We have moved to justicebaogong.blogspot.com as the servant is not IT savvy and finds blogger easier to use than wordpress. Too much time has been spent on the technicals which could have been better used to investigate and research better articles to help the man in the street.

Do bookmark us at the new site justicebaogong.blogspot.com and do refer to all your friends and colleagues if you find the articles to be useful.

Thank you and God bless.

Mulia

http://justicebaogong.blogspot.com

In this post, we will highlight the plight of businessman Mr Amirul, who is faced with claims of $18,000 for a small carpark bump in which his own repair for his Toyota Wish is only $650! We have done an interview and will unfold the events that occurred, resulting in this exhorbitant claim, and how you can PROTECT yourself against unscrupulous people who have no qualms about taking advantage of the complicated system to benefit themselves and passing on the cost of insurance to you:

The accident occurred on 5th Nov 07, when Mr Amirul was reversing his Toyota Wish, from the left of the picture, into an area which resemble a delivery ramp (Refer to Picture A). At the same time, the insurance agent was coming from behind and thus the accident occurred.

ACCIDENT SITE

The Toyota Wish was hit from the back of his vehicle as shown in the next picture, while the insurance agent’s Nissan Sunny was hit at the right side of his car during the accident. In Singapore, the car that knocks the behind of the car in front is generally at fault, but in this case, both parties seem to share a fair share of fault.

Nissan Car showing very slight dent in front right with no visible damage to headlamps nor bumper

Immediately after the accident, the Insurance agent came out of his vehicle, bend down to look at the damages, walked to his car boot, opened up his briefcase and took out a piece of paper.  He wrote a note explicitly stating Mr Amirul was at fault and asked Mr Amirul to sign which of course he did not.  Mr Amirul disagreed that he was responsible for the accident but acknowledged that the accident did occur.  The insurance agent wrote another note of acknowledgement that accident did occur and he claimed that it was for insurance claim and no lawyers involved.  As Mr Amirul does not want to cause any obstruction to other vehicle along the driveway and the insurance agent ‘appeared’ to be very honest and sincere (he even offered to give Mr Amirul a better deal in his next insurance renewal and given his name card; AIG Insurance agent).They had the agreement that no lawyers will be involved and they will let the insurance settle the small accident as they assumed that damages would be limited only to a few hundred dollars, as shown by the pictures ( by the way those were the exact original pictures taken at the point of accident).  At the point of accident, nobody was injured, including Mr Amirul’s 77 year old mother-in-law and 17 year old son who was sitted behind. Both parties then agreed to make report to IDAC separately.  As for Mr Amirul he drove and proceeded to Paya Ubi IDAC straight away to do the necessary report, but according to the Amiruls, NO PHOTOGRAPHS were taken when their car was there.

A few weeks later in Dec 07, Mr Amirul received a lawyer’s letter demanding claims of $4672.  And fast forward 3 months on 6 March 2008, Mr Amirul received a letter from NTUC Income for injury claim of $13,070!  The injury claim was in respect of injury sustained by the insurance agent as a result of the minor accident.  The insurance agent had gone to the Department of Emergency of Alexandra Hospital in the evening of the same day of the accident.  In his medical report it was stated that he was ‘hit by a reversing car on the front of the door and subsequently developed cervical neck and left shoulder pain and was given 5 days mc’.  ‘Subsequent visit for complaint of low back pain after the accident.  X-rays done were normal and he was discharged with 2 days mc’.

According to Mr Amirul, he has gathered more than sufficient evidence that the exhorbitant claims is not justifiable and he has also engaged a private investigator showing the other party going through his normal daily movements which does not correspond to his claimed medical injuries.  Mr Amirul had approached NTUC Income several times with these evidence, but NTUC remains unconvinced that the evidence is sufficient.

A few doubtful points were raised:

- Why is it that the insurance agent did not make a police report within 24 hours of the accident if he suffered a genuine injury? And only to come back with lawyer letters claiming exhorbitant injury claims 3 months later?

- The insurance agent’s medical report stated that his car was hit on the front of the door, but the original pictures show that the dent was at the front right side fender just behind the right headlamp.

- How fast can a car travel in a tight carpark area like the one shown above such that a 29 year old man can suffer injuries that can demand injury claims of $13070 while a 77 year old lady is not the slight bit injured?

- Why is it that the insurance agent who had a clear view of Amirul’s car in front and thus, can anticipate the impending accident, suffer a whiplash injury to back and neck while Mr Amirul’s 77 year old mother-in-law, who had no idea nor no any view of any impending accident did NOT suffer any slight injury at all?

Bear in mind the driver of the Nissan Sunny who made the exhorbitant claim is an insurance agent who has been in the insurance line for 7 years, while Mr Amirul has no inkling of the intricacies of insurance. Being in the insurance line for so long, it is obvious that one party knows the industry very well, and its very loopholes and thus more likely to be able to capitalise on the system.

Mr Amirul has been kind enough to share their experience to benefit the man on the street so that they will not fall into the same predicament. Remember, the above could happen to YOU! Do share with your friends this website and bookmark this website (Ctrl D) so that everyone can benefit from it. So, what should you do in an accident?

- NEVER sign any written acknowledgement which has any words that suggest you are at fault, as it could be cleverly phrased and used against you in Court.

- Always take pictures (closed up and with vehicle number visible together with damage).

- Exchange particulars of all parties.

- Obtain witness contacts and if possible, written account of their testimonials, as cases can drag for months and witnesses will forget the details

- Confirm that no party is injured (Record conversation or have it stated in writing to declare that everyone is not injured, or get witness to verify) This is to ensure that neither party will malinger and slap you with ridiculous medical injury claims later on. Everyone knows how easy to fake injury or illness or attribute old injuries to this accident in order to unethically claim insurance monies at another party’s expense.
We are a non partisan blog and we welcome the other party to post his comment and let the public decide.

If you suffer from similar insurance grievances, I implore all readers to place a comment, email us & bookmark us, and ask your friends to visit www.baokong.wordpress.com to place their comments. All constructive comments are welcome. If you suffer from similar grievances, do place your comments, and we will endeavour to highlight your predicament so that other people can benefit. We strive to reach out to as many people as possible and through collective strength, we can create change for the better. We welcome anyone to link articles to our articles for the benefit of all.

Your humble servant

Your humble servant

However, it is the constant increase in FOOD PRICES that places the greatest strain on the man on the street.

The previous rally in commodities have have ended or at least, corrected and in view of the financial turmoil facing the world right now, world demand for oil is expected to drift much lower, led by America, which accounts for a quarter of the world’s oil consumption (Source: http://www.nationmaster.com).

Price of commodities have dropped, including rice.  As at June 2008, The Straits Times article ‘Price of rice likely to fall in next few months’ quoted that the price of fragrant rice could tumble to US$1,000 (S$1,370) a tonne by year-end, importers forecast.

As at 2nd October 2008, the quote for commercial rice from Thailand is about USD$625 – $690 per metric tonne (which is approximately SGD$940 per tonne). That is a hefty drop in the price of rice. The prices of other food commodities are also falling in tandem, but prices of hawker food still remains high. A bowl of rice used to cost 20cents before the commodities rally, and every hawker took the opportunity during the commodity price rally to increase it to 50cents to a dollar per bowl. Now that commodity prices have fallen, why is it that their food prices still remain high?

An interesting highlight of how much food prices have escalated: With reference to Mr Brown’s article on rising prices: He has commented his roti prata has increased price by 10cents, and that was dated 3 July 2006. During 2006, the cost of a prata kosong was 50cents, fast forward 2 years now it costs from $1.00 to $1.30! and all these within 2 years! The cost of retail food has been increasing at a much higher rate than the price of commodities. So, somewhere along the food chain, the savings from the drop in commodity prices is not being passed down to the ultimate consumers. Someone along the food chain must have been making a tidy profit at the expense of the man on the street.

One would think it is the hawkers that are profiting from this because commodity prices have been dropping but he is still selling at the same high price. Others would think it is the landlord who is profiting from this, because the landlord raises the rent, which in turn forces the hawker to raise the price. Then another group of analysts says that the landlords are forced to increase the rent because they bought the property at high prices (We will talk about property prices and its effect on the ordinary man on the street on a later post). So, ultimately, the source of this rising food prices starts from property prices, which then results in higher rentals, which in turn results in higher food prices and the final consumer suffers the consequences. Of course, along the complicated chain, every party adds on a premium as profit and the cost snowballs to the final consumer by way of a $1.30 kosong roti prata or a 50cents small bowl of rice or 50 cents more for a few strands of extra noodles. Life is becoming more and more difficult for the middle and lower class Singaporean.

What we can do is to highlight the various eateries that charge reasonably cheap food and also those that charge high and yet cut down on the ingredients for the benefit of everyone.

We welcome suggestions and comments of eateries and we will post them for the benefit of all.
Your humble servant.

References:

http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption

http://www.straitstimes.com/Free/Story/STIStory_251740.html

http://www.riceonline.com/uploads/prices2.htm

http://www.mrbrown.com/blog/2006/07/today_sporeans_.html

MP Cynthia Phua also suggested such financial products should be graded and offered to investors who can fully understand the underlying risks.

OK, the above is what that has been printed in the newspapers. So, what is behind the scenes that the ordinary man in the street need to take note of? In www.baokong.wordpress.com, we explain what the layman needs to know:

Firstly, financial institutions are there to make a PROFIT- their FIRST priority is to MAKE MONEY, everything else is secondary. Take their ‘customers first’ marketing with a pinch of salt. If you do not buy investments and insist on leaving money in fix deposits, you can be assured you won’t be their ‘first rate’ customers. If they tell the whole truth to customers, nobody would buy the products, and everyone will leave their money in fixed deposits or under their pillow.

So what these institutions will do is they will put in place a very good system of reporting to MAS that they have forms and brochures that clearly states the risk of each and every product (which comes in small print and SEVERAL pages), that they give AUDITED training to all their sales staff to ensure that they COMMUNICATE ALL RISKS to customers, and they make their sales staff acknowledge and SIGN on the training forms so that if there is any customer complaints, the institutions, by reasonable man’s standards, have certain immunity as they can prove that by way of the above systems, they have done a reasonable man’s standards in communicating the inherent risks to customers.

So this places the onus on the sales staff or bankers, who are given very high ‘revenue targets’ which they have to meet in order to keep their high paying jobs ( In banking, sales staff remuneration are tied to the products they sell – look out for Justice Bao Kong’s future blogs, his servants will elaborate in greater detail how the bankers’ remuneration works, and you will have a better idea why your bankers don’t tell you the whole truth). These poor bankers are coerced to sign on forms provided by their financial institutions which require them ‘to communicate the whole product risks, structure and other terms and conditions’ clearly to customers and they will be LIABLE for any customer complaints of misrepresentation. These poor souls are facing a dilemma: If they tell the whole truth to customers, it is likely they will not get the sale, and thus they do not achieve their targets and they get fired. So, what naturally happens is that bankers will tell selective truths and run through quickly on the ‘risks’ area and cover them up with the potential of returns, etc such that they did communicate the ‘inherent risks’ to customers, albeit not clearly, and customers get the impression of the ‘potential returns’ but not registering the full risks involved due to the clever presentation by the sales staff. Thus, the turnover rate of bankers are extremely high: The only way these institutions can maintain their high revenue targets is to ‘hire and fire’. Sales staff initially start off achieving their targets, and until a few months later, when their customers have no more money to buy investment products, they get fired and new bankers are hired and they bring in their portfolio of customers, sell products, no more money left to buy, bankers get fired, and the cycle goes on. Just ask any investor on the street how many bankers have they had within the same bank in the period of two years? 6 bankers? or 8? That explains it all.

In summary, when planning to do investments, always take responsibility to do research and speak to friends who have experience. The government can only do so much, the onus is on oneself to protect one’s assets and investments. This is the world of capitalism, every man for himself, profits come before compassion. And this is why we created www.baokong.wordpress.com, to help the man in the street understand more and not be taken advantage by hungry capitalistic corporations.

Your humble servantsource: Singapore Straits Times

Your humble servant.

If you are interested in finding more of Singapore, you can find out more by clicking here .

Much have happened in the recent weeks in the financial circles. The origin of the financial turmoil is from the American housing market, where a recipe of cheap money then and the American Dream of house ownership coupled with bankers and mortgage brokers too keen to achieve their sales targets resulted in today’s financial mess. How then, does this result in the failure of 2 of US largest investment banks and the downgrade of the last 2 to commercial banks? How did Bear Stearns and Lehman Brothers go bankrupt? How did AIG, the largest insurer in America go illiquid?

Around midyear 2003, US Fed Fund Rate was a paltry 1% (Source: http://www.wsjprimerate.us/fedfundsrate/federal_funds_rate_history.htm), creating cheap money and liquidity. Previously, it was the bond insurers and experienced traditional investors who maintained a standard of risk management by placing a premium on the loans based on the seller’s credit worthiness or track record. But due to the growing competition and appetite of these mortgage brokers, more and more brokers are creating ‘synthetic ABS’ or CDOs, collateralised debt obligations. The tight spreads on triple B ABS squeezed the traditional bond insurers out of the market, leaving  the subprime securitisation market to the CDO sector.

The problem here is that when brokers package these CDOs, they do not assume the inherent risks involved in the underlying ABS- It is the investors that bear the credit risk. Renowned credit rating agencies rate these CDOs based on the underwriters, ie the mortgage broker or the banks, and they generally obtain very good credit ratings, and they may not rate the underlying asset which are the slices of subprime securities which are difficult to assess due to the intricate layers of packaging.

So, now comes the important part: What your bankers DID NOT tell you:

When investors, especially retirees who invested their life savings, 401k, etc into such structured products, ie minibonds, etc, they are usually not told the whole story. In fact, the name of the product is already misleading. When laypeople hear the word ‘minibonds’ they were given the impression they are buying a double A rating bond linked to the huge investment bank or corporation. What the salesperson may not tell you is that this CDO product is also linked to hundreds of ABS. aka, sub prime securities which are not rated and any credit events occurring on these securities could result in loss of capital.

The salesperson cannot entirely be blamed too. He is also working for a living, and he has revenue targets set by his bank and he will be fired if he does not meet his targets. If the salesperson tells the whole truth to the customer, he will lose the sale and face the possibility of being fired.

Banks make their sales staff sign on declaration forms that on one hand, require their bankers to explain ALL the risks related to the products to their customers, and yet on the other hand, will fire them if they do not achieve their sales targets. This is a fantastic way of protecting the bank themselves while relegating the blame to the sales person if anything goes wrong.  There was an article written by a kind certified public accountant to Monetory Authority of Singapore (MAS) but according to the article, not much has been addressed- I have attached the letter for your reference (source: Today Newspaper)

Why do I know so much about banking products? Because I was a former banker, and I have been through it all, and it is time to share with the masses all that is happening behind the scenes, and share with the man on the street things that your bankers do not tell you.

its way past 2am, and I am very tired, but I make this effort to share with the community what I already know to benefit everyone else.

All comments and questions are welcomed. Thank you.

Your humble servant.

(Source: Today Newspaper)

* disseminate information with the aim of educating and helping the masses and improving their lives

* Assist aggrieved individuals, who have no means of redress, by garnering public support.

In order to achieve the above, we will be posting articles regularly and we hope to reach out to as many followers as possible so as to ensure our mission can be effectively carried out.