LOL.....As usual it's all someone else's fault!
First it was the banks, now it's the Federal Government.
Meanwhile, the real culprit rarely gets a mention as he hunkers down in his Brisbane mansion.
Storm Financial Group
- Thread starter Garpal Gumnut
- Start date
LOL.....As usual it's all someone else's fault!
First it was the banks, now it's the Federal Government.
Meanwhile, the real culprit rarely gets a mention as he hunkers down in his Brisbane mansion.
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bunyip, I was thinking of going incognito here in a couple of weeks to see if I can pick up any goss on the ground. Was kinda hoping GG was back from Almaty by then and could join in as well. Got a spare lapel mic and could be very interesting
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Last time I checked the petition I think there were only about 387 people who have registered.
Looks like the Stormers may now need to hope that Tony's Team may give them some sort of lifeline.
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"Keeping Storm's victims in mind"
".. a petition launched by Storm Financial investors addressed to the Prime Minister, Kevin Rudd at www.petitiononline.com/vfahmg/
comes close to expressing the frustration and anger of those who trusted in the Townsville-based financial planner.
The language is raw and some of the emotional hyperbole is easy to dismiss. But it would be a mistake to ignore their case."
More in The Age by Stuart Washington here;
http://www.theage.com.au/business/keeping-storms-victims-in-mind-20100518-vc6e.html
".. a petition launched by Storm Financial investors addressed to the Prime Minister, Kevin Rudd at www.petitiononline.com/vfahmg/
comes close to expressing the frustration and anger of those who trusted in the Townsville-based financial planner.
The language is raw and some of the emotional hyperbole is easy to dismiss. But it would be a mistake to ignore their case."
More in The Age by Stuart Washington here;
http://www.theage.com.au/business/keeping-storms-victims-in-mind-20100518-vc6e.html
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I wasn't going to post in this thread because it's hard to get all the facts together, you only seem to get half the story from every person you talk to. But now there's a petition to make the taxpayers compensate stormers for their losses. So as a taxpayer I guess I should find out the details. I admit to not reading all 4844 posts in this thread, although I have read most. So if I ask a question that's been explained somewhere else, my apologies, just tell me it's in the thread somewhere and I'll go looking for it.
The petition makes many accusations but offers no evidence. "corrupt banking practices... inflating customers’ assets; ignoring customers’ current liabilities; inflating house valuations so more money could be borrowed;" Where might I find this evidence? In any financial contract I've been a part of, I've had to sign a declaration stating that the information in that document is correct. So when was the incorrect information added? Surely the trail of signed paperwork will lead us to the guilty party?
Many stormers have commented that the loans were too big and they could never meet the repayments. Did they sign the form to approve the loan? Did the bank debit the loan payments from their savings account? If so, why didn't they notice large sums of money being withdrawn from their account to pay the loan they couldn't afford to pay? There are thousands of ex storm clients claiming to be victims. Obviously some of them must have noticed that the figures didn't add up. But they did nothing about it. These are the ones that deserve what they got, but sadly there's no way to tell who these people are.
How much compensation are we talking about? I'd have thought that they'd still lose as much money as what would've been lost had they been stopped out at the legitimate margin call level. Surely they don't expect to get the initial investment returned? I ask because of the number of people complaining that because of corrupt banks they've lost all their retirement money. Even if there was no bank corruption they still would have lost most of their money. Anyone using high leverage to invest in the markets prior to the crash got stopped out on margin calls, and that wouldn't leave you with much in the retirement fund. Unless you had a stop loss, but that's an issue between the client and Storm, it's not the banks problem.
Of course it's more complicated than this because what would they have done once stopped out? Some would reenter with what they have left, throwing good money after bad. Those people would either lose every cent, or get lucky. Others would have sat on the sidelines too scared to reenter the market and would've missed out on recovery. I'd say that's is quite likely. It's easy to look back and say "Oh I would have reentered at about 3000 and sold again when we got to 5000 and I'd now be in cash." But in reality it's not that easy, especially for people who previously didn't pay any attention to the market. I thought compensation was for people who, due to no margin call being issued, went into negative territory and still owe the banks money. But some make it sound like they expect to be back at pre-crash levels.
There's something not quite right about, in a petition for government compensation, commenting that you don't want to rely on government handouts. It would make sense if the petition was for the government to fully investigate the matter on behalf of storm clients, but it's not. The petition is for full and immediate compensation to be paid. Then, try to get some of that back from the banks. This is all wrong. I would agree to the government paying for the cost of the investigation because the truth should not remain buried simply because you didn't have enough money to dig it up. However, at the end of the day, the people found to be at fault should pay back all costs involved in the investigation. Even if the clients themselves were identified as supplying false information. The petition ends with "We want justice..." But that's not what this is at all. Justice is finding who is at fault and penalizing them for it. Demanding full and immediate government compensation regardless of the the findings of any investigation is simply a grab for cash wherever you can get it.
Also something that concerns me - How does the petition recognise each signature as being unique? Do you provide your address and phone number, or just an email address? Do the names get verified somehow later? I note that the very first person to sign the petition signed it a second time further up the page with a comment "I forgot to mention...". It's not a discussion forum, it's a petition. You can't sign multiple times. It makes me seriously wonder how legitimate the rest of it is. If they thought they might get some money out of it you can bet there are people out there making up fake names on webmail accounts to grow the list. I certainly don't mean to imply that all stormers are like this, but not all stormers are victims either.
The petition makes many accusations but offers no evidence. "corrupt banking practices... inflating customers’ assets; ignoring customers’ current liabilities; inflating house valuations so more money could be borrowed;" Where might I find this evidence? In any financial contract I've been a part of, I've had to sign a declaration stating that the information in that document is correct. So when was the incorrect information added? Surely the trail of signed paperwork will lead us to the guilty party?
Many stormers have commented that the loans were too big and they could never meet the repayments. Did they sign the form to approve the loan? Did the bank debit the loan payments from their savings account? If so, why didn't they notice large sums of money being withdrawn from their account to pay the loan they couldn't afford to pay? There are thousands of ex storm clients claiming to be victims. Obviously some of them must have noticed that the figures didn't add up. But they did nothing about it. These are the ones that deserve what they got, but sadly there's no way to tell who these people are.
How much compensation are we talking about? I'd have thought that they'd still lose as much money as what would've been lost had they been stopped out at the legitimate margin call level. Surely they don't expect to get the initial investment returned? I ask because of the number of people complaining that because of corrupt banks they've lost all their retirement money. Even if there was no bank corruption they still would have lost most of their money. Anyone using high leverage to invest in the markets prior to the crash got stopped out on margin calls, and that wouldn't leave you with much in the retirement fund. Unless you had a stop loss, but that's an issue between the client and Storm, it's not the banks problem.
Of course it's more complicated than this because what would they have done once stopped out? Some would reenter with what they have left, throwing good money after bad. Those people would either lose every cent, or get lucky. Others would have sat on the sidelines too scared to reenter the market and would've missed out on recovery. I'd say that's is quite likely. It's easy to look back and say "Oh I would have reentered at about 3000 and sold again when we got to 5000 and I'd now be in cash." But in reality it's not that easy, especially for people who previously didn't pay any attention to the market. I thought compensation was for people who, due to no margin call being issued, went into negative territory and still owe the banks money. But some make it sound like they expect to be back at pre-crash levels.
There's something not quite right about, in a petition for government compensation, commenting that you don't want to rely on government handouts. It would make sense if the petition was for the government to fully investigate the matter on behalf of storm clients, but it's not. The petition is for full and immediate compensation to be paid. Then, try to get some of that back from the banks. This is all wrong. I would agree to the government paying for the cost of the investigation because the truth should not remain buried simply because you didn't have enough money to dig it up. However, at the end of the day, the people found to be at fault should pay back all costs involved in the investigation. Even if the clients themselves were identified as supplying false information. The petition ends with "We want justice..." But that's not what this is at all. Justice is finding who is at fault and penalizing them for it. Demanding full and immediate government compensation regardless of the the findings of any investigation is simply a grab for cash wherever you can get it.
Also something that concerns me - How does the petition recognise each signature as being unique? Do you provide your address and phone number, or just an email address? Do the names get verified somehow later? I note that the very first person to sign the petition signed it a second time further up the page with a comment "I forgot to mention...". It's not a discussion forum, it's a petition. You can't sign multiple times. It makes me seriously wonder how legitimate the rest of it is. If they thought they might get some money out of it you can bet there are people out there making up fake names on webmail accounts to grow the list. I certainly don't mean to imply that all stormers are like this, but not all stormers are victims either.
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Lone Wolf - Unfortunately I am one of those people who attempted to secure a modest income for my future retirement by investing ALL my super and savings in Storm (on the advice of several work mates who had been in it for years - my timing was impecable, I got in 12 months before the GFC - but that is another story).
However,to cut to the chase, I also feel that the petition does not look right when you have people making multiple entries - but my sympathy goes out to the comments of the people who have been ruined by a system dominated by greed.
As an example - I took out a home loan 2 years ago with a bank - lets call it ABC - this bank allowed me to borrow money on my house through Storm on the fact that
"a few houses have been sold in your vicinity and we will allow you to borrow XXX,XXX dollars to invest in Storm"
I have now gone through the so called Resolution Scheme with ABC and they now wish to value my house again, but this time they are sending out a professional valuer to take pictures and look at house plans.
Why do they now take a huge interest in "doing it by the book" - that is using business ethics when 2 years ago I did not sight a person representing ABC?
However,to cut to the chase, I also feel that the petition does not look right when you have people making multiple entries - but my sympathy goes out to the comments of the people who have been ruined by a system dominated by greed.
As an example - I took out a home loan 2 years ago with a bank - lets call it ABC - this bank allowed me to borrow money on my house through Storm on the fact that
"a few houses have been sold in your vicinity and we will allow you to borrow XXX,XXX dollars to invest in Storm"
I have now gone through the so called Resolution Scheme with ABC and they now wish to value my house again, but this time they are sending out a professional valuer to take pictures and look at house plans.
Why do they now take a huge interest in "doing it by the book" - that is using business ethics when 2 years ago I did not sight a person representing ABC?
I agree with the views of Lone Wolf - I think he's given a pretty fair overview of the situation regarding the petition for Government compensation for Storm victims.
Maybe that's the intended purpose of Rudd's proposed new mining tax - to compensate Stormers!
Seriously, this is yet another attempt at a money grab - a clear demonstration that money is seen as more important than justice.
Interesting to see that Jelich has signed the petition. He was a Storm adviser and as I understand, the main promotions man for Storm. His advice cost a lot of people a lot of money. Now he's blaming the government and demanding that they compensate him for the money he lost. This character and his kind make me sick.
If the government paid up it would be ordinary Australian taxpayers who would really be footing the bill.
I don't see why I should contribute one single dollar towards compensating Storm clients for their investment mistakes.
They should never have gone near Storm Financial, and they wouldn't have, if they'd put some effort into financially educating themselves.
People who put in the effort to acquire basic working knowledge of finance and investment, were savvy enough to steer clear of the Storm Financial debacle.
Everyone has ample opportunities to get themselves some basic education in finance and investment matters.
There are no excuses for people to go through life without educating themselves financially. I can understand younger people getting caught out by the allure of sensational profits through Storm, but older people should have known better than to put all their eggs plus massive borrowings into the same basket.
Did they learn nothing from the lessons of the 1987 stockmarket crash?
Did they really think it couldn't happen again?
Did they really think that margin calls were their safety net?
Did they not realise that losses are already significant by the time a loan goes into margin call? If they didn't, they should have.
And now they want me and other taxpayers to bail them out. No thanks, not interested.
Dear Mr Bunyip
What I don’t understand is why you really believe that we would care what you think of us Stormies, talk about illusions of grandeur all your pontificating about how wonderful you are and how you would never do this and how uneducated, greedy, we all are.
Guess what your life isn’t over yet and by continually reading; and reading; and here we are still reading your comments one gets a pretty clear picture of who and what you are or let me re phrase that, what you think you are.
It’s amazing really with anonymity you can paint yourself as anything you would like to be, I paint you as a rather conceited buffoon. You would have to be fairly young I would say about 40 a member of the me generation otherwise you wouldn’t be so conceited to think that we would even care what you thought of us.
Your life isn’t over yet and my imagination just runs wild, with a conceit like yours you will make a misjudgement some where along the way as you still have such a long, long way to go, say another 40 years and life will be full of traps and pot holes even for you.
I can just imagine your response to this, you will blow yourself up like a toad and puff and carry on about this is a forum and how I don’t know you etc well guess what you don’t know us and you haven’t walked in our shoes and you sure as hell don’t know the facts otherwise you wouldn’t say what you say.
Oh yes , of course you, only you, you know the real truth, you know what actually went on, of course someone like you would be privy to it all.
Ever heard of misinformation well guess what you swallowed it all, so, my question to you - are you really as clever as you think you are?
PS. Was it you who was a farmer or ran cattle at some time in your life?
Did you get any handouts from the government during that time?
I am curious I would love to know if my taxation dollars ever went into your pocket.
If my posts upset you so much, why do you read them? It would surely make more sense if you were to simply skip over them as soon as you see my name.
If you don't care what I think, then why bother responding?
If you're so upset by hearing views that differ from your's, why then do you frequent a public forum? Perhaps you should find another interest that's more to your liking.
I didn't say you would or should care what I think of you. My opinions of you, or your opinion of me, are irrelevant.
I didn't say or suggest that I was wonderful.
Nowhere in my post did I say you were greedy.
You're wrong about my age.
I've never had handouts from the government or anyone else.
I took responsibility for any mistakes that cost me money - I didn't go looking for someone else to blame, nor did I petition the government to bail me out.
There's no conceit in saying that some basic investment education enables people to avoid many of the pitfalls that trap those who heavily invest in financial markets without first educating themselves.
One area I will agree with you is that I probably don't know all the facts pertaining to the Storm situation.
There are, however, some basic facts about Storm investors that I do know.......
* At least some of them took out big loans that they could barely service even in good times, let alone if the market went bad.
* They violated the rules of prudent investment by putting too many of their eggs, plus large quantities of borrowed eggs, into the same basket.
* They didn't put sufficient effort into personal education by reading and researching investment opportunities - had they done so, they would have seen the flaws in the Storm strategy and would have avoided Storm like the plague.
* The investment strategy they followed was guaranteed to fall over when the bullish market ended.
*. Insufficient risk control measures in combination with heavy gearing meant that losses would be huge once the market turned bearish, even with the 'safety net' of margin calls in place.
Now Shibby, you can huff and puff all you like, but I challenge you to show me where my views are incorrect.
Under different circumstances I might take offence at you calling me a conceited buffoon. That sort of personal abuse is in violation of forum rules, and is reason enough to report you to the moderator and request that you be disciplined.
However, I've become used to emotional and abusive rantings of people like you and Mash, so I'll make allowances for you on the grounds that you're a bitter old woman who took a big gamble and lost. Now you're lashing out at anyone who reminds you of that fact, and you're demanding that other people bail you out.
I see no reason why I or any other member of the general public should come riding to your rescue. We didn't cause your losses. We had no part in the decisions you made.
Good luck in your quest to get the government to hand over taxpayers money to pay for your mistakes - you'll need it.
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From the Townsville Bulletin
http://www.townsvillebulletin.com.au/article/2010/05/22/140631_news.html
My In-Laws are disillusioned. Who to believe or trust.... There is a hell of a lot of misinformation out there being pushed by people with hidden agendas.
They are more than happy with the support they have received from Slater & Gordon.
The next couple of months will be interesting I think.
http://www.townsvillebulletin.com.au/article/2010/05/22/140631_news.html
My In-Laws are disillusioned. Who to believe or trust.... There is a hell of a lot of misinformation out there being pushed by people with hidden agendas.
They are more than happy with the support they have received from Slater & Gordon.
The next couple of months will be interesting I think.
Julia
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This from link above provided by Jifrimoz:
Hard to believe that anyone could imagine the Storm model was not the fundamental cause of the mess.
Hard to believe that anyone could imagine the Storm model was not the fundamental cause of the mess.
How interesting.
So now there's dissension among SICAG ranks.
At long last the media are starting to highlight the conflict of interest in having former Storm employees, and the father of a former Storm employee, on the SICAG committee. Also, the media are letting it be known that Cassamatis is alleged to be in contact with SICAG.
One of the co-chairmen of the SICAG committee hasn't yet taken off his blinkers, and continues to defend the Storm investment model.
Slater and Gordon are now painted in a bad light by some on the SICAG committee.
Many Storm victims have made it clear that they feel less than kindly disposed towards Cassamatis and his investment scheme. Meanwhile, the SICAG homepage continues to carry favourable comment about the Storm investment model.
Understandably this has created tensions within the ranks - now those tensions are beginning to show out publicly.
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Personally, I don't see a problem this. It's not like the bank pretended to do an accurate valuation when it was really just an estimate. They told you the figure was an approximate figure based on recent sales in your area. But for a resolution scheme, approximate figures just won't cut it.
The reason a bank wants to know how much your home is worth is to protect themselves from the risk that you might lose everything in bad investments. They want to know, if you lose all their money, how much can they recover from the sale of your house? It's simply a way for the bank to manage their risk. If they choose to use an estimate rather than a full evaluation, that's a risk they themselves choose to take. They aren't putting you at risk by overvaluing your home, they're putting themselves at risk because the sale of your home won't actually cover the money they loaned you. But for the resolution scheme, don't the banks now have a responsibility to obtain an accurate value for your home?
I've read many times that the problem was caused by banks overvaluing homes. But how did this overestimate put people at greater risk? Just because the bank will let someone borrow more money doesn't mean they should. It's the responsibility of the individual and the financial planner to manage risk. The greater risk came because Storm advised people to borrow more money than they were comfortable with and invested it in a place that history has shown is volatile.
When did people start believing the banks should be looking out for them? The bank is a company looking to make money just like any other company. The more you borrow, the more you pay. Banks want you to borrow more so they can make more. Margin calls are not there to protect the borrower. Margin calls exist to protect the bank from the risk that the borrower will lose all their money.
I don't see the banks being at fault for people choosing to borrow more money than they can afford to borrow. That's a personal choice. If the banks have any blame here I'd be looking more at the margin calls that apparently weren't issued when they should have been. But this doesn't make sense, it's not in the banks interest to delay a margin call. As I said, margin calls are there so the bank can get their money back before the borrower loses everything. But from what I've read I can't make out who was responsible for reporting the margin calls. I've heard the banks informed Storm who did nothing. Storm claims the banks should have informed the individual. What does the evidence say? Where is the signed document saying what happens in the event of a margin call?
It may be true that you were looking for a modest income. But just to be clear to any new investors that might be reading this, there is nothing modest about the income storm was seeking. Maximum leverage is only used by those seeking maximum possible returns during the boom times. Storm is an example of what happens when maximum leverage is used with no risk management. In regards to compensation, if Storm sold the strategy as low risk (and you can prove it) then you are entitled to compensation from Storm because it was obviously always a high risk strategy.
With regards to the petition, I notice very few comments about Storm compared to the many comments about the evil banks. Why? The banks just offered the service. Storm was the one that inappropriately used that service to gamble with your money. Even the margin call problem... By the time you hit margin call you've already lost most of your money. The problem wasn't the margin call levels, the problem was that Storm relied on them as the only risk management tool.
What evidence do the creators of the petition intend to submit to the government to substantiate the claims of wrongdoing? If hard evidence has been found why are people not already being fairly compensated? If there is no hard evidence why should the government pay full and immediate compensation? Without concrete evidence the most the petition should be calling for is a government funded investigation. In my opinion the current petition simply makes stormers look greedy. The trouble with petitions is that there's nowhere to sign to say you disagree with the petition. I'd like to see how many people are against the petition and why.
Julia
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This is what some Stormers don't seem to understand.
This is what several of us have asked throughout this marathon thread.
Unless I've missed it, there has been no clear response.
Again, unless I'm deluded, there has already been a taxpayer funded enquiry by Ripoll et al and their report submitted.
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I've seen you asking and no, I haven't seen a response. That's the point. There's little evidence being displayed to back up the accusations made.
Yes, government investigation isn't the right term because we've already had one. I was more thinking of the following section from the petition:
"We believe it is unconscionable to expect us, the victims of a so-called regulated banking industry, to have to seek justice in the Courts when we are the victims. It is particularly onerous when we do not have the financial means to do so. The Government should be doing this on our behalf because they let it happen."
The very most they could hope for is that the government will cover their legal fees. I don't necessarily agree with this, but it makes more sense than a demand for full compensation.
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Finally the links between SICAG and the originators of this disaster, the Cassimati (is that the plural of Cassimatis?), are becoming apparent.
Given Weir and O'Brien are fond of transparency and fairness perhaps they will open the books of SICAG so we can all see who is funding them. Perhaps we will then understand why their view is that it is all the Bank's fault while the Storm model was just misunderstood.
Who is/was paying Big Max?
Given Weir and O'Brien are fond of transparency and fairness perhaps they will open the books of SICAG so we can all see who is funding them. Perhaps we will then understand why their view is that it is all the Bank's fault while the Storm model was just misunderstood.
Who is/was paying Big Max?
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I think we all know the answer to that. I have been saying it for over 12 months now, yet we have constantly been shot down.
SICAG will only care about victims until the point where O'Brien's son and associates get called out as being perpetrators.
SICAG will only care about victims until the point where O'Brien's son and associates get called out as being perpetrators.
Shibby - this post will upset you - I suggest you don't read any further.
Storm investors lost billions of dollars in the 2008 global financial crisis.
Now some Stormers have organised a petition to demand that our government use taxpayers money to compensate them for their losses.
Stormers represent only a small percentage of the millions of people who lost money in the GFC - I wonder if they think that all those other losing investors should be bailed out by the government as well, or if Stormers should be the only ones given favourable treatment.
I wonder if they seriously think it would be prudent, or even possible, for the government to come up with billions of dollars to rescue people who have made poor investment decisions.
I wonder if they've seriously considered the can of worms that would be opened if the government was to set a precedent by handing over billions of dollars to a group of disgruntled investors.
I wonder if they've seriously considered that such action would open the floodgates for government compensation to every man and his dog whose ever lost money in a bad investment.
I wonder if the Stormers who are pushing this petition have really considered the implications for Australia if the government was foolish enough to bow to their demands.
I and others taxpayers don't mind our taxes being used to provide police, roads, hospitals, schools, defence forces and other essential services. But we'd take strong exception if billions of our money was diverted away from these essential services, and used instead to bail out imprudent investors.
Storm investors who sign that petition are making themselves look foolish. I'd like to see them come up with a rational argument as to why I and other taxpayers like me should share their losses. Do we share their profits as well? If Stormers ever sell something for profit in the future, should taxpayers get their share of those profits? Of course not - the suggestion is ridiculous, but no more ridiculous than asking us to share their losses.
To their credit, some Stormers have accepted the reality of their situation, acknowledged their share of the responsibility for what happened, and have moved on with their lives.
Others just can't seem to accept the reality of the situation at all, and are coming up with money grabbing tactics to extract money from anyone they think might pay up. They only reason they haven't gone after the real culprit is because they see no prospect of getting any money out of him.
It really is time for some of these Stormers to get in touch with reality.
Storm investors lost billions of dollars in the 2008 global financial crisis.
Now some Stormers have organised a petition to demand that our government use taxpayers money to compensate them for their losses.
Stormers represent only a small percentage of the millions of people who lost money in the GFC - I wonder if they think that all those other losing investors should be bailed out by the government as well, or if Stormers should be the only ones given favourable treatment.
I wonder if they seriously think it would be prudent, or even possible, for the government to come up with billions of dollars to rescue people who have made poor investment decisions.
I wonder if they've seriously considered the can of worms that would be opened if the government was to set a precedent by handing over billions of dollars to a group of disgruntled investors.
I wonder if they've seriously considered that such action would open the floodgates for government compensation to every man and his dog whose ever lost money in a bad investment.
I wonder if the Stormers who are pushing this petition have really considered the implications for Australia if the government was foolish enough to bow to their demands.
I and others taxpayers don't mind our taxes being used to provide police, roads, hospitals, schools, defence forces and other essential services. But we'd take strong exception if billions of our money was diverted away from these essential services, and used instead to bail out imprudent investors.
Storm investors who sign that petition are making themselves look foolish. I'd like to see them come up with a rational argument as to why I and other taxpayers like me should share their losses. Do we share their profits as well? If Stormers ever sell something for profit in the future, should taxpayers get their share of those profits? Of course not - the suggestion is ridiculous, but no more ridiculous than asking us to share their losses.
To their credit, some Stormers have accepted the reality of their situation, acknowledged their share of the responsibility for what happened, and have moved on with their lives.
Others just can't seem to accept the reality of the situation at all, and are coming up with money grabbing tactics to extract money from anyone they think might pay up. They only reason they haven't gone after the real culprit is because they see no prospect of getting any money out of him.
It really is time for some of these Stormers to get in touch with reality.
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Jifromoz, I'm sure the next couple of months will be interesting, the next week especially will be indeed, be very interesting.
I spent some time yesterday afternoon with my Stormer mate. He's got some big things to consider at the moment about where he'll be heading in the future. I believe he's coming to the realisation that his original expectations of restoration will not be attained. And he's making the lifestyle adjustments for the future now. I have a full understanding of the the debt and gearing levels he was exposed to in the Storm model including the amount of fees and interest that was paid. I understand his disbelief in losing his capital and virtually his lifetime of effort and savings to now only to be straddled with debit.
He gets upset with being painted as being greedy, I know the modest amount he was hoping to draw down on from his structure to live on. His dream was to live a life without having to rely on government handouts and have a secure retirement.
I asked why he wasn't concerned about the Storm strategy, to me the large debt and the gearing would have flagged a risk. His reply was he trusted, Storm and the banks especially after having a long association with them. His core skills are not in the finance or investing area so he said he engaged professionals in the field. What do you say to that ? It's hard to be hypercritical of that decision, especially when you are sitting opposite each other having a coffee. He's trying to understand why he's being punished so severely for placing his trust in others that has left him in this predicament. Life's very tough, I suppose Stormers who are backed into a corner are willing to fight and try anything to improve their position when things go sour. I'd do the same.
Every Stormer's situation is different and I suppose what ever choices are made depends on the individual's circumstances. If Tony Raggatt's report is accurate about varying opinions within SICAG, I believe that this would be an expected variation within a group. My mate's not in SICAG but I do believe the group has been of huge benefit and support to some who have been through some very dark days. I don't know if EC has any influence in the group or if it would be of any significance with such a wide cross section of members, opinions and backgrounds.
I'm looking forward to pending developments in this ever evolving episode in Aussie financial history.
Solly - I get the impression that many Stormers just didn't know they were being greedy.
There's no greed in wanting to be financially independent so as to ensure a comfortable retirement. The greed came in when Storm hatched a highly ambitious and risky plan for their clients to achieve their goals, and the clients saw dollar signs in front of their eyes, accepted the strategy and used it as their blueprint for investment.
Double gearing, risking the family home, all the money sunk into one highly risky investment strategy that was going to make piles of money if things went well, but incur massive losses if things went bad.
That's a greedy and reckless strategy, pure and simple.
Their objective of achieving a comfortable retirement wasn't greedy, but the attempted method of achieving the objective certainly was. Perhaps Stormers just didn't realise it at the time.
