Equitable Life

[RogerM]

The verdict on Equitable Life is out this afternoon, and whilst I hesitate to make a prediction, particularly one involving the future, I confidently expect it to lead to an offer of compensation to policy holders from public funds, although possibly not immediately.

Why? The main target for Equitable Life salesmen was the professional community, particularly doctors, directors of large companies, the legal profession and accountants. These professions account for the vast majority of MPs,so it stands to reason that a large proportion of MPs will have Equitable Life Policies themselves.

So - case solved. Parliament will vote for compensation, there will be no opposition from any of the opposition parties, and the result will be presented as a triumph of MP's taking the interests of the general public to heart.

Now please excuse me while I go and throw up!

 

[bracke]

RogerM

Your post is the most optimistic that I have seen on this site for some while. I heard on the news earlier today that the cost of compensation would be approx £4 Billion. What chance that Gordon is going to give that to anyone let alone a group of people who are regarded as the better off

Your optimism does you credit but I suggest it is overly so.

Regards

bracke

 

[RogerM]

bracke - my view is bred from pure cynicism. I never cease to be amazed by the extent to which politicians will feather their own nests at the expense of the rest of us.

When Labour came back into power in 1997 the first thing they did was to increase the pension benefits for MPs from an already generous 1/50ths scheme to an even more generous 1/40ths. That's a 20% increase. This gives them a maximum pension after only 26 years. The justification was that MP's have no job security - they can be thrown out at any General Election. Well, that gives them 5 years job security - rather more than the rest of us have I think? And was there an outcry from the opposition? Nope - just a deafening silence.

And this from a gov't that has killed off the final salary pension scheme for the rest of us!

 

[Thirteen]

Quote:
I never cease to be amazed by the extent to which politicians will feather their own nests at the expense of the rest of us.

yea right on! look at iraq war - all to benefit a couple of bush's oil company exec buddies. off thread - sorry, but shows the problems are bigger (like every thing else) here in the usa.

 

[Mayfly]

Hi Roger,

Acres of space devoted to this dismal story in the broadsheets this morning, as you correctly forecast.

I don’t suppose you, or anyone else here, have access to source data for ASX with dividends re-invested by any chance? If so, I’d be grateful if you could post a link or pm me with the data.

TIA

Mayfly

 

[Rainmaker]

Read Penrose. Amazing stuff!

Why oh why did the auditors get off so lightly. IF management were withholding information from the board, then don't the auditors have a role in balancing this, I agree that the implementation of checks and balances are a board and management responsibility, but what use is the audit report in that case??

Ernst & Young have very deep pockets and cannot be allowed to get off so lightly.

 

[Mayfly]

Rainmaker,

According to the white Times, they've filed a £2.6 billion lawsuit against Ernst & Young and rather pointlessly - one for £3.2 billion against the former directors.

But, we've known about these for some time.

Cheers

Mayfly

 

[Rainmaker]

I thought Penrose should at least have helped the case by pointing the finger at the auditors. You really have to question the point of an external audit if it is not to expose such failings in the financial statements and controls.

 

[chump]

The primary thing about this reporting exercise is it shows you how pointless it is to wait for anyone other than yourself to manage your wealth.


Cheers

Steve

 

[BBB]

Quote:
The primary thing about this reporting exercise is it shows you how pointless it is to wait for anyone other than yourself to manage your wealth.


Well said Chump! A winning attitude if there ever was one.

The quicker people understand and appreciate the depths of corruption in the legal and financial industry the better. Interesting interview on C4 news last night where it was proved the FSA are a complete waste of space and tax payers money

 

[chump]

I look at this as commonsense. If you stand aside in the expectation that someone somehere is going to put you in the place that you want to be/ have a right to be/should be .Then you are mistaken in your reasoning. They will put you in the place that they want you to be.

Take this in the context of your ability to maintain your desired standard of living ,or anything else in your life for that matter.


Cheers

 

[bracke]

RogerM

I understand your cynicism and hold similar views but MP's have their own pensions nicely sorted I don't think that they will push too hard to compensate Equitable Members.

If any compensation is to be initiated by government it is more likely that they will get the insurance industry to bear the cost one way or the other.

Regards

bracke

 

[BBB]

YES YES YES!

It's either me or you SUCKER! and I'm going to fight tooth and nail to make sure it ain't me! Listen kiddo, go to school, learn MY rules and just do what I say. Dont ask questions. Go push a pen or go click a mouse for the rest of your miserable life. Save up for what little happiness you may have in the winter of your life and then I'll take that from you too. You cant touch me because I have a mountain of regulation and laws protecting me from insignificant little people like you. In return, I'll give you a handful of change, so you can stand in a queue at Ikea all weekend because I told you to do that as well (from my pals down at the TV company and newspapers whom I also finance).

Jesus on a bike - life must suck for some people - the bitch is - they don't even know any different - so they are happy!

Congratulations to every one who learnt to trade and support themselves. Sure, the drawdowns suck, but it could be worse - and for those of you still learning - keep at it!

 

[RogerM]

bracke - I'm not expecting anything so overtly partisan as MPs voting for a motion to compensate EL Policyholders directly. What is more likely imho is a series of legal actions against either the auditors or the management. If this pushes EL under, then the Policyholders Protection Act comes into play, and compensation of up to 90% is then paid from the public purse.

This story will run and run - could take years!

 

[bracke]

RogerM

I understand your reasoning and the same thought had occured to me but my understanding was that the Policyholders Protection Act was not retrospective and would not offer compensation to the policyholders

I also thought that the 90% rule had a ceiling but I don't what the figure is.

Regards

bracke

 

[Rainmaker]

I agree with the general sentiment of "caveat emptor", but in order for that to be effective, one needs a far better educated buying public (absolutely no hope of that!), much more honesty from the financial services industry (huh!), much simpler products and better quantification of risks and returns.

My objection to the whole Equitable chain of events is around the following points:

1. The value of the external audit, if it cannot provide the board and members with an independent view on the financial statements and systems of control.

2. The actuarial bandwagon, who were firmly stuck in the investment/inflation/ interest rate assumptions that looked back over an inappropriate period.

3. The false comfort given to members by the regulatory regime. Surely it is not up to individual members to become part-qualified actuaries in order to understand the risks and returns in the Equitable balance sheet. What is the point of the regulator? And I think it is not a political issue - I think if the FSA had existed then, things would have been little different. The total cost of regulation in the UK is immense (I have seen the FSA and individual company figures) - what do we get in return?

End of rant for now!

 

[Mayfly]

From today's Telegraph:

http://www.telegraph.co.uk/money/ma...d=242&sSheet=/portal/2004/07/23/ixportal.html

Is this a result?

Cheers

Mayfly

 

[RogerM]

bracke - I'm not expecting anything so overtly partisan as MPs voting for a motion to compensate EL Policyholders directly. What is more likely imho is a series of legal actions against either the auditors or the management.

This story will run and run - could take years!

Ahem! Mayfly - you heard it here first. I still stand by the comments I made in my opening comments on this thread, and for the same reasons.

 

[Mayfly]

Hi Roger,

I did indeed! I've got to say that I've got total confidence in your judgement on this issue! And hope springs eternal, as they say? Well, it'll be a bloody long wait if you ask me?

Cheers

Mayfly

 

[bracke]

RogerM

Was that you I heard coughing.

I still do not think that Mr Brown will shell out 4 Billion to compensate the better off. If anyone is going to pay it will be the Insurance industry, but I await events with interest.

Regards

bracke