Read D.F.'s bio and previous columns
October 13, 2008
Market Meltdown is
Serious, And Yet I’m Still Amused
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
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.
think there will be a few problems, but nothing big,” I remember one guy
“What do you base that on?” I asked him.
“Just a feeling,” he said.
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.
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.
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
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.
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 . . .
© 2008 North Star
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