tag:blogger.com,1999:blog-1603222303785259307.post5189308259881459435..comments2023-09-23T21:52:50.905+08:00Comments on Health and Wealth: The Credit Crunch de-mystified in 2 minutesKhiat Han Hwee Adrianhttp://www.blogger.com/profile/00954307521105388372noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1603222303785259307.post-49968600926465526142008-03-26T23:43:00.000+08:002008-03-26T23:43:00.000+08:00One of my reader emailed me saying that I did not ...One of my reader emailed me saying that I did not mention about the problem escalated due to margin losses where hedge funds & private equity had to cash out, also unwinding of yen position.. all these lead to stock mkt crashes & companies going bankrupt.<BR/><BR/>Thanks for the email and I shall talk about these in future postings.Khiat Han Hwee Adrianhttps://www.blogger.com/profile/00954307521105388372noreply@blogger.comtag:blogger.com,1999:blog-1603222303785259307.post-39025882647659026352008-03-26T09:45:00.000+08:002008-03-26T09:45:00.000+08:00Modified comment:In US mortgage loans are sold by ...Modified comment:<BR/><BR/>In US mortgage loans are sold by brokers like insurance agents here. They earn a commission. During good time, housing boom, to increase sale they lent to people with low credit rating, even the jobless. The brokers would sell to anyone regardless of their ability to service the loan. They would sell" the sure win or sure make" idea and convinced the buyers that property prices would go up and they could make a tidy sum.<BR/>In the short term then need not worry about the loan. They charged these people high interest , like Ah Long here. <BR/>Unfortunately, the property market crashed.Defaults and foreclosures became the order of the day..<BR/>In the meantime, financial whiz kids, cooked up some ideas to repackage these good and bad loans and get the credit rating company like S&P to give high rating for thier MBS, later became CDOs and the likes.<BR/>These new products were sold and repackaged a few times like MLM and marketed to banks to improve their returns.<BR/><BR/>Well the rest is history.<BR/>Like them, today insurance companies are imitating them. Many new useless products are repackaged products, supposedly with enhanced value but dubious, are hitting the market. <BR/>Buyers must examine with the help of good advisers and competent enough to see through fake and dubious products.Don't fall for them just becuase your trusted agent introduces to you. Some agents, just like the loan brokers , who are interested in nothing but the commission. These agents are not interested whether you are homeless or have adequate coverage. They just want your money.<BR/><BR/>TerminatorKhiat Han Hwee Adrianhttps://www.blogger.com/profile/00954307521105388372noreply@blogger.com