Which one are you: a realist or a cynic?

Being one is harder than the other

This timely article is probably most important one I’ve written this year—maybe in years. If I don’t get it all right, I look forward to your comments and corrections. If you believe it can be of use to improve quality of your circle, please share it. As always, they are my opinion and they are not to be construed as financial advice.

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One morning, Hendra was the proudest man in Jakarta. He sipped his morning coffee and started his day swiftly.

He held an envelope in his jacket pocket. It contains the enrolment deposit for his daughter’s first semester at university. Hendra is a simple man. He works at Astra Graphia as a salesperson, selling Fuji Film printers to offices (mostly companies within the Astra Group as well). But his salary was enough for him to save for his daughter’s education.

A little every month, for years until his daughter got accepted to Universitas Indonesia. What a moment. He never made it to university himself, but his sacrifice and hard days in the office would soon pay off to something great in the future, through the life of his daughter.

He took the route he always took, down Jalan Gajah Mada toward Glodok. The same shophouses he had passed 10,000 times — the gold sellers, the electronics counters, the hardware stalls run by the same families for three generations.

Except today there was a gridlock. He sensed something wrong when he smelled a distinct smell of smoke on the streets.

He initially was still calm, but he grew restless as he overheard people from afar screaming and shouting.

Hendra decided to leave his car. As he started brisk walking towards the bank, he saw from a distance that Glodok Plaza was alight. Further down, the old market was alight. The street lamps had come on early, because the afternoon had gone black with smoke.

Hendra was delusional, maybe the bank is still open. He proceeded forward through a group of strangers carrying televisions and rice cookers and whatever they could carry. Only to finally learn that the bank building he wanted to pay a visit was literally on fire.

And the envelope was still in his pocket, worth 9 months of his salary at Astra Graphia. When he saw that the building was lit on fire, he finally realised that his plan had to wait. He must quickly go back home. He’d need to at the very least make sure that his daughter is safe.

He ran.

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That is not the opening of a film.

That is May 1998, reconstructed as faithfully as I can through the eyes of one ordinary man who set out to do nothing more than deposit his daughter’s university tuition fee. Across the city that week, more than a thousand people would die — most of them burned, hundreds of them inside a single shopping centre in Klender.

And here is the cruelty that adds to it. Lets say Hendra made it out, got his daughter and a single bag to the airport to flee the country. The money had saved up already betrayed him too. Rupiah had collapsed from around 2,500 to the dollar to as much as 16,000. Even the escape was a loss.

The banks you trusted, gone

Start with the most reputable bank in the country.

It was owned by a mega business empire Indonesia, run by the tycoon sitting close to Soeharto himself. If any bank on earth appeared untouchable, it was this one. This is the bank the middle class handed their salaries to without thinking further.

During the riots, it suffered a violent run. In a matter of days, deposits collapsed from around Rp56.8 trillion to Rp34 trillion — and 122 of its branches were burned and damaged. It didn’t survive and the state had to step in to park it inside Badan Penyehatan Perbankan Nasional (BPPN), the bailout agency.

The deal to salvage the bank was messy and topsy turvy. But less than 30 years later, the bank went on to be the most valuable public company by market cap in Indonesia.

That company was BCA.

The state owned banks did not have it any better. There were four of them that went under:

• Bank Bumi Daya

• Bank Dagang Negara

• Bank Exim

• Bapindo

They were so broken they couldn’t survive on their own. They were fused together into a single entity. And again, less than 30 years later, it became the largest bank in Indonesia by assets.

You know that entity today as Bank Mandiri.

Let me stress this once and for all, because this is easy to skim past. These banks did not have a “rough quarter”, or “slower-than-expected growth”, or “NIM compression” or “made by government to channel money to villages”.

They died.

And the rescue?

The years after the fires didn’t restore anyone’s faith either.

The dead banks were swept into BPPN, the bailout agency, and the government had political will to save them. It just cost a fortune which was on the order of 50 to 60% of GDP to recapitalise banks whose books were garbage. Yeah, the initial capital for the government to setup Danantara is about 1.4% of GDP today. That number looks cute compared to the amount in proportion they had to spend to rescue the banks.

Was the intent good? Yes of course. Because you do not want a country with no functioning banks.

But how about the execution? Predictably, there was corruption involved.

You’d think every rupiah back then went purely toward saving the dead banks?

Well, the most famous example is the Bank Bali scandal. A businessman named Djoko Tjandra engineered a disputed “cessie” (debt-claim) deal that ended with Rp904.6 billion of public money being paid out through Bank Bali — funds tied to the very bailout that was meant to be stabilising the system.

Let me be careful here and stay strictly with what the courts and the press have established. Tjandra was acquitted at first, then convicted on review by the Supreme Court — sentenced to two years and ordered to forfeit roughly Rp546 billion to the state. The day before the ruling, he left the country. Here is how The Jakarta Post headlined it when he was finally caught, eleven years later:

“Indonesia brings graft fugitive Djoko Tjandra back from Malaysia.” — The Jakarta Post, 31 July 2020

So now put yourself back in Hendra’s shoes, assuming he made it home safely that day. He watched the violence, he watched his savings evaporate, he watched the most reputable bank in the country collapse. To put sprinkles onto the ice cream sundae, he then watched the rescue itself mired in a corruption scandal.

What more can you ask. I mean if I were to be Hendra, I might walk away and never trust a bank in Indonesia ever again. Let alone, becoming a minority shareholder in one. That would be max insanity.

His feelings would have been justified. In 1998, the skeptic was the smartest person in the room.

And then the world kept testing it

Fast forward ten years, 2008. We saw The Global Financial Crisis.

If you’d lived through 1998, perhaps your reaction was completely reasonable: Ah, sudahlah. Indonesia is finished. There is no chance this economy weathers a crisis of this size, not with this many corruption cases sitting at the top.

And the markets did get hit. IHSG went from 2,830 to 1,113 that October. The Rupiah weakened from Rp 9,000 to Rp 12,400 at its worst in November 2008.

How about BCA?

While banks in the US were imploding, BCA’s lending slowed but it remained profitable. It booked around Rp3.3 trillion in just the first half of 2009. And Indonesia grew +4.6% in 2009 — the third-fastest in the entire G20, one of only a handful of major economies on earth that didn’t shrink.

Fast forward 12 years later after the Global Financial Crisis

The economy is literally shut down. People can’t leave their homes. The country posts its first recession since 1998 — GDP −2.07%.

Surely this is the one that finally breaks the banks in Indonesia. Well quite the opposite. BCA printed money.

BCA’s net profit for 2020: Rp27.1 trillion.

Yes, that was a dip, down about 5% from Rp28.6 trillion in 2019. The bank deliberately parked enormous provisions against the loans it restructured for struggling borrowers. But read the number again. In the year the entire economy was switched off, BCA still earned twenty-seven trillion rupiah. It didn’t lose money. It didn’t wobble. It was certainly quite far from dying.

It earned slightly less for one year, then went straight back to compounding:

• 2021: Rp31.4 trillion

• 2022: Rp40.7 trillion

• 2023: Rp48.6 trillion

In three years it went from a COVID “low” of Rp27T to nearly Rp49T which is an all-time record. The share price followed, printing high after high (right up until the 2025 drawdown I wrote about in To those holding big banks — but that’s a story about price and sentiment, not about the business underneath it).

So by now, something genuinely strange had settled in. Owning banks was no longer the reckless move. It had become the prudent one. Virtually everyone — advisors, respected investors, your disciplined uncle — was urging you to hold banks as a core equity position.

How did that happen?

Let us sit with the seismic size of this shift for a second.

Picture a population that was traumatised into distrusting banks. They watched them collapse and they also watched the bailout get robbed by greedy elites. Yet they somehow turned into a population that treats banks as the bedrock of Indonesia’s capital market.

And this isn’t dumb money talking itself into a story.

If we take a look who actually owns BCA (you can take a look at the daftar pemegang saham). You have:

• Norway’s sovereign wealth fund is in there

• big global index and pension funds

• among others

They are not a random retail you’d find on a discord channel that broadcasts price predictions every minute.

Here’s the part where I think is rarely discussed.

While everyone was, correctly, furious about the corruption and the looting and the Djoko Tjandras of the world, something boring and durable was being built in the background.

They are real instruments:

• LPS / deposit insurance (2004) — the backstop Hendra didn’t have.

• Independent central bank (1999) — no more BLBI-style political liquidity hosing.

• Caps on connected lending (~10% of capital) — the big one; it outlaws the exact thing that killed the banks (owners lending to themselves).

• Higher capital floors + consolidation + Basel buffers — why CAR now sits north of 20%.

• OJK (2013) — dedicated bank watchdog.

• Crisis playbook (2016, the KSSK committee) — coordinated handling instead of a panicked scramble.

These things are not trendy to be discussed. The robbery and scandal make headlines, but I see that the rebuild happens in silence over decades.

And that’s the trap ladies and gentlemen. The bad news is loud but the repair is almost always slow and quiet. If you listen to the loud volume, you’d come to the conclusion that the country is ending even when it is quietly becoming the very thing foreign sovereign funds want to own for the long term.

I am not from La La Land

In this economy and bad sentiment today, you are probably thinking that Toby is starting a patriotic singalong. Not really.

Is the government free of corrupt officials? Of course not. You could take the most recent one — the Makan Bergizi Gratis (MBG) or free nutritious meals program. Just days ago, in June 2026, the Attorney General’s Office arrested the former head of the National Nutrition Agency and two of his deputies as suspects. The scheme prosecutors describe is too familiar: rig the vetting portal so affiliated foundations win the kitchen contracts, then mark up the procurement and pocket the difference.

Just like a normal taxpayer, I am absolutely furious that my tax money is being spent to feed these dreadful creatures instead of being spent to feed school children who can’t afford quality meals.

So no, I am not saying that corruption has been solved. Corruption is still being committed and the people who do it should be prosecuted. Full stop.

But here is a question that matters equally. Is it smart to expect government to eradicate corruption completely?

No, of course not. No matter how good the system gets, no matter how qualified the official, there will always be someone, somewhere, who does the awful thing. Even in developed nations!

So yeah, it is reasonable to disappointed, angry and upset about the corruption that inevitably happens. What I think is not reasonable is to:

• look at a SELL INDONESIA headlines

• listen to gossips at your tongkrongan on how bad some officials are conducting their affairs

• read too many Telegram groups’ negative opinions that contain too much logical gaps mixed in with unofficial news or rumors

• and many other ways you get your information from

and then conclude that the country is about to go bankrupt, or collapse back to what it was in 1998.

But can it go back to 1998 though?

Well of course it can. There is always that tail end possibility.

But can you reach financial independence by winning the lottery? Yes you can.

Do you stop work when you know that you can win the lottery? Well I hope not 🙂

So the question to ask is: are you a realist or a cynic?

When you see the next scary headline — another scandal, another half-baked policy implemented at a large scale — ask yourself that question honestly.

If you’re a realist, that’s healthy. I believe that people should treat every new government regulation, every new program, with suspicion, so that we stay critical of what they actually do. Pressure them in whatever means or capacity we have as a lawful citizen.

Contribute, deliver good work and teach good values by real example, to demonstrate that the bad examples we see in the media are just below our standards.

But being a realist is not the same as being a cynic. And the line between them is thinner than people think.

A cynic is someone who can only criticise — who assumes that whatever anyone does, it must end badly.

And here’s the uncomfortable truth: being cynical is much, much easier than being a realist. The realist still has to weigh the evidence. The cynic has already decided to believe in just the negative things. Any new information about some negativity just reinforces their beliefs without much critical thinking.

Any positive news? It’s fake bro, if they are a cynic.

Think about it like religion. Expecting no official to ever be corrupt is like expecting no priest to ever be caught in a scandal. If that’s your standard, you will be disappointed.

The cynic’s response is to stop going to church entirely. To declare the whole thing hypocritical and walk away. There is no point in religion if we can’t trust religious leaders who commit awful scandals.

But I strongly disagree with that. Practising religious values and actually living them is still a virtuous, worthwhile thing to do, no matter how many individuals fall short of them.

If we can see that so clearly with religion, why is it so hard to see it with our government?

The banks that failed the population in 1998 are the banks the world wants to own in 2026. Like it or not, both things are true. And the herculean effort to save them from the gutters seems to not be for nothing in the longer run.

There are other long term projects that are running now in Indonesia. Danantara, IKN, MBG and so on. Your realism in the form of eye balls, critical thinking and constructive discourse in good faith is very much needed. Your cynicism can probably take a back seat.

Perhaps corrupt officials will never ever be eradicated from this planet. But also perhaps if you play your cards right, future generations might thank your contribution in ways you will never be able to imagine.

Cheers.

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If you feel that there has been too much cynicism in your circle, share this post, or restack it. Let’s build more critical thinkers around here.