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Amber Gold and other Poland's suspicious institutions


jon357  72 | 22781  
9 Aug 2012 /  #31
be compared with the financial position of someone who buys himself a house or a flat.

I suspect a lot had to do with the selling. Personally of the people I know who have said they are in trouble, all have foreign currency mortgages.

If you look at the statistics, you will see that there are much less Swiss frank or Euro mortgages in trouble as compared to those in Polish zloty

This is true. In Warsaw, there was almost a mania for buying second properties as buy-to-let which is financial speculation. The people I feel sorry for are those who only own one flat and were missold mortgages in currencies they don't earn.
OP pawian  219 | 24604  
9 Aug 2012 /  #32
I could never understand that as well. My mortgage is in PLN - it just doesn't make sense to borrow in a different currency when you have no real idea of how it could go, especially with a very young currency like the PLN.

In 1990s Swiss frank mortgage was a much better option than PLN. Ziemowit explained it well.
bullfrog  6 | 602  
9 Aug 2012 /  #33
Its a shame that these people were not offered "Tracker mortgages"at the time (2007-2008),

No. Although the outcome would have been positive, because of the lower interest rates today, the amount of risk you take on initially is the same; your repayments depend on a parameter that you cannot master, the level of interest rates. The only mortgages that should be offered to the majority of the population are ones with fixed interest rates over the whole life of the mortgage; it is not the "average joe" 's remit to speculate on/hedge interest rates, that is the banks role

As a result, things have returned more or less to normal for Polish Swiss franc mortgage owners.

You must be kidding, with a CHF/PLN at 3.38 versus 2 at the time??
Avalon  4 | 1063  
9 Aug 2012 /  #34
it is not the "average joe" 's remit to speculate on/hedge interest rates, that is the banks role

Hedge/speculate? where is their risk when they fix the libor rates? The banks cannot lose because they never play fair.
Ziemowit  14 | 3936  
9 Aug 2012 /  #35
You must be kidding, with a CHF/PLN at 3.38 versus 2 at the time??

What does it mean "at the time"? At which time? The CHF/CHF at 2 did last for a very short period only, so it is unfair to point to this particular, the lowest ever since 2001, ratio as a benchmark.

When I said "things have returned more or less to normal", I meant the sort of new "balance" that was established on a much higher level, of course, roughly around the 3.33 peak onto which it climbed steeply in February 2009 from its lowest at 1.96 in August 2008, but less than the 4.11 peak of 10 February 2011.

edit:I don't understand why the chart has not shown itself :-)
bullfrog  6 | 602  
9 Aug 2012 /  #36
What does it mean "at the time"? At which time? The CHF/CHF at 2 did last for a very short period only, so it is unfair to point to this particular, the lowest ever since 2001, ratio as a benchmark

KNF put severe restrictions on the distribution of CHF mortages around nov 2008. For the 2 years prior to this, sales of CHF mortgages had vastly outnumbered those in PLN, while CHF/PLN oscillated between 2.50 and 2 (2 being reached in July 2008). Even taking 2.50 as a reference, that is 50% below the 3.38 rate. A heck of a drop by any standard..

Hedge/speculate? where is their risk when they fix the libor rates? The banks cannot lose because they never play fair.

Well, if ever this story comes to and end and banks get sanctioned (in addtiion to Barclays), some people might be in for a shock. As the press reporting has amply shown (see FT), the BoE was, with a nod and a wink, pushing banks to lowertheir LIBOR estimates, in order not to show that they were having difficulties in getting interbank financing. during the height of the crisis So if redress is sought, the new estimates should be higher.. Guess what will happen to millions of people in the UK who have mortgages indexed on LIBOR??
cms  9 | 1253  
9 Aug 2012 /  #37
In 1990s Swiss frank mortgage was a much better option than PLN. Ziemowit explained it well

Yes and in 2008 or 2009 then returns on gold probably were much higher than returns on bank interest, shares, bonds, property or any other asset class. Coincidentally the same time these gold deposit shysters entered the market.

The principle is exactly the same - people who signed swiss frank mortgages thought they were able to circumvent economic reality but over a 25 year period were sure to come unstuck. By the way there was an interesting article in last weeks GW that some banks were calling people who had more expensive swiss frank mortgages and asking them to provide extra collateral.

I havent seen the statistics showing pln mortgages to be more underwater than swiss ones - where was that published.
Ziemowit  14 | 3936  
9 Aug 2012 /  #38
By the way there was an interesting article in last weeks GW that some banks were calling people who had more expensive swiss frank mortgages and asking them to provide extra collateral.

That's just what I mentioned in one of my preceding posts.

The problem now is that banks demand of many (not all) of the Swiss franc mortgage owners to repay some of the debt or buy an additional insurance even if they pay regularly to the bank since the value of their house or flat has gone down and does not cover the value of their mortgage.

delphiandomine  86 | 17823  
9 Aug 2012 /  #39
I havent seen the statistics showing pln mortgages to be more underwater than swiss ones - where was that published.

As an interesting aside, the WIBOR seems to be creeping up recently. Wonder if this will prompt a interest rate cut, like they've been speculating about for a while?

The principle is exactly the same - people who signed swiss frank mortgages thought they were able to circumvent economic reality but over a 25 year period were sure to come unstuck.

That's my logic behind having a PLN mortgage - I earn in it, so I know exactly how much I need to earn in it to repay the mortgage. Being at the mercy of the easily-manipulated FX market when earning in a minor currency just seems senseless.
Grzegorz_  51 | 6138  
9 Aug 2012 /  #40
Didn't son of Tusk work for them ?
bullfrog  6 | 602  
9 Aug 2012 /  #41
That's my logic behind having a PLN mortgage - I earn in it, so I know exactly how much I need to earn in it to repay the mortgage.

That's plain common sense

Even taking 2.50 as a reference, that is 50% below the 3.38 rate.

Before any one intervenes, it's not a 50% drop but a 35% drop. Apologies. Still a sharp drop..
SeanBM  34 | 5781  
9 Aug 2012 /  #42
After all ,we are talking about sth which doesn`t pertain to reality anymore.

Pity, I was just going to call my private banker and take out a mortgage @ 6% (all in) and just sit back and watch the money roll in.

7% return for doin nada, not bad.
sobieski  106 | 2111  
9 Aug 2012 /  #43
Didn't son of Tusk work for them ?

Ahh, I was just waiting for such a moronic remark. You forgot to mention Jews/Palikot/liberals :)
Tusk's son works the Gdańsk Airport Authority.
Maybe we could have a talk about Maria Kaszyńska's husband shady business connections, then ?
SeanBM  34 | 5781  
9 Aug 2012 /  #44
The Chairman[25] of Amber Gold, Marcin Plichta, is a former bankrupt and was also convicted of embezzling 174,000pln from 400 customer of his previous business, Multikasy, in 2008[26]. He was given a 10 month sentence, suspended for 2 years. After the conviction he changed his name from Stefanski to Plichta.

en.wikipedia.org/wiki/OLT_Express#Amber_Gold_financial_questions
OP pawian  219 | 24604  
9 Aug 2012 /  #45
Ahh, I was just waiting for such a moronic remark.

:):):):):)

Moronic vs funny.
bullfrog  6 | 602  
9 Aug 2012 /  #46
2 things I don't quite grasp:

1) is Amber Gold a bank or not (someone referred to it as a 'parabank')?
2) if not, how can they be allowed to take deposits from the public?
3) if yes, how can a former bankrupt be allowed to run a bank? I thought the vetting process of KNF was quite severe..
Grzegorz_  51 | 6138  
9 Aug 2012 /  #47
You forgot to mention Jews/Palikot/liberals :)

I checked it, sorry he didn't work directly for Amber Gold but for OLT Express owned by Amber Gold.

Tusk's son works the Gdańsk Airport Authority.

So he works for a public compnay. Excellent.
OP pawian  219 | 24604  
9 Aug 2012 /  #48
1) is Amber Gold a bank or not (someone referred to it as a 'parabank')?

Me! Me!

Enraged clients accuse the Polish authorities of having ignored the parabank`s suspicious activities.

2) if not, how can they be allowed to take deposits from the public?

Look, if one day I start collecting deposits from people living in my street, with all formalities fulfilled, who forbids me to do it?

3) if yes, how can a former bankrupt be allowed to run a bank?

That would be impossible in communism, indeed.

Fortunately, we have capitalism. :):):):)

So he works for a public compnay. Excellent.

And one day JKMikke inserted a bayonette into his stomache.

An interesting interview with Gwiazdowski, a financial expert:

1. The authorities had no legal right to meddle into Amber Gold`s functioning. Only when a client reports his/her case to prosecutors, action can be taken.

2. Parabanks and financial pyramids have duped people for centuries all around the world.
3. People like being duped. Madoff managed to dupe not only common investors but also big institutions like major state banks etc.
4. Actually, modern finances are based on one giant pyramid. It also refers to state banks.
bullfrog  6 | 602  
10 Aug 2012 /  #49
Look, if one day I start collecting deposits from people living in my street, with all formalities fulfilled, who forbids me to do it?

In most countries (and I think that includes Poland, hence my questions), non banks are forbidden from taking deposits from the public. The quidproquo is that should a bank go bust, deposits are reimbursed through a guarantee scheme (to the tune of 50 k€, I think)

Fortunately, we have capitalism. :):):):)

People managing a bank have to be individually approved by the KNF, and a bankrupt would never get approval.
OP pawian  219 | 24604  
10 Aug 2012 /  #50
most countries (and I think that includes Poland, hence my questions), non banks are forbidden from taking deposits from the public.

I don`t think so.

Various institutions operate in the market and act as banks and the only difference is that some are licensed by the state while others aren`t. That`s all.

I don`t need to get a license from Financial Supervision Authority to collect deposits from the people in my street. I can start doing it tomorrow.....

The quidproquo is that should a bank go bust, deposits are reimbursed through a guarantee scheme (to the tune of 50 k€, I think)

Yes, but it doesn`t work for parabanks and people who deal with them should be aware of it.

People managing a bank have to be individually approved by the KNF, and a bankrupt would never get approval.

That `s why Amber Gold is a parabank without a license.

Such things can be checked. But greed blinds people.

lokaty.wieszjak.pl/warto-wiedziec/307214,Polacy-nie-odrozniaja-banku-od-parabanku.html

On the whole, Amber Gold scandal is a good warning for people.

But I am sure in a few years` time we will hear about another scandal and the thread wil continue..........
bullfrog  6 | 602  
10 Aug 2012 /  #51
I don`t need to get a license from Financial Supervision Authority to collect deposits from the people in my street.

Unfortunately,that's wrong:
1) In most countries, you can only start a bank if you are approved by the banking regulator
2) to take deposits from the public, you need to be a bank

en.wikipedia.org/wiki/Non-banking_financial_company
OP pawian  219 | 24604  
10 Aug 2012 /  #52
Come on, bank or non-bank/parabank, it is all the same.

the only difference is that some are licensed by the state while others aren`t. That`s all.

That `s why Amber Gold is a parabank without a license.

Your link
NBFCs offer most sorts of banking services, such as loans and credit facilities, private education funding, retirement planning, trading in money markets, underwriting stocks and shares, TFCs(Term Finance Certificate) and other obligations.

And if you mean this:
However they are typically not allowed to take deposits from the general public

You need to quote from the Polish site.

Like this one:
pl.wikipedia.org/wiki/Parabank
cms  9 | 1253  
10 Aug 2012 /  #53
The authorities had no legal right to meddle into Amber Gold`s functioning. Only when a client reports his/her case to prosecutors, action can be taken.

This is one that really surprizes me. My own business trades a lot of forex and we get inspections almost every year from the NBP (not the KNF admittedly). We have done nothing wrong and nobody ever made a complaint but they always say they have the right to inspect us whenever they want.

But here is an organization that is taking deposits which to me is clearly against the law but they are saying they are powerless to inspect it !
OP pawian  219 | 24604  
10 Aug 2012 /  #54
I advise you to read The Godfather. A fascinating book about US finances in the past. Years passed, but it is still valid stuff. I read it a dozen times and today I know everything about investing. :):):):) That`s why I didn`t fall for those Madoff or Amber Gold acts.
bullfrog  6 | 602  
10 Aug 2012 /  #55
Come on, bank or non-bank/parabank, it is all the same

So one thing and the opposite are the same? Pawian, you have just created by yourself a whole new branch in logical science !!

You need to quote from the Polish site.

Here it is, the link to the KNF's site which states clearly that without a banking licence organisations are not allowed to take deposits from the public

knf.gov.pl/en/About_us/Public_warnings/index.html

But here is an organization that is taking deposits which to me is clearly against the law but they are saying they are powerless to inspect it !

Indeed. What is surprising is that Amber Gold, like a few others, is clearly listed on the KNF's site as an organization taking deposits without the appropriate banking licence. That in itself should have been sufficient for the Prokurator to visit them ..
OP pawian  219 | 24604  
10 Aug 2012 /  #56
Pawian, you have just created by yourself a whole new branch in logical science !!

Stop squabbling about the names. Be more mature - we are talking about practice, not theory now. :):):)

Here it is, the link to the KNF's site which states clearly that without a banking licence organisations are not allowed to take deposits from the public

So it is done in another way. Clients sign perfectly legal contracts with the parabanking institution and they lend their money to it.

m.onet.pl/biznes,7dfen

4 paragraph from the bottom.

What is surprising is that Amber Gold, like a few others, is clearly listed on the KNF's site as an organization taking deposits without the appropriate banking licence.

Legally, everything is all right.
Ziemowit  14 | 3936  
10 Aug 2012 /  #57
That in itself should have been sufficient for the Prokurator to visit them ..

It should have been sufficient for him to visit them. But it wasn't! What's more, Mr Amber Gold the President shouldn't have been allowed to register his new company in court (KRS) since he was sentenced five times for financial fraud before it (though only one sentence should have been sufficient to forbid him from doing so for the five following years from the verdict).
bullfrog  6 | 602  
10 Aug 2012 /  #58
I agree Ziemowit, someone did not do their job properly there. I just hope that consequences are drawn and whoever was too lazy/incompetent is fired!!

Legally, everything is all right.

Sure . All hunky dory in cloud cuckoo land!!
OP pawian  219 | 24604  
10 Aug 2012 /  #59
Sure . All hunky dory in cloud cuckoo land!!

Various things happen here and there:

In 2004 Genevievette Walker-Lightfoot, a lawyer in the SEC's Office of Compliance Inspections and Examinations, informed her supervisor branch chief Mark Donohue that her review of Madoff found numerous inconsistencies and recommended further questioning. However, because of agency pressure to investigate the mutual fund industry, she had to conclude...

en.wikipedia.org/wiki/Bernard_Madoff
Ziemowit  14 | 3936  
10 Aug 2012 /  #60
I wonder all the time if Amber Gold started to pay out deposits to their clients yesterday as they had promised before. I am inclined to think they eventually did as there was no information about it on a TVN CNBC Polish business channel all evening. Indeed, the fact they were doing so would have been no news for anyone except Amber Gold clients.

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