Maybe I am missing something. Or maybe something is amiss? But my basic maths and logic tell me it simply doesn't add up. Perhaps Wall Street and the banking institutions have not taken stock of the recent situation, or they are replacing one stock with another.
Citigroup's US$2.2 billion offer to buy Wachovia's banking operations is a case in point. After Wells Fargo was cleared to buy the entire company for US$11.7 billion, Citi said it would sue Wachovia for US$60 billion in damages for breach of contract. If Citi thinks Wachovia could possibly pay out US$60 billion, why did it offer a meagre US$2.2 billion to acquire the better part of this bank?
Clearly, the US financial industry is still of the same mentality as before the financial crisis: reap the greatest profit and secure the best deal it can, rather than seeking a 'fair' deal.
Now, let's turn to Hong Kong's situation. Since when are our banks allowed to use private information to profile customers to try to sell them various products? When you open an account and make a deposit, you expect those details to remain private, only known to yourself or anyone you deem relevant. But the banks' sales teams have been using such information to analyse your net worth or spending habits.
Should you have money sitting around, someone from the bank would find an appropriate product and try to sell it to you. It seems that such products have been structured specifically to scoop up small investors who do not understand the risks involved, whereas big investors would be too savvy to get involved. That may explain why those burned by the Lehman-backed minibonds are from all walks of life.
I imagine that credit card issuers use the same techniques to understand your spending habits and financial vulnerability, and use that information to their advantage. Perhaps our government will now put forward laws to curtail such abuses of private account information.
For those with wealth just sitting around, be it in the form of cash or some other liquid asset, the worry may be what to do with it. These people may also wonder what the pieces of paper they hold are worth. What is the best way to preserve wealth or, better yet, achieve some growth? A very select few may be able to take this opportunity to rethink what they do with their money - perhaps spend or invest in something totally different; something that would deliver value, but not necessary more paper wealth.