We prepared you for the worst, but all things must pass. Now prepare for something new, something different.
“'The going is the goal," a pragmatic philosopher said; past and future had both been swallowed in the void of a meaningless now. Such are still the pious beliefs of the futurologist, whose inflated expectations, like the inflated values of our dubious financial-credit system, are based on the supposition that the day for casting up a balance between assets and liabilities can be indefinitely postponed. Are not the losses in fact gains, he asks, like his predecessors, since only through constant waste and war can the mega-machine keep on expanding.”
Dubious financial-credit system? Check. Indefinite postponement of balancing assets and liabilities? Check. Constant waste and war to continue expanding the mega machine? That cuts to the quick. It wrestles with the very beast of the thing. Yeah, the very beast of this thing we're doing today. Except the historian and literary critic Lewis Mumford wrote that in the New Yorker 36 years ago. Thirty-six whole years. That was a long time ago.
There are quite a few ways to look at this, of course. And I don’t know which is right. But having for so long read, written, edited, and published sentences that were nearly identical to Mumford’s — updated expressions of the same critical view even if unwitting in their adherence to it — the paradox of an increasingly nihilistic absence, a meaningless present peppered with inflated expectations, emergent from the sham of our broken and corrupt financial system (which, incidentally, we are told, exists solely by fiat), a precarious and dubious faith only half-granted to our credit-based, debt-stricken system and its looming, forever looming, day of reckoning postponed only by and perpetuated only through never-ending waste and war — I’m finished.
It's not that I disagree with any of it. I have little doubt that all of the following will inevitably happen: war, terrorism, wholesale currency change, inflation, deflation, stagflation, collapse, border shifts and national realignments, the list goes on. I have little doubt because those things have always happened and will continue to always happen. What also happens is peace, forgiveness, birth, rebirth, rebuilding, innovation, the list goes on. No, what I disagree with is preparing for a termination point that will never arrive. History does not, in fact, end. That point on the horizon, the vanishing point, does not arrive as a singular destination, but marches forward with interminable parallelism, the pull of an illimitable and mythic convergence that never appears.
Make no mistake, there are times to prepare for the worst, typically when everyone around you is enjoying the best. One evening in 2006, Minyanville contributor Scott Reamer and I were riding downtown in New York City on a sparkling new subway car. It was as if the car had been unwrapped from the factory only moments before we stepped on. At the time, 2006, Scott and I were both writing articles on Minyanville about the coming housing collapse (See Kevin Depew, Jan. 23, 2006, Housing: The Final Fury (obviously we weren't concerned much about search-engine optimization back then)), the looming debt crisis, (See Scott Reamer, Mar. 27, 2006,Can You Feel It?), how the intensity of that coming deflationary leg down would necessitate, at least for the vast majority of investors and traders, a survival posture, as opposed to a speculative posture. The trick to surviving, we believed, was not to win, but to avoid losing. At any rate, back in 2006 at least, our gloom was misplaced in this city. Sitting in this pristine subway car, Scott looked at me at one point and laughed and said, "You know, this is the best this subway car will ever look. This is the best this city will ever look."
It's been more than five years since that conversation, nearly seven years since I moved here from Richmond, VA, to help build Todd Harrison's vision of removing intimidation from business and financial markets, of refusing to believe that people for some reason needed to be talked down to and condescended to about business and financial markets, his vision that a cartoon bull and bear could make difficult concepts seem less overwhelming. It's been 11 years since the dot-com crash. Our 2006 gloom no longer feels misplaced; it feels comfortable, safe. Yes, there are times to prepare for the worst. Then there are times to prepare for something else. I'm preparing for something else. After more than six-and-a-half years at Minyanville, I owe it both to the dedicated people who are here turning Todd's vision into reality, and to myself, to prepare for something else.
I am proud of what we've accomplished at Minyanville. I remember the day four of us, plus one intern, sat in a conference room in midtown and wondered, "OK, we've got a website, now what?" I remember when we celebrated reaching 100,000 unique visitors a month, a goal that seemed unimaginable when we started. We now have more than 1.5 million unique visitors come to Minyanville on a consistent, month-in and month-out basis. But there is still more work to be done. And it's time for someone with a different vision and new ideas to sit in this chair as Editor-in-Chief and continue building from the foundation we've laid down.
The Worst of All Possible Times?
These are the worst of all possible times, we're told. Just ask any cab driver who will tell you the US default and inevitable currency collapse is only the tip of the iceberg. Hyperinflation, or deflation, or years of stagnation await, take your pick. There will be no winners this time, we're told; we will all be impoverished by the banking system, slaves to the global elite. They say government has never been more corrupt. They say businessmen and bankers, never more villainous. Our schools are failing, they say, and college is a scam. On the one hand, we hear that the environment is being polluted, our children's future traded away in a maze of carbon credits and energy derivatives. On the other hand, they say, environmentalism itself is little more than a clever ploy by cynical capitalists trying to wring out the last dollar from a foolish public only too eager to trade cash for recycled plastic plates and overpriced vinegar-based solutions branded with little "green" pine trees. Meanwhile, we are obsessed with distraction, pop culture, celebrity, bread and circuses facilitated by technology and rapid-fire communication, if one can even call it that, rewiring our brains to crave the Pavlovian immediacy of the virtual call and response; Twitter, Facebook, a vast ocean of meaninglessness that crowds out the significant, a fake narrative broken by unbound connectivity and emergent complexity. Nothing makes sense anymore. That's one way to look at it.
Perhaps it is the only way.
From 1975, Mumford in the New Yorker again, "We had begun, whether we liked it or not, to live in a porous, permeable, increasingly translucent world, whose walls and boundaries, if not altogether illusions, existed mostly in the mind."
Reading that -- the struggle with the evaporation of prior walls and boundaries, the increasingly translucent world, the illusion of control and linearity evaporating before our very eyes -- makes me despair of ever once having an original idea in my lifetime. It's exactly what I felt I had described in a number of earlier pieces on how technology is exposing the non-linearity of life, The Crisis of Non-Linearity I called it. How foolish. The idea is as old as the first scratch on a cave wall. The stakes are no different, only magnified by our lack of humility and the arrogance we display by assuming the worst. The Ballooning Progeny of the Concupiscent Black Swan
Can you see the shift that has occurred? If you have not participated in or observed the financial services and money management industry throughout the 1990s and before, then perhaps not. Prior to 2000, the very concept of a black swan -- an unexpected event that has an outsized impact and which endures post-impact rationalization as wholly expected (a la dot-com crash, subprime collapse, debt crisis, etc.) -- was anathema. The models accounted for all possibilities. Math and science, financial engineering and the science (science!) of risk management had permanently eliminated tail risk. This is not overstating things. Fast-forward a full decade, black swans are everywhere, their ubiquity serving as a sort of psychic balm. Today, every unexpected event is black swan-worthy.
I would like to attend an event on how to prepare for a white swan, an unexpected positive event that carries with it an outsized impact, rationalized in hindsight as an inevitability given our desire for progress etc., etc. No such thing exists, of course. I don't know if I would fork over $695 to go this event, however. Times are, after all, tight.
Preparing for white swans, moving past collapse, it all sounds so good... in theory. It's a happier existence, to be sure. But there remain problems, serious problems, that must be dealt with. Take, for instance, the debtor prison. Debt has always been about morality, and the intensity of the moral conviction that you must pay what you owe, is nowhere as fierce as it is in America. Despite forgiving, literally forgiving, banks and hundreds of other companies in all industries for owing more than they can pay, for the average citizen in America, forgiveness comes hard, if at all.
More than a third of all US states allow borrowers of money who find themselves unable to repay their debts in harsh economic times to be jailed, and US judges have signed off on more than 5,000 warrants since the beginning of 2010 in nine US counties, according to the Wall Street Journal.
Philosophically, it is an ill logic that presents itself. The much misunderstood Occupy Wall Street is fighting this illogic.
"You must repay what you owe. You borrowed it, after all. We are sorry your circumstances may have changed, but a contract is a contract. See, you signed this contract. And you owe this. You must repay it."
This conveniently papers over, literally, the lending side of the contract. In this logic, lending is an economic activity without risk. What, then, is the rate of interest, the cost of the money that one borrows? Theoretically, this was to compensate the lender for the possibility that you have made a promise you cannot keep. That's what borrowing is, after all, a promise. So what is this rate of interest in a system where banks face no risk whatsoever for overestimating your ability to keep your promise? A fee perhaps, or gratuity? After all, you borrowed the money and agreed to the rate of interest, the fee. You promised. And the promise is viewed as sacred. How is it different from any other promise? A campaign promise perhaps?
Risk-free economics. Our bankers and lenders may be evil, a role they embrace because to do otherwise would illegitimize their risk-free lending activity, (see Bank of America's (BAC) debit card fee increase) but woe be to the individual who refuses to pay his debt.
Enough. Enough preaching. You know it's time to hang it up when everything you write comes out like a roadside revival sermon fueled by secret sips of whiskey.
So this week is my final week in this chair. I leave with a tremendous respect and much admiration for what Minyanville has accomplished. It is Todd's vision, of course, and it's also thanks to the many hours of work behind the scenes by those whose faces may not be on the homepage, creating content, editing it, working with partners, creating new relationships and building this community. While this week may be my final week as Minyanville's Editor-in-Chief, it's hardly my final week in Minyanville. I'll be joining the community as someone who actively follows the content here, even though I may not write about finance as much. Like I said above, it's just time. Let's stay in touch. Meanwhile, I'll see you at Festivus.
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