Storm Financial Group

[swazee]

whilst we r on the topic of declaring interests....

maybe "swazee" might like to reveal himself as well - i think we would all find that very interesting given where "he" works.... and the rumours he pushed.

it didnt take me very long to track u down buddy and i am sure u will prove quite newsworthy.

Im not sure why you would find where I work intersting or in fact newsworthy. I consider this to be a threat of sorts so if you have any allegations, lets hear them. I have no link to either Storm the banks or not any of the Storm clients. I am happy for you to know who I am, I have nothing to hide and I'm not a 'he'.

BTW, forums are designed to be anonymous, otherwise how many of Storm clients or anyone else would actually post their story.

 

[MR.]

Given MR's post I thought I would put in my 20 cents worth and provide some perspective.

Can’t agree more with your particular extract from buffet. Now is a far better time to be greedy when compared to the last couple of years, that’s for sure. However, if I have read your post correctly, you base your theory with data back to the 1960’s that we are already at or close to perhaps a bottom. Therefore now would be the time to be greedy and perhaps that could encourage investors to take on leverage in the markets.

It matters not to me the outcome either way in the next couple of years. If I am wrong I will lose minimal, only just potential profits. If someone is leveraged in the markets now and they are wrong it is a completely different story.
I have always thought I have had a fairly good business mind and it lead to a very early retirement. Now perhaps, I may have slipped some since then. So be it.

But my opinion appears not alone.
An extract from the economist Steve Keen :
http://www.debtdeflation.com/blogs/

My answers are that our escape route from previous downturns was to renew the private lending engine, and that this is a trick that is one recession past its use-by date.
The 1990s recession saw private debt to GDP ratio top out at 85% in late 1990, and then fall to 76% by early 1994. From then it took off once more, with households taking over the borrowing binge mantle from business, which actually reduced its debt level from 56% of GDP to 40% in mid-1995. The household debt binge, which began in 1991 in the depths of Keating’ recession, took the household debt to GDP ratio from 30% to a peak of 99%, from which it is now falling.
Meanwhile, business borrowing likewise began a China and Private Equity fuelled blowout in mid-2004, rising rapidly from 46% of GDP to 66%–a new record–by early 2008. The combined debt total reached 165% of GDP in March 2008, and it has since fallen to 160%.
So what are the odds of encouraging businesses or household to start borrowing again, from their now record levels of debt?
Not good, I would think. Instead, they will be de-leveraging, not just for the duration of a standard recession but perhaps for a decade or more, to bring debt levels back to something like 1960-70 levels of 25-50% of GDP. Deleveraging has only just begun, and it has a long, long way to go.
So we can’t encourage businesses to borrow, or households. Who else does that leave?
And the bingo award goes to Kevin Rudd: government can get into debt instead. That is what is now happening of course, and from a position in which the government’s debt to GDP ratio is currently close to zero. So it has capacity to borrow and thus boost demand, but how does that weigh up against what the private sector might do in the opposite direction?
Not well.

It’s that 32% average rebound I’d like to catch, but from where?
Nothing more in the near future on the index.

 

[Solly]

There's a question and reply on E&J C's web site regarding gearing for the over 65's

http://www.cassimatis.com.au/FAQRetrieve.aspx?ID=36205

It is claimed that the question was submitted from a person from the "CBA" so I suppose we can predict the tone of the reply.
I found the response reasonable.

Where the post talks about the Master of Applied Finance that EC developed does anybody know the course content, electives, prerequestites etc. What inputs EC actually had into the course?
Does anybody here known any graduates ? Which campuses is it offered?

Got this link sent to me

http://handbook.uws.edu.au/hbook/course.aspx?course=2702

It appears to be the Master of Applied Finance course from the University of Western Sydney that is refered to in the post.


Some of the course units look quite interesting.....

 

[Solly]

"Commonwealth Bank offers Storm clients deals to save their homes"


Story by TONY RAGGATT is here;
http://www.townsvillebulletin.com.au/article/2009/03/10/43701_hpnews.html

' Carey Ramm, said the Commonwealth offer was promising but well short of expectations.

"From the behaviour I have seen, I would expect the loans to be extinguished." '


What are the chances of the CBA extinguishing loans?

 

[Trevor_S]

What are the chances of the CBA extinguishing loans?

As a CBA shareholder (albeit small) I hope no chance.

Assuming the loans have been made in good faith on the part of CBA.

 

[swazee]

"A spokesman for the Commonwealth said they were working with customers to minimise their financial hardship"

Since when did the CBA enter the world of standup comedy...seriously this is a massive admission of something a lot deeper and should give Storm clients a glimmer of hope.

This is what is commonly referred to as 'Damage Control, knowing that it may avoid some of these clients taking further legal action.

If there are any lawyers on here, when was the last time a bank did something that was not in the best interests of it's shareholders, particularly when it had no trouble charging clients ridiculous fees to break their loans, which was primarily out of the control of Storm clients.

This could be a PR exercise, but I suspect something a lot more cynical.

"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem."
J. Paul Getty

 

[Solly]

"CBA moves to calm Storm"


CBA, "is negotiating confidential settlements, has is team negotiating "rearrangements" with the Storm clients,
require that clients sign away any right to legal action"

"Damien Scattini ....said the deals might open CBA to accusations of undue influence and unconscionable conduct"

Full story by Colin Kruger in The Age is here;

http://business.theage.com.au/business/cba-moves-to-calm-storm-20090310-8u8j.html

 

[Glen48]

Looks like you don't have worry about responsibility any more:
Have a house in the Bush and no insurance no problems, Take out a margin loan no problems..


The Herald has also received documents dealing with the settlement of margin loans by Storm clients for what appears to be a reduced sum.

All of the deals will require that clients sign away any right to legal action against CommBank over the debacle.

"In this climate, it is appropriate that the bank is seeking appropriate legal arrangements with its customers to ensure that any rearrangements of facilities are final and conclusive, to allow all parties to move on," the bank said in a prepared statement.

Storm clients who took the failed company's advice - borrowing against their homes, taking out margin loans, and investing the lot in index funds - were caught out when the sharemarket collapsed last year. Thousands face losses that are expected to top $1 billion.

CommBank was the largest provider of mortgages, margin loans, and fund management services to Storm clients.

A class action being prepared by Slater & Gordon is expected to allege that Storm effectively acted as an agent for CommBank, and other Storm partners like Bank of Queensland, which would make them liable for its flawed advice.

CommBank is understood to be offering a complete freeze on mortgages where the clients are pensioners and unable to make payments. These clients are in effect being offered "life tenancy" in their homes which will only be sold after their death. In some cases, CommBank will not charge interest and the loan will not be indexed to inflation.

 

[donteventryit]

So, anyone changed their minds about Storm clients receiving some sort of restitution?

 

[bunyip]

A class action being prepared by Slater & Gordon is expected to allege that Storm effectively acted as an agent for CBA, and other Storm partners like Bank of Queensland, which would make them liable for its flawed advice.

Well now, wouldn't that just be typical of a dammed law firm.....twist things around to make it look like the banks are responsible for the advice that Storm gave their clients!
Maybe Slater & Gordon should try a little honesty and reality by saying that nobody forced Storm clients to accept and act on the advice they were given. Nobody forced them to take foolhardy risks by gearing to dangerous levels. Nobody forced them to implicitly trust someone else to look after their investments. Nobody forced them to take out those loans.
But honesty and reality don't make any money for law firms.
If the market had kept rising, clients would have been cleaning up and praising Storm and the banks for helping them.

I once bought a new Toyota Land Cruiser Wagon that turned out to be a real dud and ended up costing me a heap of money. Maybe I should have sued the relatives and friends who had Toyotas and told me they were great vehicles. Maybe I should have sued the salesman who sang the praises of Toyotas. Maybe I should have sued the finance company who arranged the lease agreement.
But I didn't. What I did instead was shrug my shoulders and say 'Ah well - nobody forced me to buy a Toyota'.


Slater & Gordon's Damien Scattini said the deals might open CBA to accusations of undue influence and unconscionable conduct given the distressed state of customers and the short time given for people to settle. "It's disappointing they want to go about things this way," he said.

I wonder if Scattini's disappointment could be due to the decreasing likelihood of him getting a decent cut out of it, if CBA comes to some private arrangement with clients on an individual basis.

 

[MR.]

So, anyone changed their minds about Storm clients receiving some sort of restitution?

Instead of paying their legal teams, the bank offers that money to people who will benefit more..... perhaps?

A class action being prepared by Slater & Gordon is expected to allege that Storm effectively acted as an agent for CommBank, and other Storm partners like Bank of Queensland, which would make them liable for its flawed advice.

An agent perhaps.... So that makes the banks liable for Storms advise? How many effectively acting agents would/could the banks have altogether then?

Where do you draw the line? That would mean anyone who received advise and that organization suggested a particular credit facility, makes that credit facility now liable for the advise given! How much are the banks expected to know?

Hope you win. Certainly will clean up the whole lending industry.

 

[Julia]

Slater & Gordon's Damien Scattini said the deals might open CBA to accusations of undue influence and unconscionable conduct given the distressed state of customers and the short time given for people to settle. "It's disappointing they want to go about things this way," he said.

I wonder if Scattini's disappointment could be due to the decreasing likelihood of him getting a decent cut out of it, if CBA comes to some private arrangement with clients on an individual basis.

Yep, exactly the thought I had when I read Mr Scattini's remark, Bunyip.

 

[Steve Borden]

Slater & Gordon's Damien Scattini said the deals might open CBA to accusations of undue influence and unconscionable conduct given the distressed state of customers and the short time given for people to settle. "It's disappointing they want to go about things this way," he said.

I wonder if Scattini's disappointment could be due to the decreasing likelihood of him getting a decent cut out of it, if CBA comes to some private arrangement with clients on an individual basis.

Or he may be disappointed with the arbitrary way the offers are being made, perhaps it's the way the offers are being 'sold' to the clients or maybe it's the divide and conquer methods being used on very vulnerable people.

 

[Solly]

"ASIC gives Storm wind-up deadline"


"THE Australian Securities and Investments Commission (ASIC) has been given until tomorrow afternoon to file an application to wind up failed investment advisory company Storm Financial."

AAP story in The Australian is here;
http://www.theaustralian.news.com.au/story/0,25197,25171943-12377,00.html

 

[bunyip]

So, anyone changed their minds about Storm clients receiving some sort of restitution?

My opinion remains unchanged.....that if Storm clients take on the banks in a court case, the banks will drag it out for years through the appeal process if necessary, and the law firms will be the big winners.
I can't see any law firm being prepared to work indefinitely without payment on a no win no fee basis. The lawyers would want progressive payments in one form or another if the case drew out long enough, otherwise they just wouldn't continue.

 

[Glen48]

Does any one know if Storm altered the info on victims forms forcing them to end up more highly geared?
IF Storm had authorisation from Victims to do as Storm liked on their behalf and the Banks were aware of the scam then you could understand the Banks wanting to talk.
I can't see any banks lending $1.8M to a Victim on $50K PA...

 

[swazee]

Does any one know if Storm altered the info on victims forms forcing them to end up more highly geared?
IF Storm had authorisation from Victims to do as Storm liked on their behalf and the Banks were aware of the scam then you could understand the Banks wanting to talk.
I can't see any banks lending $1.8M to a Victim on $50K PA...

Yes, if Storm were acting as the 'agent' of sorts which I beleive you will find they were, then CBA are in trouble. That is why EC keeps referring to the partnership between the Bank and Storm.

Bunyip rightly points out....who will be prepared to roll the dice and take on one of the largest banks in Australia, for possibly many years and who is going to fund it?

It will be interesting to see how the DOCA issue pans out over the next few days....

 

[Solly]

"Inquiry into collapses to include role of banks"


"THE Commonwealth Bank's secret deals to settle potentially costly litigation by its Storm Financial customers will not be enough to keep a lid on its alleged role in the debacle..."

.."Storm itself may soon be history or, alternatively, back in the hands of its founders, Emmanuel and Julie Cassimatis."

"A Federal Court judge in Brisbane yesterday gave the Australian Securities and Investments Commission until today to decide whether to proceed with its application to wind up Storm."



Full Story by Colin Kruger in the SMH is here;

http://business.smh.com.au/business/inquiry-into-collapses-to-include-role-of-banks-20090311-8v9f.html

 

[bunyip]

Does any one know if Storm altered the info on victims forms forcing them to end up more highly geared?
IF Storm had authorisation from Victims to do as Storm liked on their behalf and the Banks were aware of the scam then you could understand the Banks wanting to talk.
I can't see any banks lending $1.8M to a Victim on $50K PA...

Well, one of the Storm victims interviewed on 60 Minutes claims Storm told her to just sign the documents and they'd fill in the details later. She foolishly did so, and some crazy amount of income was entered in the loan application.
But how could it ever be proven that her Storm advisor entered those details after she signed the documents? Storm naturally deny doing so.
In a court case they'd say they filled in the details based on the information supplied by the client, the client then read the document, verified the details, and then signed it.

 

[stung]

I contacted the CBA to ask about the 7 page document that outlined assets liabilities and debt. This document was not signed by me. It contained anomolies. When I asked how this document came to be, I was told that it was filled out by the CBA whilst in telephone conversation with my storm financial advisor.

I wanted to know how the $1880 in the extra monthly income was derived.
This was apparently the monthly return on investment that I was expected to receive ( 4 percent) once I signed with storm. So as far as I can ascertain my ablility to pay the loan included income from potential future earnings!! Since when has a person been able to apply for a loan and add possible earnings to their income figure?

I also enquired as to why my income was inflated, why my son was not listed as a dependant, and why my personal debt of $25 000 was not noted.
She claimed that this info would have been verified by the phone call we would have received from the bank. We received no such call.

All other documentation that was involved in the loan application required a signature. Why not this one?

Yes I know its all my fault but I did have a smidge of help from the banks and from storm.