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Take the Money and Run

by Harun Rashid (Jan 14, 2002)

Writers of commentary generally have no arcane sources of information. They differ from the average interested citizen who reads the newspapers only in an excess of enthusiasm for current events. After looking around the local and world scene at the recent reports of objective jouralists, commentary writers are distinguished by the seizure that strains them, relieved only by writing something that seems to make sense of it all. The intended audience is themselves, and any sharing that may follow is a form of communion with one's fellows. In this sense such scribbling is a solitary social event.

Writing a commentary on current affairs is refreshing in its simplicity. It provides satisfaction nothing else can. Once a new article is finished one can sit back with a cup of coffee and begin the process of revision. There is little difficulty to write an article on current events. Malaysia daily provides sufficient material for numerous subjects that can be treated in depth. For anyone with a writer's itch it is a big box of oats. It isn't important that the readership is large or small. It is the act of writing that matters, not someone else's reading of it.

The usual article forms nimbly in the mind as a nebulous nexus, later to coalesce when the addition of further input suddenly causes an idea to jell around a theme. Take today's news for instance.

There is the Enron story, in which the world's largest bankruptcy has occurred. The stock has fallen from US$83 to US$0.67 in a very short time. The external auditors have issued memos to destroy all the records. The Enron officers have sold their stock at a high price, before the bankruptcy announcement. Pensioners have taken a lot of the loss through their managed portfolio funds.

So the message is, you cannot trust the accounting firms or analysts to tell you when an outfit has gone bust, that the corporate debts are out of line with income, and that the sneaky officers who knew the stock was worthless have sold out. If the prospective pensioner with his retirement nest egg in a professionally managed fund could roll back the clock, the best thing he could do would be to sell out, take the money and run. That is Item Number One.

In Argentina the national debt has been renounced. This is a new twist. Individuals can declare bankruptcy and receive court protection that allows the appointment of special administrators to sort things out. The same is true for publicly listed and traded corporations. It is not true for countries. Yet there it is, headline news, Argentina is bankrupt, and cannot pay its debts.

The old currency has been declared worthless, so if you have a few million Argentine pesos under the mattress you can continue to sleep on it. It isn't worth anything else anymore. There is a new currency, but it is not pegged to the US dollar, as the old currency was for the past ten years or so. If you still have money in the bank, the government may let you take a little out, but not much. The government will let you know when and how much. Today, though, it isn't worth the same number of US dollars at the money changer's window. If things continue as they are now for a few days more you will need to put two Argentine bills up for every US dollar, so you have effectively lost half your savings.

If you had known this a little earlier, you could have moved your money into a foreign bank which allowed deposits in US dollars. It would not have increased much in value during the present readjustment, but it would still buy the same amount of airplane tickets, should you choose to take a trip. But if you did not see this currency business coming, or had been lulled into inactivity by the ministers and their shills, then you did nothing. It is too late now. But if you had known what the ministers and their friends knew, you would be smart to take your money in US dollars and run with it. That is Item Number Two.

Now for a local story, Item Number Three. In Malaysia there is a dictator who rules by fiat. He has the goods on his ministers, and if they don't cooperate he has a prosecutor who will cook up a case to indict and convict them. He had an honest finance minister who objected to the theft of government funds, and he was jailed for 15 years for doing so.

It is widely thought that the prime minister is holding things together until his partner in crime gives him the signal that all is ready. No one speaks up because the prosecutor who cooked up the case against the honest deputy is now the new Attorney General. There was a nice lady who filled the post for awhile, but when she made moves like she was about to clean house the prime minister sent her packing. But the pernicious prosecutor she had in her sights, none other than the man who prosecuted the honest finance minister, got to her first. I repeat, he is now to be the new Attorney General.

Malaysia's national currency was pegged to the US dollar in late 1998. It has been reaffirmed routinely since. A few days ago the head of the national bank again said it was set in concrete. But now the news is that the peg is subject to "re-examination". Coming from the prime minister, who knows a thing or two about the potential for a profit in currency exchange, this has set the alarm bells ringing. Analysts are advising their associates around the country at this very moment. The public must be reassured. The analysts will advise not to panic. They will try to hypnotise the public into inaction. But if the citizen investor knew that there was still time to act, what would the citizen investor do? Right! Take the money and run.

So that is how a commentator clears his head (and his conscience). It does not mean the ideas are particularly sound or that conclusions are always accurate. No one is perfect, and one is at some times more imperfect than others. After all, a commentary is only an opinion, freely formed from fractured facts available, and openly expressed. Many who are taken by the commentary bug write gratuitously, and thus are beholden to no master. That does not remove a requirement to be responsible. But to be free to express the truth as one sees it, without concern for threat or intimidation, that is rare in Malaysia these days.