Monday, July 18, 2005

Stand Up and Be Counted!

We've been hearing a lot of varied opinions from both sides of the debate. In order for us to get a better understanding of what the true wishes of the majority are, we have decided to organize a poll. So we encourage all of you to speak up and let your voice be heard!

You can only vote once in this poll so think your decision through before clicking to vote!

Now that we've read all issues surrounding Pacific Plans, what course of action do we take?
I want to see wrongdoers punished and am willing to put my plan at risk, in whole or in part, to see justice meted out.
I have lost my faith in the company and it is in my best interest to listen to any suggestion that allows me to get my money back now.
I have lost faith but willing to work with the company so that I can get my principal back with some interest.
I am disappointed but i wish to continue my plan and business relationship with the PPI.

Wednesday, July 13, 2005

Picking Up the Pieces - Planholders Are All In the Same Boat

Editor's Note:

For the general readership. As we've said on many occassions, this website is meant to engender well-reasoned debate and research. As you've seen in the previous comments, other planholders have asked how they should think about their situation relative to the trad planholders. The latest series of posts are well researched pieces as the editors are not given to frivolous and irresponsible analysis nor speculation.

Divergent views have never been feared by this weblog. However, it is our prerogative to delete comments that do not contain any hint at all of diligent research. We need to move on beyond emotional tirades and focus on cold and hard facts in order to arrive at the concrete set of actions.


Other issues for other planholders to consider:

a) While the idea of putting up an escrow for planholders that have premium payments was emotionally appealing, it may likewise be nonworkable. This is due to the simple fact that we once again have to deal with contracts. In the planholders' existing contracts with PPI, there is no mention of conditions when escrow accounts can be activated. Given that fact, it is unlikely that PPI will accede to operations and initiatives that fall outside of the contract.

b) Let's assume that the trad planholders are paid off in full this year by PPI to shut down this debate on default. That is merely postponing the problem for next year because PPI will yet again have to pay out in full. If they continue to adhere to good business practice, they will preserve their credit standing since this is what PPI needs to continue to convince people to continue buying products for them.

Think hard about this one...who will buy insurance or insurance-like products from a firm that is defaulting? That will mean PPI will continue to pay off all current and maturing obligations IN FULL. In other words, the trad holders will still end up getting their full benefits.

So let us turn the problem on its head. If the trad holders keep their composure and continue to demand full payment, they will be eventually kept whole. It is the other planholders who now have to face the uncertainty of what PPI will have to resort to in order to stave off perennial default situations.

So again, we pose the question. Are not all planholders in the same boat? For the lawyers and finance people in the readership, the situation is totally binary. Do you believe that the planholders hold on to different classes of claims versus PPI or is it just one class?

From the previous posts, it is clear that we believe that it is only one class of claims.

We welcome any logical arguments to the contrary.

Tuesday, July 12, 2005

Picking Up the Pieces - All the Planholders Are In the Same Boat

Judging by the comments to the last three posts, there seems to be a general feeling of unease as well as impatience on the next steps to be taken.

Prior to the SEC revocation, the battle lines were very clearly marked as well as the offensive moves to be taken. However, it can be said that the success the coalition scored with revocation has brought its own set of complex issues.

Much care and time has been spent in examining the new issues as well as the new concerns brought up by the commentators. At this point, we believe we can state the following since these can be supported with very tight analysis:

a) The selective default situation cannot be allowed to fester. Each day that passes that this situation is left unchallenged creates legal precedents that will make it easier for YGC to default on its obligations to other creditors;

b) The trust agreements are revocable in nature. It is an illusion for the other planholders to think that their particular plans have been "firewalled" by YGC. There is only a single trustor for all of these agreements. At any point in the future, YGC can revoke these agreements and rejuggle the holdings as they see fit. While this may sound inflammatory, it only does so because of the loss of trust that YGC has experienced. If YGC still enjoyed the confidence of the investing public, there would be no questions regarding this ability to rejuggle investments since this is not only the prerogative but the duty of YGC to make sure that the best possible returns are always being achieved by the investment pool(s).

c) As difficult as it is to swallow, it is the who are unavailed or have continuing payments that have the worst of all positions. They face unquantified risks and major uncertainties because default has not only happened but is the preferred strategy of YGC.

From the above points, there is actually commonality of interest FOR ALL PLANHOLDERS. We are all now dealing with a single which is behaving badly and which is creating serious questions about its viability as a going concern.

It is now time for all PLANHOLDERS to step back, take stock, and if they find the above to be the case, to start taking concrete and concerted action.

Friday, July 01, 2005

Picking up the Pieces - Initial Round-up of Suggestions

As stated in the previous post, there is a need to continue looking at solutions and suggestions since we cannot live in limbo:

From the posts, we have culled the following comments which could use further exposition:

a) An analysis was submitted which argued that the PPI customers who are worst off are those that still have subscription payments to make, regardless of the plan. And their dilemma is that of continuing to make payments in the face of a company that has already defaulted on its current obligations and may be setting up precedents on the issue of selective default with each passing day. The analysis concluded that the solution to dilemma was to liquidate the company. While it is a depressing prospect, it stops the uncertainty and unquantified risks that are accruing to those planholders.

b) One recommendation was to look into a management takeover of PPI, again as a result of the defaults. There are cautionary opinions regarding the feasibility of such a move if the takeover team will come from the coalition who, presumably, ave existing engagements;

c) Another recommendation was to use the power of aggregation to get better deals on investment products such as government securities. The concept of a cooperative has been put forward;

d) Another observation was to encourage / challenge financial institutions to offer "self-service" investment facilities so that customers can buy investments such as Treasury bills themselves in small amounts with small brokerage commissions rather than the hefty spreads as well as minimum lots that are the industry norm.

Let us see if we cannot continue to develop these and other ideas further. "If you want to get things right, you have to do it yourself" said one of our commentators. We wish that this did not have to be the case with respect to the management of our savings. However, the recurring sentiment is the loss of trust and the abovementioned items are evidence of that.

Have a good week-end.