Mortgage advisory

Many couples allocate responsibility for management decisions or for record keeping and bill-payment to one spouse. This may pose problems if the responsible spouse dies without sharing important information with the surviving spouse. Spouses should keep each other advised as to the following:
• The location of valuable papers such as deeds, wills, leases, insurance policies, military service records, marriage certificate, birth certificates, and social security records. Also, a record of each person’s contribution to the purchase of property may be important. This would include records of earnings and property inherited.
• Records and inventories of the business, including any outstanding debts, notes, and mortgages.
• Records of employment and investments.
• The names of the banks where checking and saving accounts are kept.
• The names of persons usually consulted on business, legal, and personal matters.

Court and other costs will also vary, depending on length of time used in the proceedings, contests, and disputes;
the length of will; and size of estate. For each instrument in the court proceedings that is filed in the office of the court clerk, a fee governed by statute is charged against the total cost. For this reason the length of the instrument, as well as the nature of it, influences the court costs. If there are parcels of land involved in the decedent’s estate, they must be appraised separately; and if they are scattered through the country or over the state (and in other states), additional costs will accrue for the three appraisers’ travel and time.
The total of publication fees will vary with length of each notice. The cost of notices is affected by the length and number of times that hearings must be had on accounting and actions of the personal representative.
Funeral expenses and costs of last sickness must be paid from estate funds. These costs will, of course, vary considerably. Other costs that may be incurred are sale expenses, abstract fees, and internal revenue stamps. Income taxes and federal and state estate taxes will also vary from estate to estate.
Often liquid assets are held in joint tenancy and life insurance policies name specific beneficiaries. Under these conditions, no cash would be available to pay estate settlement costs and taxes. This is why some estate counselors recommend the estate be named as the beneficiary of some life insurance.

The executor and administrator are referred to commonly as “personal representatives” of the decedent. The executor is one appointed in the will of the decedent. The administrator is appointed by the District Judge. The person named as executor, if otherwise eligible, must petition the court for letters testamentary. If a personal representative is not named in the will, the court issues letters of administration to persons eligible to serve as administrators.
The surviving husband or wife (or competent person whom such husband or wife may recommend for appointment) is first legally preferred to receive letters of administration. Then other classes follow in order: children; father or mother of decedent; brothers; sisters; and grandchildren; next of kin; creditors; and any other person legally competent. A business partner of the decedent is not eligible to serve as administrator.
The fees allowed the personal representative are based on a percentage of the appraised value of the estate as shown upon the tax return (before exemptions and deductions reduce the estate to taxable value). The schedule as provided by Oklahoma Statutes14 for determining the fees for the personal representative is as follows: 5 percent of the first $1,000; 4 percent of the next $5,000; and 2 1/2 percent of excess.
In the event of complex and time consuming litigation requiring the personal representative to spend time for consultation and preparation for trial and for travel and unusual personal expenses, the court will be inclined to increase the fees to the personal representative.
Except in the case of paying for the cost of obtaining a bond to secure his faithful performance, the administrator’s fee will be no higher than that for an executor. Their duties generally are the same, and the time and expense in the performance of their duties usually will be similar. The only difference might be when the will of the decedent prescribes unusual duties or confers certain authorities on the executor that would differ from the duties and powers of an administrator.

Much has been written about currency speculators in the past, much of it with a few rare exceptions utter nonsense. As noted above, the very term “speculator” can create an emotional reaction. Here, in this section, we seek a dispassionate analysis of just who are the currency speculators, how and why they operate and their function within the overall currency market. The benchmark for this analysis is obviously the de?nition of currency speculation given earlier; that is someone who trades in currencies without an underlying, attached asset. Trade and investment do not count because of necessity they have attached, underlying assets. What is left — the vast majority — in currency market volume is speculation. So who takes part in this activity? Broadly speaking, currency speculators can be divided into the following main groups.

On the face of it, this may seem only to con?rm the worst fears of those who see currency speculation as an intrinsically malign force, ready to bring down currency systems and governments on a whim. Surely, if currency speculation is such a dominating force within the global currency markets, then it is currency speculation that is responsible for currency crises. Following on with this logic, some may take the view that action should be taken to ensure that currency speculation cannot cause such devastation and damage again! On the face of it, these are understandable conclusions. However, just because they are understandable does not make them right. Indeed, I would suggest that they are at best overly simplistic and at worst ?atly wrong for the following reasons:
Currency speculation does not act or take place in a vacuum. Rather it is a response to changes in fundamental or technical dynamics.
The essential aim of currency speculation is not to bring down governments, nor to hurt countries economically, nor for that matter to break currency pegs. Simply put, the aim is to make money, pure and simple.
Currency speculation therefore is neither benign nor malign. Both of these terms have emotional if not moral connotations. Currency speculation is amoral. It aims to make money, whether buying or selling a currency, and it will do that in direct and proportional response to government economic policy.
In cases such as currency crises where substantial destruction is caused, currency speculation is the symptom rather than the underlying disease. Indeed, in the case of the UK in 1992, currency speculation was the cure to the disease, which was a ridiculously overvalued exchange rate value of sterling within the ERM.
Currency speculation does indeed provide a valuable service, in giving liquidity to the productive areas of the economy.
The idea that a speculator is a seller and an investor is a buyer is worse than nonsense. It is propaganda designed to cover policy mistakes.
In line with this, there are many more kinds of speculation than just currency speculation. Was not the NASDAQ bubble of 1999–2000 speculation? When Alan Greenspan dared to try to temper that irrational exuberance did he not get shouted down by the public and b congress?
This series of posts is for both those who seek a clearer understanding of currency speculation, why and how it takes place, and also for the currency speculators themselves. The latter is done with some humility for there are currency speculators who are amongst the most revered and respected — and honourable — participants within the currency markets. In my career, I have met many of these and many are amongst the most brilliant minds out there. Thus it is with care that I have the temerity to suggest that some of these still have a few things to learn about the currency markets! That said, another perspective is always useful. I have certainly found that myself. My experience is as someone who has followed the currency markets for the last decade, ?rst as a journalist, then as an analyst, then as a manager of a currency business and ?nally as a currency strategist for an investment bank. Perspective is important and being able to look at an issue from several different angles sometimes critical. Thus, I hope I can say that I have gained immeasurably from the wisdom of my economist colleagues. We look at the same question from two completely different perspectives. Equally, it is my hope that even some of the most experienced currency speculators may gain from my no doubt different perspective.

So armed with this de?nition, however inadequate, let us now look at the issue of currency speculation in more depth. The second aspect of currency speculation to realize is its size. On the face of it, it is immense. The global currency markets turn over some USD1.2 trillion in daily volume, according to the 2001 report by the Bank of International Settlements. That is the rough equivalent of world trade in global goods and services every day. In the last two decades, as barriers to capital have broken down and capital markets become liberalized, in line with the move to liberalize trade in goods and services, capital ?ows have played an increasingly important role in global currency markets. By comparison, world trade has seen its role diminish proportionally as a determining factor in exchange rate movement. Trying to work out the percentages of global currency volume is very far from an exact science given that one is faced with issues such as double counting and so forth. Nevertheless, it is possible to get a rough idea of the relative ?ow importance of the different sectors of the market. Put together, and being generous rather than conservative in one’s estimation, world trade and investment (portfolio and direct) makes up around 30% of currency market volume. The rest, using our de?nition, is currency speculation, with no underlying asset behind it. I have not the slightest doubt that these ?gures will cause debate, if not outright rejection. The truth however is that I have been charitable and generous with the ?rst half of the equation, that of trade and investment. The imbalance in favour of currency speculation should actually not be that surprising. If one thinks about it, the economic text book de?nition of a currency speculator as a liquidity provider to the productive areas of the economy might suggest an eventual 50/50 role between the two sides. The liberalization and deregulation process seen over the last three decades has meant that we have gone far beyond that.

The effort to ?nd blame for the calamities which befell the region in 1997–1998 re?ected not only the political desire to ?nd convenient scapegoats and lay the blame on others, but also a deep sense of injustice and anger at the way Asia had been treated and abused by ?nancial markets, at the way much of Asia’s economic progress over decades had been destroyed so savagely in so little time. Initially, it was more expedient to blame foreign speculators for the Asian currency crisis than to try to discover the fundamental economic reasons why the crisis should have happened, since the latter might have involved laying some of the blame at the feet of the Asian governments themselves. This was not only for politically pragmatic reasons, but also more seriously for reasons of political survival. It should be seen as no coincidence that the dictator Soeharto was overthrown in the aftermath of the Asian crisis. Equally, in Thailand, a series of corrupt governments gave way to signi?cant political reform and the administration of Chuan Leepkai. Needless to say, there may have been some Asian governments opposed to such ideas of change, preferring the old social pact of stability and prosperity. The only problem with this was that there was no longer any prosperity. Whoever was to blame for it, the Asian currency crisis impoverished millions. After the crisis, it was said that in Indonesia the economic work of three decades had been all but wiped out, and that as a result half the country lived in a state of absolute poverty as de?ned by the World Bank, living on USD1 a day. An of?cial backlash against currency speculation was certainly not limited to the Asian crisis or to the emerging markets as a whole. Following sterling’s ejection from the ERM in September 1992, the UK government’s ?rst public reaction was to blame the German central bank for either not coming to the aid of the UK in defending the ERM parity, or in fact deliberately seeking its ejection. There was talk that the Bank of England was drawing up a list of banks which had played a part in speculating against sterling — a ridiculous measure given that the whole market had been selling sterling and the Bank of England had effectively been the only buyer. Equally, after the forced widening of the ERM bands to 15% on August 1, 1993, the hysterical reaction by of?cials within the French and German governments, lambasting the implied devaluation of the ERM currencies as the result of nefarious activities by heinous “Anglo-Saxon speculators” — presumably the German of?cials simultaneously forgetting their own ethnic origins — would have made Asian government comments seem tentative by comparison. Europe’s best and brightest didn’t only talk either. Some of them sought to punish those who had dared go against their precious plans for currency union, by keeping interest rates at punitive levels subsequent to the band widening — in the process, hurting the “innocent” along with the “guilty”.
In Asia, the response was also not just verbal. Thailand created a two-tier foreign exchange and interest rate system, while the Philippines and Indonesia slapped on limits to swap market trading and Malaysia went so far as to ban offshore trading in the ringgit and peg it at MYR3.80to the US dollar. While the dividing line is somewhat thin, these measures were not so much aimed at punishing speculators after the fact as they were efforts at self-defence during the climax of the speculation and panic. The reaction to the Asian crisis by governments was initially in many cases one of recrimination, however with one notable exception that eventually turned to one of pragmatism and the realization of a need for accelerated reform. The essence of Asia’s of?cial protest at its rough handling was two-fold: ?rstly, a natural reaction to such treatment whatever the reasons, and secondly an issue of control — the authorities had lost control, or at least a high degree of it, and the market had gained it. Of necessity, control is a subject close to the heart of any government or central bank. This was the case in Europe after the two ERM crises, and it was also the case with Asia. Control was relevant not only for economic reasons but also because the previously strong growth had masked or postponed underlying political and social problems.
The Asian currency crisis was followed swiftly by the Russian currency crisis of August 1998. It is interesting if not amusing to remember now that a high-ranking Russian of?cial said at the 1997 IMF annual meetings in Hong Kong (which I attended) that the Asian crisis had prompted a re-think of currency policies generally, and of Russia’s in particular. That Russia would not act immediately but would clearly have to reconsider their exchange rate policy in the face of such events. Politicians say a lot of things, but that is not to say that they actually do them. In the case of Russia, clearly the process of reconsideration was neither speedy nor decisive enough. In August 1998, the Russian rouble de-pegged from the US dollar and collapsed, and Russia defaulted on its domestic debt. This was followed shortly by a currency crisis on the other side of the world, in Brazil. In January of 1999, the Brazilian real also de-pegged and collapsed in value. It seemed to some almost as if some immense and malign force was at work, triggering currency crises and devaluations and in the process setting these countries back years if not decades in terms of economic progress. Just to bring this blog up-to-date, in February of 2001, the Turkish lira experienced the same fate, de-pegging against the US dollar from 600,000 and falling to a low of around 1.65 million in October of that year. It is without doubt that these experiences over the last 10 years have coloured our judgement and opinion on the subject of currency speculation. It would be dif?cult for that not to happen. The aim here, in this series of posts, is therefore to attempt a dif?cult task, namely that of looking at the issue of currency speculation from a fair and unbiased perspective. At the offset, I must say if it is not already clear, that as a currency strategist in a global investment bank I am obviously (to a limited extent!) a participant in the currency market. My own experience should also be taken into account. That said, I am no more biased than anyone in the of?cial community on this issue. They have their (biased) perspective, a currency strategist has his/her own. Moreover I have considerably more experience of seeing currency speculation than many, certainly most within the of?cial community. With that in mind, the aim here is neither to see currency speculation as a benign or as a malign force. Rather, it is ?rst to draw the fangs of emotion and morality from the debate and then to seek a balanced, unemotional and practical perspective of this issue of currency speculation. The very ?rst thing one has to do in this regard is to seek some sort of de?nition for what one is talking about. There are probably as many de?nitions of this issue as there are people on the planet, however clearly that is not helpful. The broad de?nition I have used so far in the blog is the following:
Currency speculation is the trading in currencies with no underlying attached asset
This is of course far from a perfect de?nition. However, any weakness of this de?nition does not detract from our essential need to have a de?nition in order to put this whole debate in context. This is clearly not the only kind of currency speculation, but it is a useful reference, not least for the incentive of a currency speculator. Their main aim has nothing to do with an underlying, attached asset such as an equity or ?xed income product. Their aim is purely to achieve what academic text books suggest is impossible — consistent excess returns from currency directional trading.

In the last decade some have increasingly taken a different view in the wake of one currency “crisis” after another. The ?rst real currency crisis of the decade came not in the emerging markets but in the developed world. The ERM crisis of 1992 was a wake-up call to countries in a number of ways. On the face of it, it was manifested in the form of Scandinavian currencies breaking their pegs to the Deutschmark and ERM countries such as the UK and Italy being forced out of the system. Inevitably in the chaos of that time, many wrong lessons were learned. It appeared that the liberalization of the currency markets had allowed currency speculators to become such a huge force that they were now capable of dismantling exchange rate systems and causing the downfall of governments — or at least Prime Ministers. The UK Chancellor of the Exchequer Norman Lamont may have been said to have sung in his bath after sterling was expelled from the ERM, but Prime Minister John Major was not singing the same tune a few years later when his government was routed more completely than any government this century at the 1997 general elections. Headlines reporting that George Soros’ famous Quantum “hedge fund” made around USD1 billion by speculating against sterling only served to reinforce the misconception that currency speculators alone forced sterling out of the ERM, that they were indeed large enough to accomplish such a feat.
A year later and currency speculators were again on the attack, this time against the ERM system itself. Under enormous pressure, after having resisted through intervention for months, in August 1993 the governments of the ERM countries gave in and widened the ERM currency trading bands to ±15% from ±2.25%, thus de facto allowing a depreciation of their currencies against the ERM anchor, the Deutschmark. The idea of recrimination after a currency crisis is thought of these days as a feature of the emerging markets, indeed currency crises themselves are thought of as an emerging market phenomenon. Thus, it is important to remember the sense of outrage, fury and a desire almost for vengeance that permeated of?cial Europe in the wake of that exchange rate band widening. The enemy of the European project, of the European dream of integration and eventual uni?cation was clear, and it was “Anglo-Saxon” speculators. After the ERM crises of 1992–1993 however, it was indeed the turn of the emerging markets to see one currency crisis after another. Here the sense of betrayal at the hands of the “market” was particularly acute because many emerging market countries had adopted free market practices precisely to progress economically and eventually bridge the perceived gap between the emerging and developed worlds. Thus, the 1994–1995 currency crisis in Mexico was a very rude awakening indeed, not just for Mexico and its neighbours but also for the emerging market countries as a whole. After that, came the Czech koruna currency crisis in 1996–1997. Like the Mexican peso, it was pegged to a base currency. In the Czech case this was the Deutschemark, and like the Mexican peso it eventually was forced to de-peg from that base currency and promptly collapsed.
In 1997–1998, the Asian currency crisis exploded on the international scene. I remember it in the context that I was living and working in Hong Kong when it took place. It is an important realization in discussing the subject of currency speculation that countries facing a currency crisis experience a stage of siege followed by something very akin to bitter defeat. Blame is sought, or more accurately in some cases scapegoats are found. It is easy to forget in the 24/7 information society that we now live in just how that time was. It was a time of high drama and higher emotion. In September of 1997, the IMF held its annual meetings in Hong Kong (for the most part in the huge, new exhibition and conference centre made famous by the signing of the Handover of Hong Kong from the UK to China in that same year). The Thai baht had devalued on July 2 of that year and thereafter most Asian currency counterparts followed suit, albeit unwillingly. Answers to this crisis were sought and not surprisingly many were found, of varying accuracy. At those meetings, in front of a packed audience, the Malaysian Prime Minister Dr. Mahathir Mohammed, in all else a most erudite and educated man, thundered that currency trading was “unnecessary, unproductive and immoral”, that it should be “banned . . . it should be made illegal”, that the pro?ts of currency speculation “came from the impoverishing of others”. It should be reiterated that it was a time of high emotion, a keen sense of betrayal and great pain. Asian economies up until then had been viewed as the model for emerging markets generally within the of?cial community. The World Bank itself coined the phrase the “Asian miracle” — as close as the of?cial community has ever come to verbal irrational exuberance — to de?ne the Asian boom from 1985 to 1996. Asia was a success story for other regions within the emerging markets to only hope of emulating. Indeed, the Asian-related optimism, both within and without, went so far as to have the western media suggest that the economic centre of power was shifting from the West to the East. Given all the fundamental progress made and the resulting praise globally, how else to explain Asia’s collapse in 1997–1998 other than by malign, almost “terrorist” means? Indeed, the terrorist analogy was used speci?cally at the height of the crisis to describe the suspected hand of unnamed evil forces at work. While the remarks by Dr. Mahathir were undoubtedly the most prominent in re?ecting the backlash within Asian countries against the perceived evil of currency speculation, they were by no means the only example of this backlash. In Thailand, there was talk that the Bank of Thailandwas keeping a “black book” of suspected foreign banks which had speculated against the Thai baht, though the Bank of Thailand denied the existence of such a list. In Indonesia, the Indonesian Justice Minister was reported as considering that currency speculators could face subversion charges if their activities were found to damage the economy, and that the ultimate penalty for economic or political subversion was death. At around the same time, the Indonesian Republika newspaper published a public service announcement featuring a westerner (presumably a currency speculator) wearing a terrorist mask and kef?yah in the form of US 100 dollar bills, with an underlying question “Are you a terrorist of this country?” Indonesians were exhorted to “Defend the Rupiah, defend the nation”. Even in the Philippines, where the authorities had traditionally taken a benign view of market forces, there was some suggestion of blaming foreign speculators.