The Flying Change

Lesson #3 From The New Depression

(For Lessons #1 and #2 click here and here)

Timing is everything.  (ed. note: we need a lesson that isn’t so trite)

Here’s the point.  The point is that timing is everything and that there are no moral judgments associated with this reality.  Hindsight is perfect but there are false narratives in the world, taken from the perspective of wherever you sit and those narratives don’t always adhere to truth or fact.  Because those things are slippery as eels.

For a long time, people made money investing in real estate.  For a long time, people made MD at Goldman and Morgan Stanley and at JP Morgan and at Bear and they made a lot of money and they made it for long enough that they felt they deserved it and were smarter than you or me.  For a long time, AIG’s Financial Products division made money hand over fist.  For a long time, Nouriel Roubini and other pessimists had been predicting a collapse of the housing and equities bubbles and for a long time they were wrong.

Then one day things changed.

And our instinct is to herald the naysayers as prophets and the fallen as inevitable victims of their hubris.  But for a long time, the naysayers weren’t prophets, they were simply wrong.  And for a long time the fallen hadn’t yet fallen.

Here’s the deal with the market of life: it’s long term efficient but in the long term we’re all dead.  In the short term, the smart and the fortunate exploit pockets of inefficiency to their own gain even if the broader story pursues a different end.  

Yes, many people lost a lot of money in the real estate bubble.  But many didn’t.  Just like many lost their paper worth in the dot-com bubble.  But again, many didn’t.  Sometimes lightning struck just right and through careful planning or prescience or just plain dumb luck, certain people made off like bandits.

Timing is everything.  Another way of saying this is: there is no band.  Another way of saying this is, there is no clean cut story to tell because the story of life is a messy thing.  Perhaps another way of saying this is, there is a narrative being developed right now that, in retrospect, will seem obvious but, of course, isn’t and if you’re lucky or fortunate you may yet exploit it.  Another way of saying this is, it’s not good or bad it just is.

Uncategorized Comments View Comments Mar 29th, 2009

  • brooklyn counsel
    I like this post. Yet a large part of me thinks that the best policy would be to tax the fuck out of those who made out like bandits. Some people might label me a vindictive, jealous, sadistic prick without vision or a grasp on the bigger picture of our place in time. It's possible that this is true. I'm human, after all. But I think those people are wrong.

    Speaking of our place in time, or time travel generally... did anyone catch "Lost" this week? I thought we weren't supposed to violate the rules of time travel? Sayid?
  • theflyingchange
    As I've commented, I am *generally* against mob rule and I don't like
    changing the tax code after the payment is made, regardless of whether it's
    technically ex-post-facto or not.
    But that's really a continuation of our dinner conversation and not
    necessarily relevant to this point which is merely that, again, in the short
    term, the market of life is inefficient and can be short-term profitable,
    long-term unprofitable and that, essentially, the long-term is mostly
    irrelevant.

    Re: Lost: We don't know that Ben is necessarily dead or that the Island
    doesn't bring him back in some way. Sayid is annoying me.

    Thanks for your comment, neighbor!
blog comments powered by Disqus