Markets Crashes, Trains and Izakaya
The markets have been in turmoil this week, the two biggest drops in the DOW since 9-11 for the most part coinciding with massive, unprecedented bailouts of major investment banks and companies tied to mortgages and other debt securities. You know its bad when you can hear the water cooler talk, especially the older co-workers talk about huge losses on the year to their retirement accounts. There is a somber, anomic mood overall, a sort of helplessness, much like there is nothing that can be done. The younger folks on the other hand, so far have been largely silent, maybe due to the confidence that they all have many years ahead to make up for the losses. Maybe because many of us don’t have much of a stake in the market yet, or another possibility is that much like the rest of the country right now, we have no assets at all and are drowning in debt.
All of this brings to mind some of the tax and policy goals that I’m covering in my ERISA class. One of the flawed assumptions of many of the polices and incentives these retirement plans is that the bull market would continue indefinitely, giving ample gains betting the rate of inflation. Like any economic argument, there is a tipping point, at which the economic incentives of a policy will shift and have a minimal, or even discouraging affect. It very well could be that we are witnessing a shift in financial realities for our generation. The concepts of finance, retirement and investments may be headed towards a different mindset overall. If so, the policies should adjust accordingly to fit the new realities.
Been having a a recurring dream lately about riding a train, I’m headed either to or from work. Sometimes the train is crowded, other times there is an old friend, often its someone that I was once close with but lost touch over the years. The one recurring detail however has been that I overshoot my destination and get off onto the platform and have to double back and wait for the train going in the opposite direction. The most recent one I run into a friend on the platform who convinces me to go to a nearby izakaya instead of heading to my original destination. It’s a refreshing change of pace, whenI realize that despite passing through the station on the train many times before, I’ve never actually stopped to get off and look around. The izakaya itself is located on the side of a busy street, inside a sort of shopping arcade near the station. When we get there my friend starts talking to the waitress in Japanese, and despite my limited proficiency, for some reason I am able to understand almost all of it. The dream ends there after we’ve placed our order.