Quora Answer: Did the Investment Company Mismanage My Retirement Funds?

The following is my answer to a Quora question: “I moved my retirement 401K fund to a company called Security benefit.  My balance was $52,000 in 2014, then $42,000 at the end of 2016, and still $42,000 at the end of 2018.  Did they mismanage my money?  Do I have any recourse?” 

It is very difficult to state whether there was mismanagement when we have no details on your fund allocation, the terms of placement, and how their compensation is calculated.  As such, I will not speculate.  If you can prove negligence and mismanagement, then you may consider legal action.  What I can say is this: in a period where all asset classes experienced tremendous increase in value, and the market grew at a significant rate, it is surprising that you made a 20% loss on your principal over a period of almost five years.  What I find more surprising is that you did nothing immediately. 

When a client makes a loss in a period of growth, either the financial consultant has a meeting with you to reallocate the weightage of your portfolio, or the client raises a ruckus, and there is service recovery.  However, considering the current economic climate, with a projected global slowdown, and the small principal, I do not see how you can recover your losses in a decent period of time.  I suggest you look for a competent financial consultant in your area, and see if you can salvage some of this, by mitigating your paper losses.

TLCS Bilingual TMC as Table Topics Master, 19th January 2020

On the 19^th January 2020, I was at TLCS Bilingual Toastmasters Club, as table topics master.  This was my 148^th club visit on the 203^rd day of the Toastmaster year.

The sergeant-at-arms was Srivatsan K. V.  The Toastmaster of the Day was Tejasvene Ramesh.  The timer was Sreenidhi Rengaprasad.  The ah counter was Sowmyalakshmi Ramesh.  The language evaluator was Jackson Chua.

Kris Frank Martis gave a demonstration of speaking impromptu for his project.  He spoke about his interests in travelling, and extreme sports.  He is a bona fide thrill seeker.  These activities around the world, included skydiving, diving with sharks, snowboarding, and so much more.  He ended with saying that he learned that sometimes the best way to appreciate life can be found in the small things, such as savouring a cup of tea on a cold day.

Amos Lim spoke about child drownings, taking from his experience as a lifeguard.  He gave detailed statistics, and explained that there is a need to educate the public.

The evaluators were Tejasvene Ramesh, and Kris Frank Martis.

There was no voting for best speaker, and best evaluator.

Best Table Topics Speaker: Myself.

Quora Answer: Did Thailand Suffer the Hardest & Longest Fall after the Asian Financial Crisis of 1997?

The following is my answer to a Quora question: “Did Thailand suffer the hardest, and longest, fall after the Asian financial crisis of 1997?  Why did Thailand not bounce back as did Malaysia?” 

Thailand suffered the hardest from the Asian financial crisis of 1997 because Thailand was ground zero.  It spread from Thailand to the rest of Southeast and East Asia, and, for a while, raised fears that would lead to a global economic meltdown.  The Thai government of that time was complacent.  In a time of easy credit to fuel an economic boom, the Thai economy developed into an economic bubble fueled by hot money.  This was particularly so, in the property sector.  Similar conditions developed in Malaysia.  All of these countries had the added complication of crony capitalism and weak regulatory regimes, leading to artificial demand based on speculation.  This was exacerbated by the short-term flow of capital which was funneled to a few connected people.  The cost of the expensive source of capital was put on the economy.  Development funds were wasted. 

Another factor was that many of these nations had large private current account deficits, and fixed exchange rates.  This encouraged external borrowing, leading to excessive exposure to foreign exchange risk.  All this was conditioned on low interest rates from the Fed, which was untenable.  As the US economy recovered from recession in the early 1990s, the Federal Reserve slowly raised interest rates to control inflation in an economy that was heating up.  This put a crimp on cheap credit.  There was a knock-on effect, including the devaluation of the Chinese renminbi, the decline of semiconductor prices, and reactionary measures due to a strengthening US dollar. 

Since Thailand and Malaysia had their currency pegged to the US dollar, the higher value of the dollar caused their exports to become more expensive, and less competitive.  This lowered demand, slowing growth.  Due to a lack of savings, their foreign exchange reserves were low, they could not pay the interest rates on all that foreign currency borrowed.  This had a knock-on effect on the private sector, leading to corporate failure, lowering market sentiment, and creating a downward spiral. 

Since lenders were no longer confident they could recover their funds from creditors, they withdrew credit.  This caused a major liquidity crisis, a credit crunch, and asset prices collapsed once that artificial demand was no longer there.  This increased defaults, which lead to further collapse in asset values as the market panicked.  Foreign lenders, investors and speculators, who had flooded the market with cheap credit, tried to withdraw their funds.  This lead to a dearth of foreign exchange and a flooding of the market with local currency.  This lack of demand caused currency prices to collapse, causing these countries to default on their sovereign debt.  The central banks were forced to raise interest rates.  In their panic, they raised it too high, leading to further credit crunch.  Neither Thailand, nor Malaysia, had the foreign exchange reserves to support their own currencies.  Here, however, is where they took different paths.  Thailand accepted the IMF bailout, which was based on faulty assumptions of austerity.  IMF bailouts were conditional upon economic reforms.  The IMF prescribed reduced public spending, lower deficits, and aggressively raising interest rates. 

On hindsight, this is a mistake.  The IMF economic thought was based ceteris paribus.  An economy in crisis is no longer ceteris paribus, and old theories should have been thrown out the window.  One immediate way would be to defer payments for a year to raise the current account surplus.  Public sector projects should have been brought forward to create growth and cushion softening demand.  Singapore did something like that, and their economy recovered within months.  The IMF rescue package for Thailand was more than US$17 billion.  It was conditional on passing legislation regarding reduced bankruptcy protection, and strengthened regulatory framework.  There was a further bailout package of just under US$3 billion less than a month later.  Thailand’s economy recovered by 2001, four years ahead of schedule. 

The Malaysian ringgit was subject to attack by speculators within days of the baht’s devaluation.  The assumption was that the conditions that lead to the Thai economic crisis was also found in Malaysia.  This lead to a ratings downgrade on Malaysian bonds, from investment-grade, all the way to junk.  The KLSE lost more than 50% of its value, just like the ringgit.  The Malaysian government did not accept the terms of the IMF bailout. The prime minister and finance minister, Mahathir bin Mohamad, imposed strict currency controls that have never been fully repealed.  The ringgit was also pegged at 3.80 to the dollar.  This riled up the IMF, but curbed speculation.  Mahathir has many faults. He is a racist, Malay-exceptionalist, corrupt politician.  But in this, he proved to be correct. 

Mahathir stopped the overseas trade in ringgit and ringgit assets.  This made offshore use of the ringgit invalid.  He restricted the amount of currency and investments that Malaysians and foreign residents of Malaysian could repatriate, and imposed what eventually became an exit tax for foreign portfolio funds.  Another consequence of halting the trading of the ringgit offshore was the permanent suspension of CLOB counters.  This indefinitely froze approximately US$4.5 billion worth of shares.  Most of the affected investors were Singaporeans.  The Malaysian economy recovered by 2000. 

That being said, Thailand’s economy now is in a better position than Malaysia’s.  This is because Thailand made painful changes in the intervening years whereas Malaysia devolved into a kleptocracy.  The problem for Malaysia is that Mahathir is behaving as if the world was 20 years ago, when it is not.  Singapore’s economy in total is larger than Malaysia, which gives a sense of scale of the decline, and the daunting task facing the Pakatan Harapan government.  The same measures that saved Malaysia then, are an impediment to foreign investment in Malaysia now.  In summary, Malaysia recovered faster, but Thailand made the structural reforms necessary for long-term economic growth.

Quora Answer: Could You be a Beneficiary of Someone’s Life Insurance without Knowing about It?

The following is my answer to a Quora question: “Could you be the beneficiary on someone’s life insurance policy without ever knowing it?”

Yes, that is possible.  The policy owner need only fill up a nomination of beneficiary form, with the requisite details, such as your name, your date of birth, your address, your tax identification number, and your share of the insurance payout, in percentage terms.  It is conceivable that someone, especially your parent, or spouse, would have this information, and fill up such a form without your knowledge.  Neither your acknowledgement, nor your consent is required on the documentation, for the nomination to be legally valid.

Quora Answer: Could the Iranian Navy, Blocking the Strait of Hormuz, Choke the Global Economy?

The following is my answer to a Quora question: “Could the Iranian Navy, blocking the Strait of Hormuz, choke the global economy?  If it goes on long enough, would it invite military retaliation from other countries?”

The Straits of Hormuz is the only egress from the Persian Gulf to the Indian Ocean.  It is estimated that 25% of crude oil, and 60% of LNG goes through the Straits.  Iran is on the northern shore of the Straits, and it is part of its littoral waters.  As such, Iran does not have to actually block the Straits of Hormuz.  It need only threaten to, and global energy prices will spike.

Iran does have the capability of blocking off the Straits, which is not that difficult, because it is only 21 nm wide, at its narrowest.  This means that Iran can deploy mobile shore batteries, and still threaten shipping in the straits.  It does not need to deploy its naval fleet of attack craft armed with anti-ship missiles.  Iran has the largest, and most diverse, ballistic missile and anti-ship missile complement in the region, despite having the lowest per capita spend on military.  Much of its capability is indigenous due to an American lead arms embargo.

The nature of the geography means that it suits Iran’s asymmetrical warfare strategy.  Blocking the Straits will certainly invite an American military response.  However, the narrowness of the Persian Gulf means that a carrier fleet, or any element of the US Navy, cannot operate freely in those waters.  The carriers will have to launch from the Arabian Sea, which limit their effectiveness.  The US has military assets in bases around the region, and they can launch aircraft from bases as far afield as Incirlik, in Turkey, or Bagram, in Afghanistan.

The problem is this: Iran has demonstrated, whether by itself, or through proxies in the region, that it has the ability to strike at US military bases in the region, using drones, and missiles based within, or outside of Iran proper.  They may not have aerial superiority, but they are quite capable of destroying aircraft on the ground.  Iran, with Russian assistance, also has a significant air defence network, and an air campaign will be expensive, and risky.  Any attack on Iran will draw in the entire region, and that will further tank the world economy, which is still part of the Iranian objective.

That being said, this is not a card the Iranians will play lightly since China, and friendly nations, also depend on oil and gas from the region.  There will be a diplomatic backlash, and further isolation if the Iranians were belligerents.  This is a card to be played when there are no other alternatives.

In any case, both sides are not stupid.  Despite military posturing, the solution is still a political one, not a military one.  The United States establishment are under no illusions that winning the war at massive cost is not ideal, and not guaranteed.  More likely, they will be pulled into a quagmire against a nation that has a potential military of over a million men, who will fight to the death.  The intelligence community paid attention, and took notes, during the Iran-Iraq War.  The only nations that seem intent on war seem to be Saudi Arabia, and Israel, based on their own strategic calculations.  Binyamin Netanyahu needs a crisis to detract from his own political troubles.  Mohammed bin Salman is ambitious, and aggressive, but he is a hot-headed liability.  The murder of Jamal Kashoggi, and the invasion of Yemen, is ample proof of this.

Quora Answer: Could China Invade the USA with a 50-Million-Man Navy?

The following is my answer to a Quora question: “Could China invade the USA with a 50-million-man navy?  How many ships would that come out to, in the most effective possible force?”

Firstly, no nation has or has ever had a 50-million-man navy.  Where are they going to deploy all that manpower?  It is a waste of human resource.  China’s entire military, the PLA, stands at 2 million.  At its largest ever, it was just under 7 million.  At the end of the Second World War, the Soviet Union had just over 10 million men under arms, the largest military force ever.  No country has the resources to arm and maintain a 50 million men military, let alone, just a navy.

Secondly, how are they going to get them across?  The distance between mainland China and the continental United States is over 10,000 km.  That means China must maintain a logistics chain that is at least that, and then some.  It must secure that logistics chain and the passage of a significant military force, which requires air and naval superiority.  China has neither.  That is why it cannot invade Taiwan, which is just under 200 km away.

This is the same reason why the US, for all its military might, cannot invade China as well.  The invader requires a three to one ratio at the point of attack, and then have enough resources to secure a beach head and expand the theatre of operations.  This is a manpower and logistics requirement that would compromise the US’s ability in other theatres.  The losses would be politically untenable, and they are guaranteed to be eventually starved of material and reinforcements.

Jauhari Bilingual TMC as Toastmaster of the Day, 18th January 2020

On the 18^th January 2020, I was at Jauhari Bilingual Toastmasters Club, as Toastmaster of the Day.  This was my 147^th club visit on the 202^nd day of the Toastmaster year.

The sergeant-at-arms was Siti Zuhriyyah binte Mohammed Ariffin.  The Toastmasters of the Day were Muhammad Nurhakim bin Mohamed Yusop and myself.  The timer was Hasniza binte Khalil.  The language evaluator was Mohamad Hijazi bin Sudarmaji.

Wiwiek Najihah binte Hairudin, in her presidential address, mentioned the peribahasa, Malay proverb, “Melepaskan batuk di tangga”.  In modern Malay, some literally translate this as “coughing at the stairs” which does not make sense.  The “batuk” is actually a sort of ladle used to scoop water for wudhu, ablution, prior to performing swalah, the Muslim ritual prayer.  To let it go at the stairs, instead of putting it back, is symbolic of performing an act without regard and due diligence, to be sloppy, and careless.  In this regard, we have to consider, in this new year, how we want to conduct ourselves, and carry out our work.

Eliza Yuliana binte Zubaidy gave her icebreaker.  She told her she was the first child born in a private hospital in Indonesia on the day of her birth.  Her father was Indonesian, and her mother is Singaporean.  As such, she is an Indonesian citizen, staying in Malaysia, and commuting to Singapore to accompany her ailing mother to the doctor.  To date, she has been unsuccessful in her bid to get Singapore citizenship, to rectify an oversight since her birth.

Nurliza binte Sawi, gave her first speech in the Pathways programme.  She is a secondary school teacher with adult children.  She married young, and has a black belt in Tae Kwon Do.  She spoke about her family, and early life.

Mohammed Hatta bin Ibrahim gave a speech in Malay.  He said, “Luka itu perlu”, “The wound is real”.  It was a heartfelt speech about understanding pain, and challenging ourselves.  The audience gets the impression that there is greater personal depth to the subject matter.  He also recited a pantun, a Malay poem, that he composed.

Syazwani Dwiputri binte Abdul Wahid gave us an insight into her leadership style.  She is an innovative person by nature.

The evaluators were Othman bin Muhammad Sadli, Malcolm Sunny Chen @ Malik Sani Abdullah Chen, Patrick Oei Kian Seng, and Aaron Khalid bin Azhari.  It should be noted that Patrick Oei Kian Seng evaluated a Malay speech, in Malay.  His facility with languages is impressive.

Best Speaker: Mohammed Hatta bin Ibrahim; and

Best Evaluator: Aaron Khalid bin Azhari; and

Best Table Topics Speaker: Mohamad Saddiqi bin Mohamad Said.

There was an additional prize for the best dressed, according to the theme.  The winner was Mohammed Hatta bin Ibrahim.