My family and I are moving. Across an ocean. Large upheavals for the entire lot of us. Leaving friends and an indolent but simply honest way of life will be challenging for children and parents alike. But this is no time for regret as the die has proverbially been cast. As a result, I've had little time to write - much to my chagrin - hence the spartan posting of late, as the practical details associated with sifting and sorting more than a decade-and-a-half of accumulated shite and entrenched life that seemingly must (and now as I edit this, has) found its way into boxes and crates before floating across the azure, and hopefully placid (lest the container slip off), sea.
Down-sizing is a time-consuming though cathartic exercise. One gets lost in the endless photos, letters to or from friends, loved-ones now passed and old flames, pondering the whereabouts of old acquaintances whose address on a scrap of paper or business card has been used as a bookmark in a half-finished novel, or in ruminations upon mementos such the unusual brass desk calendar (something like this) with a fine 70-year old patina that turns to flip the two-sided cards within in order to change the prevailing day, (twice at the end of the month if it's a short one) ... one of the few tangible relics I possess from my grandfather, that made the cut on all prior moves, and will, again, this time. As I packed, I wondered of the origins and stories of these oddities and curios - the seemingly endless accumulated junk like the pair of E&Y mini-binoculars handed out at some function or another, never used, having consumed resources, the energy of asian labour, shippers diesel, the forwarders trans-shipments, multiple deliveries and manifests that brought it hither only to land (with one of it's siblings, no less) in a drawer, still-protected by its hermetical seal. Multiplied by five people, and untold drawers and shelves, now binomially at the crossroads between the increasingly pregnant rubbish bag, and membership in the growing tower of #42, #52, and #62 cartons, the exercise is arduous. Will the stuffed animals ever be re-cuddled, the re-match of "Clue", ever re-played, or the old cards and letters ever be re-read?!? Yet a few days later, with the boxes gone, I cannot tell you what became of most of them, such was the frenzy and blizzard of the removal. Now, I am profoundly unsettled. Not because of the impending move, but because I am not proud of the hoard. In fact, just the opposite. I am at once shocked and horrified by the obscenity of clothes, linen, PVC, toys, games, DVDs, CDs stuffed animals and all type of shiny, glazed colourful bric-a-brac that we human magpies collect (or, at least my family unit has collected). And yet, prior to this, I thought (or romantically imagined) we were parsimonious - at least compared to our peers. "Quality, not quantity". "No No No, you CANNOT have that - it's a waste...". The unending pleas to grandparents NOT to buy more junk. "Need little, want less", the wise catchphrase, over at Jesse's Cafe I hold out as a core value to demonstrate good non-acquisitive non-materialistic values. And yet, before me are boxes with too-many-multiples and sets of errrr ummm well, nearly everything, evidence I've failed in my attempts. Despite continual shedding of excess to friends, acquaintances, and the needy, the substantial purge of what will shortly be incinerated, and the sale of all the pedestrian furniture, devices that will not operate on 220v, what remains seems inconceivably vast, I feel empty, and ill as a result. I wish for that feeling when I first discovered DT Suzuki, identified with anicca and annata, and swore a now-broken oath that I'd never find myself where I presently am.
Analysing how this happened without my noticing, I begin to suspect that there is something allegorical in my predicament, both with respect to The Credit Bubble in general, and the erosion of America's fiscal position, and household balance sheets in particular. For just as I never set out with a plan to mindlessly consume and acquire, so too did America not consciously embark upon a credit-induced death-wish, nor the State and Her households conspire to burden themselves with untenably servicable quantities of debt. Incrementalism was the path. Manana, manana, manana was the mantra of denial that insured the difficult choice, the painful option, the road less travelled, was rarely contemplated let alone set out upon. Just as one doesn't become hugely obese by the pull of a rip-cord, the extension and multiplication of credit is not instanteously conjured. It is a slow-motion result cumulating from innumerable small decisions, each not life-threatening and reversible in themselves, but when conjoined, and embedded in feedback-loops, result in veritable disaster, be it fiscally, in one's waistline, or, in the accumulation of stuff. One's child desire's a brightly coloured plastic widget-thinger. One is tired, so one relents, makes the bargain with the devil and buys it - a respite from incessant demands, a bribe to keep the polity content. But intuitively, from wisdom and experience one knows it will rarely be played with thereafter, as are the multitudes of birthday presents, holiday gifts from family close and far. One knows the moment of weakness, far from currying favor or satiating demand, will only amplify it. One knows intuitively it's wrong and wasteful. But few are strong enough. Few people in the heat of that decisive moment - be it a mindless "toy" or an omnibus appropriations bill take into account cost vs. benefit analyses or an assessment of negative externalities. A plant, a book, a poem, a perennial bulb, a sketch, a charitable donation, all devalued in favor of PVC plastic bakelite injection molded synthetic rayon nylon stuff with imagination engagement values measured in the minutes or hours, but environmental half-lives measured in the centuries. Or deficit-spent consumption at the expense of investment. It is the same. How did we get here? Haven't more people noticed?
Does this stuff have value to anyone else? Would it find a market in its hovel of origin, outside of the salvage value from the materials from which is was constructed? Were they thinking of the gullible buyers, as I wonder about who made it? Decorative votive holders? Harvest motif napkin rings? Endless junk and clutter, some once useful, others never approached any reasonable utility. There is no secondary market value for most of it. Even the local charity ceased to accept clothes excepting those of a suitable pedigree. Beggars, it would seem, can, and are, choosy.
Now, I have shed [much of] my excess, filled my boxes, and sent them on their way in the container. Now, I am living in a minimalist purgatory for a couple of months until my [remaining] belongings arrive at their destination. I miss none of it. I feel liberated. If the container fell off of the ship, was waylaid by Somali pirates, or jack-knifed on the A7 enroute to delivery, I would shed no tears. I have my family, my health, a piano, some books, a trusty bicycle (which I've yet to figure out how to bring to its new home), and my running shoes. But this is potentially where the allegory stops. The last twelve months of de-leveraging at first glance, appeared to provide some strong introspective incentives. The upper boundary of aggregate credit appeared to have been reached, and the consequence of the mass-realization of this fact, combined with the cascading impact upon asset prices of system-wide reactions was too much to countenance. While I've satirically and bitterly mocked how we got there, as we were getting there, I do believe in the predicament at the moment, that stabilization of the patient was necessary. Just seven months ago, we had innumerable 'Ghost of Xmas Past' moments. "Never again" , "How could we have been so foolish?" "XYZ is the new normal", etc. Now, with asset prices on the mend, and feedback loop, well, feeding back in the prevailing direction, there is the belief that the worst is passed. Recovery is purportedly here (at least if viewed through the eyes of risk premia). Jimmy Stewart is already forgotten, as are the sleepless nights of what systemic obliteration might have meant. The promises of change and pleas of obedience to the deity of choice have been transgressed. Or at least so say the price action of the commodity complex and diversified inflation hedges.
This may true. But the crucial question, put most simply is: Has the denoument of the crisis passed, or is this merely the eye of the storm?? I am but an economist with a very small "e", however, as I wrote in favored post "If You Can't Tell Who The Sucker Is...", the question of what is likely to appear to be normal in hindsight is not (if this is The Big One as I believe it is) what is popularly perceived. "Peak Credit" has come and gone, and with it, the Era of Stupid Loans passed - for this generation anyway. In hindsight, we will wonder NOT why credit was crunched, but how the hallucinogenic wheat fungus that caused those with capital to, along with pixie dust conjured from it, to give it away to anyone and everyone who wanted it with such reckless abandon. So IF the era of Stupid Loans is finished, there will be no recovery. There will be precious little inflation, and it is likely deflation will persist.
I want to be bullish. I want asset prices to already be south of some long-term equilibrium, and be ready to rise. It would be less painful for The People. But with employment shocks still to ripple through the chain of dependencies, household balance sheets compromised, continued real-estate indigestion, our position between a fiscal rock & a hard place, and continued financial sector deleveraging, we collectively are the place that I've just been. We collectively are just beginning to sift through our shit - mentally sizing up what's important, what to take and what to leave. We are just beginning to realize that tough choices lie ahead - in all facets of life. We are just beginning to understand that these choices do not include 5-litre Cadillacs, absurdly over-applianced kitchens, or $5 iced-frappucino lattes. But, on the bight side - you won't miss most of it as much as you ex-ante believe you might...
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24 comments:
Good luck to you on your next stage in life. Enjoy the important bits (family, kids and the like). I enjoy your posts hugely. Don't lose the uncertainty and the cynicism.
Marc
I have very much enjoyed your posts as well. As someone who has made the reverse migration (Tokyo to Chicago) a few years back, I truly understand what you're going through. The re-adjustment was difficult for us (wife, 3 kids) in so many ways. And although I had 20 years tied up with Japan it was equally liberating (once I accepted the fait acompli) to re-acclimate Stateside. Good luck!
Very, very, very nice.
Thanks.
Best of luck - are we looking at change of blog title - dropping of "tokyo" from it?
I love your post - look forward to many more...
Godspeed
need little want less
"But with employment shocks still to ripple through the chain of dependencies, household balance sheets compromised, continued real-estate indigestion, our position between a fiscal rock & a hard place, and continued financial sector deleveraging, we collectively are the place that I've just been."
I like your ideas, but can we see some numbers please? For example, what does all this mean to the earnings of S&P500 in the next two years? or the P/E multiple? etc.
Please keep posting! I, too, look around at all the crap we've accumulated and wonder how it all came to wash up in our household. Every item was a conscious decision and they do add up in a single household just as they do in the overall economy.
Good luck on the move, and in the markets.
interesting website...Econ & Finance Articles Updated Daily
One of your best posts, C. In fact, one of the best blog posts I've read overall. Proof that you should (please) keep blogging! I hope everything goes well with the transition.
We all benefit from some time in the desert. What a great piece of writing came out of it.
That's communism!
Sid
I too enjoy your work very much. Good luck with everything.
Are you gonna hit up some soaplands for some one last times before you leave?
Any parties before you leave with some Japanese AV actress hoes?
You should!
A7 in Germany? Well, good luck. Hope you keep writing. I like your thoughts, even though the style is dense at times.
Good luck from a UK investor/casino player in France :)
Please keep writing. I admire the quality of your work!
Ritchie
Ah, the ritual "leaving season" for us financial gaijin when the markets head south, only to return to Japan when the cycle swings back for the better. I look at my packing thinking "shit, not again :-("
Best of luck & keep blogging!
Cynicism? I don't see it.
Your departure is to Japanese equities what Bank of England bullion sales were to gold.
Thanks for sane comments. Having done the back and forth a couple of times now, you indeed have my sympathy. I've followed your notes with interest lately and wondered at the recent lapse. You'll be fine.
As one left behind here in Tokyo, I've downsized for all I'm worth, no puns intended. Gone, the expat apaato; hello to servicable mansion. Farewell the fashionable office; welcome to the under 9-man econospace. I'd already crushed down my salary. So we will soldier on at least for a while yet.
On your larger theme, the last bubble has yet to burst and that is the US$. FEDGOV, or gov't by Goldman Sachs, has little left to apply, at least within the parameters of acceptable reality. So we either expect the hit or we move to unacceptable reality. Or, equally likely now, both.
I am all cash and applying for permanent residence.
Please keep your comments coming. Such a transition state is numinous so your comments will be more resonant than usual.
Your moving adventures call for watching "Fight club"! There, the dude blows up all his precious furniture, just to get liberated from the junk that the consumer society got him to buy into.
Thanks for your voice. Don't lose it/lose us in the voyage.
you are the william gibson of the financial industry. please keep writing!
Matt said, "Every item was a conscious decision........... ", but was it really? They may have been conscious in that you were awake and aware of your actions but were you in control. Were you in control of those parts of your brain that provide you the impetus to purchase just as a nicotine addict relishes their next cigarette? Do your synapses get a glorious bathing in dopamine and other psycho-reactive molecules each time you partake? Most people can't help but to pursue those delicious brain chemicals, too bad someone lent them the money to do it, when the party's over the hangover is hell.
We cannot trust ourselves to do the right thing. Like a Skinner rat we keep hitting the reward lever until it collectively kills us. The Chinese and Indians are just getting started and the pleasures of mindless consumption await them. Their low wages will guarantee unfulfilled dreams as the moneymen entice them to further enslave themselves. Too bad the parabolic punchbowl of oil is now half gone and will continue to evaporate like a puddle on a hot summer's day. The little fish will flop around in the wet mud, desperately seeking satisfaction. The ones at the periphery will succumb first. The struggle for survival will statistically favor those who position themselves in the deepest part of the pool, after all, who knows when and from where the next shower of life-saving energy will come.
Wonderful writing. As I said once before, you make it look easy.
Thanks for the past posts (this one in particular) and I'm looking forward to the future ones. Someone said earlier that you're the William Gibson of financial journalism. That's high praise, and I agree with it. Best of luck!
(And to whoever noted "Need little, want less," thanks for the clarity.)
Uncle Jeffy
Fantastic... One of the best reads yet!!!
Thanks.
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