D.F.

Krause

Read D.F.'s bio and previous columns

October 13, 2008

Market Meltdown is Serious, And Yet I’m Still Amused

I keep watching out my office window to see if any falling bodies will pass by. Would it be appropriate to wave? I mean, this would be a human being we’re talking about, at least for another four-tenths of a second or so.

It would be a shame if the last thing he saw was an unfriendly CEO.

Yes, I know, this is not funny. The market meltdown is very very very very very serious, and everyone is very very very very very worried. The market went into its own nosedive this week. It’s lost 40 percent of its value since it peaked a year ago. It lost $2.4 trillion in value in one week. And it didn’t even have anything to do with Kim Jong Il announcing he is changing toothpaste brands!

And yes, my clients are nervous. Their cash flow is suffering because the people who owe them money are having a hard time borrowing. Does that make me nervous? You bet! They might start wondering why they have contracts with me. I often wonder myself.

And yet I am still amused. Not by the market crisis. That is deadly serious. But people’s reactions to it are still kind of funny. It’s sort of like Y2K, if you remember that. We had never experienced anything like it, so no one had the slightest idea what to make of it, but that didn’t stop people from confidently predicting what they thought would happen – as if they had any idea.

“I think there will be a few problems, but nothing big,” I remember one guy saying.

“What do you base that on?” I asked him.

“Just a feeling,” he said.

In other words, he didn’t have a clue what might happen or why, so he tried to come up with some sort of prognostication that would make him sound reasonable – not too extreme – and somehow informed.

In retrospect, we know that no one knew anything. There was no Y2K bug, and nothing was going to happen. But we couldn’t know until the moment arrived. It’s too bad no one made a disaster movie about it for summer 1999 release, because back when it still seamed feasible, it probably would have been a big hit and scared the bejeezus out of everyone. And I always find that amusing.

We’ve never experienced a capital markets meltdown like this, and I’m not sure anyone can really say what’s going to happen. But it’s not stopping some people from confidently prognosticating.

“I think the Chinese are going to be the winners in all this, D.F.,” said one of my clients. “The Chinese are sitting in the catbird’s seat. They’re the ones we owe all this money to!”

But if the whole crisis is that people can’t pay back their debts, how does that put a lender in the catbird’s seat? Silly question. It doesn’t need to make sense! It’s just a theory. The Chinese! Watch the Chinese.

Then there was this one: “We’re going to end up with a one-world stock market, D.F. Just you wait.”

Why would we end up with that?

“Because Obama’s been running around blaming deregulation, right? So as soon as he takes office, he’s going to say we need one set of standards and one set of practices, and he’s going to approach that Ban guy from South Korea – the one at the UN – and they’re going to combine all the stock markets under the UN. Just you wait. I’m telling you, it’s coming.”

Because every time we have a global capital markets meltdown, that’s what always happens.

Well, every cloud has a silver lining. Every silver lining has a cloud. Every bin has a liner. And one thing I’ve noticed in this bin is that at least business people are speculating mindlessly about the market meltdown instead of talking about “Kaizen events” and whatever other nonsense they usually talk about. At least it’s something new.

Of course, they have no idea what they’re talking about. Now me, well, I know the score. You know what’s going to happen, don’t you? Those Mexican bankers, the ones who got in on the ground floor when no one was paying attention? Well, those Mexicans, let me tell you . . .

Click here to talk to our writers and editors about this column and others in our discussion forum.

To e-mail feedback about this column, click here. If you enjoy this writer's work, please contact your local newspapers editors and ask them to carry it.