Solitaire and Nuclear War

10371641_sMy new goal is to be a butterfly. Not in the I’ve just metamorphosed from a caterpillar sense, although I think that’s a nice idea, too, but more in the a-butterfly-flaps-its-wings-in-North-Carolina-and-then-the-world-changes for the better kind of way.

Yes, one reason is that I do feel small and powerless these days, like I’m no match for the storms around me. And part of it is that I am more concerned about man-made catastrophes than I’ve ever been in my adult life. But much of it, really, is that I’ve been playing a lot of solitaire lately.

3I had no idea that is was such a fascinating game. My favorite part of it is how one little decision, like whether to put this king at the top of the stack instead of that one, can make all the difference as to whether you win or lose even though both moves were equally logical based on what you knew at the time. But, thanks to the fact that I play on a computer with an unlimited “Undo Move” feature, I’ve played many of my games two, four, or even eight different ways. I’m fascinated by how one series of more or less reasonable decisions yields a totally different outcome than another. And the problem is that while you are making the choices, you have no idea that you are locking in victory or disaster.

And  then there’s what happens if you make a couple of stupid decisions, or outright mistakes, mixed in with a fair number of those okay choices.

I’m thinking about how wars start and how peace is made, how markets crash or don’t, how criminal activity succeeds or is uncovered, and how alliances are forged or broken. How many if-that-little-thing-hadn’t-happened components are there to any major world event? I’m thinking there are a lot of them, most of which we never know.

5We are all basically playing solitaire, aren’t we? We get up every day and do the best we can trying not to make a mistake while hoping that our random choices don’t paint us into some corner where we find ourselves saying if only …..

Because we all know that life doesn’t have an “Undo Move” button, and it probably should.

(For more thoughts on Solitaire and life, see Mindless entertainment?)


Should I hope for calm or cheer on the storm?

djiThe words “The Dow hit 20,000” may not mean much to you, but if you are lucky enough to have some savings invested somewhere, you probably do know that it is worth more on paper today than it was last October. And you are probably happy about that.

But does this high-rising Dow really mean that our country is on the right track? That could be a possible explanation, if it weren’t for the fact that the stock market is far too moody to behave so simply.

In my opinion, the health of stocks as a whole is a sort of aggregate thermometer of how calm the wealthiest parts of America feel. Money, big money and big institutions, appear to care little about politics and a lot about predictability. The stock market fumbled and finally did it’s housing-bubble fizzle on George Bush’s invasion-laden watch. Then it rose steadily in the midst of Obama’s alleged socialism. I think that those with a lot of money understood that life was stable then, and that there was no real socialism to be found.  Stocks floundered in the late stages of the election, hating the whole mess right along with the rest of us. They likely would have risen in relief at the election of either candidate.

moneyI don’t think Mr. Dow (actually short for an index of large companies known as the Dow Jones Industrial Average) got overly excited until Mr. Trump began to put forth his cabinet nominees. As their wealth and ties to institutionalized money became apparent, major investors began to consider that the next four years could be exceptionally good for big business.

But will they be?

I wrote a book about prescience, the ability to see into the future and understand the true likelihood that an event will or won’t occur. Constructing the plot of d4 forced me to spend quite a bit of time considering how such an ability could work.  What’s more, several of my characters were attempting to use their prescient skills to make money in the stock market, so I ended up learning quite a bit more about Mr. Dow Jones and all his friends, too.

crystal-ballI think the market will get very nervous if our new president’s ill-considered interactions with foreign governments raise the possibility of an international crisis of some sort. I think the market will become unhappy if the 2016 election results are tied more firmly to Russian influence, and a rocky period will follow until the matter is resolved, possibly with the president’s removal.  I think the market will level out and become bumpy if internal protests and unrest continue to grow, or if the 2018 election proves that the majority of the American people truly do want a regime change.

How likely are these events? Well, my talented and courageous character Ariel could answer that question if she were real, but alas, she is not. As her creator, I have no ability to foresee the future. My confidence that the 2016 election could not possibly turn out the way it did certifies that I should not be trusted to make predictions.

But I do have investments. Thanks to a 401K and several years with one company, I have a little account, some financial security and a personal interest in seeing the stock market happy.

And, I have a passion for social justice. I want to see my nation at peace, behaving with compassion and inclusion within our borders and outside of them. I want to see the current administration hamstrung as much as possible regarding its horrible agenda and I want to see it exit as quickly as it can.

cropped-lightening-2These two aren’t compatible interests. I could hang on to my little investments for four more years, hoping that politics goes smoothly and that I will make more money. Or I could sell everything now while the Dow is happy and then hope for the worst for our current regime. Or hedge my bets and do some of both. Oh, if I only knew how this all was going to go.

That’s why the stock market is a gamble. I don’t know what the next four years will bring and neither does anyone else. But I do know that I have to go with my principles instead of my pocketbook. I’m going sell investments and move funds to safety, and then sit back and cheer on any storm that returns America to the compassionate values that I hold dear.

“The Big Short”: a review and a look at modern investing

BS3In 2007 I took over managing all the money my husband and I had saved over our lifetime, even though I knew nothing about investing. Most of the money was in a 401K plan with my employer. I got laid off, was damned sure I didn’t want to keep that company’s stock, and so I had to do something else with it. We’d already had bad experiences with professionals too busy to answer the questions of folks with our meager level of savings, and twice we’d been directed into investments clearly not in our own best interest.  There wasn’t going to be a third time. Not when everything we had was on the table.

B8So I spent the rest of 2007 figuring out how to buy stocks myself and, hopefully, how do it well. The jargon was overwhelming and the websites intimidating and the calls from other people who wanted to handle my money for me were relentless. I think it was the tenacity of those who wanted to get their hands on my savings that pushed me to persevere.  I mean, if they were all that eager to do this, it couldn’t be that good for me, right? Then, well…..

I guess you all heard about what happened to the economy in 2008, didn’t you?

BS1“The Big Short” is an emotional movie for me for many reasons, but the biggest is the way it attacks the veil of complication draped over modern money management. In an attempt to get the average viewer to open their minds the movie uses techniques like having a champagne-drinking blond in a bubble bath explaining what a sub-prime mortgage is and letting chef Anthony Bourdain tackle describing a Collateralize Debt Obligation as he makes a fish stew. Even after nine years of studying this stuff, there are parts of the movie that I still did not understand, so I can’t say they were totally successful making all of this simple, but it is an impressive attempt.

BS7The movie is really three stories told simultaneously. Each one is engrossing and would have made a fine movie of it’s own. In fact my biggest criticism of the film is that I would have liked to have known more about each of the characters and more details about their story. The tales never really intertwine, and while I applaud the writers for honoring reality and not forcing connections where there were none, it does leave the viewer with the feeling of having watched three movies about a related subject at once.

That aside, I enjoyed the movie immensely. It is well written, well acted and a compelling look at how something could go so wrong with so few people noticing. The housing collapse itself is well explained; I just got lost in the nuances of how each of the characters ending up making money on the collapse. The wide variety of people shown profiting from the system makes the fair point that it wasn’t only greedy Wall Street bankers that brought this upon us. Pretty much everyone who had a chance to make hay while the sun shone tried to get theirs from a system that was spinning out of control, and this makes the whole mess all that more more understandable.

BS4One can’t help but cheer on the movie’s three groups of small time investors who discover what is going on, who try to sound an alarm, and who are all ignored. It is hard to begrudge them their profits in the end. The movie does raise legitimate questions about why so few were punished for what eventually turned into fraud, and why the very richest experienced so few consequences while so many others down the food chain had their lives turned inside out.

BS9In spite of these worthy themes, I feel that there is a bigger one here, and it is best voiced by Brad Pitt’s cynical former trader. Why does this system exist as all? I mean the question seriously.

Why doesn’t a stock exchange simply exchange stocks? You know, buy and sell them.  Why can one short (bet against) a stock? That adds no value at all. Why can one trade options? Why can one use the stock market to engage in a host of other, far more complicated methods of gambling that add no value to the underlying companies but only serve to provide an increasingly convoluted casino? Does no one notice that this casino has rules that tilt in favor of those with much more to invest? Why have games been devised that are too complicated for the average player to understand? Is it primarily to provide income to those trained specifically to manage money?

BS6If we are going to have corporations, let’s invest in them, not use them like sports teams for some kind of complicated fantasy football gambling fest. Worse yet, let’s not use them like a complicated fantasy football gambling fest in which you have to hire an expert to mange your team for you because the rules have become to complicated for you to understand. Isn’t our economy too important for this kind of nonsense? Most of the folks who lost their homes in the mess of 2008 surely agree that it is.

BS5I could so easily have been one such person. I took a life savings and put it into a system I barely understood, trusting that the system would behave reasonably. What saved me was my own timidness. I split my sum into tiny parcels, directed most of the money to a variety of cautious endeavors, with all of them scattered across the spectrum of investments I was qualified to make. Basically, I drove like my grandmother. It was a good time for that, and I’m just plain lucky that I did. (I don’t always.)

At the very end of the movie, there is a hint as to why these convoluted games are not to our collective advantage. We all know that they provide for endless paths by which one can figure out a way to cheat the system. The movie is nice enough to point out a “new” investment vehicle which basically does what the Collateralize Debt Obligations of 2007 did. But hey, it’s now called something else. No one will notice the similarity, right?



Would you be illiterate?

booksThere was a time, a mere few hundred years ago, when most adults could not read or write. Literacy was the domain of the rich, and of others with power, like clergy,  healers and scholars. And while the ability to read did not automatically confer power, it was a stepping stone of some value.

Fast forward four hundred years. Even today, denying any group a basic education is equivalent to denying them power in society. But the world has grown far more complicated.  Along with flush toilets and stain removers, we have new kinds of literacy. Computer literacy, for starters. Older adults who refuse even the basics of email and cell phone usage are slowly relegating themselves to the sidelines. On the other hand, those of any age who bother to learn the basics of nutrition, medicine, law and even geography are better equipped to navigate life. Knowledge isn’t power, but it is one of the prerequisites. We choose ignorance at our own risk.

moneyYet of all the types of literacy we can benefit from, none seems to be more intimidating even to intelligent, educated people than the one that ties directly to power: money itself. This amazes me.

My financial education began several years ago when I was laid off by the company I worked for for two decades. Along with the expected problems, I found myself with a 401K plan that had been quietly growing in the background. Lucky me. I had the option of leaving it where is was, but I was far too pissed off at the company to leave any of my money in any thing that bore their name. So silly anger inspired me to learn enough to make a roll-over into an IRA. That wasn’t the end of it though. Most of the funds in the IRA were still in the hated company’s stock, which was now doing very well given that Wall Street always loves a good lay-off. So, I sold the stock.

bankersI quickly discovered that the investment community was (1) quite good at finding people in my shoes and (2) quite persistent about letting me know how well they would treat me and my money if I would just turn everything over to them. The louder they clamored, the more cautious I became.  I figured that if so many people wanted to handle my investments so badly, it had to be a very good deal for them. Which meant it probably wasn’t a particularly good deal for me.

Slightly paranoid contrarian that I am, I decided to learn to handle my own investments. I figured I had two years of college calculus. I could explain special relatively to my sister. If all of these guys calling me could all understand investments, so could I. How hard could it be?

Well, I made a lot of stupid mistakes. The good news was that I made them in little tiny increments, because at least I knew that I didn’t know much. I made baby-sized bad investments and itty-bitty good investments. Yes, I did make only a pittance off of stocks that did great because I’d only invested a pittance to begin with. I let a lot of cash just sit there doing nothing while I made spreadsheets and read a lot of stuff I didn’t really think I cared about on the Fidelity and Motley Fool websites.

27-Courage-Quotes-14I did sign up for some services that make recommendations for individual investors. Some were so much of a rip-off that they ought to be shut down. Others were useful and I began to pay a little more for their more elite recommendations. I learned to hold my nose at terms like “preserving wealth” and to buy stocks in companies I didn’t like. I learned to sell stocks I did like. I played with stops and limits and then I experimented with short-term trading. I tried basic options investing, learned how to by higher risk corporate bonds all by myself, and checked out index funds. As long as I only used a little money at a time, and kept track of absolutely everything, I discovered that I could learn a lot.

So. I wasn’t rich before I started and I’m not rich now. I think for all of my effort I about match what the S&P has done over the seven year period that I’ve been doing this. That is fairly remarkable, considering all the dumb mistakes I made. I could well have pissed away what savings I did have, but caution and variety were my friends.

high-frequencyBut wait. I’m way richer in one way. I’m now literate about money. Me, who always thought the stuff was kind of evil even though I liked to spend it. What’s more, I find that I understand the politics of money better. I get how those with wealth can make more wealth and not even realize how easily they are doing it. No evil intended. I get how our system is skewed toward the investor. I get the reasons this is good, and the reasons why this makes our society increasingly lopsided, and allows some of those who are talented and hardworking to still be barely able to get by. I’m not powerful, but I’m literate in a language of the power, and that matters.

Why mention this on a writing blog? Not to brag; I hope there is no bravado in this tale of me stumbling along powered in part by mistrust and in part by anger with a former employer. Rather, I want to share a second facet of this that baffles me.

What I know makes its way into my writing. You’ll find geology in x0 and physics and anthropology in z2. And you’ll find a fair amount of information about wealth in y1 and some basics about the the stock market in d4. Some readers could do without this sort of thing, and I respect that. I do try to keep my fun facts short and relevant to the story. Other readers seem to enjoy them, which is nice. I’ve received praise for my bits about the South Pacific, about anti-depressants, about the sex trade, and the Buddhist path to enlightenment. Only the stock market seems to leave people cold.

“I skimmed over it.” “I don’t understand that stuff.” “I don’t care about money.” It seems that readers, both friends and total strangers, have the biggest block of all when it comes to learning about the financial world. I’m not saying I’m the world’s greatest teacher. But the same people who gamely followed along with entanglement theory and immigration law had a much harder time opening their minds on this subject. That’s cause for concern.

In a world with increasing income disparity, and with the jobs that create wealth the fastest coming from the financial sector, doesn’t it behoove us all to understand that “sector” a little better? I think it does. It’s not that complicated to learn. And while the ability to understand investments will not automatically confer power, it will be a stepping stone of some value. Knowledge isn’t power, but it is one of the prerequisites. We choose ignorance at our own risk.

You don’t need to know this stuff because you have a little money to invest. You need to know this because your world is increasingly run by those that do.