This has been a dull week for the local stock market. The rescue of Fannie Mae and Freddie Mac spurred a lot of kneejerk buying in many markets just this Monday but failed to entice our own. In fact we closed down from last Friday's close. It signaled what would be the performance for the market this week, boring - dismal - disappointing.
Overheard at the exchange: "This is better than counting sheep!"(Photo Courtesy of BusinessWorld)
It's been one year already into the so called subprime crisis and US banks have been falling like dominoes ever since. All the big US banks - Citibank, Merril Lynch, Bear Stearns, Lehman Brothers, AIG - (apart from others) have seen their share prices fall off a cliff. Although I live thousands of miles away from the US, and am by no means an expert on the banking sector, (most especially that country's), it lends me to ask one simple question,
Should I entrust my money to a bank?
When I watch CNBC, and I hear all the commentaries from stock brokers, analysts, and research reports from the Citibanks, Merril Lynches, etc of the world, advising you to buy this (stock) sell this (stuck), I wonder, should I still be listening to these guys? It strikes me as quite odd when the big banks that have "asset management services", "investment advisory services" are now the ones in need of asset management and investment advisory advice. It is pure irony.
If I entrust my money to an institution that supposedly gives me the opportunity to grow my wealth, and then it severely disappoints by eventually wiping out my entire capital, wouldn't it be better for me to just hold on to cold, hard cash instead? The question that begs to be asked is,
What do banks do with your money?
Locally, I think our banks have low levels of exposure to US subprime securities. That is good. But with service that sucks, sometimes I wonder to myself if I should just put my money into a going concern instead. At the end of the day, banks may have a good business purpose for you, but it's the oldest tool of using OPM (other people's money). This could explain why our taipans almost always have their own banks. It could have been a spring board for them to wealth accumulation.
Lucio Tan - Allied Bank & PNB
Henry Sy - BDO
John Gokongwei - Robinsons Bank
George Ty - Metrobank & PSBank
The ongoing turmoil in the US financial sector should open the eyes of the banking consumer to be more vigilant about where their money goes to. Lehman Brothers is the new casualty in the financial turmoil, and people still don't know if there will be others who may follow the road to financial RIP.
I think the next time I enter a bank and some bank personnel talks to me about "investment advisory", "asset management", I'll just smile and say "No. Thank you."
I know where my assets should go, it's just that I do not have the time to do it on my own. The ones who are supposed to do that on your behalf are banks and investment institutions. But if financial institutions can't be trusted, who then can I trust? Maybe I should just forgo taking risks with investment placements and instead, place a time deposit and watch my money die due to inflation. At least, the principal does not die with the interest "gains".
Should I entrust my money to a bank?
When I watch CNBC, and I hear all the commentaries from stock brokers, analysts, and research reports from the Citibanks, Merril Lynches, etc of the world, advising you to buy this (stock) sell this (stuck), I wonder, should I still be listening to these guys? It strikes me as quite odd when the big banks that have "asset management services", "investment advisory services" are now the ones in need of asset management and investment advisory advice. It is pure irony.
If I entrust my money to an institution that supposedly gives me the opportunity to grow my wealth, and then it severely disappoints by eventually wiping out my entire capital, wouldn't it be better for me to just hold on to cold, hard cash instead? The question that begs to be asked is,
What do banks do with your money?
Locally, I think our banks have low levels of exposure to US subprime securities. That is good. But with service that sucks, sometimes I wonder to myself if I should just put my money into a going concern instead. At the end of the day, banks may have a good business purpose for you, but it's the oldest tool of using OPM (other people's money). This could explain why our taipans almost always have their own banks. It could have been a spring board for them to wealth accumulation.
Lucio Tan - Allied Bank & PNB
Henry Sy - BDO
John Gokongwei - Robinsons Bank
George Ty - Metrobank & PSBank
The ongoing turmoil in the US financial sector should open the eyes of the banking consumer to be more vigilant about where their money goes to. Lehman Brothers is the new casualty in the financial turmoil, and people still don't know if there will be others who may follow the road to financial RIP.
I think the next time I enter a bank and some bank personnel talks to me about "investment advisory", "asset management", I'll just smile and say "No. Thank you."
I know where my assets should go, it's just that I do not have the time to do it on my own. The ones who are supposed to do that on your behalf are banks and investment institutions. But if financial institutions can't be trusted, who then can I trust? Maybe I should just forgo taking risks with investment placements and instead, place a time deposit and watch my money die due to inflation. At least, the principal does not die with the interest "gains".
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