Time to Build Your House

tl;dr: in times of accelerated financial stress, opportunity abounds as new needs rapidly emerge. Looking back at the debt panic of 1835.

“When Baltimore merchant George Peabody sailed for London in 1835, the world was in the throes of a debt crisis.

The defaulting governments weren’t obscure Balkan nations or Souther American republics, but American states. The United States had succumbed to a craze for building railroads, canals, and turnpikes, all backed by state credit.

Now Maryland legislators, with the bravado of the ruined, threatened to join other states in skipping interest payments on their bonds, which were largely marketed in London.”

When History Pivots

So begins Chapter 1 of Ron Chernow’s book, the House of Morgan, which chronicles the “rise, fall, and resurrection” of an Anglo-American financial empire, which today has spawned the banks of J.P. Morgan, Morgan Stanley, and Morgan Grenfell.

The book was written in 1989 and Chernow ends his introduction by stating that “our story looks back at a banking world fast vanishing from sight-one of vast estates, art collections, and oceangoing yachts, of bankers who hobnobbed with heads of state and fancied themselves ersatz royalty.”

Looking back at the role and importance of bankers and, J.P. Morgan, in particular, it certainly doesn’t feel like that statement has aged so well.

Of course, I’m only in Chapter 1 and Chernow, whom you may remember is the biographer who brought us Hamilton, which inspired Lin-Manuel Miranda, is a world class researcher and writer. I’m excited to continue reading it.

Debt and Opportunity

I didn’t know this until I began researching it, but the only time the US has ever paid off its national debt was in 1835, under Andrew Jackson. One year later, things had apparently spiraled out of control.

But out of that great debt crisis, Peabody built a global financial entity that has lasted nearly 200 years. Peabody had no heirs (though he was apparently quite fond of women) eventually transferred controlling interest to Junius Morgan and the rest, as they say, is history.

You know how sometimes you just feel like things line up for you? (Against you, as well, but we get dark enough on this blog).

I had reserved this book in my local library system months ago and then, on April 5th, I received a notice that it was available. I downloaded it to my Kindle (I still have the original and I love it) and began reading it.

So, when I read those first words, “the world was in the throes of a debt crisis,” I took notice and heard the words of Ecclesiastes in my head.

What has been will be again, what has been done will be done again; there is nothing new under the sun.

Taking Notice

As we all try and make sense of what the post-Corona world will look like, there are those who see opportunity out there.

I suspect there will be a lot of it.

We can speculate as to how things will change.

• will we go back to movie theaters or sporting events?
• will live conferences return?
• are handshakes dead?
• does the commercial real estate market rebound?
• will 5G rollout get accelerated?
• will there be significant inflation?
• will suicides, divorce, marriage, birth rates change dramatically?

I have NO idea, of course, but I do believe that all of us are going to carry the scars of this experience for a while and it will radically change us. We just don’t know how.

And, what’s more, we don’t know what the alternative would have been since history doesn’t provide an alternate timeline, unless it’s a Back to the Future scene.

The key thing, for me, at least right now is to practice the skills of awareness and noticing.

The signs of change are slowly starting to make themselves known, even though it might be too early to separate signal from noise. But it’s coming.

My brother, Barak, said it quite well.

“We all went through a wormhole at the same time. Now, we’re on the other side.”

We get to choose to recognize that we are an alternate April reality than the one we had imagined only a few week ago in February. Unlike Back to the Future, there’s no time machine.

But there’s an accelerated and growing set of new needs that millions, if not billions of people, around the world have. There are massive new problems that need to be solved now.

The question for all of us is: if this is the moment, what will our legacies be?

We don’t need to create multi-billion dollar banks, but we can do things now that position us and our descendants to thrive and survive in the future.

Survey the land, pick a plot, start buidling your house.

Good luck and stay safe (and sane.)