Last week started like most of my work weeks. I first generated a series of reports to see how my business did in the previous week, and to see what mandatory action items were needed before the market closed that day. I work for Morgan Stanley as a "financial advisor" which, in its most basic terms, means that I manage other people’s money for a living. Sometimes the analysis of my "book of business" can take me three or four hours. It’s boring administrative work, but it is essential and I do it routinely.
Last Monday was different.
The markets had been particularly volatile in the previous weeks as Freddie Mac, Fannie Mae, Lehman Brothers, Merrill Lynch, IndyMac, Bear Sterns, etc dominated investment news and consequently drove stock prices lower. Indeed client behavior (calling me to sell their investments) was definitely picking up. Monday saw the collapse of Lehman Brothers, a financial company that had been around for over 150 years. In spite of this news, the jittery market was holding up. It was down for the day, but wasn’t collapsing. That is, until about one hour before the market closed. That’s when the bottom fell out. The Dow closed 500 points down for the first time in years/decades. I had just been punched in the face.
As Morgan Stanley was about to announce its Q3 earnings (rumored to be very positive) I got on the phone and called every client I could to calm nerves. These phone calls were as much me listening to their concerns as me talking to them about what I thought was going on. It was a process that took two full days. Morgan Stanley stock began the week in the high 30’s. By the end of day Tuesday, the Dow had recovered about 140 points and Morgan Stanley stock was trading at 27 per share. Tuesday night saw the release of our earnings report. We were the only firm on Wall Street that had a profitable quarter and we announced that we had $180 billion in the bank. Yes, that’s a lot of cash, even for an investment firm. By all rights, we were smelling good amid a sea of stink.
With that I left for a long scheduled business trip to Chicago. Big mistake. I left early Wednesday morning from the San Jose airport. It was right about the time when the stock markets opened. I didn’t have a chance to see what happened at opening, but felt positive that things would be good. I landed in Chicago about one hour before the markets closed. When I exited the plane, I looked up the stock reports and discovered the markets were dropping precipitously (again) but also that Morgan Stanley stock, instead of being lifted by the glowing earnings report from the night before, had sunk to about 17 per share. I felt as if someone had punched me directly into the solar plexus. I sat down on a chair and panicked. For the first time in my career at Morgan Stanley, I did not know what to do.
I called my office voicemail and had fourteen messages waiting for me. I didn’t have any means to log onto my office computer systems because the hotel computer wouldn’t allow for the Java applet to download. I couldn’t call out because the hotel’s cell tower was under repair and mobile service had been turned off. Realizing I needed to do something, I ran down to the nearest computer store, bought a laptop and parked myself in my hotel room. I didn’t attend any of the meetings that brought me to Chicago in the first place. I called all of my clients from my hotel phone. I was miserable; and so were they. It was relentless. My job is to be positive. How is that even possible when our world was in darkness? I was in deep despair.
Wednesday night was the gloomiest night I have ever spent with Morgan Stanley folks. There was a storm cloud over all of us as we tried to socialize at dinner and make sense of what was happening. Thursday morning, it wasn’t looking any better. Morgan Stanley stock had fallen to 11 per share. Our executives were hosting video conferences and they were angry. Naked Short Sellers had taken over the financial sector and were driving the prices of stocks lower and lower. Our CEO and his team were on the phone with the head of the SEC, NYSE, the Fed, the Treasury, even the President of the United States. Morgan Stanley had advised the Federal government (for FREE!!) on how to structure the Freddie/Fannie "bailout" and damned if they weren’t going to call in a few chits. "Stop the short trading" was the mantra. At about 2:00pm EST, there was a total ban of short selling in Britain, and there was rumors that it was going to take effect in the US as well. Sure enough, with the markets down another 200 points, the rule was put into place immediately. A cessation of all short selling. And the government announced that it was going to assume all of the bad debt that was carried on the books of most of the financial firms in the country. Neglecting the political or social consequences of such a dramatic decision, the DOW ended the day up 400 points and Morgan Stanley closed back at around 27. It was the largest single day turn around in the stock market in decades and the 15th most volatile day in history.
Needless to say, everybody there felt a wave of relief and a sense of victory. I blandly reminded everybody that this was just a battle. The war is still carrying on.
Friday morning, the markets already in the green, I left Illinois to return home. I landed and checked the markets and the news. The markets opened up about 300 points and were still there when I landed at about market close. I had survived the week. The ironic thing about the performance of the markets, during all of this, is that if you had fallen asleep on Sunday night and awoke Friday night, you would have seen that the market prices were almost even with where they left off the previous week. You would not have experienced the most volatile times in recent memory. But forget all of that, the financial world, as we knew it, was gone. Established names like Merrill Lynch or Lehman Brothers don’t exist (or don’t exist as they were). The government has turned, under Republican rule no less!, into a socialist regime, willing to bail out private companies for the good of the country. Morgan Stanley has been turned into a bank. Nothing is as it was. Nothing is as it will ever be again.
Amidst all of this, I had lost my ability to think, to feel, and to speak. Friday night, I came home to my family. My kids greeted me at the door as they hadn’t done in awhile. My seven year old son jumped into my arms crying "DADDY!!" as I walked into the house. My nine year old daughter simply gave me a hug and wouldn’t let go. I hadn’t even shut the front door, and I started to cry. People don’t seem to realize how stressful it is to invest other people’s money. I feel a large sense of responsibility. Think about it. Someone gives you $500,000 of their hard earned and saved money. They say, "I need this to be more in a short amount of years. Please safeguard it for me and help my family reach our financial goals." When their money goes down in value, they look to me for advise. Do I pull it out? Do I stick to the plan? What do I do? Everybody is different, and it is never easy to decide. After a week of extreme turmoil, I simply melted at the front door. I spent the night on the couch, unable to move, to talk. I was shell shocked.
Saturday, I couldn’t shake the feeling. My family was in the back of the house so I do something I haven’t done in years. I put in a CD and turn the music up loud. Really loud. The type of loud that makes the walls shake and the neighbors call the police. I had put in U2’s POP album. I needed to dance. I needed to sing. I needed release. And there is something about that album that brings it to me. I couldn’t do the whole album, and after "Staring at the Sun", I switch to The Joshua Tree. "Streets" sounded better than ever. "Running to Stand Still" took on a special magnificence I hadn’t ever considered. "One Tree Hill" brought happy tears to my eyes. It’s been years since I’ve used U2 as a crutch. It is such a luxury that I still can. My family knew to stay out. To let me be. After I turned off the system, I went to play with the kids. I played a game with them. Work life is hell. Home life is life.