Less it, more thou (Sunday Reflections for May 23, 2010)

The past month has been another roller coaster ride for Wall Street. Watching stock market gyrations in recent years has no doubt done wonders for Pepto-Bismol sales. And yet a longer term view shows that, when it comes the nation’s equity markets, things have really just been going nowhere in a hurry. With this week’s decline, the S&P 500 index (a broader measure than the DOW) is back at a point it first reached 12 years ago.

For as long as people have thought in terms of economics (a modern development, by the way), it has simply been assumed that the goal was always GROWTH—more, bigger, faster, better. In recent years there has been much worrying talk of our economy being "stagnant," "flat," or "stuck." Such conversations always occur among people with grim faces, communicating that these are seriously bad things.

There are a growing number of people, however, who are challenging that assumption. They have actually been around for quite awhile but in the past they usually were dismissed as naïve if not irrational. Not so much anymore.

It’s not that economic growth has suddenly gotten a bad name. Rather, it’s starting to become apparent that, whether we like the idea of constant growth or not, it may just not be possible anymore—at least not the way it used to be. In other words, the stock markets’ decade-plus seesaw may be telling us something important about a new world that we are entering.

The one factor leading to this new world that everyone is aware of is oil. The term “peak oil” is being discussed a lot these days. It refers to the fact that global oil production is slowly declining now—it’s “peaked.” New sources are still being found but they are (at best) only replacing depleted sources. Those new sources also tend to be harder to reach and therefore more expensive and more hazardous. At the same time, however, demand is growing as formerly under-developed countries build all the modern infrastructure of their developed neighbors. Other resources are also being strained to keep up with demand for all the concrete, steel, plastics, cables, microchips, etc these nations want. And then there’s that whole food thing (oh yeah, and water—hmm, anything else?).

Awareness of this has produced a lot of doom and gloom prognosticating. In addition to scholarly papers and books, Hollywood had found dystopian, end-of-the-world-as-we-know-it sagas great ways to show off their latest special effects gadgetry (3-D!!). They’re good money makers, as well, being the newest type of horror films, and we all know how much we like being scared to death (that ancient Greek catharsis thingy still seems to work).

Yet this is all based on the assumption, so common in the business world, that if you’re not growing then you’re dying. Indeed, it is built into our culture in so many ways and we learn it almost from birth. As consumers (a great word in itself) we are taught that, whatever we have, something better will be coming soon to render it obsolete and needing to be replaced. Planned obsolescence used to get people angry but now it’s an accepted part of life. “Of course, it broke after the warranty expired. What did you expect? Just go out and get a new one.”

What happens, though, if we find ourselves in a world where you can’t “just go out and get a new one”? For most of us, me included, it’s almost impossible to imagine. We are so accustomed to our lives being a climb up a ladder of ever-growing and improving products: toys, electronics, cars, houses, RVs, etc. Indeed—and here’s the rub—it’s the way we’ve come to measure and value our lives. “If I don’t have “X” by the time I’m 30/40/50 then, I’m a failure.” What else is there?

In the last chapter of Saving Jesus from the Church (the book a group of us have been discussing at church), author Robin Meyers concludes his re-imagining of Christianity by saying religion and life itself is all about relationships. He refers to the German Jewish philosopher and theologian Martin Buber (1878-1965), whose most famous book was I and Thou (Ich und Du, 1923). In his works, Meyers says, Buber “spelled out his belief that life at its depth is dialogical and that reality itself is defined by personal dialogue.”

The contrasting type of relationship is “I-It” in which a human relates to something else as an object. There is no dialog in such a relationship because the other is treated as a thing. We are unconcerned about what affect we may have on it and assume it can have no real affect on ourselves. “It” is disposable because it has little if any intrinsic value. “I-It” is the type of relationship most common in our lives, often even when we are relating to other people.

An “I-Thou” relationship, however, assumes that there will be genuine interaction. As a result of such a relationship, I will learn and grow, “I” will be affected and so will “Thou.” In the course of such a relationship, I will become a different person, and ideally a fuller and better one. Imagine if we evaluated our relationships on such a basis, and not just those with other people. Imagine if we asked about the inanimate objects that we consider acquiring, not just will it make me happy or impress my friends, but will it make me a better person, will I grow and learn from this?

It’s said that the Chinese for “crisis” combines the ideas of danger and opportunity. There is much danger in the current crisis but also real opportunity. Our current cultural lifestyle is rapidly becoming untenable. Yet most indications are that it hasn’t really been making us all that happy, anyway.

There is an opportunity here to stop and ask ourselves anew, “What really makes me happy?” Having more and bigger things hasn’t really been doing it for us. What if we saw our lives not as a journey of accumulation of things but as a journey of experiences which help us learn and grow as human beings? What if we asked of people and things, not how can we use them, but how can we relate to them and interact with them and be changed by them? Such a life would have little concern for price tags, size or speed. And the nice thing is that for that kind of growth, there doesn’t seem to be any limits.

Market madness

Last Thursday's 1000 point joy ride provided Wall Street its most bizarre day ever--and there is still no explanation for it. Financial blogger Felix Salmon advised individual investors this is your last warning: get out of the market NOW. The waters are getting far too rough for any but the big boys to play in. 

And if you needed any more evidence that Wall Street has simply become an extension of Wonderland, there was this announcement today by Goldmas Sachs. During the 63 trading days of the 1st quarter of 2010, GS made money ON EVERY ONE OF THEM. This has never been done before in its history, the company said. Commentators say the odds of doing this are beyond calculation. Wall Street is now regularly described as a casino but it won't be long before Las Vegas sues for slander: that description is unfair to casinos and giving it a bad name.

Oh, Goldmas also issued one other statement today. It says it is anticipating further investigations of its practices and possible litigation as a result. Ya think?

To whom much has been given: an update

Wall Street bank heads testify before Congress

Yesterday the SEC indicted Goldman Sachs for civil fraud. The specific trade cited is just one example of countless others done by GS and other TBTF Wall Street banks. In brief, GS is charged with selling sub-prime mortgage-backed financial instruments which it knew would soon turn into junk. It did not disclose this to buyers, however. Further, these were created at the request of a hedge fund client specifically so it could bet against them. GS is not (yet) accused of similarly "shorting" its own product but if it is later this would be much worse.

The one individual named in the indictment is a GS VP named Fabrice Tourre or "Fab" as he sometimes calls himself, as in this email. The brains behind this particular deal, in his own words he perfectly describes the use of intellectual gifts to create a device for fraud and deception build on sheer greed:

Goldman Sachs CEO Lloyd Blankfein

More and more leverage in the system. The whole building is about to collapse anytime now... Only potential survivor, the fabulous Fab[rice Tourre]... standing in the middle of all these complex, highly leveraged exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!

Reportedly the Attorneys General of both New York and Connecticut are seriously considering criminal indictments against Wall Street bank executives. It's also assumed more action will be coming from the SEC and perhaps other Federal agencies. This is likely just the first chapter in what could be a very long saga--at least, let's hope so.

Update: LA Times columnist Michael Hiltzik has an excellent column on the SEC lawsuit against Goldman Sacks' and the financial chicanery that led to it. He zeroes in on the larger issue and why new federal financial regulation is essential to restore order in the world of TBTF banking:

The real issue isn't what Goldman knew or didn't know about the larger economy. The issue is that Wall Street's business model has become corrupted into one dependent on creating transactions that spin financial wheels to virtually no economic end, merely to generate fees and profits.

To whom much has been given (Sunday Reflections for April 18, 2010)

This week marks the 40th anniversary of one of the great “happy ending” stories of modern times: the flight of Apollo 13. At the time, I was experiencing the last weeks of junior high and so was more than a bit distracted. I remember it happening but it took Ron Howard’s 1995 movie Apollo 13 for me to learn the story in detail. Even prior to that, however, those events had provided a phrase for my lectionary and that of many others: “Houston, we have a problem” (though the actual words spoken by Jack Swigert were “Houston, we’ve had a problem”).

Apollo 13 was to have been the third human landing on the Moon. Instead, an oxygen tank rupture, two days after the April 11, 1970 launch, rendered the craft nearly inoperable as well as nearly unsustainable for its three-man crew. The story, told well in Howard’s movie, is one of calm ingenuity under immense pressure, by the ship’s crew and the Mission Control staff in Houston. With the absolute minimum of necessary power and barely avoiding fatal carbon monoxide poisoning, Apollo 13 did a single loop around the Moon and limped home to a Pacific splash down on April 17. Later NASA deemed the mission a “successful failure.”

Tom Wolfe’s 1979 book chronicling the beginning of the US space program focused on the first test pilots and Mercury astronauts. In his title, Wolfe deemed these men to have The Right Stuff. That “stuff” was obviously still present ten years later and was the only thing that made Apollo 13’s failure a success rather than the catastrophe many expected.

My memory of that time has other events imprinted more vividly, however. In addition to being a rocky time for my family (on top of the usual early-adolescent angst), it was also a time of great upheaval for the country. A new president, Richard Nixon, had won election promising he had a plan to get the United States out of Vietnam. After a little over a year in office, that plan wasn’t going so well.

The South Vietnamese military was not stepping up to replace American forces the way they were supposed to. In order to give our allies a leg up, President Nixon ordered an “incursion” into neighboring Cambodia to root out Communist Vietnamese forces that had taken refuge there. Nixon’s April 30th nationally televised address announcing the invasion was two weeks after Apollo 13’s return and I still remember it. The glow of Apollo 13’s rescue was quickly lost.

The following week on May 4, 4 students were killed and 9 injured by Ohio National Guardsmen at Kent State University. Some of the students were part of a crowd protesting the Cambodian operation but others were just bystanders. Almost immediately college campuses across the country were engulfed in protests and violence. Hundreds of campuses were closed as 4 million students went on strike.

My brother was a freshman at Southern Illinois University. A little over a week after the Kent State deaths he called home: “Come get me. They’ve closed the school.” My dad and I jumped in the car and made the long boring drive to SIU (Interstate 57 was only partially completed then). It certainly looked like the war had come to Carbondale. Every window in the downtown was broken. A campus building had been burned. The National Guard had set up an outpost right next to my brother’s dorm.

To borrow NASA’s language, it’s hard not to view the events of May 1970 and everything leading up to them as a horrendously unsuccessful failure. Perhaps the most well-known chronicle of America’s Vietnam experience is David Halberstam’s 1972 The Best and the Brightest. His title, like Wolfe’s, highlights the unique abilities of the people involved in this national endeavor. His title, however, is highly ironic, of course.

The question Halberstam pursues is how such able and intelligent people could have gone so horribly wrong in virtually every way: in their expectations, strategy and execution of the war. These were the “whiz kids” brought to Washington by President Kennedy and largely retained by President Johnson. Renowned leaders of business and academia, their self-confidence led them to arrogantly pursue, in Halberstam’s words, “brilliant policies that defied common sense,” which often ignored contrary judgments of lower level military and foreign policy officials. (This was something I heard of first hand from a college professor of mine who was a retired Green Beret general. Stationed in Vietnam before the buildup, his negative evaluations of the war’s prospects were not welcomed at the Pentagon. Realizing his career was at a dead-end as a result, he moved on to college teaching.)

A similar story is beginning to be told about the 2008 financial meltdown. Of course, the events of this saga are likely still being played out. It is already clear, however, that the precipitating causes of our current economic collapse have all over them the fingerprints of many of today’s “best and brightest.”

It’s obvious that the heads of the nation’s “too big to fail” Wall Street banks are made of equal parts brilliance and arrogance. It has been documented how these firms also regularly recruited thousands of the top graduates of the country’s best colleges and universities. By their own admission, many of them now admit they had one goal: make lots of money—which they did, often beyond their wildest dreams. Put to such use, however, their education and brilliance have now cost us and people around the world houses, jobs, savings and still unfolding economic misery, beyond most people’s worst nightmares.

Interviewed about their flight, Apollo 13 commander Jim Lovell was asked if the crew was ever scared or thought of dying. Matter-of-factly he said no, they were just too busy carrying out their various tasks. And even if they had run out of things to do to save themselves, Lovell went on, they knew that, until the power or oxygen gave out, they would continue to send data and report their findings so that it could be figured out later what had gone wrong. That was their job.

In Luke’s parable of the faithful steward, Jesus concludes by saying, “From everyone to whom much has been given, much will be required.” I suspect that if the Apollo 13 crew or those who had been down below in Mission Control were to hear those words, they would be received with a shrug-of-the-shoulders “Well of course.” Yet that wisdom or awareness seems to have escaped many of those in the midst of our current national crisis.

As we enter graduation season, I hope commencement speakers will use this crisis as an opportunity to convey both the blessings and the responsibilities talent and opportunity carry, and warn against the irresponsibility and harm of selfishly misusing them. If they do, those speakers will certainly have no trouble providing living examples of people who have chosen each of those paths, and of the consequences of the choices they made.

Indefensible Men

In the previous post and elsewhere, I have written about the culture of Wall Street and its role in the 2008 economic debacle. Here is an amazing post by Yves Smith at her blog Naked Capitalism. It was originally a magazine article and is a LONG read but well worth the effort. The reader discussion that follows is also astonishingly excellent. Starting the post and in the comments you will find quotes from Reinhold Niebuhr, Hannah Arendt, George Orwell, and others to give you some idea of the level of conversation.

In brief, “Indefensible Men” makes clear the enormous economic and cultural distortion that Wall Street has become. “Psychopathology” is the word that comes up more than once in the comments and it is not at all inappropriate. This is a world most of us have no experience with and can hardly imagine, yet it is impacting all of our lives and indeed much of the world—and not for the better. As the responders make clear, however, doing something about it will be a monumental undertaking.

We are in the midst of an economic, political, and cultural crisis of the first order. If it is at all possible, I encourage you to find an hour or so to read this piece and the conversation that follows.

Dream big (Sunday Reflections for March 14, 2010)

Your old men shall dream dreams, and your young men shall see visions. (Joel 2:28)

A little after 8 am, five days a week 52 weeks a year, I get in my “In Box” an email newsletter from KurzweilAI.net. This is a web site created by inventor, author and futurologist Ray Kurzweil. (If you’ve ever used an electronic keyboard or voice-recognition software, you’ve probably made use of something he has a patent on.)

Kurzweil is a dreamer but, as his life has shown, he also has the ability to turn dreams into reality. Now in the latter part of his life (or maybe not “latter” if one of his dreams comes true) he is focusing most of his attention on creating dreams, big dreams—visions of the future both near and distant. Many of his futuristic visions have been dismissed by others as fantasy but not all. And given his past accomplishments many hesitate to dismiss anything he imagines as “impossible.”

Each of the little e-newsletters he sends out has about a half-dozen story summaries, with a link to click on to find the full story if it interests you. These stories are all about things happening right now in countless fields of research and technology. The topics include biology, medicine, nutrition, energy, computing, transportation, physics, astronomy, climatology, communication, robotics, and more.

Many of the stories are truly amazing but for me what’s most impressive is simply the sheer volume of the stories. They arrive day-after-day so that you can’t help but thinking, “Wow, there’s a lot going on in the world.” And the result of that is to make me really—hopeful.

That’s important because we live in what can be a very discouraging time. We can be discouraged by our own personal circumstance or by the economic gloom that has covered much of the developed world. I know it affects me. It’s obvious that—unlike the TV commercial—there is no Easy Button to get us out of the financial and economic mess we’ve gotten into. We’re going to be here for awhile.

Yet as this newsletter shows, around the world people are working to solve problems and make our lives better. Most of these people are working with little recognition—they fly below the media’s radar. Yet they are doing truly remarkable things, many of which someday (and in many cases it isn’t far off) are going to make this world of ours a better place to live.

In many ways Kurzweil provides little glimpses of humanity at its best, of human beings fulfilling what we imagine is our ideal function and purpose: helping each other to live better and happier lives. It brings to mind those early and simple instructions in the Bible: "till the garden and keep it" and “love your neighbor as yourself.”

Obviously, however, that isn’t all that’s going on in our world. Indeed, what makes these newsletter articles stand out is that they are often so unlike what is in the news much of the time. Yet one other hopeful thing is that we seem to be asking serious questions about why that is. We are wondering about the ways we are spending our time and talents, energy and resources. We are asking serious questions about our collective values and priorities.

The 2008 financial meltdown has caused a harsh spotlight to fall on Wall Street and for good reason. Certainly the causes of the Great Recession are varied and complex but the Wall Street investment “too big to fail” mega-banks must take a lot of the blame. Their ever more complicated, multi-trillion dollar financial schemes and products (financial weapons of mass destruction Warren Buffett has called them) collapsed like a house of cards, very nearly bankrupting the country and much of the rest of world. The reverberations and repercussions are not over yet nor, apparently, are many of the risky bank practices that got us into this mess.

While not necessarily justifying their previous behavior, bank leaders have argued that these institutions provide a vital service to the country and the world. Goldman Sachs CEO Lloyd Blankfein has gone so far as to say they are doing “God’s work.” The importance of banking services, especially making available investment capital, is not disputed. What is in doubt, however, is whether these banks are, in fact, providing those services. Rather, their top priority seems to have become not making loans but making money and lots of it—mindboggling amounts of it—however they can.

Wall Street’s banks are the most extreme examples but they are causing many to ask some basic questions about our economy and our society, our needs and priorities. For instance, there are many enormously talented people at these banks. They and their talents are a great resource—is what they are doing really the best use of that resource for our society?

Even more basic: what values are we teaching our children? What should their priorities be? Do we still believe making money and being happy are one and the same? What should be the goal of their education? If we say it is to be able to get a job, how do we deal with the fact the many of today’s jobs will cease to exist in the near future and many of the future’s best jobs haven’t even been imagined yet? And with our ever-increasing productivity and efficiency, is “having a job” even going to be the best way to think about adult life for future generations?

It has perhaps always been true that one of humanity’s greatest obstacles has been lack of imagination. We are creatures of habit. Those who ask “what’s over that hill?” or “what if we did it this way?” have more often been laughed at or scared off than listened to. What is remarkable about the world’s recent history is that such people have been given much more credibility and opportunity. Still, changing habits and ways of thinking are hard for all of us.

My daily e-newsletter from Ray Kurzweil tells me, however, that countless, mostly nameless, people are asking questions and searching for answers in a quest for a better life for all of us. Are they being encouraged? Are there enough investors willing to take a chance on their research and to make their discoveries reality? Are there other talented people who could be doing such things but who got misdirected into jobs or life paths that really aren’t benefiting themselves or the rest of us—or are benefiting themselves without consideration for the rest of us?

Great things ARE happening. Great discoveries are being made. Great problems are being solved. Imagine now if these weren't just stories in a newsletter but it was everyone’s daily reality? A dream? Perhaps. But dreams are where great things always begin. And this dream is based on belief in the greatness and goodness of the creation in which we live and of which we are a part.

Fannie, Freddie, and the new Red and Blue

Matt Taibbi writes for Rolling Stone and blogs at True Slant. Let me warn you up front: Taibbi has a sharp tongue and somewhat of a potty mouth. More importantly he has a brain and uses it well. Recently he has been focusing his attention on Wall Street’s and Washington’s role in the financial crisis. Last summer he wrote a blistering attack on Goldman Sachs.

In this piece, Taibbi goes after the notion that our problems lie either with Wall Street greed or with Washington socialist incompetence. Clearly it’s both, he insists, and much more. Here in Illinois columnists and political critics talk of the Springfield “combine,” the sinister cooperation by politicians of both parties to award no-bid contracts and accept payouts from businesses and lobbyists. Thus, two governors in succession—of different parties—have both been jailed or indicted for corruption.

Much the same is going on in Washington Taibbi asserts. Which party is in power has become irrelevant to Wall Street interests because both are in their pockets. Thus the 2008 TARP bailout was created and sponsored by the Republican Bush administration but then passed by Democratic majorities in Congress. The strident Red/Blue divide is actually a side-show which conveniently distracts attention from cynical bi-partisanship that works for Wall Street’s interests.

“The essentially complicit nature of the two ruling political parties was in this way covered up for decades, as the crimes of the Democrats were greedily consumed as entertainment by the Limbaugh crowd while the crimes of the Bushies became hot-selling t-shirts and bumper stickers for the Air America listenership. The abiding mutual hatred the red/blue groups shared consistently prevented any kind of collective realization about the structure of the overall scheme.”

Read, laugh, get angry--repeat.

(An explanatory note for the article: “GSEs” = government sponsored entities, e.g. Fannie Mae and Freddie Mac.)

Too Big to Jail

On his program last Friday, Bill Moyers interviewed David Corn and Kevin Drum. Corn and Drum are two of the contributors to Mother Jones’ cover story exposé “Too Big to Jail,” which tells how Wall Street has been able to avoid being held accountable for the 2008 financial crisis. Their emphasis is not so much on the problems of Wall Street but on those in Washington. Here’s a short preview:



The financial crisis revealed not just shortcoming in our economic system. More seriously it showed how Wall Street’s influence is now virtually dictating policy in Washington and thus preventing the reforms necessary to correct our seriously flawed financial system. Indeed, Wall Street has carried out an “intellectual capture” of the country’s mindset so that we assume, like GM in the 1950s, that what’s good for Wall Street is good for America. David Corn likens this to a new form of the “Stockholm Syndrome”:

“While [people are] angry at Wall Street, particularly on the corporate compensation front — which is very easy to get angry about — they also are fearful of taking Wall Street on, because they've been taught that if the Dow falls, if you take on the big banks, it's going to be bad for all of us. So, it really is this ‘Stockholm Syndrome,’ where we're forced to identify with people who are holding us hostage without our interest in mind.”

People are angry and frustrated but don’t know what to do. Moyers correctly sees this endangering our whole democratic system.

“The worry is, have we become so big and things become so complex? Have people been so politically abused, as a psychologist recently said, that the will to fight for democracy, the political will has been dissipated?”

Understanding what has happened, and what is going on now, is essential for the public to demand meaningful change, in Washington and on Wall Street. Listen to the two-part conversation and Moyers' commentary.

Not a good day

A smattering of reports and developments roiled the economic waters. The green shoots are really struggling.

• Another high unemployment report (supposedly) sent stocks lower. (I say "supposedly" because I think these simplistic explanations for market moves are normally just media spin.) It seems nealry impossible now to avoid double-digit unemployment by the end of the year (and probably sooner).
• Unusually, bonds fell as well (more typically bonds and stocks move in opposite directions). Reports indicate that Standard & Poors will soon be downgrading the debt of the UK and suspicions are growing that the same will happen to US debt. At the same time the credit of several European countries and multiple European banks recently have been downgraded.
• To no one's surprise the large Florida thrift BankUnited was shut down by the Feds today. This will result in a large hit to the FDIC, second only to that of California's IndyBanc which collapsed last year.
• Finally, AIG Chairman and CEO Edward Liddy announced he is throwing in the towel. Liddy was brought in after AIG's implosion last year and was literally working for nothing. In interviews he came across as someone who was sincerely trying to make the best of an awful situation and was working out of a genuine sense of social obligation. He took a lot of heat for the incompetence of his predecessors. Called out of retirement as head of Allstate, he's obviously had enough. This has to be viewed as very unfortunate as it is unlikely that there are very many people of his abilities and character available for such assignments as we tried to rebuild our tattered economy.

All-in-all, just not a very good day.

End of the 401K?

(Note to CCBlog users: There seems to be a problem creating a link to the right post. If you are looking for "Is it art or ..." you'll find it here.)

Last night, 60 Minutes did a segment on the fiasco of the 401K. One interview emphasized a forgotten fact, which is that they were intended to be one leg of a three-legged retirement stool, with the other legs being Social Security and traditional guaranteed benefit employer retirement plans. The latter leg has virtually disappeared, however, leaving a very wobbly stool indeed.

The weakness of 401Ks has now been revealed for everyone to see, of course. But as the 401K industry lobbyist 60 Minutes interviewed bluntly implies, the problem goes beyond that one program. The problem is equity investing itself. The spokesman tried to deflect 401K criticism by saying participants shouldn't have been in stocks in the first place if they weren't prepared for the inherent risks. This conveniently ignores the fact that hitching onto the Wall Street rocket has always been the appeal of 401Ks.

Yes, everyone read the mandatory warnings in the various fund brochures that past performance could not be guaranteed. But surely the charts showing 1-year, 5-year, and 10-year returns got much more attention. And yes, everyone knew the market had hiccups and investment strategies needed to be "long term". But nothing was said about Wall Street having a seizure that would wipe out half or more of your retirement savings, resulting in "long term" being longer than many will be in the work force.

"Why I Fired My Broker", the cover story of the new May Atlantic, is another bracing dose of economic reality thearapy, helped down with a measure of gallows humor. Jeffrey Goldberg consults a variety of fiancial wizards in search for an answer to the question every staggered "average" investor is asking: "What do I do now?" After years of being told stocks were the path to financial security and a comfortable retirement, he finds the message has changed nearly 180 degrees.

Goldberg seeks out Robert Sorros, son of George Sorros and deputy chairman of the fund started by his father, who quickly disabuses him of the idea anyone on Wall Street has interests at heart:

“You think a brokerage should be a place you go to pay commissions for fair and unbiased advice, right?” he asked.
“Yes,” I said.
“It’s not. It never has been.” He then cited another saying of Buffett’s: “‘Wall Street is a place where whatever can be sold will be sold.’ You are the consumer of their dreck. What they can sell to you, they will sell to you.”
“But they told us—”
“They lied.”
He went on: “You should be disheartened and disappointed. But don’t kid yourself. You’re a naive capitalist. They were never your advisers. Do not for a moment think that a brokerage firm is your friend.”
“So who’s my friend?”
“You don’t have one. This is the market.”

From Seth Klarman, a highly successful fund manager, he gets much the same wisdom:

He agreed with Robert Soros that the financial-services industry treats the small investor not as a client but as a source of ready cash. “The average person can’t really trust anybody. They can’t trust a broker, because the broker is interested in churning commissions. They can’t trust a mutual fund, because the mutual fund is interested in gathering a lot of assets and keeping them. And now it’s even worse because even the most sophisticated people have no idea what’s going on.”

All of which causes Goldberg to reflect, "After 15 years of pabulum, I was enjoying, in a perverse sort of way, receiving straight talk from masters of finance."

One of the reasons the market won't be coming back, at least not to anything near wear it was, is that investors won't be coming back. Even without having Goldberg's conversations, people are figuring out for themselves that Wall Street and all its affiliated components have been taking "average investors" for a ride. The billions paid in investment fund fees and commissions over the years have left most people right where they started, with the money they paid in--and sometimes not even that.

For Goldberg this is a reality check, a painful but necessary crashing back to earth. Truth is always to be preferred to fantasy.

I no longer expect to get rich. It makes me happy to realize this. It also makes it easier to give more money to charity. In retrospect, I can’t imagine what led all of us to believe that we could regularly expect double-digit annual returns on our money, for doing no work.