24.9.08

One Good Turn: the Preponderance of Myopia

With the brokered sale of Bear Stearns, the nationalization of the GSE, and now the $2,000,000,000,000 bailout of financial US firms—good things must come in threes. So here is my list of the top three myopic myths of the financial times:

1. Myth One: History is 50 years old.
It must be, because every life-long financial analyst, advisor, and investor is quick to quip how his life-time of experience explains away the potential woes of governmental involvement in our free-no-longer market. These “experts” explain how the Harry-Potter like magic used to create upwards of $2,000,000,000,000 from nowhere probably won’t cause inflation, how the Fed is too smart for that, how tax payers likely aren’t going to lose money, and might even make money as the Fed sells off these assets. (If they could be sold for more than what someone is currently willing to invest in them, wouldn’t someone want to invest in them?). Note the repetitive use of the subjunctive—might, could, would, should, may, possible, likely, probable. And in defense, these “experts” can point back to what? Well, to 50 or 60 years in the lifespan of their experience.

Where is the long-term historian among these experts—who looks back over a period of 500 years and says, “Once Government takes over an area of society, it never relinquishes it back; never—short of a revolution. Never. “ Never. Read my lips, “NEVER.” The myopic blindness that resulted in this financial crisis was caused by the very same approach that says, “In my experience, as an expert…”

While we can justly say that the governing bodies of these financial institutions were stupid, we cannot say they were dumb—and they drew from their experience as experts. And now we are to trust that the Fed is “smarter than that” or “too smart” to cause inflation?

It is the lesson of history, for those willing to learn it—that there are opportunities to avoid disaster that lie far beyond the scope of our years and experience—beyond the last 50 (even 100) years.

2. Myth Two: Governments—like God and magicians—can make things from nothing.
We have allowed ourselves to be reclassified. No longer are we Countrymen, or Citizens—humans as imago dei. We are now consumers. As such, our status is not dependent upon a common participation in a common society. Instead, we have been monetized in a fiat system for political means. No longer neighbors in communities—more often we are residences of subdivisions. No longer husbands and wives—more often we have become cohabitating civil unions. No longer fathers, mothers, sons, daughters, and friends—we are only consumers, workers, and the struggling Middle Class. (Thanks to constant government entitlements, we don’t have to call ourselves lower class.)

Having allowed ourselves to be so redefined in relationship to country and government—we become Gnostic believers in a pagan state whose god is money—in this God we trust. Gnostic—because, far from owing our personal responsibility in a government “by the people,” we plead ignorance and demand recompense, allowing the elite (those highly trained and educated experts in the secret formations of higher governance) to rule “for the people.”

We hear it every time a community suffers some disaster—some neighbor says to the camera, “Something has to be done! This isn’t right! If it was a terrorist attack, the government would be here! Why aren’t they here now?”

In a word—entitlement, expectation…or some other people might say, comeuppance.

3. Myth Three: The US is Saving the World by this Bailout.
Having been reduced to the struggling masses of a recent history and Gnostic approach to governance—it is only natural that we would see the actions of our government (and our nation) as “saving” the world. In the past, in some wars, tragedies, and the financial woes of other nations, we have done just that.

Not so today. In fact, this problem is ours. We caused it, and the culmination—of a consumption-driven economy (vs. a production driven economy), the abuse of monetary production (inflation) and the willingness of neighboring countries to buy and hold our debt—is all on us. Though the US news agencies don’t report it in so many words—the rest of the world knows this is our problem.

Moreover, they are taking steps to protect themselves from the impact of our fiat, financial tomfoolery. That is why Russia, China, and Iran (whose own Oil Bourse will not accept US dollars) are meeting regularly—in the Shanghai Cooperation Organization. Russia and the EU are meeting in what has been dubbed EATO, or the “Euro-Atlantic Treaty Organization.” Japan has entered into closer bilateral ties to China than with any other nation (including the US)—revealed after Japan’s Emperor Akihito met with Chinese President Hu Jintao three times in the month of May. Even Latin American countries have begun to take the same steps.

Friends, Countrymen, we are not saving anybody—not ourselves and, least of all, the rest of the world.

Conclusion
Media talks about the historic presidency, but I suggest that in 100 years that we had a black president or that we had a female vice president will be little discussed. Of much remembrance will be what was done today—whether we allow the separation of powers between private and governmental realms to safeguard the continuance of our fundamental and Constitutional (not entitlements) freedoms; or whether, in our rush to ensure the status quo of comfort, lulling us toward totalitarianism, we sacrifice what cost us (personally and individually) very little but is of inestimable value.

Either way, a century from now, someone will be able to say of this period what Paul Johnson wrote concerning the shift in Asian powers leading up to World War II, “There now followed one of those decisive historical turning-points which, though clear enough in retrospect, were complicated and confused at the time” (Modern Times, 194).

13.9.08

A Momentary Reflection on History

“History shows us the truly amazing extent to which intelligent, well-informed and resolute men, in the pursuit of economy or in an altruistic passion for disarmament, will delude themselves about realities.” (Modern Times, Paul Johnson, p175)

Nothing has come so close to capturing the heart of our current financial situation as this statement written—not primarily about markets and economies—about the regional instability and political blindness that led to the rise of Japan as a global threat in the 1930s and, ultimately, World War II.

It is easy to say that the housing bubble was predictable, easy to call “blind” the men (and women) at the helm of stations like Bear Stearns, Lehman Brothers, Washington Mutual, IndyMac, Countrywide, and a thousand other banks. Everybody loves being a sidelines quarterback—silent when wrong, but multi-active on the blogsphere (and Fool boards) when right. “I called it!”

I’m not saying these leaders didn’t make bad decisions, nor had lapses in judgment. But eventually, alterations in models force all of us to reexamine our fundamental principles and, at times, cause us to radically change long-held suppositions. For example, how long would the rise of oil have to increase (recognizing we are currently in a commodity pullback), before even the “bubble bears” would have to say, “Something has fundamentally changed and so too must my model.”

In fact, that is the reality of investing. Otherwise, we’d all be piling in to Corel, Hotmail, and Altavista. These each were leaders in their areas at one point. As late as 1990, Wordperfect (not yet owned by Corel) was the de facto standard for word processing. Corel Draw owned a market unfamiliar with the name of Adobe. Altavista was one of the lead search engines a decade before anyone would use the term Google (despite the “misspelling”) for anything but a mathematical formula. What changed? Fundamental trends which, over an ever-lengthening period of time completely adjusted fundamental application of core principles. No, “we” didn’t stop buying value, or looking for growth. But how this was applied—that changed.

So here are 10 questions to think about over the weekend:
1. Did the rise in the dollar (by 4 points in the last 3 months) cause the fall in commodities, or vice versa? Or was there any correlation whatsoever?
2. Was the flight from commodities due to fear over being overbought and, if so, are they now oversold? Or was the flight from commodities due to the cash crunch that many banks, funds, and individuals find themselves in?
3. For the first half of the year, equities and commodities reacted inversely, but now are tracking in parallel? What does that mean for investors?
4. Will the Fed bail Lehman Brothers over the weekend? With what equity backing? And what will that ultimately do to the value of the dollar internationally?
5. China and Russia are the largest holders of the US Dollar. Relationships with both are…less than optimal. China continues to be the leader in energy growth consumption, while Russia remains the leader in Natural Gas. How does this bode for the US, especially in light of our continued printing of fiat money to back failing investment banks?
6. Will Russia seek to acquire once-held segments of Ukraine, just as it now is holding sections of Georgia? Will NATO respond, and how?
7. What long-term impact will the Iranian Oil Bourse have on dollar stability and oil prices?
8. McCain wants to extend our military imperialism (think Brittan, 1920)—and pay for it with what?
9. Obama wants to tax the heck out of big oil and the top 20%—and do what when these entities are in their waning seasons? He also wants to make healthcare free to all (think France in the last 30 years)—what will this ultimately do to the healthcare industry?
10. What will be the global consequences of either a) pulling our extended military out of Iraq and Afghanistan or b) actually getting one or both of these nations to a place of (some semblance of) stability?

These are global questions, intricate in their implications, complex in their development, massive in their scope, but altered often by nuanced decisions—a condition ripe for “intelligent, well-informed and resolute men, in the pursuit of economy or in an altruistic passion for disarmament” (of which many of us claim to be!) to delude ourselves about reality—to make mistakes, have lapses of judgment, and let a truly-changing global politico-economic environment affect long-held beliefs.

11.9.08

Remembering 9/11 – Le Sauveur est Mort! Vive le Sauveur

It seems we’ve arrived—that moment when we can definitely acknowledge understanding and claim a cognitive victory over the once unknown. I’m talking about 9/11. Now on the seventh anniversary of the tragic, deadly attacks—we remember… by declaring victory. The documentaries of a dozen channels have moved from the now too-familiar footage of the collapsing World Trade Centers…to explaining—all explaining: why one building fell sooner than the other, why the planes disintegrated on impact, why the black box at the Pentagon was found near the nose, why, why, whywhywhywhy. We are good at explaining.

And we are good at explaining away. As such, we become victims of a false sense of self-security which creeps into our living. It is almost as though when—having explained, having found satisfactory (though never complete) understanding—we become the exception. Consequences need not apply. Explanation has set us free.

Have you ever noticed that it is the people who regularly smoke who know the statistics about lung cancer better than anyone (just look at the nurses lined up on the sidewalk at St. John’s hospital along Ballas Road)? How it’s the guys who actively trade stocks that take the biggest risks—believing somehow that their “experience” and their “knowledge” make them immune to the dangers of excessive loses.

Enron, K-Mart, Bear Stearns, Lehman Brothers, Freddy Mac, Fanny Mae. Most of the leaders in these collapses or corruptions (or both) made the same (wrong) judgment calls as people before them—believing, somehow, they were different, exempt. That some secret knowledge or “insiders’ insight” would protect them from the law, bankruptcy, ridicule, and prison. Then there are the pastors who sacrifice the entirety of their families, reputations, ministries, and vocations. There are the union workers who entrench themselves into a work-ethic of complacency. And there are the democratic nations that embark upon socialistic and fascist pathways. “We’ve studied the past. We understand it. We have a secret knowledge. And we will avoid those consequences.”

Ironically, Western nations thought they understood what gave birth to the Great War and so—in that time between wars—they made decisions with improved “knowledge” and heightened “insight” that offered certain confidence in the prevention of future such happenings. Less than a generation later, another great war ravaged the world. NASA, having studied the destruction of the Challenger, took steps to ensure it would not happen again…until the Discovery exploded on landing. On the same day that I watched the “9/11 Documentary” on why we are better prepared, I heard report of a study that found the US almost unchanged in its preparedness against biological and chemical attack as on September 11, 2001.

As with all pride born from knowledge, naming, and discovery—we forget what matters most: The children who are growing up without parents killed in the 9/11 attacks. The husbands and wives who lost their partner. The parents who lost children. The friends who lost friends. The nation…that lost its ability to reflect long on the cry for deliverance. The cry—that died so soon after the attacks—for deliverance, for salvation, for…God.

Today is like that first 9/11—the weather and the world, I mean. The only thing missing is the silence—the silence born from confusion, unanswered questions, sadness, fears. And from the humility that comes with the momentary reflection that knowledge, information, and understanding cannot deliver us, cannot defend us, cannot save.

Seven years later, there is no room for silence. We have filled up all the silent places with explanations, comforted with the self-certain belief that our knowledge will makes us exempt, safe. John Bright might have said it this way, “We are a self-saved people and oh, how we love our savior.” Or in the words of Pogo, “We have seen the savior, and he is us.”

5.9.08

In Remembrance: Dr. Wilbur Wallis

(Wilbur and Marie Wallis on their Wedding Day)

Wilbur Wallis is dead. A week has passed since his memorial service, but his memory still hangs on me like an albatross on the neck of the Ancient Mariner. I think, how unremarkable is the passing of great believers. It almost seems the greater the impact, the longer the faithful service, the deeper the Christian commitment and love—the more silently they pass into the night. How even the passing of CS Lewis was shrouded by the death of a President—and he slipped, that great man, beyond the curtain of glory, while all eyes were elsewhere. NPR tells me that two died in fighting on some distant plain, or that seven died with some new storm front. But the passing of one such as these gains what—the emptying of some nursing home room, the forwarding of last pieces of mail, and the disposal of papers kept for some reason unbeknownst to the living.

The white administration building is likewise on its final days, and stands now—more often than not—an empty shell of inactivity. I walk her empty hallways knowing that Dr. Wallis spent the better part of a dozen years in the confines of her walls—knowing that if I could just gather up the dust and decay from every decrepit crack, and regenerate that waste by science or speculation, I could birth again the ghosts of yesterday. But death has come, and mites have feasted upon the stray hairs of passed-away saints. Like the noble elephant in David’s memories (from Hemingway’s Garden of Eden)—it is a glorious thing in its massive size and animal defiance. But when the gun it put to its ear, and the repeating shots ring out in the surrounding forest, the elephant is gone—and only an empty mass of wrinkles remains. So too—whether in caskets or cracks—Wilbur is not here. The nobility resides elsewhere, and only wrinkles remain. Ashes to ashes. Dust to dust.

His brothers and sisters were there. They told stories about childhood—about Wilbur’s dance with death, and bare escape from Phenomena; how he walked 6 miles a day, alone, lumbering his 6-foot height with an easy gait. He was known for years afterwards to walk from Des Peres to the Seminary campus. I’ve walked that stretch of Ballas many times, and see how little the passing cars note my existence. Did they note his? In life, was he granted—at the least—that passing driving queried at this tall man of the disheveled hair, taken so often to the wayside? Or was he just another obstacle to avoid, something not to hit, to miss but not regard; to avoid but not acknowledge?

I remember my last visit with him—now nearly two years ago. He was praying when I came in. Dr. Wallis explained to me that there was a fellow resident at Friendship Village who mocked him whenever he spoke about Jesus. Here—this great saint of faithful years and heavy sacrifice, of theological battles and exegetical comprehension, treated by caretakers as little more than a needy geriatric—was untiring in his prayer for the lost, his compassion for their salvation; such that—when the rest of us had forgotten him—he had never forgotten his mission. Like the abandoned robotic WALL-E—faithful in his unending directive—this man was about the work of the King, the advance of His Kingdom, and the building and strengthening of His Bride.

To be like that. To be remembered like that—remembered for faithfulness when the faculties of body have failed, and the ability of recollection weakened; remembered for remembering even when I have been forgotten. God, let it be so.

The ancient mariner waits for the wind to blow again, and the empty administration building waits to see what redemption will bring. The grave stands ready to receive another—in that cry that never says, “Enough!”—and yet, with every fleeting soul to the side of the Savior, the curtain of heaven closes a little bit less. The glory shines out a little bit more. Glimpses of eternity pierce more regularly the monotony of days that, one upon another, fall. We will all fall. And while the world is distracted, looking left, I look right and see there another saint slip behind the curtain. Eventually, I think, heaven will be so full of those who have gone ahead that the sound and sight of it cannot be hidden from this world—and those who remain will walk a season as if in-between worlds—till Christ reclaims His own.

Soli Deo Gloria

3.9.08

Garden of Eden, by Ernest Hemingway

Hunger—that nagging, empty, gut-tugging, bone aching, heavy, and exhausting insatiability. That is the unsatisfying hunger of Hemmingway’s The Garden of Eden. It is the story of a newlywed couple, David and Catherine Bourne, insatiable in their hunger—famished for breakfast, dying for lunch, starving for dinner. And a drink—always some alcoholic drink: whisky, beer, wine (of a thousand brands), Armagnac, and absinthe. And the sexuality of their marriage bed.

But it is a dark hunger—unsatisfied. A hunger that finds hinted-at expressions of the unnatural. Catherine longs to be the boy. She longs David to be the girl. And they make the game of it—in the dark of their room. But what is done in secret will be revealed. It is—and she is discontent. There is one more secret yet to be had by the unsatisfied Catherine, one more desire to find fulfillment, one more experience to try, one more mores to break. Always one more attempt at happiness.

But the loneliness of the empty soul is a dark hunger satisfied only with great difficulty, by an ancient love. Catherine seeks to be as dark as an African, with hair so white that it becomes almost colorless when wet. And in her pursuit of darkness, she never finds the end of those troubled ways. Contentment remains a handbreadth away—while the darkness is always closer than that.

“…Now there is this disregard of the established rules which can very well be the salvation of the whole coast. We are pioneers in opening up the summer season which is still regarded as madness.” Human salvation never is. The trust of wealth promises. The lure of the siren raises echoes of brokenness not to be healed in the pursuit of the vain. And the empty heart, like an empty bottle, is all that remains after drinking the vanity of the earth.

“I thought you might be lonely,” David says to his wife of three months—after they have ventured too far down the roads of marital contentment.
“I was.”
“Everybody ‘s lonely,” David said.
“It’s terrible to be in bed together and lonely.”
“There isn’t any solution,” David said. “All your plans and schemes are worthless.”
“I didn’t give it a chance.”
“It was all crazy anyway. I’m sick of crazy things. You’re not the only one gets broken up.”
“I know. But can’t we try it again just once more and I really be good? I can. I nearly was.”
“I’m sick of all of it, Devil. Sick all the way through me.”
“Wouldn’t you try it just once more for her and for me both?”
“It doesn’t work and I’m sick of it”
“She said you had a fine day and that you were really cheerful and not depressed. Won’t you try it once more for both us? I want it so much.”
“You want everything so much and when you get it it’s over and you don’t give a damn.”


Brokenness is empty. This kind of soul hunger will not be filled with the ordinary kinds of food and drink. Hemmingway drew long from the draughts of promise—till in the end there was nothing, for him, for David, for Catherine…for any who set upon such paths. Vanity? Yes. And the revelation of a modernity now nearing the exhaustion of age and waste and trying.

“All your plans and schemes are worthless,” the heart says.
And with a desperate voice we hear ourselves reply, “Oh, but to give it one more chance.”