Filth
As I’m approaching the coming trip to Africa, I’m reminded of all the things I don’t do well — maintain my patience, avoid lustful thoughts, ignore judgmental thinking — all the behaviors that attempt to undermine my confidence in my own righteousness. But wait a second … what righteousness?!?! Who ever said I was righteous?
In his letter to the Corinthian church (a church that was strutting in its own righteousness), the Apostle Paul writes about himself to the church:
“We are fools for Christ, but you are so wise in Christ! We are weak, but you are strong! You are honored, we are dishonored! To this very hour we go hungry and thirsty, we are in rags, we are brutally treated, we are homeless. We work hard with our own hands. When we are cursed, we bless; when we are persecuted, we endure it; when we are slandered, we answer kindly. Up to this moment we have become the scum of the earth, the refuse of the world.”
(1Corinthians 4:10–13 NIV)
He is pointing, quite clearly, to the lowly degradations that the world has placed upon the face of Paul and his fellow missionaries, the ways that (with a voice of sarcasm) he is not being as righteous and perfect as the people in the church at Corinth.
His point, and mine, is that we are not to judge the righteousness of someone’s soul (or our own) by what we experience in the world; instead we are to recognize that we are made righteous by God and God alone in Christ — that the very fact that we are walking piles of filth, filled with ire and desire, judgment and doubt is a testimony to the power of God when He uses us in spite of that.
I know quite a few really Godly people … they’re awesome and they do lovely things with their lives. I also have seen just about all of them do some really “human” things. This does not undo the righteousness of what they accomplish, it actually enhances it — because I know, when I regard them in my heart and memory, the miraculous work they do is not because they’ve become super-human righteousness heroes … but because, in the midst of all the noise in their lives — inside and out — they strive to listen to God and do what He tells them … and through that, they are included in the things that God is doing. We are Saved in Christ, but we are not suddenly perfect people… we are perfectly imperfect.
When I see a righteous friend helping change the world, I know that person isn’t doing it — I know that God is moving behind that person, doing it all Himself in spite of that person’s “brokenness.”
I’m not a fan of that word, brokenness. Christians sling it around to talk about their own fallen nature — almost as a euphemism for sin. I think it’s a bit pedantic — childishly describing our open-faced defiance of Deity as if we’re a toy that can be mended. Let us be clear — left to our own mystical, spiritual devices — floating in the Matrix-esque ether of eternity, defined only by ourselves … we would all be overweight throne sitters, holding scepters of judgment, naked in our own gluttony and desires, drifting around in a stupor of self-indulgence while pointing at each other in judgment — seeking to destroy that which we don’t like and consume that which we like. We’re not broken … we’re evil. (“Speak for yourself, Malcolm; I’m a good person.” Well I guess that’s Paul’s point, isn’t it?)
Given that, no wonder we seek our own righteousness in Christianity — no wonder that we seek to be free of such a fat and ugly picture and do “good” as much as we can … who wants to be a lust-filled consumer our entire lives? (besides our friends on Madison Avenue) So, upon receiving the Salvation of Christ, the Promise of Redemption to a truly Holier existence in God — we seek to embrace it. Like the vomit covered alcoholic who quickly jumps up from the gutter, tucks in his grimy shirt and combs his greasy hair as the queen approaches, we stand up and do our best to make ourselves presentable. Of course, since we’re pathetic — we then look at all the other homeless drunks around us that are straightening up and judge them because their shirts are ripped and they have smears of filth on their faces.
But, if we are to be truly Righteous, the first step is to be truly true. We are to recognize that while we are Redeemed in Christ, we’re still stinky; we’re to see that even the queen (“hey, you fat cow, nice hat”) is filthy before the Lord, and it is the fact that He can use such a ragtag bunch of malcontents for Good that proves His Divinity — God is God and we are not.
So, as much as I want to head to Africa and share Divine Inspiration about the things I have learned to help them move forward as Christian Business people — what I really want to do is impress all of you. I want everyone who reads this to say, “Wow, check Malcolm out, he’s going all the way to Africa to teach Pastors and business people things about business. God must really love him.” I want you all to be impressed by what God is doing and see that yes, I have accomplished some serious level of junior Righteousness — and well, it’s ok… because I’m humble. I want you all to shut up and listen to me, because I can hear God… then maybe, just maybe, the world will be a better place.
Thankfully, God doesn’t really do it that way — in spite of how awesome I secretly am in my own mind — He uses me. Not because of anything I’m doing that’s righteous (hey, what’s this stain on my tie? Is that puke?), but because — for whatever reason HE chooses, He has decided to Love me… in all my squalid splendor.
These people are waiting to hear me tell them things — but it really IS God doing the teaching. Not because I’m a “vessel for His Divine Word” … but because I’m the self-indulgent, self-important, self-righteous hammer that He chose today to drive that nail today.
But you know what? I’m really, truly comforted by that. You see, if I am only responsible for being a stinky pile of self-involvement … well … I know I can handle THAT! Since God is really the one doing the work here, I get to be a spectator; and if I get “lost in the shuffle” and suddenly am concerned about whether I’m doing a righteous thing or not — I don’t have to reach for that fake parachute of “perfectness” that I hope is enough … I can fall over in the pool of my own awfulness and let God drive. How awesome is that? I get to watch all this cool stuff happen — I get to smile when people say nice things to me, and if I suddenly find myself wandering in the situation — all I gotta do is find my lesser person and I’ll be ok. Woot.
Yes, we ARE made more righteous in the Lord (this would lead to an entire dialog on expiation and propitiation of sin, for those of you with scorecards), and of course we are Sanctified in the Lord! (Praise Jesus for His Divine Sacrifice!) But most of all, even though we are witness to our lives becoming much more pure in our actions and motivations — we are never called to be Perfect ourselves … we are called to be LIKE Jesus, not be Him ourselves. So, when the going gets rough, puke and fall over, baby.
I’m filth … plain and simple … but, after all, God makes things grow out of filth every day — He does so by planting His seed in the soil and tending it Himself. Can the decaying rot take pride in the orchard? Not directly, the filth did not make the seed. Can the decaying rot be glad in its usefulness? I’ll let you know later…
My Chair matches my desk — I’m no longer fighting with one hand
In my study at home, I have a huge desk, it’s at least six feet wide and probably 4 feet deep, it’s about 3 feet tall, it’s vast and made of wood — I love it.
Unfortunately, I haven’t had a chair that fits it and keeps my back from being destroyed in the process. I spent at least two years seeking a solution. Since I’m 6’5″ I tend to need bigger stuff — but all the “good” chairs are just too small.
So, at one point, I brought my Aeron chair home, thinking that it would be able to answer the problem, to bring the chair experience home for me. But it was too short!!!
Well, not to be defeated, Hillary and I went to the Aeron store in Seattle — and they explained that the two inches I needed weren’t possible — that my chair could be 20″ tall, or I could get the 23.5″ tall chair — but there’s no 22″ chair… sorry.
Ok — fast forward — I found a guy through a friend who has a factory — I planned to send the piston to him while I’m in Africa and have him make the changes necessary, basically manufacture my own piston to fit, because I’m a solution kind of guy. Meanwhile, the piston also happened to be broken slightly (nothing dramatic, a missing washer), so Kathy called Herman Miller, who has a warranty program that would replace the piston.
So — here’s the plan — we get the repair guy to come, replace the piston, we send the busted one to the guy with the factory, he modifies that one, we swap it out — all while I’m in Africa. I come home, chair joy. Got it? (Part of the reason we planned that is because Kathy sits in this chair at night when we do snackviewing together).
Then the repair guy says, basically, “Well — why don’t I just put a better piston in there? The European model is taller.”
Umm… what? So for almost a year, Herman Miller has let me twist in the wind because they don’t know about the European piston? Arg.
Ok — fast forward again … The chair is refitted, has bigger casters also, so it’s a really nice fit. I’m sitting at the desk right now, using the big computer that I haven’t been able to use because I can’t sit here for any extended period of time without hurting my back.
…so this got me to thinking…
I really feel like I’ve been living with one hand tied behind my back as far as productivity goes, for a very long time. Way back in the day, we lived in Kingston, which was basically 2.5 hours round-trip from the office with ferry and car — so I was working from a major distance…
Then we moved here to Bainbridge, and my study was in pieces parts for at least a year, then Kathy helped me get it better and we got this great desk … and even that didn’t work. So I was in laptop mode for years.
Now — the positive fruit of all of this is that, during those times, I’ve become a master ninja road-warrior. I’m so dialed in from a laptop remotely that I don’t even consider it mobile office — it’s just life in our righteous company (hey, team mates, you rock).
But, ironically, the laptop makes paperwork tough in some ways — because I don’t really have a way to review paper, process mail, etc.
That happens at the office in Seattle, of course — but more often than not — I’m highly digital, and any visual project that involves paper (e.g. editing, markup, sketching, etc.) wasn’t happening well from here because well — I sit in a chair with a laptop (which also has a small screen).
The positive of that, of course, is I’m not able to print from anywhere in the universe to the office, and we do everything with scans and digital.
But now, I have a chair at my “power desk” — the one at home where all the stuff is as I want it, in the room where I get things done. My desk works, my desktop computer is huge (and is currently playing that 70s retro Jamiroquai hit “Cosmic Girl”) and … I’m now fighting with two hands.
This could be fun.
Signing up for the GMAT — or why I may hate Kaplan
I am studying for the GMAT in preparation for possibly applying to business school.
Since I’m dry on my algebra (a squared minus 2ab plus b squared equals what?!!!) — I figured it would be a very good idea for me to get a tutor… so I chose Kaplan, which is a nationally recognized test prep company. The jury is still out on whether that was a good idea.
Three weeks ago, I paid my fees, which were not insubstantial, to get going on my tutoring. The people at the Kaplan center (in the University District), were nice enough — and they told me to come in for a diagnostic test.
Cool — will do… I drove there in my truck, spent a long time trying to find a hole to cram my long-bed F-150 into around that school — and then went to take the paper test.
Please, sit right here, and fill out this bubble sheet. Awesome — I love me some bubble sheet… just like the old days. Mind you, now the tests are all done by computer — and there are major differences in that … but for the diagnostic, no problem … I’ll just sit here in this room with these other people who are also taking diagnostics.
Like this nice man next to me … who seems to need to talk to his friend in the next cubicle… oh wait — they’re just discussing how to plug in his laptop — using the power port on the other side of my cubicle … no — that’s fine — please run your power line across my feet — that’s ok … oh, am I disturbing you? Making too much quiet and intruding on your talking? Sorry … I’m just taking a TEST!
Get up … head down the hall of the KAPLAN center in Seattle (have I mentioned that this pain is from Kaplan?) — and get to the front desk.
“Excuse me, I’m sorry … but well — there’s two men having a conversation in the test room?“
“What?! Oh, I’m so sorry — we hate when they do that … let’s go up there and make them stop.”
Up we go.
“Excuse me, sir,”, said the nice young lady, “you really can’t talk in here.“
“What? I am with the making of talk? I do not understand why for you are saying this to me. Tell me, other man to whom I have been speaking, what is this she is saying. Here, let me hang my head in shame, we will not speak loudly anymore — only softly.”
She turns to me. “Would you like to finish your test somewhere else?”
“Yes. Yes, I would.”
So, I head to one of the classrooms (I am sorry, my friend — I was just about to use this for my noon-time prayer? Oh. Sure. I’ll keep moving) … get to a room and start working on my test.
In comes a guy to eat his lunch. He’s quiet though — all is well.
Oh — wait — listen to THAT. The giggling, shrieking, laughing, shouting, crazed students who don’t realize other people exist are running up and down the hallways (all 20 of them) playing slap and tickle between the girls and the boys. Isn’t that FUN???? Have I mentioned that this is happening at the KAPLAN center in Seattle?
Well — whatever, it’s only a diagnostic anyway. I did ok for no sleep, this sort of environment, and no prep (which was the sane plan — want a good diagnostic of my “z” game as I called it).
So, I finished that — got my score later (after a few bugs and hiccups on the website that are too boring, but stupid, to describe) — and they planned to get me a tutor. At this point, it’s November 18th or thereabouts.
Having discussed the situation with the tutoring coordinator at the KAPLAN center in Seattle, I indicated that I was likely going to want to take the test in mid-December, so I can take it AGAIN if something goes bad. So, the coordinator is under the impression that I’m gong to take the test in mid-December, remember that.
Well, a week later, I reach out and he’s indicated that the really good tutor might be able to wedge me into her schedule — awesome. She and I connect, and start talking about schedules. She’s under the impression that my schedule is very inflexible, and that I have to start my testing in mid-December — so we better get at it!
But after we talk — we both realize that if I sign up for the Ultimate Practice Test (a full-drill true test experience at the test center, sans real grade), we could see how I’m doing, so I can actually schedule against my required due date, which is January 8, 2010. Mid-December was my home-made “practice test” — but since they have this awesome thing available, the UPT, she and I can coordinate a better schedule. Super!
But she can’t start until December 8, bogus. But that’s ok — it’s worth it, we work it out, super.
Finally, December 8 comes around. She’s great — her name is Cat — really great, loving it. Her first day with me, she tells me that at this late date, I really should sign up for my actual test and the UPT — now! Oh. I was under the impression there was plenty of time… and nobody said anything to me anyway … and hey, aren’t they under the impression that I’m testing mid-December? What?!!!
So I head to www.mba.com (blech) … and rapidly go to sign up on December 9, 2009.
Fill out lots of intrusive information (Are you white? Are you married? How much money do you make?) … and then submit your profile.
“Thank you for submitting your profile. You won’t be able to sign up for two business days while we process your profile… but here’s access to the things you can’t do yet.”
Umm… what? Ok — let me call in.
“Hi, thanks for calling — it’ll take you 20 minutes to answer our questions — why don’t you just go online?”
What?!! I … what? Seriously? Ok — whatever.
Following day (today). Email arrives.
“Thanks for signing up for mba.com … you’re cleared to sign up for tests and stuff.”
Great.
So I head to the website to sign up. Phew. let’s take a look at the first week in January.
“Sorry, everything is just about booked — you can have an 8am test in one of these locations.”
Arg! What? 8am? In the morning?
Ok — well … let’s … oh, what’s this button do? Shows all available for the week? That’s interesting… click.
Mysteriously, a time slot for 12pm on January 8 appears (woot!)
Click THAT baby!
“Thank you for selecting your time. Would you like your scores sent online, or online and by mail? Would you like your reports sent online? Would you like your schedule sent online?”
Hmm… I think I’d most likely like to get the scores online and in the mail… that makes sense. Let me think about these other ones. I guess … oh, I’ll just leave the defaults — that’s ok.
“Thank you for making your selections. Please enter your credit card information.”
Rummage, rummage — where’s my credit card… ahh — ok … type type type … there you go, mba.com.
“Your scheduled appointment isn’t complete yet! Please confirm the information below, check the ‘I accept’ button, and then continue.”
Sure — no problem. I accept. Click.
“I’m sorry — that time is no longer available, please schedule another time.”
What??!!!!! The extra 2 minutes I took to fill out your forms lost my seat? Are you kidding me?
Ok, ok ok … give me 8AM.
Finalize order. Begin email to my tutor (the only contact I have at Kaplan).
“Hey! Arg. Nobody told me (for the three weeks I was in contact with Kaplan) that I should sign up for my test. I’m barely squeaking in at 8am — this sucks. Why didn’t anybody tell me?!!!”
Ok … well, she had instructed me to sign up for the UPT a week prior to the actual exam.
Umm… how do I do that.
Head to KAPLAN. Look at my syllabus. In there is a line about signing up for the UPT. Click.
“Here’s an explanation of how you need to do this. We don’t have any pertinent data for you — just an explanation that you need to do this. Over at mba.com/kaplan. Have a nice day.”
arg… ok … mba.com/kaplan
“Please fill out your information”
Mr. … Malcolm … Mead … etc…
“Have you taken this test before? [yes/no] … please include your KaplanID”
No. Click.
“You cannot proceed without a KaplanID, which you will find in your syllabus.”
Um… what?
Ok — flip back over to KAPLAN.
“You have to fill out your UPT application at mba.com/kaplan — you’ll need your KaplanID, which you will find above this section.”
Above this section? I’m on a pop-up page … there’s no above here … this is all there is?
Email tutor:
“Arg … how do I find my KaplanID? This is insane. Why is this so painful? I’m really pretty ticked off now. –Malcolm”
Check my email records — ahhh… here’s my receipt with my Enrollment ID … phew.
Back to mba.com
Copy/Paste.
“I’m sorry — that’s not a valid KaplanID — you will need to find it in your syllabus.”
Back to syllabus (at this point I have about 6 or 7 windows open slamming back and forth trying to find info).
Oh — thank God! Here’s something marked “information about signing up for your UPT”
Click.
In the jankiest plain-text looking puke language possible (read, written by a coder, not a web-developer), is a paragraph that babbles about taking steps .. and here’s your KaplanID (which is something like 12012398230.asadf23423).
Copy/Paste into mba.com
“Thank you for registering for your UPT. What dates would you like?”
January 1, or thereabouts.
“I’m sorry — we don’t have anything available on those dates, nor do we have anything available where you will be taking your actual test. Here are some 8am tests slots in other test centers … ha ha … you should have applied sooner, you overcharged loser.”
Great… umm…
grrrr.…
Skip it. Write another email to the tutor.
“What is the MATTER with these people? Arg! –Malcolm”
Get home — fully amped. Feeling agitated and miserable because of KAPLAN.
Kathy tries to hose me down — no good … gotta lock myself in the study. Get away from her and the kids — no innocent bystanders.
Fume, rage, fume, rage … call 1800-KAP-TEST
“Thank you for calling — please navigate an arduously long-winded voicemail tree.”
Beep — boop — beep.
“Thank you for calling — your call is important to us. Your call will be directed to the next available operator.”
*click*
What? Hello? What?!
GRRRR!!!!!
Call 1800KRAP-TEST again.
“Thank you for calling — please navigate an arduously long-winded voicemail tree.”
Beep — boop — mistakeboop.
*click*
SERIOUSLY?!!!!
Call again!
“Thank you for calling — please navigate an arduously long-winded voicemail tree.”
Beep — boop — beep.
“Thank you for calling — your call is important to us. Your call will be directed to the next available operator.”
Wait … wait …
Real person, “Hello, thank you for calling Kaplan. Our offices are closed right now — would you like me to take a message for you?”
“Yes please? I’d like to file a complaint.”
“Oh, ok — please describe the complaint? What’s your phone number?”
I give all the info — hang up.
Let’s go check mba.com again — because I’m twisted.
Schedule GMAT — click
Review available dates.
“There is a slot open in Northgate on January 8, 2010 at 12pm”
WOOT! Scream out loud — “Honey, help! I need my wallet RIGHT NOW … run!”
Kathy comes running in, grabs my wallet — I reach over and pull everything out of it onto the floor, scattering it across the floor “just get the gray card — get it now!”
She hands me the card.
Type fast — fly fingers fly!
Click — yes, I’ll choose defaults for deliveries — here’s my card information — submit request … oops, didn’t click the “I accept” ok — check the box — click! Woot … it’s saying…
“I’m sorry, you already have a test scheduled on this date — you cannot schedule two tests on the same date.”
AAAAAAAAAARRRRRRRRRRRGGGGGGGGHHHHH!!!! (I think I actually said that as I screamed across the house).
I screamed enough that Kathy came over from the dinner table quietly and closed the doors to the study.
I was just trying to reschedule — where do I do THAT?!!!!
Find an innocuous link called “View Appointment Activity” — whatever THAT means.
Oh — there’s my registered 8am … it has a reschedule button! Woot!
Click reschedule. What’s your availability for January 8?
“I’m sorry — 12pm is not available on that date. Would you like 8am?”
Ok … for those that know me — I’d just like to point out that I did not throw either my phone, nor my laptop at this moment.
I just screamed — a lot… in a room with closed doors.
No profanity though — just screaming.
Defeat.
Despair.
Leave the room — go to dinner. I’m recalling that I bumped into the available 12pm because I’d expanded my search to include Oregon and Canada — the 12pm is still in Northgate — but I had seen it due to desperation is all.
Dinner is over. Chris calls.
“Hey man — how’s it going?”, he asks.
“Pain … suffering… despair — you?”
“Just working.”
I aimlessly navigate mba.com — seeing if I can find that reschedule button again — maybe over the next week I can just poke and poke and poke at it — like at Ticketmaster for a good show.
Oh — right, it’s easily found under “View Appointment Activity”
Chatting with Chris.
Reschedule — click.
“There is an appointment available at 12pm at Northgate on January 8″
At this point, I think what Chris hears is something like:
“Ohmigodohmigodohmigod … dude — I can’t explain — just can’t talk — I gotta do something … where is it? Gotta get it — I need my card … I can’t explain man — gotta move fast … look out!”
Chris described it later as sounding like I was playing an online video game.
Well — I scored the 12pm slot on January 8, 2010 … only cost me an extra $50 for the reschedule (an hour later).
Should I hate KAPLAN center in Seattle? I’m not sure yet. They should have told me to register weeks ago.
I mean … what if I actually was taking the test in mid-December?
Watch out — deep thoughts
So — I’ve been pondering “the big top” problem in this life. That’s when you look up from where you are, financially, socially, career-wise, whatever — and you realize that you’re still in the seats, that there are some rare and impossibly gifted people flying way up high at the top of life, and there’s not much you can do to get there besides leave your seat and just go for it… but you’re getting older, the rules keep you from trying, and frankly — it’s scary.
I’ve watched movies about the inordinately wealthy, I’ve read books about the powerful, I’ve seen a lot of things that show the incredible void that people feel when they’re actually at the top … the feeling of being absolutely lost in their own riches — and basically forgotten by everyone else.
Most inordinately rich and powerful people don’t have many (or any) friends, for example. They tend to be highly isolated and “left alone” because that’s what they’ve wanted and that’s what most people think that the inordinately wealthy and powerful want.
In fact, they become enslaved to the skills, luck, drive, art or whatever it is that got them there — the world machine grabs them and drives them — forces them to stay at what they’re doing — or it will take all their riches away.
They acquire more — accomplish more, get more trophies, awards, victories, contracts or whatever and find themselves waking up to do the same thing over and over — because they do it well — and it’s what people expect of them.
Yes — they attend beautiful parties — but the parties are just made up of people that have talent, power, riches, strength — and they all get to look at each other across the void and realize that they’re all just normal people in very strange lives.
If they are blessed, they have family — that’s a key to not self-destructing. They might have a friend from before their success that they can trust — but overall … they are alone with their art, gift, power, strength, majesty.
In the big top, the trapeze platform is very, very small. People tend to avoid making you angry up there — they tend to approach you carefully, they tend to do and say whatever they think it is you want to hear, even when you tell them what you want to hear is the truth. They unintentionally isolate you because they don’t want you to exercise your power on them, which you can do at any time.
So these people end up with boats, jets, houses, cars, parties, travel, resorts and all the other trappings — and it ends up meaning less and less to them … they don’t care.
The point is that there’s nothing of value in things. Put all your focus on satisfaction. Keep yourself fed, have enough to drink, and be satisfied in what you do in life. If you do that, you escape the big top completely.
To burden the metaphor — that’s when you get to see the sky, which of course has no limits at all.
Can this Umbrella Stop my Fall?
Money is fake. Get that through your head — it’s not real, it’s hardly even paper these days. Money isn’t real — it’s credit.
You take your money, put it in a bank, they make a record of it — based on the trust that they are accurate — you have credit to purchase things up to the amount you have stored in the bank.
If they bank believes in you, it offers you money from the future of your life so you can buy bigger things now. That’s what you think of as credit, but is just monetization of your existing credit bearing ability.
Now, if you take money from you in the future, it’s a pretty dumb thing to spend it on things that don’t retain value. Like just about everything in your house, your car, and everything you consume. If you’re robbing yourself from the future to buy things that don’t retain value — you’re basically making yourself poor in the future.
See — you can’t make more than you’re going to make in your life — that’s the limit. Everything you will ever make is what you’ll make. So, if you take $1,000 from next year and eat it now, next year, you’ll be $1,000 behind.
PLUS, you’ll have to pay the people who pulled that time warp for you — that’s interest. So, not only have you taken that money from you in the future, you’re also taking money from you again to pay the people who lend you that future funding.
So what can you put your money INTO? There’s only one thing you should put your money in — PAY ATTENTION …
Things that retain value. That’s it. Everything else is noise.
What kinds of things retain value?
A house, for the most part, even with this crisis, retains value or will recover value after the crisis is over.
Real estate, raw dirt of the Earth itself — retains value.
Stocks in stable companies retain value.
But how, Malcolm, do I find stocks in stable companies? Well, that’s the trick isn’t it?
Squint into the future — what companies will most likely still be here? Coke? IBM? Google? Who knows — that’s up to you … but when you put your money in those things that retain value … you don’t lose it.
The trick is to find those. Not big mondo super stocks that will grow and make you rich — just ones that won’t tank.
…oh, and btw — stop taking money from your future — leave it there — you’ll need it.
The Financial Debacle — an Explanation in Layman’s Terms
HOW YOU CAN HELP: DECREASE YOUR CREDIT CARD DEBT
The following is an explanation of what’s happening for intelligent people who don’t track this stuff — in the form of an analogy:
There’s a fictional town called “Carville”, where the majority of people sell new and used cars. All the outlying towns come to Carville to buy cars, because the market is great for cars there — since that’s where everyone’s selling their used cars.
Between 2002 and 2007, the five largest car dealers, Al’s Autos, Bob’s Beauties, Charlie’s Cars, Diane’s Diesels, and Eddie’s Engines, were going gangbusters. They were expanding their inventory, buying up used cars left and right, and even loading a lot of these cars into trucks and selling them in lots to smaller car dealers; that was standard procedure — the smaller dealers would buy these lots from the ABC dealers (that’s what they were called) and the smaller dealers would turn around and sell these “wholesale” cars at higher prices.
Now the Carville town government had a requirement of all sellers. You could only sell cars if you kept at least 1 new car, or equivalent, per 100 used cars. The “or equivalent” was a rule our little town’s mayor made that said any car worth $15,000 or more was considered a new car equivalent.
Based on that, the ABC dealers always kept a portion of their cars as new and equivalents, so that they could sell all those cheap used cars that were moving like hotcakes. The dealers even sold car lots to each other based on this sort of new car requirement — so sometimes, overnight, Al would call Diane and say “Diane, I’m short two new cars for what I have on hand, will you sell me a pair of new cars at wholesale?”, and she’d agree — since Al had 98 new cars in hand for the 10,000 used cars he was holding. She’d charge him a small fee, and everyone’s happy — no problem there, standard business.
Now, someone realized that if you took apart 10 used cars and put the nicest pieces back together again, you’d end up with an “equivalent to new” car — one that could be counted as part of your new car requirement. So the ABC dealers, since they had the most cars, started chopping used cars as they came in and making these higher value “equivalent to new” cars — which was cheaper than buying actual new cars — how great is that?!
Before you know it, they’re not only making these “chopped new” cars for themselves, they’re selling them to each other for equivalency headcounts as well, and selling them to smaller dealers as well — there’s a whole new kind of car here, and frankly since the value of a chopped new is so much higher than the pieces it’s made out of, the ABC dealers were focusing on chopped new cars a great deal.
For five years, it’s a wild ride. They realize that they can go after cheaper and cheaper used cars, chop them into just barely equivalent cars, and actually create MASSIVE inventories of new or equivalent cars, so they can go out and get tremendous amounts of used cars — just vast lots — Al went from 10,000 used cars and 100 new cars to 200,000 used cars and 2000 (!) “chopped new” cars. He was buying and selling car lots to folks as far away as Indiana — making money hand over fist … and nobody ever expected it to end — because it wasn’t some bubble, it was just a great way of doing business.
Then one day, there was a car accident — and one of the drivers was driving a chopped new car. In the accident, the chopped new broke into pieces and the driver was severely injured. People at first didn’t notice, until more chopped new cars started breaking apart in car accidents. See, chopped new cars were great for regular use, but they actually were terrible in a crisis — they collapsed like a cardboard car, and people were getting hurt badly.
All of the sudden, nobody wants to buy chopped new cars. They’re dangerous, they go bad at the worst possible moment and can’t survive a crash. So the chopped new cars lost their value. Well … that meant they were no longer equivalent to a new car — heck, they weren’t even equivalent to a used car. They were rolling junk, worth nothing.
So on a dark Monday morning, the ABC dealers went out and looked at their vast fields of cars, and realized they had a major problem. They had massive counts of used cars (remember Al’s 200,000 used cars?) and only a handful of new or equivalent cars. So first, they called each other.
Al called Diane and asked if she had any new cars she could sell him at wholesale — she replied that she was just about to call him and ask the same thing … or would he like to buy a few lots of used cars so she can drum up the money needed to get the new cars she needed? Well, nobody had enough new cars. In fact, all of Carville had maybe 150 real new cars and close to 1,000,000 used cars on hand. Nobody was going to be able to afford the tens of thousands of new cars needed to keep Carville alive. Now what?
So — here’s the analogy explained:
* Carville is the Financial Industry
* Each of the ABC dealers is a major Investment Bank (Morgan Stanley, Goldman Sachs, Bear Stearns, Lehman Brothers, and Merrill Lynch)
* The new car or new car equivalents is “Assets on Hand” — this is a requirement that the Government and lenders have for how much money you must have on hand before you can lend, or borrow money. Clearly, when you go to get a loan, the bank asks you what you have for collateral — but what you may not know is that the Government won’t let banks lend money unless they have a certain amount in cash or cash equivalents — assets. These restrictions are lower for Investment banks — but “regular” (or commercial) banks have very strict requirements for how much cash on hand they must hold. (See Reserve Requirements explained for more details)
* The used cars is the loans and other MONEY MAKING methods all these banks and Investment houses had out there. It’s the equivalent of how many things in your house you’ve bought on credit vs. with cash. Imagine if most of your entire home is bought on credit (if that’s the case, stop reading and fix that now) — that’s how “leveraged” the banks got. Well, that’s how leveraged they tend to be in general — but in this case the “ABC dealers” were basing it on these crazy “chopped new” cars … which are…
* The “Chop New” cars are the CDOs (See Collateralized Debt Obligations for more details) that the Financial Industry (“Carville”) was slinging around as if they were real assets (“new car equivalents”). The CDOs basically are an armful of debt — and the big monster in this case is consumer debt, in the form of crazy sub-prime mortgages (Mortgage Backed Securities aka MBSs) wrapped up with a bow and treated basically like money. That’s great, until we start seeing…
* The car crashes are when individuals started defaulting on their consumer debt. These defaults were getting more frequent — which forced the Financial Industry to review the MBSs and realize that these MBS “chopped new” cars fell apart in a financial crisis — individuals with low credit ratings had been scooping up vast amounts of debt, being put into these CDO/MBS securities — which were then sold to the major banks. When all the bad consumer debtors started defaulting on their crazy loans (those “half-caff with a twist” super sub prime ARM cheater mortgages that sane people avoided), those individual loans made the CDOs that had them bundled, into garbage. All of the sudden…
*The major investment firms realized they had massive amounts of loans out there, and their assets were next to nothing — they had no capital, they couldn’t match Reserve Requirements (where applicable) — and all they had were giant piles of these useless CDO/MBSs filled with defaulting debt.
So what happened?
Well, to date of this post — the mayor and government of Carville realized they had to buy all these “chopped new” cars from the dealers, or all of Carville would fall. The hope is that the Mayor’s people can fix the chopped new cars, or at least hold them long enough for the good ones to be worth something again.
“But that’s going to cost the town $700 Billion”, someone shouted.
“Well,”, said the Mayor’s banker, “if we don’t do something, there won’t be any more cars to sell, and frankly, without cars, nobody can drive, and if you can’t drive, the farmers can’t sell their goods, people can’t get to the store, and the whole sky will fall. Folks will be trapped on their own farms, living off the land. We gotta do something.“
…and where it stands right now is that the Mayor, his banker, and the town elders are all sitting down to figure out how to get this money available to the car dealers so they can get back to selling cars, and unwind this mess.
What happened to the ABC dealers?
* Lehman Brothers (let’s say that’s Al), failed. They’ve filed bankruptcy protection (they’re not closed, they’re just saying they can’t pay any of their creditors and need protection until they recover, you’ll see them again)
* Merrill Lynch (Diane) found a neighbor, who never got a big piece of the “chopped new” business. See, that neighbor is a truck dealership — and they’re required to have many more new trucks per used truck (let’s say 10 new trucks per 100 used trucks vs. 1 new car per 100 used cars). Since they have stricter requirements, they were less exposed, and tended to act more conservatively (usually). Coincidentally, since they’re kept in a more strict position and act more conservatively, the town of Carville lends them money at a lower cost (The Federal Reserve System). These are the “real” commercial banks. That neighbor bought her for almost nothing. That neighbor is Bank of America
* Goldman Sachs and Morgan Stanley (Bob and Charlie), went to the mayor and said they’d like to become truck dealers — primarily in the hopes of getting their hands on that cheaper Carville town lending that truck dealers get. That’s helping, but not a given solution. “Old Jack”, the smartest man in Carville, sauntered in from his ten million acre ranch and told Bob he’d give Bob some of the money he needed if Old Jack could have a whole bunch of things from Bob (including a 10% dividend, which pays essentially $1.3 million a day). Of course, “Old Jack” is Warren Buffett — what a great dealer 
* Bear Stearns (Eddie) died early and was sold to JP Morgan months ago (not to be confused with Morgan Stanley)
But the saga continues — as the Mayor and his people determine how to deal with this — Washington Mutual, a “truck dealer” found itself so massively extended in these CDO/MBSs, that they couldn’t meet the strict requirements, and the Government seized them and sold them ALSO to JP Morgan
What does the future hold? It’s gonna be more expensive to buy a used car for a while (get a loan), because everybody’s gotta make money and the prices will go up — and if the Government does nothing, Carville will go bust and we’re all living in our farms alone. How’s your farm?
Your Farm:
Your farm is your personal financial status. You should be primarily as debt free as you can be — your mortgage, if you have one, should be very traditional and the lowest rate you can have — get out of your credit card debt, period.
Another thing about all of this is where it can get worse. See, there’s a LOT of Credit Card debt out there — and it could make things worse. If consumers are defaulting on their mortgages, then they’re also going to default on their Credit Card debt. That’s going to create ANOTHER burden on the banks, and make the heavy lifting even heavier.
HOW YOU CAN HELP: DECREASE YOUR CREDIT CARD DEBT
How much credit card debt should you have? (None, but…) If the cash you have can’t pay the debt you carry, you’ve got too much. Stop investing, stop buying, pay off your cards now — it’s how we got here. You want responsibility? Yes, the ABC dealers are responsible, but the extreme credit card debt of consumers is the cause.
To do that is going to take an emotional shift. When you look at your flat screen TV, enjoy it — don’t then look at mine and say “Well, his is bigger, I need a bigger one too.” — stop looking at your neighbors and comparing; just look at yourself and be happy, in other words — live off the land on your own farm, live within your means.
Bottom line? $10,000 cash is better than $20,000 and $10,000 in debt — for you, your farm, and our country.
The Transparency of the Invisible Hand
If you have read Adam Smith’s The Wealth of Nations or one of the hundreds of books that comment on that classic, you’ll probably know the term “the Invisible Hand”. This term references the outcome of a fully open free-market society that is driven by self-interest.
But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavors as much he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labors to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
Adam Smith — The Wealth of Nations
Smith’s primary point is that when people work for their own interest in a fair, open market, they contribute to the overall good of society in the process, not through their own cooperation with others towards that overall good — but by virtue of the economic process, the good comes about as if by virtue of an “Invisible Hand” guiding things.
In modern “short speak”, if you look out for yourself, that’s gonna help everyone.
Well, there are a few huge problems with that notion — not operationally, but philosophically … problems that don’t go into maudlin morality or any other such notion — but simply outline that the Invisible Hand requires what I call transparency.
In the movie Wall Street, the character Gordon Gecko says the famous line “Greed is good.“
As any novice investor or trader will tell you, greed and fear are the enemy when it comes to managing your portfolio — they cause you to make emotional decisions that undermine your overall return. So, in essence, (as we all know from our 2nd Grade Teachers), Greed actually is not good.
But what happens when a society, having been educated to the very valid concepts of competitive advantage, and even Ricardo’s comparative advantage — get it wrong and begin to equate Greed with self interest?
What happens if, after reading two paragraph synopses of Smith’s ideas, an entire community, like the Investment Community, gets it in their heads that Smith has created some sort of license to be a jerk, and cheat the next guy — since the process of looking out for yourself makes all nasty maneuvers justified? We end up with the sort of debacle that’s been happening over the last 6 months.
Transparency, in my nomenclature, does not simply apply to the pedantic demands by wounded civilians that the corporations open their books, share the emails of their CEOs and allow us to see what they were thinking. I present, instead, the idea that risk itself has an opacity — a quality that requires us to ensure that what we know is everything necessary to be known. You cannot work for your own self interest if you do not understand what that self interest is. In the old saying, if you can’t see the sucker at the poker table, it’s you.
Consider the example of the driver who does not know the bridge is out. He is driving along, safely at the speed limit, when his wife calls and informs him that she is going into labor and he should race home so he can be with her as the baby is born. In his mind, it is suddenly in his best interest to get home quickly, so he makes the choice to accelerate — thus giving himself no opportunity to respond to the missing bridge in time and soon he’s swimming to the far side, hoping to call his wife from a soggy cellphone.
Risk cannot be completely removed, and as he accelerates, the driver increases the possibility of that risk — but he is oblivious to that relationship — he has driven on this road a thousand times, he is a careful driver — and while yes, driving faster is a higher risk, it’s a calculated risk he is willing to take.
So, the question becomes — how does one make the situation more transparent for him, so that he can better recognize the choices he is making and truly make decisions in his own best interest? Such a question becomes the focus of regulators — the point of the exercise — and that opacity is their job to conquer.
There are 5 places that the opacity against self interest can originate. The first and most likely unavoidable is random chance. We cannot rule out random chance — it will always be the Scepter of God — wielded at his Will and impervious to our attempts to control it.
The second most important one is our own ignorance. If we do not understand what we are doing, we are that driver blindfolded or refusing to read the signs by the side of the road. There will always be lunatic drivers out there — call them day traders and gambling speculators — but for the most part, if we can generate a better and simpler methodology for enabling ourselves to see clearly — but also to understand the details.
If our driver sees a sign in Chinese, or is illiterate — what will he do? He will act in perceived but inaccurate self-interest, eventually hurting us all in the process.
The third source of danger is the ignorance of others. That also would be remedied by the same things that would save us. Others, presumably working in their own best interests, may advise us to our own detriment. The man’s wife told him to move quickly — she was also ignorant of the bridge.
The fourth source of confusion is the intentional act of others but not directly intended — there is the drunk driver who drove over the sign in a stupor — didn’t know what that bang was, and drove on. That driver did something to confound us, but didn’t know it. That’s the largest group of people who interfere with the transparency of the invisible hand.
Finally — for the sake of this post — the fifth source of confusion is the intentionally evil person. Sadly, many people are equating “getting over on the next guy” with self interest — which is foolish. If you make the world blind so you can be the one-eyed king — you will surely starve.
So — the question of my study becomes … how to control the transparency — and how to know when you are truly seeing a transparent situation, and not just a mirage?
Day 2: Listless but continuing onward
So, I had a chance to speak with my landlord today and found out that they will be doing limited competition with me directly — so my choices are to get up off my duff and compete (thus, potentially overwhelming my notions of Lightweight Business) or sit around and hope for the best.
Well, as with all things, the right way to proceed is lazily — seeking only to do what one must and then do that with vigor. Currently, I see no threats on the immediate horizon, but it’s clear that, once again, the new adage holds true, “when your eggs are in threat of being stomped, get more baskets.“
I’m going to look hard and long at the viability of extending out into other physical areas beyond the current building. That, of course, requires cash (check, sort of), and effort — here’s to watching how well I maintain the LWB (Lightweight Business doesn’t involve typing THAT all the time) approach to expansion.
Another Year, Another Dollar
I find myself at the end of another day, the beginning of the business year, with the desire to do the biz equivalent of make resolutions, start exercising, and lose weight.
This time, I’m serious — no really.
I was plugging through www.nytimes.com, enjoying the subscription benefits I get in digital form for the wonderful gift I received in wood-pulp subscription form; when I saw a section on small business and how blogging is a great marketing tool for small businesses.
Wonderful — but what do I have to say? Well, actually, quite a bit. What do I have to say that people want to read? Not as much as the former, but still — some.
See, I’ve run a business for 10 years that has lived and survived in the white-hot center of the Internet sun. I provide colocation services to some very recognizable brands, I book a few million a year in revenue, and we do it with a team of 3–4 people, plus contractors and outsourcing. It’s what I’ve decided to call Lightweight Business — and I’ve gotten the domains to prove it.
So, here’s the first step in setting up THAT blog, www.lightweightbiz.com … coming here to my old stale blog and seeing if I can just put up a post once a day for a month. If I can do that, I’ll have developed the right new habits to justify a small-business blog. If not, well, you’re the only other person who has read this post — thanks for coming by.
One on One
So, I’m on my own in the company again — pretty much. God’s got me where he wants me, and I’m glad for it.
I’m doing all the coding in the company now, using Eclipse and loving it. If you code for real, and aren’t some HTML/Javascript script kiddie (ok, there are some of you out there who are really “masters” of JS and so forth — my sincere apologies to you), then you need to get Eclipse or some other IDE into your life.
If you don’t know what an IDE is, it’s an Integrated Development Environment — which means that it does a LOT of the thinking for you. It may seem mundane, but having a code editor that can lookup the original location of that function you’re calling, color code your syntax and check your validity is key to success.
Tomorrow, two teens in our YG are going to be baptized! I think that rocks.
Not a lot else to report, no opinions or attitudes. Just sitting around thinking is all. Still trying to get blogging into my daily routine.
You’d think that the owner of a small business in one of the most concentrated buildings for Internet in the world would have something interesting to say — and I do — but the question really is — do I want to put it onto the Internet for all of you to read forever?