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Not the Financial End of the World as We Know It


This Minyan feels fine.

I thought the release of the new REM album today might be a good excuse for a time out and a little perspective on what we've been reading in the media (Minyanville included) about the latest financial end of the world as we know it.

Full disclosure: I'm a marketing guy. Before joining Minyanville, I was the Global Managing Director of Brand Management for Merrill Lynch and Managing Director and Global Head of Marketing and Communications for Deutsche Bank's asset management arm. Despite 25 years on Wall Street, I'm no financial whiz. I suspect most of you out there are in the same position. The one thing I can bring to the party is a little more experience in having seen the chart move in a direction other than straight up over periods of time.

First Point: I've Seen Worse

For those of you who have 15 years of experience or less, you're probably having duja ve. You know what duja ve is? It's when you feel that nothing like this has ever happened to anyone before! You're wrong.

Since I've been on the Street, I've seen market crashes ('87), Bulge Bracket firms go under (Salomon Brothers), traders take down a firm (Barings Bank), one hedge fund almost take down the global bond markets (Long-Term Capital Management). I feel like the Forest Gump of Wall Street. Been there, done that, bought the deal toy.

During every one of these events, every pundit in the world rushed to tell you it was the worst it had ever been. This is the big one, Elizabeth! The assertion was that we were finished, dead and going to hell in an equity basket.

Guess what, Elton? I'm still standing.

I find it hard to believe that Merrill Lynch (MER), Morgan Stanley (MS) or Citigroup (C) will suffer the same fate as Bear Stearns (BSC). Their balance sheets may look the same, they have significant near-term problems, but remember that they, unlike Bear, are global brands and companies, not just balance sheets. They have diverse lines of businesses that are still working - and some are working pretty well.

Second Point: Societal Acrimony Has Been Around Since Cain and Abel

Let me get this straight: A couple of fat guys in cufflinks wheeze their way into the Bear Stearns building and we're ready to head for the bunkers? Give me a break!
Talk about The Gang That Couldn't Shoot Straight, these twerps didn't even know you're supposed to storm the headquarters of the victor, not the vanquished. You get more press that way, and a better shot of being arrested and posting Bear stock as bail (as long as you bring cash).

When you read that they shot a U.S. senator, a prominent civil rights leader and a governor in the space of 90 days, then you might want to let Houston know we have a problem. That was real societal acrimony, and believe me it was ugly. Sometimes I think we have the thermometer in a little too far, and are checking it a little too often.

Third Point: I Don't Believe in Conspiracy Theories (Except the JFK One)

I've been hearing a lot of chatter about how we're socializing the markets; how the invisible hand is tightening around all of our throats; how the five guys in the mountain are finally applying the coup de grace. This has been going on for years. Whenever the free markets lose their way, government has to come in and straighten things out. It's their job. We may not like it, but in most cases it's necessary, and if done correctly it works. Every once in a while we catch a glimpse of that invisible hand. As long as it's seen less than The Loch Ness Monster we'll be okay.

Fourth Point: There Will Be Screw Ups in the Future

Come on, you have the lethal cocktail of people, money and human emotions working around the clock and around the globe. Nothing succeeds like excess. It will happen and we'll deal with it

Final Point: The Chart Always Goes From the Bottom Left to the Top Right (Just Not In a Straight Line)

Okay, now Pollyanna has to admit to you that things are looking a little less than rosy.
So what? We still have families to feed, kids to educate, retirements to fund. This is no time to bury your head in the sand. But it is time to keep your wits about you. Emotions can run high during market turbulence - just the time reason should prevail. Saddle up and follow that advice, Minyans. I promise you'll make it through The End of the World Part 3,527.
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Position in MER
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