It’s been a month since I’ve posted and a lot has happened. We’re still speaking crisis big time. I’m having good fun checking out CNBC’s and newspapers’ headlines. Judging them, we should be lucky to be alive. What I find most disconcerting is the lack of insight or intellectual analysis. We’re swinging from debating on the end of capitalism to comparing the current crisis to the 1930s. Where are the philosophers, or the people who can see the bigger picture? Where’s the nuance?

What I am irritated by is the number of people acting like financial specialists, and the increasingly wild unbiased analyzes that come from that. Nobody complained when the stock market was hyped up and everybody was making money. Sure, when you lose money and feel like you’re the victim of the grand whole, which you may well be (you don’t control those showers of rain either, right?), you will want to be heard. However, I do not believe it is the right approach in the end.

For instance, when we look at the debate on bonuses. People think that the gigantic bonuses (yes I agree they were quite steep, not saying whether they were justified or not) led to the financial crisis. The reasoning is probably that the bonuses led the CEOs and traders to take more risk. However, when we do away with the bonuses, we won’t do away with the risk. The problem is, thus, not simply the bonuses but the risk. An introspection into the nature of risk would be much more needed than doing away with structured products, hedge funds, non-nationalized banks, overpaid CEOs etc… As this will kill innovation, and we know how well socialist states operated over 15 years ago.

They say no risk, no gain and so it is. At the same time, they never said risk, no pain. Our greed may have taken us too far, but as we can see in the above graph, our greed will stand corrected.

ps if you need a good laugh, check out my new collection of jokes over at www.creditcrunchjokes.com

“It’s, like, one business school guy, one finance major after another, kids who, from the time they were twelve years old, were watching Jim Cramer and dreaming of working in a hedge fund. And I think in reality that, probably, if anything, they’re less likely to make good investors than people with sort of more interesting backgrounds… Because I think that in the end the way that you make a ton of money is calling paradigm shifts, and people who are real finance types, maybe they can work really well within the paradigm of a particular kind of market or a particular set of rules of the game—and you can make money doing that—but the people who make huge money, the George Soroses and Julian Robertsons of the world, they’re the people who can step back and see when the paradigm is going to shift, and I think that comes from having a broader experience, a little bit of a different approach to how you think about things.”

From: “Interview with a Hedge Fund manager” N+1 magazine via Kottke.org

“The world is an incredibly complex place and everything is changing all the time. You can’t plan your career because you have no idea what’s going to happen in the future. You have no idea what industries you’ll enter, what companies you’ll work for, what roles you’ll have, where you’ll live, or what you will ultimately contribute to the world. You’ll change, industries will change, the world will change, and you can’t possibly predict any of it.”

On the way home I turned on the radio for a little bit and overheard a commercial that got me thinking. It was a government commercial that persuaded kids to finish school. It was absurd all in all. The commercial didn’t breathe any authenticity. I had to think of old people trying to catch up with the latest buzzwords. It just doesn’t sound real. Stick with what you are good at and don’t overextend yourself to reach out to the kids. They will know you are fooling them.

At the first I wasn’t treated like a person. No warm welcome when I wanted to announce myself. I had to walk up to the dentist to shake his hand and introduce myself while he wasn’t paying attention and glued to his computer screen. Within 5 minutes after opening my mouth he told me I had three cavities and had to make a few other appointments. No eye contact when I left either. The lady at the desk didn’t seem very happy with her job. She didn’t give me a single smile.

Feeling cheated by having to make all these appointments and not being treated as a person, I called a second dentist and was greeted by a warm voice who fit me into their schedule the next day. Coming there, never having seen the desk lady before, she calls “Hi Tim!” when I enter the building. I feel at home. Of course, this dentist was much more personable as well and told me I had no cavities, but some small spots which they noted down.

The difference? The second interacted with me like a person. The first one handled me like an item in a factory. The first was called Dentist Inc. The second one had a real name. I’m not going back to Mr. Inc. Small is beautiful.