As a major financial center in the world, the financial tsunami triggered by Lehman Brothers’ bankruptcy hit the city badly. On sept 18, the Hang Seng Index (HIS) dived about 1,300 points in the morning and touched 16,283, but due to Chinese and Hong Kong government's joint intervention, it rebounded 1,566 points in the afternoon. Although the stock market seems to be stabilized, investors of mini bond issued by the Lethman Brothers were afraid that they might lose their saving forever.
During the weekend, more than 500 investors demonstrated in the street calling the government to intervene. CC wrote a letter to the Government Finance Secretary Tsang Chun Wah and posted it in his blog:
Like some five hundreds investors demonstrated on the street today, I am also one of the victims who bought the mini bonds and affected by the collapse of Lethman Brothers. We are terrified and in deep anger that our hard earned savings may be vanished and gone forever. No one seems to know what's going to happen to our money. SFC has requested Lethman Brother to provide Q&A to the investors but nothing so far is seen or heard from Lethman. I have asked my bank the same question all they can tell me is either don't know or ask me to wait. I can't imagine any world class finance infrastructure will allow potential high risk, hazardous and irresponsible company like Lehman to walk away and worse still no one seems can or know how to take any proactive remedial action.
We really appreciate if the government can offer more help and take a leading role to protect the mini bond investor's interest.
Wanszezit is in sympathy with the small investors and criticizes the finance institution which has misled their clients in the investment:
INFI connects the poisonous milk scandal with the finance tsunami and stresses the importance of corporate social responsibility.
In the past two weeks, the manufacturers of milk powder, the PRC General Administration of Quality Supervision, Inspection and Quarantine, the finance institutions in US and the Washington U.S government, all of them are in trouble. Moreover, all of them have lost their credibility, people are very skeptical of what they said.
The poisonous powder with melamine have put the public health at risk, more and more milk products have been affected. People are very anxious about the situation. The finance tsunami, together with the Subprime problem, indicated that there are too many risky investment tool being marketed and manipulated by investment banks. Now the bubbles burst out. The situation has worsen as many corporates cannot pay off their loan. In the end, the Washington government which has been upholding the free market principle has to use tax payers’ money to save the market. The most ridiculous thing is, the debt of corporates have to be shouldered by people's hard earned money. Is this reasonable?
To build a trusted relation takes more than a decade, to ruin it, just a click. It is absolutely ok for corporates to pursuit profit, but if they disregard their social responsibility, they will just ruin themselves.
Diumanpark noticed that economic liberals in local newspapers have shifted their opinions to support government intervention and he is frustrated with the double standard:
Well, so if we help the weak in our society, they said it would had bad impact to the market. Now that the government use cash to self the stock market, intervene private corporates’ businesses, they encouraged the government to act fast. In other words, when the capitalists gain profit, a small increase in public expense is condemned as market intervention, but when they lose, they ask for help. If you said you could help them because that's market intervention, they would then say: if you are late in saving the market, the result would be disastrous.
I am such an economic dummy, how can I not understand such logic? How can I not understand “saving the market” is not equal to “market intervention”.
The substantial effect of the Finance Tsunami on the economy is yet to come. Charles mok anticipated that the negative impact would be more serious than the attack of SARS (Severe acute respiratory syndrome) in 2003 and he urged the government to develop I.T public service and prepare for the future.