Julia
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After your response to my last attempt to be helpful, I hardly think so.
viz:
+1 x 1000.
Storm Financial Group
- Thread starter Garpal Gumnut
- Start date
viz:
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Hi Doobsy
To answer your question
What about if the finance from the intended margin loan had been included as an assett for example sitting in a non existent bank account?
But the monthly expense of that margin loan was ignored. I agree there could be a chance of that happening.
I should have stated somewhere that the assets & liabilities form was completed pre margin loan the normal Storm way and I am trying to work out where the figures have been pulled from.
We all now know that the home loan was the lynch pin or the first step in the building block and it was imperative that the bank loans were approved.
Hypothetically if you have an assets and liabilities form and it has a figure sitting in an imaginary bank account unbelievably similar to the amount to be borrowed as a margin loan could one assume that it already being classed as an asset but then there is no monthly liability.
Then also included on the Hypothetical asset & liability you have the usual $100,000.00 per annum salary (very common for us Stormies) again the truth highly inflated
If the client never saw the income figure or the assets and liabilities forms then they should never have signed. I know this happened and I don't know what else to say.
Just maybe the client had never seen it and never signed it
My question back is how did the bank know the client had not seen it?
Well that is the quandary – just say the assets and liabilities form has been typed or obviously spat out of a computer printer and when the bank was asked who typed those figures and the answer was the bank yet the client has never seen or signed the paper and the assets have very little relevance to their financial position.
Every chance that Storm was not telling the client everything but also was leaving out certain information when it came to talking to the bank also.
I agree there could be a chance of that happening
I know the bank and the client were never to meet or speak that seems to be the golden rule and who would profit from that arrangement? If I was to hazard a guess - both of them
To answer your question
What about if the finance from the intended margin loan had been included as an assett for example sitting in a non existent bank account?
But the monthly expense of that margin loan was ignored. I agree there could be a chance of that happening.
I should have stated somewhere that the assets & liabilities form was completed pre margin loan the normal Storm way and I am trying to work out where the figures have been pulled from.
We all now know that the home loan was the lynch pin or the first step in the building block and it was imperative that the bank loans were approved.
Hypothetically if you have an assets and liabilities form and it has a figure sitting in an imaginary bank account unbelievably similar to the amount to be borrowed as a margin loan could one assume that it already being classed as an asset but then there is no monthly liability.
Then also included on the Hypothetical asset & liability you have the usual $100,000.00 per annum salary (very common for us Stormies) again the truth highly inflated
If the client never saw the income figure or the assets and liabilities forms then they should never have signed. I know this happened and I don't know what else to say.
Just maybe the client had never seen it and never signed it
My question back is how did the bank know the client had not seen it?
Well that is the quandary – just say the assets and liabilities form has been typed or obviously spat out of a computer printer and when the bank was asked who typed those figures and the answer was the bank yet the client has never seen or signed the paper and the assets have very little relevance to their financial position.
Every chance that Storm was not telling the client everything but also was leaving out certain information when it came to talking to the bank also.
I agree there could be a chance of that happening
I know the bank and the client were never to meet or speak that seems to be the golden rule and who would profit from that arrangement? If I was to hazard a guess - both of them
'Tis a marvelous and beautiful thing, Solly. Only one small problem that I can see. How is ASIC the "requirements" going to keep con men, cheaters, scam artists, crooks, hustlers, swindlers and mountebanks away from the advisory business? :kiffer:
After all, those standards have not worked in relation to our elected representatives, State or Federal, so why should they work in the real world?
Shibby - so if I can use an example for a retiree
On the application to the bank - for the home loan borrowings:
Assets - House = $500,000
Cash = $50,000
Imaginary Investment = $1,500,000
Superannuation = $300,000
Liabilities - Nil (assuming house paid off)
Income - $150,000 ($1,500,000 x 10% assumed return)
Expenses - Living + $28,000 (mortgage interest)
Now to the crux:
1. The imaginary investment is the investment that Storm figures will occur when we get $400,000 from the house (80%), withdraw the super, use the cash and gear it at 50%????
2. The income figure assumed a rate of return and ignored all costs (these could be capitalised) when in fact the truth is it should be distributions minus interest costs.
3. We know this is so wrong on Storms behalf as they were providing the figures but JUST HOW MUCH DID THE BANKS KNOW?
and lastly because this is important too
4. Did clients question the fact that with no income per se, $350,000 in income producing assets prior to any lending, the bank was willing to lend $1.15M ($750K ML + $400K mortgage) to them?
I think my position on this is as firm as ever. There will be clear cases of improper lending. Those banks who had much less association with Storm might continue to argue they did not know but CBA and BOQ are done.
HOWEVER - Those client who do not fit into the retiree / low income bracket and have always had income that could support at least the home loan are going to find the argument much harder as it is not as clear a case of improper lending.
For example - I have taken over clients who had only a little equity in their home. One of the clients worked for NAB. She organised the loan to draw the equity herself and Storm grabbed it and geared it. They lost 90% of what they put up when they got their margin call triggered and that loan was paid out. This has cost them 6 years as that was how long it took them to build the equity up last time.
They are late 30's and both working. The loss is less than $70,000 in their case. There is no improper lending, there was just bad advice. There is no justification for compensation I can see. I think there will be quite a few like this where the lending was legit, the figures checked by clients and the lending proper. It will result in plenty of retirement plans being put on hold and that is a pity but that is the problem with high risk strategies.
SJG1974;
But, as my post said, the reference to greed followed the comment about the independently wealthy and multi millionaires who had no need to gear yet did so. People like the doctors Frank had alluded to earlier, who had more than enough to live on, to live the kinds of lives that many of us could only dream of, but wanted more.
If you have $10 million in assets and decide to risk it all by gearing to the gills, why would someone do that, when they could plonk it in the bank, and get $500,000 per year at 5%? If you don't think thats greedy, then fine. But I sure as hell do.
Lets talk about tax effectiveness being greedy?
$500,000 per annum interest added to what I would imagine is already a rather large annual salary makes for a hefty tax bill therefore not many would choose to simply leave it in the bank.
There is a whole industry out there that specialises in tax avoidance I am not saying tax evasion but tax avoidance.
I/We can only talk about what we know through life experiences and I have been on the fringe of the legal profession most of my adult life and a barrister can usually make quite a large annual salary. I have seen barristers and doctors do the craziest things to avoid paying tax – legal of course but sometimes extreme because there is this ethos or concept or idea that you minimise your tax bill if you have the means to.
When I was younger and a rather vocal socialist I believed that one paid their fair share of tax but of course this is where the problems develop as to what actually constitutes a fair share hence the tax avoidance industry. Who out there including you does not want to minimise their tax bill? it is a socially acceptable way of life.
I am not saying that this is why the doctors that Frank is talking about went with Storm but it is an alternative to the concept of greed and to be perfectly honest I don’t think that the doctors that Frank mentioned, if they are the doctors that are involved with Levitt & Robinson can be tarred with that brush because the Stormies owe them an enormous debt of gratitude for their help and I can assure you there is no signs of greed.
The population who are in the high income, high responsibility category are usually time poor and lets face it Storm offered to take that responsibility off your hands as well.
The word greed offends me enormously and is not based on any evidence that has come forth and I simply wanted to know why it started.
I agree the Cassimatises do appear to be obscenely greedy – that sought of greed has destroyed many lives and even taken lives and that is unforgiveable.
Your comment that greed motivated many Storm lives – no I will never believe that for a second confused about the following and wanting to take responsible steps
After retiring and therefore a large amount of money in Super;
Downsizing to a smaller home and having probably more money than they had had in a lifetime;
The sudden shock of the responsibility of that money;
Preparing for retirement;
Getting older and having a sick child to look after
As HQ said running out of time to accumulate wealth for retirement
- that’s why the majority would have gone to Storm.
Leave out what we know now - Storm purported to be a bastion of respectability, successful, reliable, highly recommended by one’s piers etc etc. Most people would not know that a large proportion of those that walked through the doors never came back,
that statistic would not have been on show any where.
I can not talk about the Storm experience I am in NSW and came to Storm through the back door but I am sure that they went to Storm for the same reason I went to Precise Solutions in North Sydney to get advice about money and how I was going to live comfortably - please now don’t pull the word comfortable to pieces I just simply mean comfortable - for the next 30 years.
What younger people don’t realise is that when you are older your wants and needs have changed and they are at a minimum. I am not saying that we don’t want any more it’s just a different want.
I could go on about the post storm and left with no money wants of just survival but that is another story.
But, in reality, who, when they have lost it all, is going to admit they were greedy, when they can blame someone else.
But I in all honesty can blame someone else, and I can say that without even blinking or stammering or blushing. And I have a list of people I can blame.
But, as my post said, the reference to greed followed the comment about the independently wealthy and multi millionaires who had no need to gear yet did so. People like the doctors Frank had alluded to earlier, who had more than enough to live on, to live the kinds of lives that many of us could only dream of, but wanted more.
If you have $10 million in assets and decide to risk it all by gearing to the gills, why would someone do that, when they could plonk it in the bank, and get $500,000 per year at 5%? If you don't think thats greedy, then fine. But I sure as hell do.
Lets talk about tax effectiveness being greedy?
$500,000 per annum interest added to what I would imagine is already a rather large annual salary makes for a hefty tax bill therefore not many would choose to simply leave it in the bank.
There is a whole industry out there that specialises in tax avoidance I am not saying tax evasion but tax avoidance.
I/We can only talk about what we know through life experiences and I have been on the fringe of the legal profession most of my adult life and a barrister can usually make quite a large annual salary. I have seen barristers and doctors do the craziest things to avoid paying tax – legal of course but sometimes extreme because there is this ethos or concept or idea that you minimise your tax bill if you have the means to.
When I was younger and a rather vocal socialist I believed that one paid their fair share of tax but of course this is where the problems develop as to what actually constitutes a fair share hence the tax avoidance industry. Who out there including you does not want to minimise their tax bill? it is a socially acceptable way of life.
I am not saying that this is why the doctors that Frank is talking about went with Storm but it is an alternative to the concept of greed and to be perfectly honest I don’t think that the doctors that Frank mentioned, if they are the doctors that are involved with Levitt & Robinson can be tarred with that brush because the Stormies owe them an enormous debt of gratitude for their help and I can assure you there is no signs of greed.
The population who are in the high income, high responsibility category are usually time poor and lets face it Storm offered to take that responsibility off your hands as well.
The word greed offends me enormously and is not based on any evidence that has come forth and I simply wanted to know why it started.
I agree the Cassimatises do appear to be obscenely greedy – that sought of greed has destroyed many lives and even taken lives and that is unforgiveable.
Your comment that greed motivated many Storm lives – no I will never believe that for a second confused about the following and wanting to take responsible steps
After retiring and therefore a large amount of money in Super;
Downsizing to a smaller home and having probably more money than they had had in a lifetime;
The sudden shock of the responsibility of that money;
Preparing for retirement;
Getting older and having a sick child to look after
As HQ said running out of time to accumulate wealth for retirement
- that’s why the majority would have gone to Storm.
Leave out what we know now - Storm purported to be a bastion of respectability, successful, reliable, highly recommended by one’s piers etc etc. Most people would not know that a large proportion of those that walked through the doors never came back,
that statistic would not have been on show any where.
I can not talk about the Storm experience I am in NSW and came to Storm through the back door but I am sure that they went to Storm for the same reason I went to Precise Solutions in North Sydney to get advice about money and how I was going to live comfortably - please now don’t pull the word comfortable to pieces I just simply mean comfortable - for the next 30 years.
What younger people don’t realise is that when you are older your wants and needs have changed and they are at a minimum. I am not saying that we don’t want any more it’s just a different want.
I could go on about the post storm and left with no money wants of just survival but that is another story.
But, in reality, who, when they have lost it all, is going to admit they were greedy, when they can blame someone else.
But I in all honesty can blame someone else, and I can say that without even blinking or stammering or blushing. And I have a list of people I can blame.
That may be true, but on the other side not many would choose to gear their portfolio to the gills in order to enhance its tax effectiveness. Risk their fortune to pay less tax?
If tax was the consideration, and you said to someone you have 2 choices:
1. Pay tax on $500,000 (say $200,000); or
2. Lose the whole lot and pay tax of Nil on Nil
Then I am pretty sure which option people would take. I know that is simplistic, but if anyone went into this with tax minimisation as their sole objective, then they had rocks in their head….you don’t gear for tax purposes, you gear for growth.
Well we differ here. People are prepared to label the Cassimatis’ greedy, yet no Storm victims were greedy?
Are you on that list?
I guess we will find out over time whether the people on your list broke the law or not or whether they just sold a legal, yet flawed strategy which was gobbled up by you and other Storm victims for reasons only you can explain.
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Can I please have one of the stormies answer the question I asked before.
When you sat down with your planner and asked him the question, "How much are we likely to earn from this operation" What was his answer, Or what were the returnes they elluded to?
When you sat down with your planner and asked him the question, "How much are we likely to earn from this operation" What was his answer, Or what were the returnes they elluded to?
I must tell you that when I read your reply above I actually laughed because I knew exactly what you would say to me it was not a sarcastic laugh but a happy laugh because I knew you would not know what else to say to me, because I must fit into your hypothesis.
I am going to answer the last question first
Am I on the list
- the only way I can honestly answer that is to say if I knew then what I know now I most definetly would be on that list.
I thought that when I asked questions I was given honest answers.
I also believed that they knew what they were doing and when my spreadsheets were saying one thing and they were saying another it was me.
I think any confidence that I had in my ability was eroded.
The only other thing to say was that I had a long term relationship with Precise Solutions and therefore I had put my trust in them that they were not going to do anything stupid and it must have been me that really didnt understand.
Look I could go on and on but you really dont want the nitty gritty as you have made up your mind already I have done 3 years of research and I dont think you have even taken a week of research (maybe that is youth I am assuming that you were born in 1974) Your tone is quite abrupt and very condecending and you have already made up your mind about us you are probably a black or white person but guess what in life there is a lot of grey.
I was hoping that you would actually really think about what I was saying and not fit every thing around the word greed.
Guess what people make mistakes we make a decision on the evidence before us and we go ahead and do it. Would I have made a decision after knowing the iceberg was there never in a million years but I didnt know the truth.
There were a million things I didnt know
Cassimatis Greed - Well if any one knew what was going he did and right up until the last minute he was still taking clients.
Do you think the doctors thought for one second that they would Lose the whole lot and pay tax of Nil on Nil.
I dont know whether you are greedy or not, and I don't believe I have ever called you greedy. As I have said previously, I don't think that every Tom, Dick and Shibby who walked through their doors was greedy. But I reckon that greed would have played a part for many clients. Anyway, thats by the by, I only raised it because you asked the question about greed in the first place!!
The reason I asked if you are on your list was basically because many people on this forum who were clients of Storm have blamed others, be it the banks, Cassimatis, ASIC, the government, whoever, but seem to have ignored the simple fact that they signed on to this strategy, no matter how flawed it is. I have not gone back through your posts to see whether you fit in that category or not....it was actually a genuine question.
Whether people signed on because they were naive, greedy, stupid, whatever doesn't really matter, but in the end they made the decision to do so. Every decision has consequences.
As I have said previously (and this is a generalisation, not directed at you personally), it annoys the hell out of me when people take big risks, lose, and then play dumb and say "I didn't know what I was doing, they conned me". Whose fault is it that people didn't know what they were doing? Storm's, the bank's or the clients who went along with the whole deal? Storm is selling you something- like all salesmen part of their job is to make you feel like you need what they are selling. So in that case, do you believe all of the answers he gives, or do you perhaps verify them yourself?
We live in a litigous society where as soon as anyone loses, they look for someone to blame, when a bit of self analysis would probably be more beneficial and help them avoid making the same mistakes in the future.
If laws were broken then the guilty parties will rightly pay and the courts will decide the guilt and the punishment. But, is the fact that the banks may have behaved dishonestly the only reason why people have lost money in all of this? They can't act dishonestly unless someone hands them the money (or allows them to take out a debt) for them to mismanage....and the people who handed them the money were the clients.
And remember, this wasn't some black box or a ponzi scheme..it was actually a very simple and straight forward strategy, using products that are readily available and transparent. But it was bloody highly risky, and as soon as someone tells you to borrow money against your house, then alarm bells should start ringing telling you "this is not low risk". We have heard people say they didn't realise it was risky...please, give me a break. Anyone who has ever had a home loan knows debt is risky.
Heaven help some people if the courts decide that no laws were broken and no compensation is payable...who would they blame then? Perhaps the legal system would be the next target.
On the doctors, the Nil Nil was a throwaway line, but was used to serve the point that taking a huge risk with the purpose being to save tax is the height of stupidity, because now these doctors would probably prefer to have their tax problem rather then the problem of having lost all of their money as the result of taking huge and unnecessary risks.
OK Harleyquin
I can see you’re determined to get an answer out of me with regard to ‘What is the role and responsibility of financial planners’.
So I’ll give you your answer.
The reason I’ve ignored this question to date is simply because it’s already been discussed in detail many times on this thread, and you should already know the answer.
Without going into too much detail, I’ll summarize by saying' ‘The role and responsibilities of a financial planner are to act ethically and give good advice that’s in the best interests of the client’.
And don’t waste your time or mine by telling me that Storm weren’t ethical and honest and they didn’t fulfill their responsibilities of giving you good advice and looking after your best interests. I already know that. This whole forum knows that.
Now that I’ve addressed your question, I’ll address the question I asked you to consider. Note that I didn’t ask you for an answer, only that you consider my question, which was ‘What are the responsibilities and role of a person who consults a financial planner’.
DocK has stated that the responsibilities of such a person are ‘to provide honest and accurate answers to a fact find in order to allow them to formulate an individualised plan’.
I agree with her, but she’s missed the most important responsibility of all.
Your most important responsibility when you consult a financial planner is to thoroughly research and evaluate the advice they give you.
This is particularly important if their advice is to mortgage your home and borrow vast sums of money for investment.
Many thousands of people approached Storm Financial. The vast majority of them understood the importance of thoroughly researching the advice they were given. After doing so, they walked away.
A minority didn’t understand that it was imperative to thoroughly research the advice they were given. These people trusted Storm and believed what they said. They got burnt.
GG summed it up very well by saying ‘Storm fed you a load of crap and you swallowed it’.
Well, maybe you would have avoided swallowing it if only you’d bothered to look into it properly.
You’ve ridiculed me whenever I’ve suggested that Stormers should have thoroughly researched Storm’s strategy before committing millions of dollars to it. Your exact words were ‘What a load of hogwash’.
I could easily show you how you could have spotted the pitfalls of the Storm strategy by spending about half an hour on the internet and about five minutes working out some simple figures on a pocket calculator. Nothing complex or difficult to understand, nothing sophisticated – just some simple basic research that would have enabled you to see that Storm were liars in telling you their strategy was conservative and low risk.
But why would I bother trying to help you. You’ve ridiculed me just about every time I’ve tried to tell you anything that I thought might be of benefit. You’ve adopted the same attitude towards Julia, SJG, and pretty much everyone else whose tried to help you.
You hang on every word of people like Frank, Shibby and others who got wiped out in the GFC , to you they’re the only people worth listening to.
Yet when any successful investor gives you the benefit of their knowledge and experience, you write them off as fools. Maybe it’s time you started taking notice of the winners, the people who came through the GFC intact and in some cases actually prospered from it.
Seems to get a bit difficult sometimes doesn't it, bunyip?
When Solly posted the ASIC "What a good FP am I" criteria, there was a thought running through my mind and I could not quite grasp it. I now recall the statement. It was in a book on investing which I read about six years ago - yes, before the GFC and the Storm downfall. I just cannot find the book or remember who wrote it but the statement went along the lines of:
"goverments always make the same reassuring sounds after investors lose money but after a decade or so another batch will lose their money, only it will be in a slightly different way."
Wish that was emblazoned on every PDS printed, over every bank's door and web-site, and on the doors of every FP in the land. All in HUGE CAPITAL LETTERS of course.
Cheers
When Solly posted the ASIC "What a good FP am I" criteria, there was a thought running through my mind and I could not quite grasp it. I now recall the statement. It was in a book on investing which I read about six years ago - yes, before the GFC and the Storm downfall. I just cannot find the book or remember who wrote it but the statement went along the lines of:
"goverments always make the same reassuring sounds after investors lose money but after a decade or so another batch will lose their money, only it will be in a slightly different way."
Wish that was emblazoned on every PDS printed, over every bank's door and web-site, and on the doors of every FP in the land. All in HUGE CAPITAL LETTERS of course.
Cheers
SJG1974;68165
I dont know whether you are greedy or not, and I don't believe I have ever called you greedy. As I have said previously, I don't think that every Tom, Dick and Shibby who walked through their doors was greedy. But I reckon that greed would have played a part for many clients. Anyway, thats by the by, I only raised it because you asked the question about greed in the first place!!
I disagree with you that greed would have played a part for many clients – being responsible would have played an enormous part.
The reason I asked if you are on your list was basically because many people on this forum who were clients of Storm have blamed others, be it the banks, Cassimatis, ASIC, the government, whoever, but seem to have ignored the simple fact that they signed on to this strategy, no matter how flawed it is. I have not gone back through your posts to see whether you fit in that category or not....it was actually a genuine question.
No answer
1. Whether people signed on because they were naive, greedy, stupid, whatever doesn't really matter, but in the end they made the decision to do so. Every decision has consequences.
I agree and said earlier that we make decision on the evidence that was before us but if all the evidence is not in front of us and there is an iceberg sitting there of what was not revealed I will not blame myself.
It has been a very interesting exercise you start to scratch the surface and it’s all there, tons and tons of corruption. I was not privy to all of that knowledge at the time of signing.
The funny side to all of this is in their greed they didn’t even bother to cover their tracks.
2. As I have said previously (and this is a generalisation, not directed at you personally), it annoys the hell out of me when people take big risks, lose, and then play dumb and say "I didn't know what I was doing, they conned me". Whose fault is it that people didn't know what they were doing? Storm's, the bank's or the clients who went along with the whole deal? Storm is selling you something- like all salesmen part of their job is to make you feel like you need what they are selling. So in that case, do you believe all of the answers he gives, or do you perhaps verify them yourself?
I can honestly say that I didn’t take it at face value, I researched to the best of my ability with the tools that I had developed over my life time.
3. We live in a litigous society where as soon as anyone loses, they look for someone to blame, when a bit of self analysis would probably be more beneficial and help them avoid making the same mistakes in the future.
That again is a real knee jerk response and once again with out much thought to it and I bet you the Researcher Extraordinaire didn’t research those statistics.
4. If laws were broken then the guilty parties will rightly pay and the courts will decide the guilt and the punishment. But, is the fact that the banks may have behaved dishonestly the only reason why people have lost money in all of this?
This one makes sense - the only way I can answer that one is to say that in my honest opinion Storm was aided and abetted to an enormous degree by the banks and would never have been able to pull it off without their assistance.
They can't act dishonestly unless someone hands them the money (or allows them to take out a debt) for them to mismanage....and the people who handed them the money were the clients.
This one I really don’t understand. Maybe you could rephrase that one
5. And remember, this wasn't some black box or a ponzi scheme..it was actually a very simple and straight forward strategy, using products that are readily available and transparent. But it was bloody highly risky, and as soon as someone tells you to borrow money against your house, then alarm bells should start ringing telling you "this is not low risk". We have heard people say they didn't realise it was risky...please, give me a break. Anyone who has ever had a home loan knows debt is risky.
This point is interesting as 70% of Australians (and one could assume that a very large proportion of the 70% home owners) do have a mortgage according to census figures.
Again I will use the word ethos it’s a good old Aussie ethos, it’s our culture to be home owners and have a mortgage I am being a bit flippant here but that is not a hard thing to get your mind around. It does not mean for one second that I was not greatly concerned but I was given such assurances that I would not lose my house ever and I believed.
Because my house was on the line from day one I kept very good spreadsheets and every movement of every account was entered into MYOB. But you don’t want to talk about after the signing on the dotted line do you? You are only interested in our motives of why we did it and that has to be greed.
6. Heaven help some people if the courts decide that no laws were broken and no compensation is payable...who would they blame then? Perhaps the legal system would be the next target.
You personally will be so disappointed if we win I just know it, but, if you could see my face as I write this I have the biggest smile ever because I know we will win.
My hubby would say “The law is sometimes an Ass” - but I say Yahoo!!! not this time.
On the doctors, the Nil Nil was a throwaway line, but was used to serve the point that taking a huge risk with the purpose being to save tax is the height of stupidity, because now these doctors would probably prefer to have their tax problem rather then the problem of having lost all of their money as the result of taking huge and unnecessary risks.
. No answer warranted
I dont know whether you are greedy or not, and I don't believe I have ever called you greedy. As I have said previously, I don't think that every Tom, Dick and Shibby who walked through their doors was greedy. But I reckon that greed would have played a part for many clients. Anyway, thats by the by, I only raised it because you asked the question about greed in the first place!!
I disagree with you that greed would have played a part for many clients – being responsible would have played an enormous part.
The reason I asked if you are on your list was basically because many people on this forum who were clients of Storm have blamed others, be it the banks, Cassimatis, ASIC, the government, whoever, but seem to have ignored the simple fact that they signed on to this strategy, no matter how flawed it is. I have not gone back through your posts to see whether you fit in that category or not....it was actually a genuine question.
No answer
1. Whether people signed on because they were naive, greedy, stupid, whatever doesn't really matter, but in the end they made the decision to do so. Every decision has consequences.
I agree and said earlier that we make decision on the evidence that was before us but if all the evidence is not in front of us and there is an iceberg sitting there of what was not revealed I will not blame myself.
It has been a very interesting exercise you start to scratch the surface and it’s all there, tons and tons of corruption. I was not privy to all of that knowledge at the time of signing.
The funny side to all of this is in their greed they didn’t even bother to cover their tracks.
2. As I have said previously (and this is a generalisation, not directed at you personally), it annoys the hell out of me when people take big risks, lose, and then play dumb and say "I didn't know what I was doing, they conned me". Whose fault is it that people didn't know what they were doing? Storm's, the bank's or the clients who went along with the whole deal? Storm is selling you something- like all salesmen part of their job is to make you feel like you need what they are selling. So in that case, do you believe all of the answers he gives, or do you perhaps verify them yourself?
I can honestly say that I didn’t take it at face value, I researched to the best of my ability with the tools that I had developed over my life time.
3. We live in a litigous society where as soon as anyone loses, they look for someone to blame, when a bit of self analysis would probably be more beneficial and help them avoid making the same mistakes in the future.
That again is a real knee jerk response and once again with out much thought to it and I bet you the Researcher Extraordinaire didn’t research those statistics.
4. If laws were broken then the guilty parties will rightly pay and the courts will decide the guilt and the punishment. But, is the fact that the banks may have behaved dishonestly the only reason why people have lost money in all of this?
This one makes sense - the only way I can answer that one is to say that in my honest opinion Storm was aided and abetted to an enormous degree by the banks and would never have been able to pull it off without their assistance.
They can't act dishonestly unless someone hands them the money (or allows them to take out a debt) for them to mismanage....and the people who handed them the money were the clients.
This one I really don’t understand. Maybe you could rephrase that one
5. And remember, this wasn't some black box or a ponzi scheme..it was actually a very simple and straight forward strategy, using products that are readily available and transparent. But it was bloody highly risky, and as soon as someone tells you to borrow money against your house, then alarm bells should start ringing telling you "this is not low risk". We have heard people say they didn't realise it was risky...please, give me a break. Anyone who has ever had a home loan knows debt is risky.
This point is interesting as 70% of Australians (and one could assume that a very large proportion of the 70% home owners) do have a mortgage according to census figures.
Again I will use the word ethos it’s a good old Aussie ethos, it’s our culture to be home owners and have a mortgage I am being a bit flippant here but that is not a hard thing to get your mind around. It does not mean for one second that I was not greatly concerned but I was given such assurances that I would not lose my house ever and I believed.
Because my house was on the line from day one I kept very good spreadsheets and every movement of every account was entered into MYOB. But you don’t want to talk about after the signing on the dotted line do you? You are only interested in our motives of why we did it and that has to be greed.
6. Heaven help some people if the courts decide that no laws were broken and no compensation is payable...who would they blame then? Perhaps the legal system would be the next target.
You personally will be so disappointed if we win I just know it, but, if you could see my face as I write this I have the biggest smile ever because I know we will win.
My hubby would say “The law is sometimes an Ass” - but I say Yahoo!!! not this time.
On the doctors, the Nil Nil was a throwaway line, but was used to serve the point that taking a huge risk with the purpose being to save tax is the height of stupidity, because now these doctors would probably prefer to have their tax problem rather then the problem of having lost all of their money as the result of taking huge and unnecessary risks.
. No answer warranted
I acknowledge that it is a minor point but are you sure that it is 70% of Australians have a mortgage? If so that is very surprising to me. I can only find census data as at 2006 (and of course when I attempt to access the bloody data it says temporarily unavailable) and yet according to the ABS data (as at 14 July 2011) http://www.abs.gov.au/ausstats/abs@...2010~Chapter~Levels of home ownership (5.4.3)
Doesn't really matter anyway. I assume that most who do have a mortgage would be aware of how much is outstanding on it.
PS: Finally got the 2006 census data for Australia
Fully owned: 32.6%
Being Purchased: 32.2%
Rented: 27.2%
Other: the rest
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Yes Judd I agree with your sentiments. I suppose laws are really a refection of what our society requires as a minimum acceptable behavioral requirement. When these requirements are not adhered to it is up to enforcement authorities to detect variance and then be referred so that punitive measures can be applied where appropriate.
But maybe occasionally, stern examples just need to be made of some where they have strayed just a little too far off course and breached acceptable standards. Where the imposition of an ineffective measure of penalty units is not a deterrent maybe spending 3 to 5, sharing a cell with a big hairy boyfriend, at The Creek would send a message too loud to ignore.
:Dear Judd
What I said
This point is interesting as 70% of Australians (and one could assume that a very large proportion of the 70% home owners) do have a mortgage according to census figures.
At the time of writing I thought I was saying as 70% of Australian are home owners according to census figures I could assume that a very large proportion of that population would have a mortgage
I proof read it and then
I fiddled around with the brackets so much I think I misconstrued the message
I Apologise
I have had a long day I have been doing my sons GST all day, well last 2 days and I am tired plus a dog with an upset tummy has been added to the mix.
What I said
This point is interesting as 70% of Australians (and one could assume that a very large proportion of the 70% home owners) do have a mortgage according to census figures.
At the time of writing I thought I was saying as 70% of Australian are home owners according to census figures I could assume that a very large proportion of that population would have a mortgage
I proof read it and then
I fiddled around with the brackets so much I think I misconstrued the message
I Apologise
I have had a long day I have been doing my sons GST all day, well last 2 days and I am tired plus a dog with an upset tummy has been added to the mix.
Thanks for putting the best bit first!
Gearing to the gills and not having an understanding of the risks involved is responsible? Good lord, are you serious????
The Storm salesman’s job was to sell you their product…you expect them to respond to your doubts by saying “you know what, you are right. This whole thing is a ticking timebomb…I wouldn’t touch it with a bargepole”? Of course they will alleviate your doubts and give evidence that the strategy works….thats how they make their money.
Did you think of getting independent evidence? I mean, you weren’t out buying a pair of shoes, you were committing your life savings to a high risk strategy. Some independent analysis of such an important, life changing decision would have uncovered the iceberg. We have heard others ask why should they get independent opinions on the strategy. I would have thought because it is common sense is a good enough answer.
Not sure what statistics you refer to. But you are proof that many people who make bad decisions look for others to blame.
A scam takes at least two people…the scammer and the scammee. You played a role in your own downfall, however hard that may be to admit to.
If you had have been more discerning with your initial inquiries, if you had have trusted your doubts rather than have the salesman (who has a vested interest in selling you the product) alleviate those doubts, then perhaps you would have figured out, like 75% of people who walked through Storm’s doors, that the strategy was highly risky. And if you hadn’t have signed on the dotted line, you wouldn’t have been conned by the banks, ASIC, the FPA, Storm, the Government, the Pope, the Nazis and whoever else was involved in the high level corruption that caused your loss.
Were the people who walked into Storm, and walked away without signing up just lucky?
I actually do in fact, so far whenever I have asked a question to anyone about this, I have usually run into a brick wall for some unknown reason.
A simple question…if you had such good spreadsheets, then why didn’t they tell you long before the portfolio was sold down that you were in trouble and to bail out? Or, if they did tell you that, why didn’t you?
As you know, the market suffered gradual, steady falls during 2008 until September when the crap really hit the fan. However, for many, they were actually in negative equity long before September, due to this responsible investment strategy known as double gearing. Why didn’t you bail out earlier? Or did you get out??
Not as big a smile as I had when you claimed that double gearing was reponsible!
I don’t wish anyone harm. I am probably just old fashioned in thinking that people should take responsibility for the actions they take and the decisions they make. Apparently that type of thinking is outdated in this day and age.
And if you win or lose, personally I couldn’t care less. I don’t know any storm victims, so it will not have any impact on me. In fact, it could, I could make money out of it, as some very gullible people could again be financial.
Want to buy a woodlot, or better still, some tulips?
Chill. No need to apologise. It is only an internet forum. Have done the same in the past but fortunately got a colleague to check the numbers else it was a $120m hole in the budget.
Hope you recover quickly. And unless he is paying you, get your son to do his own GST! As if.
Julia
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I expect you will scorn my advice but a doggie upset tummy can be hugely helped with probiotics such as "Inner Health Plus" available from your pharmacy's refrigerator.
No food, just water, until it settles down.
DocK
This is in response to your post No. 6590 on page 330.
I’m unable to quote that post because the quote tags won’t work for me.
It was you who raised a number of questions about greed.
I simply responded to your post.
Time and again we’re rebuked for suggesting that greed motivated people who invested with Storm despite being well set up financially and having no need of Storm’s services. Naturally we respond with ‘OK then, what motivated you if it wasn’t greed’?
We don’t think they’re obliged to answer. We respect their right to keep that information to themselves if they so choose. They and you should respect our right to ask these questions if we wish.
This thread is for discussing all aspects of the Storm fiasco, not just the aspects that you consider important, such as the role the banks played.
I don’t care if you’re sick of hearing about the greed aspect. Don’t read my posts if that’s how you feel. I get a bit tired of hearing about the banks too, but I don’t whine and complain every time someone mentions them.
You’re not the owner of this forum, it’s not up to you to decide which aspects of the Storm debacle we’re allowed to discuss and which ones we must avoid.
I'll discuss any aspect of the Storm situation I choose to discuss....with or without your approval.
This is in response to your post No. 6590 on page 330.
I’m unable to quote that post because the quote tags won’t work for me.
It was you who raised a number of questions about greed.
I simply responded to your post.
Time and again we’re rebuked for suggesting that greed motivated people who invested with Storm despite being well set up financially and having no need of Storm’s services. Naturally we respond with ‘OK then, what motivated you if it wasn’t greed’?
We don’t think they’re obliged to answer. We respect their right to keep that information to themselves if they so choose. They and you should respect our right to ask these questions if we wish.
This thread is for discussing all aspects of the Storm fiasco, not just the aspects that you consider important, such as the role the banks played.
I don’t care if you’re sick of hearing about the greed aspect. Don’t read my posts if that’s how you feel. I get a bit tired of hearing about the banks too, but I don’t whine and complain every time someone mentions them.
You’re not the owner of this forum, it’s not up to you to decide which aspects of the Storm debacle we’re allowed to discuss and which ones we must avoid.
I'll discuss any aspect of the Storm situation I choose to discuss....with or without your approval.
