Over the course of the panic, pandemic, and politician pandering of the last month I have kept mostly calm. Mainly because I saw it coming and recognized early on that there wasn’t anything I could do to stop it. In January, I started paying attention to the virus. That doesn’t mean I knew exactly how it would play out, but just that I was paying attention. Late last year I heard about disruptions in the financial markets. The Fed was pumping money again. I wasn’t sure what that would mean, but I knew that they really hadn’t fixed anything in the Great Recession. For several years, I’ve been waiting for the inevitable correction that would eventually come. I wondered why it was taking so long, but I never doubted that it would arrive at some point. If we were lucky it would be soft, but people (and in this case, countries) that play it fast and loose usually aren’t lucky in the long term. The details of this virus, its origins, and its actual health impact on society are debatable at this point. Time will sort that part out. The corporate and government response to it will be harder to decipher. I’ve said from the early days of the panic that it was a convenient excuse for the financial reckoning that was already coming. That becomes more apparent all the time. So why write about it today? Because I enjoy being right. Always have.
About the first of April, in the afternoon, my banker called and asked how the “virus situation” was affecting my business. Thoughtful of her to call. I said that it wasn’t, today… ask me in six months. Well, if you think it’s going to, you need to take a look at this PPP loan from the SBA, she said. After listening to the basics, I said I’d think about it. The nature of my business is that I get paid for work done weeks, if not months ago. So while I was doing well that day, I decided over the next few hours that I should apply for the loan just in case. That way in a few months, if things were tighter, I’d have more working capital. I applied for the loan the next morning. Though I had applied, the bank wasn’t even sure what the requirements were yet. Details were trickling out from the SBA, they said. They were working as fast as they could. Over the next week, they built a website and got ready. I was in line they said. Money would be allocated based on the order in which the applications were received. So when they were ready, I immediately submitted all requested documentation. It was a little bit of a pain, but no more so than any other loan I’d ever gotten. I dug up the forms, fought their stupid website, and had everything submitted within 24 hours of them asking for it (keep in mind, some of their emails were coming in the middle of the night). Thanks for your application, their email said. They were working on it. But deep down, I wondered. Fast forward a week and I heard that there’d been 2 million more applications than the Feds had planned on getting. The bank emailed for some additional info. I sent it, but as I did, I put in the email to my banker: “Bet you $5 I never see a penny of this.” She didn’t really take the bet. She probably already knew. Today, I got the word that the program was exhausted. “You’re not getting it,” she said dryly. I said, “I know. You owe me five bucks.” There was no shock value. I’d known since the first week I applied. It’s okay. I’ll figure it out without government money; same way I always have. At the end of the “You’re not getting it” conversation, I asked a question about mortgages. I wanted to know if she thought there would be any to be had next year. “What do you mean?” Like she didn’t even understand the question. I said, “Do you think people will be able to even get a mortgage this time next year?” Well, yeah, she said. Like it was the dumbest statement ever spoken. This person who had just told me the well was dry on the loan she had assured me was a good idea a few weeks ago didn’t comprehend that other wells might dry up too. We are facing Depression level unemployment, unprecedented federal debt and spending, potential societal unrest, and some people can’t even consider what that might mean in a year. Lots of people. They just can’t process the question. Nothing against the banker. I know the extreme stress they’ve all been under. She probably hasn’t had time to ponder next year, but it’s a worthwhile exercise.
There was another phone call that took place early on in this most unusual springtime. My financial advisor called to “see how I was doing.” I had resisted the urge to call her after the first ferocious days of losses. Retirement wasn’t close for me anyway. We’d just ride it out. It always comes back, I told myself. But there she was, calling me. What did I want to do, she asked? We both knew full well that it was too late to do anything… unless we were headed for Dow 7,000… that couldn’t happen though, right? Or could it? I wasn’t so sure, but after a twenty minute conversation, I ended up back where I’d been. It was too late to sell. Just ride it out, I said. Since then the FED has printed and printed and digitized an unreal amount of money, and the dead cat has bounced a bit. So that was a good move, I guess. The same advisor called back this week… to check on me. I know she was probably calling because her relationship management software told her to do it. She was mainly just doing her job, but I appreciated the call. She was calling back to check on me because I sounded pretty down on our last call. Well, yeah, I sounded down: The stock market had just taken a historic dive, the Fed was printing trillions of dollars, and there was a killer virus on the loose. I was having an off day. She said I sounded better this week, but then…. she started asking me what I thought. So I started telling her: THINGS ARE GOING TO BE DIFFERENT. This is bigger than the virus. The stock market doesn’t work the same way anymore. It’s a rigged game. The Federal Reserve now has a mortgage on all of America, a major stake in stocks, bonds, junk bonds, real estate. The central bank literally has a note against almost everything in the country. Truth is they’ve owned most of it for a hundred years, but this cements it. I WAS in a pretty good mood when she called. I was not hysterical, but I was saying things foreign to her ears, which led her to say I didn’t sound so good. The home office at “BIG INVESTMENT FIRM, INC” hadn’t told her any of this. The stock market just goes up and down. It’ll all be fine, long term. Nothing to see here, folks. Just relax. Keep your IRA contributions in place. Keep doing what you’re doing. That’s all she’s heard her whole career. She can’t process information outside that realm. Same as the banker that can’t imagine that the mortgage market might seize up entirely. They can’t even consider it. It’s not normal. It’s not conventional. So they block that information out. Like the Titanic passengers that were sure the ship couldn’t sink, they keep going about their business. And they don’t want to hear about the leaks below the waterline. Things look fine in the dining room. The lights are still on. Everything’s fine.
The truth of the situation is this: We’re in a new arena with new rules. The people that know that (big corporations and the elite) are already changing their game plan. The table is tilted in their favor. It always is. If any of the rest of us are going to thrive, or even survive, in this new world we are going to have to start thinking outside the box. Six months ago if I’d told you grocery store shelves here would look like Soviet Russia in a few months, you would’ve said I was a nut. Any of what’s happened would seem crazy back then. That churches would be shuttered. People would be arrested for standing on an empty beach. License plates would be copied by law enforcement for driving to the wrong parking lot on a given Sunday. You wouldn’t have believed any of it a few weeks ago. Not in America. But here we are. Doesn’t take long for things to change, does it??? Buckle up, kids. Change is here. Historically when situations like this arise, war is next. Mark Twain is credited with saying, “History doesn’t repeat itself, but it often rhymes.” Right now, it’s humming a familiar tune. I wonder what the words will be. I hope to God I don’t know. Being right is overrated.