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MTN Programs & PPP's etc etc...
enzo
Posted: Wednesday, October 21, 2015
Joined: 4/1/2015
Posts: 6


Has anyone ever made any money from these 'opportunities'? Has anyone ever seen or genuinely met anyone else who has? Do they even exist? Where can I find further information on them if they do or what a proper 'program' should look like?
David Marchant
Posted: Wednesday, October 21, 2015
Joined: 9/13/2007
Posts: 1278


Any scheme that promises you guaranteed high returns is fraudulent. These 'programs' are all scams. Every single one of them, with no exceptions. There's not 'one that works'. That's why the promoters typically hide behind gmail, hotmail or other generic accounts.
enzo
Posted: Wednesday, October 21, 2015
Joined: 4/1/2015
Posts: 6


Thank you for your reply, I wasn't sure if my thread had posted as I could not see it till you replied.

What about a program along the lines of:

1) You open an account with a well known bank in your name only, if you bank with this same bank the funds can stay in your account you currently have.

2) There is an individual who can provide discounted MTN'S or "paper" as they like to call it along with an exit buyer. You have an agreement with them to share any profits etc. You also have an agreement with the bank and the individual that you only want to trade in AA to BBB rated debt.

3) The bank actually do the trading for you, they check that what the individual is supplying is real and is issued by an institution that is rated sufficiently to the agreement you have, if it isn't they won't buy it on your behalf. They also sell it on to the end buyer who has to be sufficiently rated and make sure the instrument is transferred and paid for. The individual providing the discounted notes have no authority to move funds from my account, only the bank staff do.

4) Where is my risk here? The money is in my account, it can only be used by the bank's traders to buy debt which is of a certain credit rating and is real, the responsibility is on the bank to ensure that this is the case. At all times I either have cash in my account or an instrument which is worth at least equal to the cash that I can sell if the end buyer does not.

5) OK the discounted MTN is only worth as much as the financial standing of the institution who issued it but that is covered off by my instruction to just buy from high rated issuers. 

6) The banks traders could be 'in on it' and send funds elsewhere not in accordance to my contract, well that's outright theft by bank staff which anyone with a bank account is open to. You would have thought if this was the case that a large well known bank would make sure that you were repaid quickly if this did happen.

7) The returns are above average but not 100's of percent per day/week/year and I can see how the process would make money if you were making 0.50% three or four times a week say. 

I forgot to mention that you do get to meet everybody involved including the bank who are well aware of what's going on as they are also making money by charging me to complete then transactions.

9) There is no minimum contract or blocking your money or MT 760's or whatever they are called it has to be cash on deposit and the cash is moving out of your account to buy the instrument then the instrument sits in your account then it is sold for cash to the buyer.

10) All the other 'programs' I have come across involved sending your money elsewhere and alarm bells start ringing, usually no one in the chain are regulated by any financial authority and yes you are right they all deal in €billions from gmail email addresses and always have meetings in hotels!!! 

I am just curious as to what could go wrong in the brief outline of the above scenario and also interested as to whether MTN'S and other such instruments can be bought at a discount and sold on quickly generating a small profit on each transaction.


enzo
Posted: Wednesday, October 21, 2015
Joined: 4/1/2015
Posts: 6


I apologise for any spelling mistakes and the man with the sunglasses on! I typed my message on my phone and it was hard to check for errors!,,
David Marchant
Posted: Wednesday, October 21, 2015
Joined: 9/13/2007
Posts: 1278


It's all nonsense. If you become involved in this, the risk is 100%, i.e. it's guaranteed that you will lose your money. These 'programs' are all bogus.

Even with legitimate products, your investment might go up, down or stay the same. No-one knows in advance. You only know after-the-fact.


enzo
Posted: Thursday, October 22, 2015
Joined: 4/1/2015
Posts: 6


I think it's a bit of a sweeping statement to say it's ALL nonsense. Please explain how all this 'money creation' has worked over the years! What is the process of 'printing money' or stimulating the economy? Quantitative easing and the like seems to be the biggest ponzi scheme of all time operated by governments and countries yet no one thinks well what would happen if everybody wanted their cash on the same day or if they actually had to pay the capital back on this debt rather than just the interest!!!
enzo
Posted: Thursday, October 22, 2015
Joined: 4/1/2015
Posts: 6


Also I am not talking about a traditional investment product such as investing in a fund etc. I am talking about buying something for 99.5% of its value and selling it for 100% of what it's worth. Like a shop buying an apple for 99.5p and selling it for a quid. Even if it is all nonsense please explain how I can lose my initial capital in the above outlined scenario.
David Marchant
Posted: Thursday, October 22, 2015
Joined: 9/13/2007
Posts: 1278


The only thing anyone needs to know about investing is that, with a legitimate investment product, no-one knows whether your investment will go up, down or stay the same. It doesn't matter whether it's real estate, shares, bonds, baseball cards or marbles. That is a fact of life. So, if doesn't matter how your investment product is structured, if someone is leading you to believe that you are guaranteed to make a profit, they are either lying to you or they are incompetent. On a final note, you stated in your email that "I am talking about buying something for 99.5% of its value and selling it for 100% of what it's worth". That's an impossible scenario. If you are buying something for 99.5% of its face value then, by definition, you are buying it at 100% of its market value. Market value is the only thing that matters. Face value is irrelevant.
enzo
Posted: Thursday, October 22, 2015
Joined: 4/1/2015
Posts: 6


"So, if doesn't matter how your investment product is structured, if someone is leading you to believe that you are guaranteed to make a profit, they are either lying to you or they are incompetent."

Are you saying that absolutely NO arbitrage opportunities ever exist in the financial world? Or in the normal world for that matter? I cannot believe that any financial market or system is 100% efficient to the point where everything is correctly priced all the time! I once read a book called 'Fast Boys' about a cable that was installed between New York and Chicago (I think) which sole purpose was to speed up the time it took to execute trades between the exchanges and for dealers to 'front run' the market and take advantage of arbitrage opportunities which may exist for fractions of fractions of seconds to enable a guaranteed return on their money. (Usually disadvantaging the normal members of the investing public in the process might I add!!) The cable allegedly cost millions of dollars to put in and the author thought that they were making between $5-$15 billion a year from this activity. Maybe it was all rubbish and I'm naïve in thinking it was right but I think it is/was a true story. Anyway this has gone a bit off topic, thank you for your input I think I need to do some more due diligence on the opportunity.


David Marchant
Posted: Thursday, October 22, 2015
Joined: 9/13/2007
Posts: 1278


Opportunities exist everywhere, including arbitrage. But none of them are guaranteed to be profitable - literally not a single one (unless you're doing something illegal like insider trading, which George Soros was criminally convicted of in France, by the way). Show me a trader who is consistently profitable and I'll show you someone who is doing something illegal. The reality is that no-one knows in advance whether a legitimate investment product will go up, down or stay the same
 

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