[A note from the editor: --
Rob Banker, our fearless young EVP/CIO/COO, spent three hours writing this missive. From 3AM to 6AM today, he was busy being crazy and writing it down. What follows is a reproduction of a plain-text document that was waiting in my inbox when I woke up this morning(they're extra creepy when they're just plain black text delivered while you're asleep...it was like getting a ransom note). Don't say you weren't warned.
--Jimmy]
I don't tend to think of myself as a particularly enlightened individual. Actually, it's more the opposite. I typically feel like I'm looking at the world around me in a sorted of stoned confusion with a big "Huh?" emblazoned across my less-than-toned chest like the shirtless dude at a Packers game at Lambeau field in January. Sorry for that visual.
I think I'm on to something, though. Or not. But indulge my delusion. I wasn't even aware of it until this past Monday, but I was sitting at my desk with a stock ticker going on my desktop. Now this is in itself completely out of character. I don't watch the stock market. I don't understand what short-selling is and I don't care. I pay a financial advisor to do that. He could be funding Polynesian vacations from the IRAs and kids' college funds he set up for me a few years ago. I'm not smart enough to know that the balance statements I've been getting for the last 7 years were really just pages from the discarded Racing Form from his last trip to the track.
But now, here I was watching the market jump around and laughing with guys in the office about how much money I'd just lost. Yup. Laughing. That's a little odd, I know, but I'm prone to laughing at inappropriate moments. My retirement account lost half of its value since January and I'm laughing. And I do genuinely think it's funny. It's not an "if I don't laugh, I'll cry" thing. I'll explain, because there's a number of elements at work here.
#1. Schadenfreude. Because no matter how much money I've lost on my modest investments, there's some other guy who thought he'd beat the system and made a killing a couple of years ago. Right now, he lying on the Rosa Aurora marble floor of his bathroom with a 1/4 bottle of Grey Goose in one hand and a Wall Street Journal alternately sobbing and vomiting into his bidet.
#2. Karma. I managed to make it through the tech boom/bust of the late 90's/2k's without losing my job. I bought a house in 1998 bought a house in suburban Washington D.C. in 1998 and sold it in 2005 for a 130% profit. Both of those -- pure luck. No reason I shouldn't have gotten s***-canned like everyone else I knew in 2001. ALSO, the whole time I was living in that house, I was pining away for the days I could just call the landlord to come unclog the toilet. I was clueless and I got lucky. I figure this is just the universe's way of balancing out some of that dumb luck.
#3. Fear. I don't mean that scared-of-the-bogeyman-in-the-closet type of fear. Just the opposite. It's fear that comes from the beginning of knowledge and not knowing quite to do with that knowledge. I equate it more to watching a horror movie about the bogeyman, knowing the bogeyman is in the closet, and laughing hysterically when the sweet young co-ed gets decapitated with a potato peeler when she opens the door. You know that something bad is about to happen, but there's nothing you can do about it, and it doesn't really matter anyway because it's not real.
This is why everything I write ends up the length of War and Peace, but never the quality. I say things like I just did in #3. Do I think I have even the slightest clue about what's happening in the financial markets? No. Do I really think that the crisis isn't real? No. Do I find decapitation by potato peeler funny? Yes. Did I search Google to find out what one of the most expensive kinds of marble flooring was. I most certainly did.
For the first time in my life, I'm finding myself taking an interest in matters that I never cared to even think about before. Finance. Politics. Business. Foreign Relations. There's something about this time we're in right now where everything seems to have been laid (layed? lain?) open and gutted on the operating table just begging to be poked and prodded. Even better, we're all being invited to walk up and give a little poke and prod because the experts are completely dumbfounded. It's the opening sequence of '2001: A Space Odyssey' happening now. In 2008. 7 years late.
Examples are in order. And again, I'm not proposing that there's anything beyond an absolute beginner's knowledge here. The point is I don't think I'm unique in finding myself taking an interest in subjects that I'd written off as too ethereal and unknowable before.
Case in point, NPR's 'This American Life' ran a show a few months back called 'The Giant Pool of Money' . I'd never really listened to 'This American Life' before, but a friend recommended a few episodes and I ran across this one purely by accident. In one hour, the authors explain the sub-prime lending crisis. That's it. But it's broken down in terms anybody can understand. It's fascinating listening because it's clear that for all the talk in the media about the crisis, nobody has any clue what they're talking about, especially the media.
I'm under no illusion that I've got the whole picture, but I sure as hell know more than I did the hour before I listened to that show. Since then, NPR's run other episodes, most recently one called "Another Frightening Show About the Economy". This one explains the federal bailout plan, what exactly the credit crisis is and how it happened. It's essential listening.
Politically, I've always been fickle. Like anyone, I have my leanings because I have certain core issues I think are important, but I never really had an investment in those issues nor any real interest in finding out more and was willing to go with the candidate that didn't threaten those core issues too much. Then the 2008 Election wheels started turning and with everything that was happening in the country and the world, I was compelled to pay attention. No, I'm not an activist. But, I voted in my first primary. I've watched the debates. My wife went to a rally and took the kids (I was out of town, but would have been there). I realized that, for the first time in my voting life, I not only care, but I actually have a candidate that I feel good about supporting. I'm not voting for the cliched lesser-of-two-evils, at least in my own mind. That feels good.
As far as business, I'm an officer of a small, successful business now and for the first time in my professional career involved in not just the day-to-day, but also the strategic planning. As a person who's prone to acting impulsively, this is a challenge. Business strategy is largely instinct, but it's also listening to those who have more experience and learning for them. Frequently, it's about patience and waiting for the right moment to act. All new concepts to me.
The catalyst for this post was actually Jimmy asking me my opinion about Google's stock price swan dive. The fact that I actually was able to formulate an opinion shocked me. I'll share my ramblings to him through the miracle of cut-and-paste:
"Google is a company that specializes in producing really, really cool half-assed software. Anyone noticed that GMail is still in beta? I opened my Gmail account in April 2004. That's almost 5 years in beta. Granted, it's damn good beta software, but a company that's not willing to commit to an actual software release and hence, having an actual product versus a proof of concept, is not a $300/share company."
Now, I realize the arrogance I just displayed in quoting myself, but the fact that I had an opinion was fairly shocking to me. Is it correct? Doesn't matter. I'm just jazzed I had something coherent(?) to say.
The foreign relations discussion? Suffice it to say I see much more clearly now how intertwined our role in the world is with our own well-being as a country. Our economy (or lack thereof) is entirely symptomatic of our place in the world right now -- a place we as a country and by proxy, individuals, chose.
I'm trying to figure out how to bring this post full circle now. Here it is: all this turmoil -- it's good, even in all its glorious crapiness. The economy getting dumped on its ass? Sometimes only massive upheaval can bring about change. I'm not ignorant to the fact that a lot of people are getting hurt by what's happening on Wall Street. The banking debacle is going to put a lot of my friends out of jobs, either directly or indirectly. However, a lot of these friends also made stupid decisions about their personal economies and put themselves in financial positions where they couldn't weather a losing a job. Is the government at fault? Sure. Is Wall Street at fault? Sure. Are we as individuals at fault? Ultimately, yes.
It's time to pay attention. Do we have to be experts in economics or politics? No. But what I see finally happening is that people are taking an interest in the world. Why? Because the world is very, very screwed up. And that's just the point. There's nothing new about the state of the world. There's always been wars, recessions, depressions, elections. We just happened to hit a moment in time where all the things that are screwed up came to a head simultaneously and forced our attention.
So that's why I'm not panicking and actually started trying to make up drinking games while following the stock market. Like a lot of other people, I've lost a lot of money and I don't know if I'll get it back or not. But that's not all that's going on in the world. I don't buy that ignorance is bliss. Ignorance is what gets you decapitated with a potato peeler. Even just a little bit of knowledge is comforting, and may even give you a reason to laugh.
Well said Rob! You speak for a lot of us who are finally beginning to accept that Wall Street isn't a big magic show with a guaranteed happy ending. If the upside of this mess is that as a country we wake up and start taking our role in our democracy seriously it's hard to say its worth this pain, but it's very good for our future. It's time to stay alert to spot those potato peelers in the closet!
Posted by: Mary Lucas | October 24, 2008 at 09:11 AM