, I like the “field work” of a subordinate. When I took desk head or ranking senior position, it was so some idiot who outranked me didn’t stand in between me and a good trade.. But I find managing others the most stressful (instead of say, making budget haha) so ideally rather than be my own boss I would’ve loved working for any of a bunch of old bosses I deeply respected, am in touch with, and would die for, except who would then take care of my orphaned Rockstar? 😀

      • zmun2

        Aileen, thanks for sharing. Hope you find your dream place! Any chance of ever returning to M’sia and buying a place here?

      • Aileen

        My parents have a bit of property in Malaysia already from their savings actually, so in that sense I would probably “diversify” elsewhere… As for living in Malaysia it is more about getting used to – lots of my Malaysian friends don’t live in Malaysia anymore, and btw I don’t drive 😛 always lived in cities where I can easily cab or MTR…

  • zmun2

    These people must have lost a lot of their hard earned money. That’s why I am so afraid of investing in any products that have the small print “capital is not guaranteed” and “past performance is not an indication of future performance”.

    • Aileen

      It is v sad because there is actually no black n white clearcut answer. Many innocent ppl got affected by others’ selfishness and irresponsibility. There were many victims of mis-selling who really deserve sympathy. There were people who bought SEVENTEEN tranches of these things – not one, not two, but 17. The mark-to-market for some of this can be like, zero. ie practically worthless. It has to do with the whole crisis tanking any and all the safety measures built in – like “Iceberg theory” – you can have millions of dollars worth of safety equipment on board a ship like the Titanic and then it hits an iceberg and the whole thing goes down anyway. 

      Then when some of these went belly up and some banks were made to bear the loss, because of market conditions making it virtually worthless, the bank pretty much pay back the whole investment to some of the investors. This makes the banks shakey. Then they start cutting back operations and staff. Some of these staff who lose jobs etc have NOTHING to do with the mis-sell or etc. But they lose their jobs anyway. Some investors still said things like “You only paid back all my capital – what about interest?” 

      Some of these banks start to go belly up, it affects even more investments, causing even more iceberg collisions – and hurting even more investors.

      There were many, many “innocent victims”, the body count is actually way high. 

      Then as always with human nature, there are people who try to profit from this. There were people who DID know what they were doing, but leveraged or invested too much. Too greedy, too speculative, out to make quick buck. And then they try to get their money back too. And this jams up the system for the people who REALLY were mis-sold to, makes it harder for the real victims to be compensated because now the regulators and banks have to also check… If they pay back everyone, not just the real victims, many banks will go belly up. That will tank many more investments, kill many more jobs…….