One world of risk
I AM glad not to have entrusted my old age to a Japanese life assurance company. Oth- erwise I might need to commit ritual sui- cide before it does. Last week a bank went down, this week a broker, more are totter- ing, and some of the life companies appear to be surviving by the grace of their actuar- ies. I imagine that a Japanese actuary is even more long-termist than a Japanese auditor. Each new financial disaster in Asia comes with official advice not to worry the government and the central bankers have it all in hand, the International Mone- tary Fund is standing by, and none of the customers or depositors will lose their money. I would as soon take the word of those long-termist people who let Yamaichi bury its losses in the Cayman Islands and said nothing. It is as plain as the nose on an actuary's face that in the five months since Thailand's financial collapse, the shock- waves have spread and are spreading and cannot now be securely confined to the other side of the world. Haven't we all been told that we are living in a global economy — and therefore in a new era that would make us effortlessly rich? I never bought the new-era story, and the New York fund manager who has just lost all his clients' money shows how easy it is to become effortlessly poor. Sensible precautions include saving with institutions whose expectation of life is greater than your own.
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