The Headwall
I taught my ethics course last night on the subject of the subprime mortgage crash of 2007. I used the movie The Big Short as the case study and had two team of students debating the thickly implications of the activities in the market in early 2007 that I lived through so very much in real time back then as the head of BSAM. I gave the students additional reading to review including the “Into the Grey” sections of Maureen O’Hara’s book Something for Nothing: Arbitrage and Ethics on Wall Street as well as Chapter 18 from my book Gulag 401k: Tales of a Modern Prisoner, which I titled “Evisceral Reaction”. 2007 was an emotional time for me, but I got through it with my conscience and soul intact, but a little bruised. My bank account took a small hit in 2007 and then a much bigger hit in 2008 when Bear Stearns was sold at bargain basement prices to JP Morgan. Fortunately for me, I am far less emotional about money than I am about conscience because the money impact was quite large by any standards. But I survived and here I am fifteen years later (Wow! It turns out that time does, indeed, fly) teaching about business ethics to very bright young minds. Next week I am having them watch a far more accurate reflection of what went on in 2008, a movie called Margin Call that is ostensibly but disguisedly about the fall of Lehman Brothers. That was the aftershock of what happened in 2007 as far as I’m concerned and it had far more bearing on the global economy than the early tremors in our BSAM hedge funds did in 2007.
How very strange to come home last night and hear the late night news that Putin had launched his full-scale invasion into Ukraine while I was teaching ethics. I wrote about the cracks in the wall of the Pax Americana the other day and it is now fair to say, as all the cable news pundits and politicians are saying (save the reprobate Republicans like Trump and the even more vile pundits like Tucker Carlson) that Putin is making a direct assault on liberal democracy in the world and that the gloves are on the ice as the bare knuckles of Russia connect with the already raw flesh of the Ukraine. We can call it what we want but the New York Times does not get close to 96 point type face for minor-league headlines and while today’s invasion headline did not make it into the top category, it has come close to being on the scale of the Pearl Harbor Attack. I think the surprise and directness of the assault in 1941 was far greater than Ukraine in 2022, but the impact may end up being all too similar. We may now be in the beginning innings of WWIII and that is all there is to it. Putin is unhinged the way Hitler and Hirohito were to be sure. The world at large (over 150 nations) are condemning the invasion and Putin specifically. If he wanted notoriety and to be remembered in history, he has certainly achieved that.
As I stare out my window this morning, the air is clear and visibility is somewhere between 60 miles and forever. I am looking at both the San Jacinto and San Bernardino mountain ranges as though I was standing at their bases. With the winter storm that just blew through here the last few days (the winters cold wind yesterday was almost Arctic-feeling), those mountains are covered from top to bottom in snow where they were snowless a few days ago. Now I am looking at a pure white headwall that goes up 10,000 feet or more. That metaphor of living in the great liberal state of California and staring at the headwall before us on the horizon is unavoidable to me. It is all still a long way off like Ukraine is a long way off from us, but the ability to see how clearly the frigidity of winter is so very close with all the hardship and human suffering that it can entail is within sight is a stark reminder that now is the time for all good men and women to come to aid, not of their party, but to the aid of their country and the people of the world.
Handy Brad is coming over here in a few minutes and he has informed me that he will lend me his truck but that I will have to go by myself to the Mexican border depot to pick up my log posts this morning. He is apparently otherwise engaged and his promise to stand with me in this endeavor has faded for his personal reasons. I feel a bit like Volodymyr Zelensky, the comedian turned diplomat and leader of Ukraine. He is now on his own against the 190,000 Russian troops and all it’s high-tech military might that is descending upon him. I respect the fact that despite not getting anything but verbal and sanction support form the West, he is still strongly and staunchly standing strong against the overpowering Russian force of will. So, I will take Handy Brad up on his offer and borrow his truck and drive it by myself to the depot to pick up the Timbers. I will then attempt to build the remaining portion of my little Hobbit dacha all by myself. What a silly analogy I am making, equating the challenge of a few logs on a Hobbit House with incoming missiles into Kyiv, but I assure you, on December 7th, 1941 there was a guy wrestling a log post somewhere on his own, solving his own problems of the moment. That does not mean his heart and mind wasn’t in Pearl Harbor in spirit. Ich bin ein Ukrainian.