Storm Financial Group
- Thread starter Garpal Gumnut
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Julia
In Memoriam
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Ah, you have so little faith.I don't like your chances of getting Frank to explain that one, Julia!
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Doobsy
“Rather than explain and argue on this I recommend that everyone try to find a TV series called the ascent of money done by Niall Ferguson.”
Okay! You have seen the program. Could you please explain where Banks get the money to lend and tell us what part of the article I quoted is wrong. I, and many others, I am sure, would be interested to know. If the writer of this article is off the planet, then this is your chance to defend the banks. In so doing, you are welcome to tear this article to pieces. Anyone else out there that can enliven us in this regard?
“Frank - When the bank lent you money for your first home, your first business loan, did you feel responsible to keep an eye on things? I suspect the answer is yes as you would have wanted to keep the house and business running and to establish a good credit rating. Why did so many ignore this responsibility just because it was for investment / speculation on the stockmarket? Because Storm said "she'll be right, we got this"? Pity”
Your postings seem at times ambivalent. On the one hand you claim some understanding of the position Storm investors found themselves in, and on the other you claim that they should have been more vigilant. The words "morons" and "gamblers" are creeping back into the picture. You might as well say, they should have never trusted a financial adviser to start with. I’m sure many ‘Stormies’ would agree with you on that one.
I think you and many others tend to forget that we paid good money to have others keep their eyes on our investments. What do you think we were paying them for anyway? That’s what they were there to do, not us. Yet you and others constantly want to throw the blame back on us. So be it but if this is an indication of what people can expect when they invest using financial advisers, namely pay them to do something and then have to do it all yourself, what’s the point of employing them in the first place?
“Again, Goodridge had money to meet the margin call if he had received it. He has a grievance. If Storm clients had got their margin call they had no money to meet the call in the majority of cases. All that would have happened would have been an earlier sell out. I have already put my position forward many times saying clients that were sold out should be considered to have been sold out at the correct time, not 3-8 weeks late.”
Correcting this wrong as you suggest does not excuse the banks’ behavior in any way nor make it an acceptable solution. Neither does it address many of the other issues involved. Our lawyers will outline those issues for you in due course. Until then, I’m afraid you will have to wait for an answer.
“If the bulk of clients can't claim imprudent lending, then why are we going through this process? It seems to be what the case is based on.”
Really? Apart from imprudent lending and Banks issuing margin loans far too late or not at all, I though UMIS was in there somewhere; Banks churning money out of their customers in conjunction with Storm for mutual gain; Banks falsifying documentation such as the BOQ; Banks promoting Storm’s financial plan despite the risks; Banks assigning their contractual obligations that they have to their customers to Storm etc etc etc! I could go on but I've spent enough time on this already, and I have no intention of going over old ground. As I have previously stated, there are many aspects to this so trying to simplify everything is just not possible although you seem to be trying to do just that.
“You confuse my banks lending paragraph. It is not the bank's money. It is MY money they are lending. As such I want to ensure MY money is protected from morons who want to borrow it to gamble on things they don't understand.”
Deary me, Doobsy! It seems that you have retreated to the dark side once more. Are you now saying that all Stormies are morons who have a gambling habit? Is that what you are suggesting? It seems that the record wasn’t broken after all. Quite frankly I expected more of you because you work in the industry and have sought in the past to explain the ‘Stormies’ possible mindset. But then, I forgot, you are one of them too!
Correct me if I'm wrong but we are talking about an industry that produced Storm and a number of other rogues that have put their clients’ interests last and their own first. An industry where people have taken their clients’ monies and squandered it. An industry that has been ineffectively regulated and has been replete with financial kickbacks from Banks that have made anything they have said to clients in the past highly suspect because these financial advisers have their own vested interests.
Quite frankly, we have never sought to label our financial advisers morons because they were too clever for that! However, they and the Banks associated with them did have a gambling problem and they had no qualms about using our money to satisfy it.
To therefore now call us morons with a gambling problem is a bit rich. Rather, you should be calling Storm and these Banks for what they are - unconscionable villains. Shafting thousands of elderly people and by so doing, destroying their lives is what I term “unconscionable” in anyone's language. In your industry you probably use a euphemism for this such as “unfortunate” or “these things happen!” Where I come from, it’s called “ripping people off” for all they are worth!
As for "the Banks protecting your money" comment you have made , that’s a joke. Banks have been extending dodgy loans all around the world for years now. How do you explain sub-prime or the financial woes that beset the world today because of it? Guess who the culprits were then and guess who they are now? The Banks, who else!
Anybody out there that can explain why the Banks shouldn’t be blamed for getting the world into a financial mess is welcome to join the conversation. Defend the Banks if you can but try to do it sensibly and state some verifiable facts. If the article I postedfor instance on the working of banks is a load of rubbish, prove it or forever “rest in peace!”
Post didn't like my quotes so I took them out.
I never said that what you said was wrong. Read my post. What I said is that the program explains the process very well. I don't need to defend the banks, I do need to point out to the forum that should they simply follow your posts you must assume all banking activities are evil and all banks are out to simply rip off the unsuspecting.
Answer the question. Did you respect debt as a younger man and did you lost respect for debt? I know if I borrow money from any source that I respect that is not mine and it needs to be repaid. My references to gambling and morons are not storm specific, turn on ACA any evening and watch the multiple stories of people who choose to get themselves involved in things they don't understand and using other peoples money. Then they want to whinge when it doesn't make them all millionaires.
Do I understand the storm victims, damn straight, I am helping a number re-build their savings. Do I think they are blameless? No.
As for your reference to my jumping between positions, take a look at your posts. One minute it is all the banks, next minute no adviser can be trusted. Is it one, the other or a combination? I can't work out who you think screwed you.
I want the blame apportioned appropriately. My wife had an investment with storm funded through a completely appropriate margin loan she could afford to service. Who screwed her? Storm did. Nothing the bank or in this case margin lender did was wrong.
She lost what was a small amount in the grand scheme but a reasonable amount in relation to her net worth at the time.
I have clients that no matter how you look at it the borrowing against the home was fine. Good jobs, other assets, etc etc. Nothing imprudent. You seem to want the forum to join your crusade under the assumption every storm client was screwed by the banks, I am here to ensure there is balance based on what I know and have seen.
Correcting this wrong as you suggest does not excuse the banks’ behavior in any way nor make it an acceptable solution. Neither does it address many of the other issues involved. Our lawyers will outline those issues for you in due course. Until then, I’m afraid you will have to wait for an answer.
Acceptable solution. I would think it is exactly what is acceptable if it is found that there was no other issues. If the lending is legit and the only thing that went wrong in the process was the margin call timing then fix that.
Before you jump up and down please do note I am talking about the numerous clients that will fall into the "no imprudent lending" section.
Really? Apart from imprudent lending and Banks issuing margin loans far too late or not at all, I though UMIS was in there somewhere; Banks churning money out of their customers in conjunction with Storm for mutual gain; Banks falsifying documentation such as the BOQ; Banks promoting Storm’s financial plan despite the risks; Banks assigning their contractual obligations that they have to their customers to Storm etc etc etc! I could go on but I've spent enough time on this already, and I have no intention of going over old ground. As I have previously stated, there are many aspects to this so trying to simplify everything is just not possible although you seem to be trying to do just that.
Wow, UMIS we have talked to death. Falsification of docs by the banks? Have not seen proof of this yet but happy to be corrected. Falsification by storm HQ? That I agree but they aren't the bank.
Frank, yet again how is it you can type all that and somehow come away smelling of roses. I again refer to the top of the post where my opinion is that society has no respect for debt. Look at people spending on absolute crap on credit cards. They are spending other people's money. It needs to be paid back. They want a return for the right to use their money. They want the bank to protect their capital anyway possible and to provide them with that return. Morons? The world is full of them. People who sit at bbqs and get told about the latest stock tip by some bloke they met 20 minutes ago and yet are willing to blindly trust and put next weeks rent money on it. Been in the game long enough to see plenty Frank.
No disagreement there Frank however the "world" runs under very different regulations to the Australian system and last I checked that was where you did your borrowing. APRA regulation of our banks is the reason we didn't have our own mini subprime here is Oz.
There you have it another post where taking your life savings, borrowing the same amount of someone elses money to then invest it into an asset class that is highly risky and that you didn't really understand is not only all the banks fault but Storm aren't really the ones mostly to blame let alone getting onto what is personally prudent.
Back to the start we go huh
I never said that what you said was wrong. Read my post. What I said is that the program explains the process very well. I don't need to defend the banks, I do need to point out to the forum that should they simply follow your posts you must assume all banking activities are evil and all banks are out to simply rip off the unsuspecting.
Answer the question. Did you respect debt as a younger man and did you lost respect for debt? I know if I borrow money from any source that I respect that is not mine and it needs to be repaid. My references to gambling and morons are not storm specific, turn on ACA any evening and watch the multiple stories of people who choose to get themselves involved in things they don't understand and using other peoples money. Then they want to whinge when it doesn't make them all millionaires.
Do I understand the storm victims, damn straight, I am helping a number re-build their savings. Do I think they are blameless? No.
As for your reference to my jumping between positions, take a look at your posts. One minute it is all the banks, next minute no adviser can be trusted. Is it one, the other or a combination? I can't work out who you think screwed you.
I want the blame apportioned appropriately. My wife had an investment with storm funded through a completely appropriate margin loan she could afford to service. Who screwed her? Storm did. Nothing the bank or in this case margin lender did was wrong.
She lost what was a small amount in the grand scheme but a reasonable amount in relation to her net worth at the time.
I have clients that no matter how you look at it the borrowing against the home was fine. Good jobs, other assets, etc etc. Nothing imprudent. You seem to want the forum to join your crusade under the assumption every storm client was screwed by the banks, I am here to ensure there is balance based on what I know and have seen.
Correcting this wrong as you suggest does not excuse the banks’ behavior in any way nor make it an acceptable solution. Neither does it address many of the other issues involved. Our lawyers will outline those issues for you in due course. Until then, I’m afraid you will have to wait for an answer.
Acceptable solution. I would think it is exactly what is acceptable if it is found that there was no other issues. If the lending is legit and the only thing that went wrong in the process was the margin call timing then fix that.
Before you jump up and down please do note I am talking about the numerous clients that will fall into the "no imprudent lending" section.
Really? Apart from imprudent lending and Banks issuing margin loans far too late or not at all, I though UMIS was in there somewhere; Banks churning money out of their customers in conjunction with Storm for mutual gain; Banks falsifying documentation such as the BOQ; Banks promoting Storm’s financial plan despite the risks; Banks assigning their contractual obligations that they have to their customers to Storm etc etc etc! I could go on but I've spent enough time on this already, and I have no intention of going over old ground. As I have previously stated, there are many aspects to this so trying to simplify everything is just not possible although you seem to be trying to do just that.
Wow, UMIS we have talked to death. Falsification of docs by the banks? Have not seen proof of this yet but happy to be corrected. Falsification by storm HQ? That I agree but they aren't the bank.
Frank, yet again how is it you can type all that and somehow come away smelling of roses. I again refer to the top of the post where my opinion is that society has no respect for debt. Look at people spending on absolute crap on credit cards. They are spending other people's money. It needs to be paid back. They want a return for the right to use their money. They want the bank to protect their capital anyway possible and to provide them with that return. Morons? The world is full of them. People who sit at bbqs and get told about the latest stock tip by some bloke they met 20 minutes ago and yet are willing to blindly trust and put next weeks rent money on it. Been in the game long enough to see plenty Frank.
No disagreement there Frank however the "world" runs under very different regulations to the Australian system and last I checked that was where you did your borrowing. APRA regulation of our banks is the reason we didn't have our own mini subprime here is Oz.
There you have it another post where taking your life savings, borrowing the same amount of someone elses money to then invest it into an asset class that is highly risky and that you didn't really understand is not only all the banks fault but Storm aren't really the ones mostly to blame let alone getting onto what is personally prudent.
Back to the start we go huh
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Hi Frank
I believe I understand where you are going with your above example. To me you appear to be commenting on that 'slippery slope' of the fractionalisation of money, the decree of fiat and the consequent impacts of M1, M2, M3, Money Supply. I suppose it all works as long as there is trust and everybody sings from the same hymn book. Did someone mention "tulips"?
S
Hi Solly,
The Banks have been getting away with things for years because the general public for the most part is content to live in ignorance until it affects them personally.
Some on this website don't seem to understand that Banks have too much power and control. Nor do they seem to comprehend that our class actions against these Banks are necessary not only to see that justice is done for us, but also to ensure that the Banks' powers are legally defined and restricted where necessary in the future. Further, the Storm collapse should be a watershed for the financial advisory industry! At least our experience at the hands of Storm will not be wasted because it led to new regulations that should, we hope, make it more difficult for financial advisers and banks to act against the interests of their customers.
"Fractionalisation of money" as you quite rightly mention is a concept that many are oblivious too and the part it plays in modern banking. Here's part of an article on this and other practices that the banks employ. The full article can be found at http://www.basicincome.com/basic_banks.htm
A book entitled “Hand Over Our Loot!” by Len Clampett also makes for interesting reading. In fact that are many such writings on this subject because it's nothing new.
"A Privatised Money Supply
Modern Banking and the Fractional Reserve System
[Figures and illustrations were current when written in 2002.]
Do you know where the bank gets the $160,000 for your mortgage? It’s very simple. Someone walks over to a computer and types 160,000 beside your name. With only $27.93 of cash reserves for every $10,000 of assets (in Canada as of June 1999) the bank has just created the remaining $159,553 of that interest-earning money out of thin air. When, after 25 years of hard work, you pay off your mortgage, the $159,553 vanishes back into thin air. Not so the interest however. It vanishes into the banker’s pocket. Chartered (i.e. privately owned) banks, such as The Bank of Montreal, The Royal Bank, The CIBC, etc. have created about 95 percent of our total money supply ($589.1 billion as of Sept 1999) in exactly this way. But the cash reserves in their vaults amount to only a paltry $3.893 billion. (About $32 billion of cash circulates in public hands.) This is called fractional reserve banking, and it’s the greatest scam of all time because it creates debt for no reason other than to enrich the banking class. Its long term effect””as becomes clearer every day””is to steadily suck wealth out of the community and into the hands of a few people, a fact that bankers and most politicians stubbornly refuse to admit. Charging interest on money created out of nothing is, in the main, unjust and immoral, and Plato, Aristotle, Cicero, the Bible (Deuteronomy 23:19), the Koran (2:275-278), the Catholic Church at various times, many codes of law and most writers on morals have condemned it for more than two thousand years. The historical name for this evil is usury. Nevertheless bankers enjoy peace of mind because they know that the public thinks they merely lend out the savings of their depositors. In fact, banks create more than 95 percent of all deposits, for when a bank creates a loan it simultaneously creates a deposit. What banks do to justify the accusation of systematic economic exploitation is to lend out interest-bearing money of their own creation using a very thin sliver of legal tender (cash) to back it up."
Julia
In Memoriam
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This is an aside from the current above, um, discussion.
I'd thought Storm investors were unique in being prepared to pay that massive 7% for their advice/management. However, I came across a bloke recently who had just extricated himself from the services of a local financial adviser to whom he was paying 7% p.a. He was, via that adviser, only invested in managed funds and he had been losing money on these, so it can probably be assumed the adviser was also receiving commission from those investments.
I'd thought Storm investors were unique in being prepared to pay that massive 7% for their advice/management. However, I came across a bloke recently who had just extricated himself from the services of a local financial adviser to whom he was paying 7% p.a. He was, via that adviser, only invested in managed funds and he had been losing money on these, so it can probably be assumed the adviser was also receiving commission from those investments.
Julia
In Memoriam
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Before you do that rejigging, doobsy, I should mention that the bloke was a real estate agent. Make of that what you will.
Garpal Gumnut
Ross Island Hotel
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Thanks Julia,
This is another good reason why financial planning should be taught in schools from Grade 5 onwards. A better educated population would be better able to resist these ripoff merchants.
gg
I was going to suggest a simpler solution which was hand each child a copy of Nick Renton's Understanding the Stock Exchange but there are two problems with this:
(a) I think it is out of print and a used copy goes for $164 on Amazon (my copy cost $40 in 2005); and
(b) most of the current crop of school students are unable to read much beyond Harry Potter.
Only joking obviously but, as has been said before, the curriculum is already pretty full (you can argue till your blue in the face about the merits or otherwise of the current structure) so the issue is:
(1) What do you drop in order to include financial matters; and
(2) What would the teaching profession know about financial matters, ie where are you going to get suitably qualified educators? That aspect can take time and lots of it.
Doobsy
Would I be correct in assuming that your wife made her Storm investment before she met you?
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The blame game!
It seems to me that a recent event can best sum up the Storm Financial debacle and put to bed once and for all where the blame should truly lie as far as Storm and its clients were concerned.
I am, of course, referring to the Costa Concordia cruise liner which foundered off the coast of Italy with more than 4,000 people on board. When the passengers booked to go on this voyage, they naturally assumed that the Captain of this vessel was competent and would steer a safe course. How could they know any differently? They also assumed that the Captain would not place their lives at risk by show boating.
“When the Costa Concordia hit submerged rocks those passengers were told to sit tight for a good 45 minutes, crew told passengers there was a "technical problem" which caused the lights to go off. Seasoned cruisers, however, were concerned, and went to get their life jackets from their cabins.
Passengers complained they were not given sufficient instructions on how to evacuate, and, once the emergency became clear, lifeboats were not lowered until the listing was too heavy for many to be released. After the ship started listing badly, lifeboat evacuation was no longer feasible.
The procurators' office in Grosseto said that the Concordia hit submerged rocks at 9.45pm on Friday, and the last of the ship's complement were not evacuated until 3am yesterday, but that Captain Francesco Schettino allegedly left at 11.30pm
Survivors gave harrowing accounts yesterday of panic and confusion after the luxury cruise ship hit rocks off the island of Giglio, eight miles from the Italian mainland. They said that, with the ship listing so badly that a number of lifeboats could not be launched, some passengers and crew jumped into the sea, a few even swimming 300 metres to a nearby island. Others told of edging in the dark along corridors so tilted that they were crawling on walls rather than floors.
Observers are still mystified that the Concordia, with its modern technology, could founder so swiftly. It is not yet known if the accident was caused by human error, or by a power failure that disabled the ship's navigation systems. Captain Schettino reportedly blamed faulty charts for the accident. "We were navigating off the coast, along a tourist route, when the ship on a flank hit a rock not marked on the nautical chart," he told Tgcom 24 television. "In theory, that rock shouldn't have been there." Gianni Onorato, an executive with Costa, the ship's operator, said that Captain Schettino had the liner on its regular, weekly route when it struck a reef. "The ship was doing what it does 52 times a year, going along the route between Civitavecchia and Savona," he said.
One crew member told TMnews: "We were too close to the coast. It was definitely a terrible human error. We took the usual route, but when you go along the coast you use manual steering, not the automatic steering. So it is up to the captain to choose how close you get
Questions are also being asked about the procedures on board. Passengers complained they were not given sufficient instructions on how to evacuate, and, once the emergency became clear, lifeboats were not lowered until the listing was too heavy for many to be released.
" Several passengers said that, for a good 45 minutes, crew told passengers there was a "technical problem" which caused the lights to go off. Seasoned cruisers, however, were concerned, and went to get their life jackets from their cabins.
"We had to scream at the controllers to release the boats from the side," said Mike van Dijk, 54, from Pretoria, South Africa. "We were standing in the corridors and they weren't allowing us to get on to the boats. It was a scramble, an absolute scramble."
Emily Lau, another passenger, said: "When we got to the deck, people were just utterly hysterical, mostly not because something was scary, but because there was no control. People were falling because the ship was actually sinking quite fast.
"The next thing we heard was 'abandon ship'. We had to embark on to our lifeboats, and people were rushing on to the lifeboats and there was no order of any sort. No one told us what to do."
After the ship started listing badly, lifeboat evacuation was no longer feasible. Five helicopters, from the coastguard, navy and air force, took turns airlifting survivors still aboard.
Whatever an investigation finally finds, the Costa Concordia tragedy has highlighted concerns about coping with emergencies on the new generation of mega-ships carrying thousands of passengers.
Mark Dickinson, general secretary of Nautilus International, which represents 23,000 ship masters, officers, ratings and other staff, said his organisation is concerned about the "rapid recent increases in the size of passenger ships" - with the average tonnage doubling over the past decade. Mr Dickinson said: "Many ships are effectively small towns at sea, and the sheer number of people on board raises serious questions about evacuation."
He added: "Insurers and salvors have also spoken about the way in which the sheer size and scale of such ships presents massive challenges for emergency services, evacuation, rescue, and salvage - and we should not have to wait for a major disaster until these concerns are addressed."
Simon Calder, The Independent's travel specialist, said last night: "Carnival's [Costa's parent company] immediate task, of course, is to care for passengers, crew and bereaved families. The International Maritime Organization will assess whether the safety regime on such floating fun palaces needs to be strengthened. But its owners must also address some difficult [business] questions. How will images of the stricken ship affect customer confidence? And can the 100 per cent occupancy, on which the cruise business relies, be sustained?"
Questions:
1. Were the passengers justified in booking this cruise?
2. Were the passengers justified in placing their trust in the Captain of this ship?
3. Were the passengers justified in waiting for an official order to abandon ship?
4. Are the passengers now justified in claiming compensation?
5. Were the passengers in a position to tell the Captain how to chart a course?
6. Were the passengers in a position to know that the Captain had himself already abandoned ship?
7. Were the passengers in a position to fully understand the extent of damage?
8. Were the passengers liable in any way for what occurred?
9. Were the passengers morons who had a gambling habit?
The passengers certainly can’t get compensation from the Captain who is now in prison. They can, however, get compensation from the owners of the vessel so is it immoral for them to do so if the Captain was entirely at fault?
Interesting! The parallels between this disaster and the Storm Financial disaster are unmistakeable. Yet, I am sure some on this forum will think otherwise. Therefore, I will be interested in seeing how you think our circumstances and those of the passengers on the Costa Concordia differ. Incidentally, lives have also been lost on our side too which makes the similarity even more pertinent.
It seems to me that a recent event can best sum up the Storm Financial debacle and put to bed once and for all where the blame should truly lie as far as Storm and its clients were concerned.
I am, of course, referring to the Costa Concordia cruise liner which foundered off the coast of Italy with more than 4,000 people on board. When the passengers booked to go on this voyage, they naturally assumed that the Captain of this vessel was competent and would steer a safe course. How could they know any differently? They also assumed that the Captain would not place their lives at risk by show boating.
“When the Costa Concordia hit submerged rocks those passengers were told to sit tight for a good 45 minutes, crew told passengers there was a "technical problem" which caused the lights to go off. Seasoned cruisers, however, were concerned, and went to get their life jackets from their cabins.
Passengers complained they were not given sufficient instructions on how to evacuate, and, once the emergency became clear, lifeboats were not lowered until the listing was too heavy for many to be released. After the ship started listing badly, lifeboat evacuation was no longer feasible.
The procurators' office in Grosseto said that the Concordia hit submerged rocks at 9.45pm on Friday, and the last of the ship's complement were not evacuated until 3am yesterday, but that Captain Francesco Schettino allegedly left at 11.30pm
Survivors gave harrowing accounts yesterday of panic and confusion after the luxury cruise ship hit rocks off the island of Giglio, eight miles from the Italian mainland. They said that, with the ship listing so badly that a number of lifeboats could not be launched, some passengers and crew jumped into the sea, a few even swimming 300 metres to a nearby island. Others told of edging in the dark along corridors so tilted that they were crawling on walls rather than floors.
Observers are still mystified that the Concordia, with its modern technology, could founder so swiftly. It is not yet known if the accident was caused by human error, or by a power failure that disabled the ship's navigation systems. Captain Schettino reportedly blamed faulty charts for the accident. "We were navigating off the coast, along a tourist route, when the ship on a flank hit a rock not marked on the nautical chart," he told Tgcom 24 television. "In theory, that rock shouldn't have been there." Gianni Onorato, an executive with Costa, the ship's operator, said that Captain Schettino had the liner on its regular, weekly route when it struck a reef. "The ship was doing what it does 52 times a year, going along the route between Civitavecchia and Savona," he said.
One crew member told TMnews: "We were too close to the coast. It was definitely a terrible human error. We took the usual route, but when you go along the coast you use manual steering, not the automatic steering. So it is up to the captain to choose how close you get
Questions are also being asked about the procedures on board. Passengers complained they were not given sufficient instructions on how to evacuate, and, once the emergency became clear, lifeboats were not lowered until the listing was too heavy for many to be released.
" Several passengers said that, for a good 45 minutes, crew told passengers there was a "technical problem" which caused the lights to go off. Seasoned cruisers, however, were concerned, and went to get their life jackets from their cabins.
"We had to scream at the controllers to release the boats from the side," said Mike van Dijk, 54, from Pretoria, South Africa. "We were standing in the corridors and they weren't allowing us to get on to the boats. It was a scramble, an absolute scramble."
Emily Lau, another passenger, said: "When we got to the deck, people were just utterly hysterical, mostly not because something was scary, but because there was no control. People were falling because the ship was actually sinking quite fast.
"The next thing we heard was 'abandon ship'. We had to embark on to our lifeboats, and people were rushing on to the lifeboats and there was no order of any sort. No one told us what to do."
After the ship started listing badly, lifeboat evacuation was no longer feasible. Five helicopters, from the coastguard, navy and air force, took turns airlifting survivors still aboard.
Whatever an investigation finally finds, the Costa Concordia tragedy has highlighted concerns about coping with emergencies on the new generation of mega-ships carrying thousands of passengers.
Mark Dickinson, general secretary of Nautilus International, which represents 23,000 ship masters, officers, ratings and other staff, said his organisation is concerned about the "rapid recent increases in the size of passenger ships" - with the average tonnage doubling over the past decade. Mr Dickinson said: "Many ships are effectively small towns at sea, and the sheer number of people on board raises serious questions about evacuation."
He added: "Insurers and salvors have also spoken about the way in which the sheer size and scale of such ships presents massive challenges for emergency services, evacuation, rescue, and salvage - and we should not have to wait for a major disaster until these concerns are addressed."
Simon Calder, The Independent's travel specialist, said last night: "Carnival's [Costa's parent company] immediate task, of course, is to care for passengers, crew and bereaved families. The International Maritime Organization will assess whether the safety regime on such floating fun palaces needs to be strengthened. But its owners must also address some difficult [business] questions. How will images of the stricken ship affect customer confidence? And can the 100 per cent occupancy, on which the cruise business relies, be sustained?"
Questions:
1. Were the passengers justified in booking this cruise?
2. Were the passengers justified in placing their trust in the Captain of this ship?
3. Were the passengers justified in waiting for an official order to abandon ship?
4. Are the passengers now justified in claiming compensation?
5. Were the passengers in a position to tell the Captain how to chart a course?
6. Were the passengers in a position to know that the Captain had himself already abandoned ship?
7. Were the passengers in a position to fully understand the extent of damage?
8. Were the passengers liable in any way for what occurred?
9. Were the passengers morons who had a gambling habit?
The passengers certainly can’t get compensation from the Captain who is now in prison. They can, however, get compensation from the owners of the vessel so is it immoral for them to do so if the Captain was entirely at fault?
Interesting! The parallels between this disaster and the Storm Financial disaster are unmistakeable. Yet, I am sure some on this forum will think otherwise. Therefore, I will be interested in seeing how you think our circumstances and those of the passengers on the Costa Concordia differ. Incidentally, lives have also been lost on our side too which makes the similarity even more pertinent.
Yes bunyip. As it was not my money no matter what my beliefs were it was her money to lose.
Frank your analogy is:
1. EC & JC are the captain
2. Storm is the vessel owner
The question should be, if a third party, say a travel agent, recommended the cruise, said the product was reliable, the boat and captain had years of experience and that their belief was that it was definitely the pick out of all the ships in the area, ARE THEY TO BLAME FOR THE ACTIONS OF THE CAPTAIN? If they had an "Interest Free" pay after the cruise offer, should the passengers still have to pay the travel agent for selling a legitimate product or should they not pay because the captain Fk'd up?
Doobsy,
If this analogy was continued then to be more accurate the situation would be that the cruise was paid for up front by the passengers. Parties and extra goodies were paid for by the travel company to sweeten the deal at little or no up-front cost to the passengers. The disaster happened and the passengers were reimbursed their travel costs and then extra for distress and discomfort - legitimate product or not.
Cheers
Maccka
Garpal Gumnut
Ross Island Hotel
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And I, Garpal Gumnut, was in a tinnie, with the fourth Mrs Gumnut, a line in the water, listening to a Tom Waits CD, smoking a cohiba and keeping an eye out for crocs.
Seriously though, I take Frank's analogy, it is not a bad metaphor for how he sees what happened to him.
gg
GG I agree the analogy isn't bad, my thoughts are that yet again it comes back to who really should take the bulk of the blame. EC & JC have done a wonderful job of distracting everyone with smoke and mirrors from the fact that it was them making the decisions. They arranged the strategy. They arranged the extra LVR, they arranged that everything go via them lest a client tell someone at the bank their real situation, they chose not to order the sell down at any stage in the 50% market fall until it was forced onto them, they are the ones that were supposed to be able to monitor the "overall" situation with their $million software.
If I achieve nothing else on this forum I will achieve the fact that Storm HQ were the ones in charge of this schemozzle.
I personally think the analogy is ridiculous. The only thing you can compare is that both incidents left a trail of devastation. How the devastation occurred is at polar opposites.
How can you compare the risk of going on a cruise with gearing to the gills and placing your life savings in the sharemarket? There is no comparison.
Costa Concordia sank due to the actions of the captain who was drunk at the wheel. It happened in a split second. One minute there is no crash, the next there is. There was no warning for the passengers that there was a high risk of this happening at any stage (yes there is a risk, but was it high?). And once there is a crash, you have a matter of hours to get everyone off the boat. It is life and death for those few hours.
Compare to Storm. Clients took a risk from day 1. A big risk. That’s what gearing into shares is. On an investment risk scale of 1 to 10 its probably a 9. And some simple research would have exposed the risks. This risk is not comparable to jumping on a boat with a good safety history and going on a cruise. It is comparable to jumping on the old rusty boat at the harbour, with patches all over it, and a captain with his **** hanging out his pants, swigging beer from a bottle in a paper bag and him telling you “don’t worry, you will be safe with me”. And paying through the nose for it.
Unless they were living in a cave, Storm clients could see that the sharemarket was going down…it went down for over 12 months. Clients could see their life savings falling in value by the day. This was not a complex strategy or some black box, not a ponzi scheme were returns were fudged….this was index funds. If they chose not to look at it closely, that’s no one’s fault but their own. If they chose to ignore their homeloan when assessing their portfolio, then that’s their fault, no one else’s. You don’t just forget you have a $500,000 loan against your home do you? Their financial devastation didn’t happen overnight, or in a matter of hours like the lives lost on the boat. Stormers could and should have seen it coming. We hear about scrambled data at margin call time…well apparently it wasn’t scrambled until then, so the gradual loss of capital should have been obvious to anyone who bothered to take any notice. People didn’t go from “conservative” gearing ratios to negative equity overnight.
As this was a slow process, the Storm clients had the option to bail out and save what they had left….we have heard people who did just that. Instead many increased the risk by gearing again and again when Storm told them to. They could have said no at any time. No one forced them to do anything….not the bank, not Storm. Just because the bank offers you money, do you take it? Just because an adviser tells you to do something, do you do it? Stormers had choices. How can anyone compare these choices, which clients had time to digest, research and make a decision on to those of passengers on a boat that is sinking and they have literally hours between life and death?
Again, how this can be compared to the captain of a ship crashing the boat is beyond me. Polar opposites in my book.
How can you compare the risk of going on a cruise with gearing to the gills and placing your life savings in the sharemarket? There is no comparison.
Costa Concordia sank due to the actions of the captain who was drunk at the wheel. It happened in a split second. One minute there is no crash, the next there is. There was no warning for the passengers that there was a high risk of this happening at any stage (yes there is a risk, but was it high?). And once there is a crash, you have a matter of hours to get everyone off the boat. It is life and death for those few hours.
Compare to Storm. Clients took a risk from day 1. A big risk. That’s what gearing into shares is. On an investment risk scale of 1 to 10 its probably a 9. And some simple research would have exposed the risks. This risk is not comparable to jumping on a boat with a good safety history and going on a cruise. It is comparable to jumping on the old rusty boat at the harbour, with patches all over it, and a captain with his **** hanging out his pants, swigging beer from a bottle in a paper bag and him telling you “don’t worry, you will be safe with me”. And paying through the nose for it.
Unless they were living in a cave, Storm clients could see that the sharemarket was going down…it went down for over 12 months. Clients could see their life savings falling in value by the day. This was not a complex strategy or some black box, not a ponzi scheme were returns were fudged….this was index funds. If they chose not to look at it closely, that’s no one’s fault but their own. If they chose to ignore their homeloan when assessing their portfolio, then that’s their fault, no one else’s. You don’t just forget you have a $500,000 loan against your home do you? Their financial devastation didn’t happen overnight, or in a matter of hours like the lives lost on the boat. Stormers could and should have seen it coming. We hear about scrambled data at margin call time…well apparently it wasn’t scrambled until then, so the gradual loss of capital should have been obvious to anyone who bothered to take any notice. People didn’t go from “conservative” gearing ratios to negative equity overnight.
As this was a slow process, the Storm clients had the option to bail out and save what they had left….we have heard people who did just that. Instead many increased the risk by gearing again and again when Storm told them to. They could have said no at any time. No one forced them to do anything….not the bank, not Storm. Just because the bank offers you money, do you take it? Just because an adviser tells you to do something, do you do it? Stormers had choices. How can anyone compare these choices, which clients had time to digest, research and make a decision on to those of passengers on a boat that is sinking and they have literally hours between life and death?
Again, how this can be compared to the captain of a ship crashing the boat is beyond me. Polar opposites in my book.
Embarking on a luxury boat cruise is statistically a very safe activity.......hundreds, maybe thousands of boat cruises every year for the best part of a century, and the number that have come to grief is miniscule in percentage terms.
People booking a passage on the Costa Concordia or any other ship had no reason to believe they’d have anything but a safe and pleasant voyage.
Different story though if the plan was to sail the ship into a Category 5 cyclone....suddenly the safe activity becomes highly risky, a wild reckless gamble that’s inviting disaster. Nobody with any common sense would board the ship in that situation.
Stock market investment falls into the higher risk category, yet it can be done with relative safety if people employ some common sense by using modest levels of borrowing, investing in index funds, and managing their investment in accordance with market conditions.
Different story though if the plan is to use a Storm – style strategy of mortgaging your home and borrowing to the eyeballs via margin loans and double gearing to triple or quadruple your stake in the market.
Suddenly the relatively safe investment becomes highly risky – a wild reckless gamble that’s’ guaranteed to hit the rocks and end in disaster as soon as the inevitable bear market comes along.
The Costa Concordia had a very good chance of completing its cruise and arriving back at port safely. Nobody knew that the captain would indulge in highly risky and incompetent behavior that would produce such a disastrous outcome. Maybe the captain himself wasn’t even planning to behave in that way.
By comparison, the captain of the good ship ‘Storm Financial’ knew exactly what his behaviour was going to be before his passengers booked their cruise.....arrange for his clients to mortgage their homes and borrow like crazy, combine the borrowings with their personal savings, even cash out assets to add to the money pool, plonk the whole lot into the stock market, then hope like hell the market didn’t collapse.
The strategy was outlined to clients before they signed on.
Every prospective Storm client had the opportunity of evaluating and researching the strategy as much or as little as they chose.
Some allowed themselves to believe it was safe and conservative. Others who looked into it properly saw that it was akin to sailing a ship into a Category 5 cyclone.
The good ship ‘Storm Financial’ was always going to flounder on the rocks sooner or later.
People booking a passage on the Costa Concordia or any other ship had no reason to believe they’d have anything but a safe and pleasant voyage.
Different story though if the plan was to sail the ship into a Category 5 cyclone....suddenly the safe activity becomes highly risky, a wild reckless gamble that’s inviting disaster. Nobody with any common sense would board the ship in that situation.
Stock market investment falls into the higher risk category, yet it can be done with relative safety if people employ some common sense by using modest levels of borrowing, investing in index funds, and managing their investment in accordance with market conditions.
Different story though if the plan is to use a Storm – style strategy of mortgaging your home and borrowing to the eyeballs via margin loans and double gearing to triple or quadruple your stake in the market.
Suddenly the relatively safe investment becomes highly risky – a wild reckless gamble that’s’ guaranteed to hit the rocks and end in disaster as soon as the inevitable bear market comes along.
The Costa Concordia had a very good chance of completing its cruise and arriving back at port safely. Nobody knew that the captain would indulge in highly risky and incompetent behavior that would produce such a disastrous outcome. Maybe the captain himself wasn’t even planning to behave in that way.
By comparison, the captain of the good ship ‘Storm Financial’ knew exactly what his behaviour was going to be before his passengers booked their cruise.....arrange for his clients to mortgage their homes and borrow like crazy, combine the borrowings with their personal savings, even cash out assets to add to the money pool, plonk the whole lot into the stock market, then hope like hell the market didn’t collapse.
The strategy was outlined to clients before they signed on.
Every prospective Storm client had the opportunity of evaluating and researching the strategy as much or as little as they chose.
Some allowed themselves to believe it was safe and conservative. Others who looked into it properly saw that it was akin to sailing a ship into a Category 5 cyclone.
The good ship ‘Storm Financial’ was always going to flounder on the rocks sooner or later.
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Some good news at long last!
We ‘Stormies’ may now have a reason to smile! A recent decision was handed down in the High Court of Australia that will impact on our cases if unregistered managed investment schemes can be proven. Our lawyers by the way are confident that such can be substantiated.
Here's the case in question:
“8 March 2012 - Today the High Court, by majority, dismissed five appeals from the Court of Appeal of the Supreme Court of Victoria, which had held that Ian Alexander Haxton, Robert Samuel Bassat and Cunningham's Warehouse Sales Pty Ltd ("the respondents") were not liable to repay funds advanced under loans held by Equuscorp Pty Ltd ("Equuscorp"). Equuscorp was not a party to the original loan agreements with the respondents, but was assigned the loan agreements as an arms length financier.
The respondents had invested in tax driven blueberry farming schemes promoted by Anthony and Francis Johnson ("the schemes"), by which members of the public could claim tax deductions for amounts invested in farming enterprises. The farming activities were conducted in north-east New South Wales. Under the schemes, each of the respondents executed a management agreement, by which Johnson Farm Management Pty Ltd, a company controlled by the Johnsons, agreed to perform the respondents' farm maintenance and harvesting obligations for an annual fee. Fees could be prepaid in whole or in part, and it was expected that these fees were tax deductible. Each of the respondents also entered into a loan agreement with Rural Finance Pty Ltd ("Rural"), a company also controlled by the Johnsons, to finance their prepayment of the management fees. Contrary to s 170(1) of the Companies Code ("the Code") of each respondent's home State, no valid prospectus in respect of the schemes had been registered when the respondents were offered what was a "prescribed interest" within the meaning of that section.
Rural executed a deed assigning to Equuscorp its interests under the loan agreements and the amounts of the debts owing ("the Deed"). The Deed was expressed to include an "absolute assignment" of the legal right to debts and interests under the loan agreements and "all legal and other remedies.
Between November 1997 and March 1998, Equuscorp commenced proceedings against investors, including the respondents, under the loan agreements. Due to the breach of s 170(1) of the Code, the primary judge held that the loan agreements were unenforceable, on account of the illegality of the investment schemes. As an alternative to claiming under the loan agreements, Equuscorp sought restitution of the funds advanced as money had and received. In relation to that claim, the primary judge held that the respondents were liable to make restitution to Rural, and that the Deed assigned to Equuscorp the benefit of the respondents' liability to make restitution. On appeal, the Court of Appeal held that the right to claim for restitution had not been available to Rural and was therefore unavailable to Equuscorp, and, in any event, the Deed did not effectively assign such relief. Equuscorp appealed, by special leave, to the High Court of Australia. The scope of the appeals was limited to the availability of restitution; it was not disputed that the loan agreements were unenforceable for illegality.
The High Court, by majority, dismissed the appeals, with the result that the respondents are not liable to repay Equuscorp the funds advanced under the loan agreements. Equuscorp characterised its claim as arising from a "failure of consideration", contending that Rural had advanced funds under the loans on the basis that the agreements were enforceable. As that state of affairs did not exist, it was contended that the respondents would be “unjustly enriched” if they did not make restitution. By majority, the High Court rejected this submission, holding that an entitlement to restitution from the respondents would stultify the policy and objects of the Code, being the protection of investors in the position of the respondents. There was therefore no cause of action available for Rural to assign to Equuscorp. The High Court held further that, if Rural had a right to restitution, such a right was capable of being assigned to Equuscorp.”
The term “unjustly enriched” is a legal term denoting a particular type of causative event in which one party is unjustly enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing. In the normal course of events, this would be a path that the Banks could go down if UMIS was proven in order to obtain restitution for the loans they extended. However, that avenue now appears to be closed to them by this decision.
Our lawyers will be explaining fully the implications of this at a meeting being held in Redcliffe next Wednesday. However, it appears to me at this time (subject to what they have to say) that any loans ‘Stormies’ took out with the Banks could not be enforced if UMIS is proven.
The basis for this is grounded in the principles of the law of contract which are superior to the concept of “unjustly enriched”that the English Courts support but is not held in the same regard by Courts in Australia.
Whatever, this Decision by the High Court is a substantive win for us, and a setback for the Banks.
We ‘Stormies’ may now have a reason to smile! A recent decision was handed down in the High Court of Australia that will impact on our cases if unregistered managed investment schemes can be proven. Our lawyers by the way are confident that such can be substantiated.
Here's the case in question:
“8 March 2012 - Today the High Court, by majority, dismissed five appeals from the Court of Appeal of the Supreme Court of Victoria, which had held that Ian Alexander Haxton, Robert Samuel Bassat and Cunningham's Warehouse Sales Pty Ltd ("the respondents") were not liable to repay funds advanced under loans held by Equuscorp Pty Ltd ("Equuscorp"). Equuscorp was not a party to the original loan agreements with the respondents, but was assigned the loan agreements as an arms length financier.
The respondents had invested in tax driven blueberry farming schemes promoted by Anthony and Francis Johnson ("the schemes"), by which members of the public could claim tax deductions for amounts invested in farming enterprises. The farming activities were conducted in north-east New South Wales. Under the schemes, each of the respondents executed a management agreement, by which Johnson Farm Management Pty Ltd, a company controlled by the Johnsons, agreed to perform the respondents' farm maintenance and harvesting obligations for an annual fee. Fees could be prepaid in whole or in part, and it was expected that these fees were tax deductible. Each of the respondents also entered into a loan agreement with Rural Finance Pty Ltd ("Rural"), a company also controlled by the Johnsons, to finance their prepayment of the management fees. Contrary to s 170(1) of the Companies Code ("the Code") of each respondent's home State, no valid prospectus in respect of the schemes had been registered when the respondents were offered what was a "prescribed interest" within the meaning of that section.
Rural executed a deed assigning to Equuscorp its interests under the loan agreements and the amounts of the debts owing ("the Deed"). The Deed was expressed to include an "absolute assignment" of the legal right to debts and interests under the loan agreements and "all legal and other remedies.
Between November 1997 and March 1998, Equuscorp commenced proceedings against investors, including the respondents, under the loan agreements. Due to the breach of s 170(1) of the Code, the primary judge held that the loan agreements were unenforceable, on account of the illegality of the investment schemes. As an alternative to claiming under the loan agreements, Equuscorp sought restitution of the funds advanced as money had and received. In relation to that claim, the primary judge held that the respondents were liable to make restitution to Rural, and that the Deed assigned to Equuscorp the benefit of the respondents' liability to make restitution. On appeal, the Court of Appeal held that the right to claim for restitution had not been available to Rural and was therefore unavailable to Equuscorp, and, in any event, the Deed did not effectively assign such relief. Equuscorp appealed, by special leave, to the High Court of Australia. The scope of the appeals was limited to the availability of restitution; it was not disputed that the loan agreements were unenforceable for illegality.
The High Court, by majority, dismissed the appeals, with the result that the respondents are not liable to repay Equuscorp the funds advanced under the loan agreements. Equuscorp characterised its claim as arising from a "failure of consideration", contending that Rural had advanced funds under the loans on the basis that the agreements were enforceable. As that state of affairs did not exist, it was contended that the respondents would be “unjustly enriched” if they did not make restitution. By majority, the High Court rejected this submission, holding that an entitlement to restitution from the respondents would stultify the policy and objects of the Code, being the protection of investors in the position of the respondents. There was therefore no cause of action available for Rural to assign to Equuscorp. The High Court held further that, if Rural had a right to restitution, such a right was capable of being assigned to Equuscorp.”
The term “unjustly enriched” is a legal term denoting a particular type of causative event in which one party is unjustly enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing. In the normal course of events, this would be a path that the Banks could go down if UMIS was proven in order to obtain restitution for the loans they extended. However, that avenue now appears to be closed to them by this decision.
Our lawyers will be explaining fully the implications of this at a meeting being held in Redcliffe next Wednesday. However, it appears to me at this time (subject to what they have to say) that any loans ‘Stormies’ took out with the Banks could not be enforced if UMIS is proven.
The basis for this is grounded in the principles of the law of contract which are superior to the concept of “unjustly enriched”that the English Courts support but is not held in the same regard by Courts in Australia.
Whatever, this Decision by the High Court is a substantive win for us, and a setback for the Banks.
