Monday, March 9, 2009

Legal actions against poor advice gaining momentum

If only we'd kept our cash under the mattress

We need more of this: successful action against poor advice. Now just waiting for a mortgage/estate agent case. It can't be long

Posted by growler @ 01:06 PM (1706 views)
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21 thoughts on “Legal actions against poor advice gaining momentum

  • “Debbie Cox a financial controller from Bristol, only realised that she had been mis-sold a mortgage endowment policy after paying in for 10 years.”

    What can you say? Except she must be extremely thick, and she’s a “financial controller”…… !

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  • Funnily enough i got asked by the Building Society towards the end of 07 if i wanted to see the manager, why i asked? To see if i was interested in a different investment product. OK.

    Sat down and the manager asks me if i understood anything about shares? ” a bit” i said. Right he says well do you understand the FTSE 100 – they call it the “Footsie”. Right interesting i said. “Well” he goes on …. “what if i told you you could invest in shares and get a 120% return of the rise in the FTSE index in the next 5 years and get your money back at the end of the 5 years if they have fallen – how does that sound?”.

    No not so good i said. “Hmm why is that?” well because im not interested in tying money up for 5 years without any interest…. “but based on history they have gone up over 5 years…. everyone knows that, so its VERY UNLIKELY they wont go up and give you a great return”…

    “Do they?” I smiled. Nope not interested, he then started to lecture me on missing out on a return. I asked him if he had a bear fund on similar terms and he look really confused. “No thought not i said”. Of course i thanked him and went on my way – he shook his head….. Wonder what hes doing now?!??

    True though structured investments “guaranteed” are subject to some financial jiggery pokery to buy some instruments with the money forgone in interest at the time (what interest!?). The option that is probably purchased (and i dont know but assume) is subject to some counterparty risk. So much for the guarantee then! I feel for these people and hope they suceed.

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  • You can see why people prefer to have their money in Bricks and Mortar, especially when the Government are prepared to drop interest rates to 0.5% as soon as the going gets tough.

    I know at least 3 people with huge mortgages that have been completely bailed out (with tracker at 0.5 – 1.0% above base). Quite how these low interest rates help anyone with out a tracker mortgage I’m not sure.

    Anyway back to the article, difficult to trust any financial product these days and it was this way some time ago, never mind another round of dishonesty/mis-selling.

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  • Hey STR – did you have a chance to look at the Turtle thing i posted? I duster off my old “Market Wizards” book at the weekend and its full of nugets of wisdom. I suppose because of the interest rate thing we could add “no wonder people are seeking higher returns…by trading / getting involved with the ggs etc”.

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  • I think those who are bailed out might be in a sense of false security. Sure, payments are low or next to zero. But are they low enough to offset the loss in value of their property over the next 2 years?

    I also am looking into the first case involving ramping as there is at least one agent around here that puts “ramp” and “tons” into their name big time! If I had a pound for every POA entry appears when an overpriced house gets price-dropped then sold then marked POA to disguise it’s origins. Makes me laugh is that noone edits the older ads as there are properties on the RM site exchanged in October still marked POA with text as it was at time of advertisement.

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  • Hi techieman

    Yes I have it down loaded, looks interesting, I haven’t had a chance to study it over the weekend, but plan to read it in more detail later today.

    Yes you’re right about getting involved due to lower returns in banks. Myself very much included. My initial plan is to try and recoup lost interest.
    However, if I could find the right structured system with which to be able to place trades to keep trading capital at a minimum risk and make a bit when the trade turns out correct, then I’d very much like to dedicate more time to it.

    My business in the construction sector offers (as you can imagine) a fair degree of risk at present. You can insure against some of that risk, but that in itself generates extra overheads.

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  • Those retarded track mortgage rates were set by retarded bankers about 2, 3 years ago. Over the next 6 months time, 99% reckless borrowers supposedly benefited from track mortgages will have to re-mortgage at minimum 3% above base rate – that is assuming they have 60% LTV, which is very unlikely, if they borrowed in the last 2 -3 years. They more likely will mortgage at 5% above base rate.

    Next 6 months will be very interesting for the property market, as the GB and BoE exhausting they ammunitions to combat HPC. What next?

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  • stillthinking says:

    peter_2008, indeed, it is a bit strange to hear about all the travails of the banks, when they are in a perfect position to charge what they like against over-extended mortgage holders.

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  • peter 2008

    I’ve got the impression that the tracker mortgages are for the life of the product and the people that have them took them out as they didn’t have tie ins etc.
    I think that the only thing that would make the holders of these products change from them would be a substantial rise in interest rates. IMO I can’t see a substantial rise in interest rates. 1/ because the government have already said they are not interested in supporting the GBP. and 2/ Behind the scenes I think they’d be quite happy with a dose of inflation.

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  • crash n burn says:

    STR 2007… Interesting to see you are also in the construction industry. The firm I’m with is completely fudged up – glad I took out my unemployment insurance – it was a kind of put option on the labour market. The partners have announced quite a sweeping cut, and even today I just said goodbye to three of my colleagues. Time is probably ticking for me too… Have a nice deposit, but without a job it doesn’t really matter anyway… On the bright side though, a good chance to tap into that entrepreneurial spirit of mine and swoop into something completely different. What about you? Are you feeling like you are on dodgy ground too?

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  • techieman

    Ok I’ve read through it. Seems very similar to the brief intro I had to the Trading University seminar. I guess all ‘mechanical’ systems follow a similar theme.
    I must admit I don’t fancy having to follow a system for ‘8 months’ waiting for the ‘winning’ results. That would take some dedication. I think the ‘Turtles’ were using someone elses money (and alot of it). So perhaps in those circumstances it’s easier than with your own.

    There are certainly some valuable snippets in there like ‘Buying in Fast Markets’ where the inexperienced start chasing the market and end up buying too high. That’s a very easy mistake to make (thinking you’ve missed your buying price) and you don’t know until after the event if you did the right thing.

    I very much like the idea of the mechanical system that takes emotion out of the trading.

    I think the analysing element done manually on your own could be very difficult and reading the Original Turtle really opens your eyes to how complex it can get.

    Are you operating this type of system ?

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  • crash n burn says:

    Watch out for turtle soup. A favourite hedge fund “dinner” according to one I know from the STA.

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  • I think that whilst the Government are trying to (badly) engineer some inflation now. They will be a lot less successful engineering it to stop when commodities rise back to normal and costs increases multiplied by a devalued sterling will make eye-watering cost pressures.

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  • crash n burn says:

    Sorry, let me explain – turtle soup is a contrarian version of the turtle method…. So another words they will slam false technical breakouts for example.

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  • Crash n Burn

    I took out a similar hedge (Euler Hermes Credit Insurance) a year ago. I haven’t actually needed it yet, but it did allow me to sleep at night. Unfortunately or fortunately depending on how you look at it, they have withdrawn insurance cover from several clients, due adverse financial statement/account filing etc.

    This has at least alerted me to potential problems and made me focus on reducing my exposure in those directions.

    So yes I can see problems looming, I could a year ago hence the insurance but now everyone is talking about the lack of work, which means alot of companies will go down this year in my opinion.

    Re: buying a place I had posted on here before that I suspect you may be better of in your own place than renting if out of work as I suspect (don’t know) that you can get your interest covered on DSS and not have to move. However if renting and forced to move if out of work, finding a new place could prove difficult.

    In the end I’ve decided to stay off the market hoping for sanity to kick in and prices fall further before buying, but now have to accept I may not qualify for anymore than 1/2 the mortage in a years time that I could get now.

    Very difficult to call.

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  • Crash n Burn

    ‘Slam false technical breakouts’

    Are you sure you’re in the construction industry?

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  • crash n burn says:

    Had been checking out unemployment insurance for a while. The very first day the market dropped I booked mine as I know about the lag time between “wall st and main st” – not only that, I’m personally involved in those ridiculously expensive, waste of space new build towers and I was sure it was going to die a death – but it put food on the table… ALL of my major projects have since been put on hold… The work dries up within the next few weeks – and the bambino is due in one month’s time…. Great combination!!! Insurance policy has been in place for one year, kept up the payments, so hopefully I’m covered for one year… Always scared about the small print, but didn’t see anything they could really screw me on.

    With regards to making a call on the house market, having recently viewed a potential a few weeks ago – I am of the opinion it is still massively overpriced and the market has hardly budged…. I just want people to be realistic. So – ok, maybe I will be unemployed, but I’m in a fortunate position that should house prices come down, thanks to the deposit, even if I got a job packing shelves in the supermarket and I was able to get a mortgage offer for 3.5 time salary, I could still be a buyer.

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  • crash n burn says:

    Yes I am in construction – although I do spend probably too much of my time charting and exchanging opinions with friends.

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  • STR2007 as i said i dont really like breakout systems. Funnily enough i have been looking at the Eur/GBP for the past few weeks and this morning (first thing) took a long position just below 9000. The reason i say this was because basically it looked like it would “break out” of its range. [been up to high 9100s today]. So now it looks like stops will be moved to b/even. By the way this is my third bite of this cherry ive been long and wrong two other times, but with relatively low amounts on the table. This position is about the same size but is making about twice as much as the other two lost …. so far.

    Anyway so no i use arbitrary chart patterns with what i think are good levels to provide a good risk /reward profile. I then use either oversold/overbought indicators and/or divergence in them to time the trades. Yes sometimes you think you have missed the opportunity when you havent and sometimes you have!

    You are right re the emotion but its very difficult to be detached, and it takes a long while. I say dont trade very much (dont take alot of positions in the same market / complex etc) and start off with small values – work out entry points, stops, goals and re-entry points (if applicable) before you take the trade. Also dont get attached to your position.

    As we discussed the breakout systems will make you get whipsawed with false breakouts…. very emotionally demanding. You need to anticipate some lows / highs and then get in if the market “behaves” the way you think. Of course its always most stressful when you get in and see the market go against you and thats what you will experience (we all do). However you decide to go about it there is no Holy Grail – try to keep things simple and take positions based on your comfort zone (by that i mean position size). Personally I take smaller positions in different markets compared to others – i mean i am more comfortable in some markets than others.

    The Turtle document is very good (and yes if you look up on the internet you will find some ex turtles selling that very system for thousands of dollars), BUT they all started with $1m and the best ones (which were the ones who could de-emotionalise it the most) stayed.

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  • Techieman

    Thanks for that one, another interesting read.

    I read around the website and the notes/methods etc. all sound very familiar to those of Traders University.

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