Friday, December 30, 2011

- Another Year In Obama's Paradise

It’s been a very tough year, but it’s tough to feel sorry for myself.

In April my profitable trading strategy was shut down by my employer of three years. But it wasn’t a risk decision; it was a decision of the legal department. I was profitable and outperforming my peers when the they discovered a potential liability issue in my employment contract, and (in my opinion) massively over-reacted by shutting down the strategies of all of us who had been hired on similar terms.

My boss was very conciliatory about the whole thing. He liked me personally and respected my contribution to both his P&L, and the firm’s intellectual discourse. He felt terrible about having to shut down something which he viewed so positively, but at the time he thought it was a temporary thing.

It was his assumption that once legal defined a new process for him which shed the liability issue, I and the other profitable managers would be rehired on new terms. As evidence of his sincerity, he not only honored my contract and paid me all I was owed, but also paid me a premium on top of that with the instructions that although he couldn’t in good conscience ask me not to speak to other firms, I shouldn’t accept a position from anyone until he has a chance to get his ducks in a row and make a counter offer.

So although he had no choice, he did the equivalent of setting me adrift in the north Atlantic with some fresh water, a few extra rations and a signal lamp. I sat there bobbing around in the dinghy for a moment trying to form a plan. And I’d only just begun to fret abut the cold and dark when I watched the firm steaming away at top speed, run headlong into an iceberg. That firm is very big – with a peak capitalization in the 20 billion dollar range, and it’s still afloat. But it’s listing badly to port, taking on lots of water, and several of its trading strategies have had to be killed. I suspect that more than one career will be ending there, thanks to this very difficult year.

In the meantime, I’ve been scooped out of the water but a much smaller but much more fleet and nimble craft. I’ve restarted my strategy, and my annualized return for 2011 has been an enviable 15.35%. It’s been a damned inconvenient year professionally, and it didn’t go the way I expected. But given the alternatives and the number of craft that have been sent to the bottom, it’s hard to feel too badly about how it’s worked out.

It’s been a tough year at rancho RFNJ too. We had a hurricane, during which our generator died, leaving us without power for a week. In the process, our basement flooded destroying all the drywall. Then while making the ‘repairs’, the drywall contractor did several thousand in damage to various appliances, furniture, and plumbing. Finally, when they brought in a plumber to fix the damage, they re-flooded the basement again, setting us almost back to square one.

As ridiculous as that sounds, I think it's another example of my personal life echoing the broader economy. Meanwhile, if anyone knows a drywall contractor who works in the Colts Neck area, we’re in the market for new one. We might maybe also need a lawyer too. I’ll keep you all updated.

So the personal and professional foibles have been many this year. And just surviving has been a triumph, made even more glorious when you think about how many people didn’t manage to. But it’s hard to be too thrilled when you’re marginally worse off than you were before. “It could be worse”, or “At least I’m not that guy.” aren't phrases that lead to much consolation.

And all the personal issues I've had in 2011 really pale when compared to the political changes in America.

This is still the long dark night of the Obama era – where losing is treated like winning, and winning is treated like a felony. This is the Shangri-la they dream of in the teacher’s lounge. It’s the paradise of the political, where fairness is dictated to us by our betters in Washington, and the only justice available to anyone is ‘social justice’.

I’m reminded of the sci-fi movie “Serenity” and the nameless villain brilliantly played by British actor Chewy Ejiofor (pictured above). In the movie he did things he knew to be monstrous but he was resigned to them because he believed that he and his masters were trying to build a better world – a world without sin. This is what I think Obama, believes too. Obama believes that he’s fundamentally transforming America into a better place - free from the sins of competition, and the avarice of capitalism.

In the movie, their experiments to make a better world transformed the humans they subjected to them into psychotic animals called reavers. The reavers then went on a bloody cannibalistic rampage, perfectly filling the nightmare role of bogeymen. As a much milder parallel, Obama’s experiments in government imposed fairness have given us the publicly defecating anarchist's circus of the “Occupy Wall Street” movement.

The OWS movement has nothing productive to give any of us. But measured on the scale that Obama and his ilk think matters most, that makes them better not worse. They toil not, nor do they spin. They are creatures whose whole participation in American society is political. They are defined by it – they exist for no other purpose. And in the eyes of Obama and the people of the left, that makes them something superior to the rest of us because they are free from what they view as "sin".

To me the OWS movement honestly feels like an endpoint. They are an ultimate expression of the ideals of people like Obama. They are fully outside the system that the hard left feels is the cause of America's problems. And since that's so, I think they're a momentum endpoint as well. The fact that they are present in the world means that the pendulum has reached it's azimuth and will begin to head back toward what we in the private sector believe is best describes as 'rationality'.

I was still a child when Jimmy Carter tried to reinvent America in his way, so I can’t recall how similar this feeling is to what adults felt back then. But I was old enough to remember what it felt like when Reagan won the Whitehouse. I can remember that particular morning in America. And although it’s still cold and dark today, I can feel the impending dawn again. Against all reason and rationality I find myself modestly hopeful for the future.

I know this isn’t much of an uplifting year end message, and I wish I could do better. But in light of the past three years, I suppose there is quite a bit to be said for the feeling that it really can’t get any worse.

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