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Most people by now may recall a moment of clarity, an inkling of doom. Maybe it helped a guy make money, or at least lose less. Maybe it came too late or went unheeded, so that now it nettles. The majority didn't expect it to be so bad, and wouldn't have been able to profit from or guard against it anyway. The sad fact is that betting against the global financial system requires more than pluck; you need to be a participant. Most of the mechanisms in place for the implementation of pessimism are known only to members of the guild.
I met a Wall Street cynic who had grumbled for years about the overextended consumer, the negative savings rate, and a profligate government that some day would be unable to make good on its promises. He foresaw a grisly end to the credit boom, if not a collapse in the markets for stocks, real estate, art, mediocrity, and foolishness, and yet, like most people, he lacked the conviction and, perhaps, the macroeconomic purview to translate his misgivings into financial gain. He got short too soon and lost heart. Meanwhile, life and the general mood conspired to compound his long position. He bought a house and went to work for a hedge fund—the latecomer playing catch-up, eager for a piece. The markets turned, and the hedge fund went under. One day in March, as the Dow fell to its lowest level in a dozen years, he e-mailed me an investment letter, in which a hedge-fund manager surveyed the world's insolvent banks and unstable sovereigns and anticipated a possible collapse of the global financial and monetary systems—the end of fiat currencies and the beginning of Lord knows what. It concluded that the world needed a "do-over." "Can I have a do-over, please?" the cynic wrote. As a broker said to me, "If it's the end of the world, you only get to bet on it once."
For many, the awakening came while they were driving through some over-built exurb in Florida or California, or watching a commercial for a subprime lender ("Mortgage consultants are standing by!"), or studying a graph depicting the ratio of total debt to the gross domestic product. In the early days, intimations of economic imbalance could come to you in a fancy restaurant, or a Home Depot, or an A.T.M. vestibule: a two-hundred-dollar dinner, a traffic jam in bathroom fixtures, fees on top of fees on top of fees. A pulse of common sense suggests, This can't last.
Some will tell a maid tale, the latter-day equivalent of the stock tip from the shoeshine boy (which, according to lore, persuaded Bernard Baruch and Joseph Kennedy to pull out of the market before the 1929 crash). A private-equity executive I talked to said that he sensed the jig was up when his cleaning woman—"from Nicaragua or El Salvador or wherever the fuck she's from"—took out a subprime loan to buy a house in Virginia. She drove down with her husband every weekend from New York, six hours each way, to fix it up for resale. They cleared sixty-five thousand dollars on the deal, in a matter of months. To many, this would have been proof that America is a land of opportunity, but to him it signalled a fatal imbalance between obligation and means.
One evening, I visited a big-wheel hedge-fund manager in his corner office overlooking Central Park. His epiphany came in the spring of 2007, at a Goldman Sachs hedge-fund conference at the Museum of Modern Art. There were eighty or so people there, almost all of them men, and he calculated that their average income in 2006 had been more than a hundred million dollars. Here were eighty guys who all happened to live in the same part of the world and ply the same trade, and who could not possibly be as smart as their rapid accumulation of dynastic wealth had led them to believe. It was the first time in a long while that he had questioned his own intelligence, or whether there was a limit to what it was worth. He didn't doubt that he was talented, even exceptional—if you harnessed the self-regard in that room, you could light up Los Angeles—but he perceived, in a way that he hadn't before, the inequity of it all, and how corrosive and unsustainable it had become. Too much money, too few hands. Still, he failed to convert this intimation into discipline or conviction; being a billionaire is distracting. He and his partners continued to gorge on highly leveraged assets.
The sky was full of signs. The final one, the big wheel felt, was the opening ceremony at the summer Olympics in Beijing: an estimated three hundred million dollars spent in a single night on a propaganda extravaganza. Many people saw it the way the Chinese wanted them to, as an assertion of capability and might, but to him it was a heedless farewell binge—the great eruption that marked the end of a prodigal age. A month later, Lehman Brothers collapsed, and his business, his net worth, and his reputation were teetering. He was grateful not to be facing ruin. "It's more traumatic to go from thirty million dollars to a million than it is to go from $1.5 billion to a hundred and fifty million," he told me. "There's a level over which it's all just philanthropy." This is what passes for perspective, in those high corner offices.
Some who foresaw the implosion underestimated its power and duration. A young Bostonian named Jeff Lick runs a hedge fund he called Galt Investments, for John Galt, the hero of Ayn Rand's "Atlas Shrugged." (He named his son Roark.) Lick was having an excellent 2008—he'd bet correctly on the collapse of the financials—but in October he closed out his short positions, expanded his long ones, and got trapped. The fund lost nearly half its value. (It has since recovered somewhat.) He wrote to his investors:
Most of you are rightfully asking yourselves right now, "Given Galt's numbers through September and what was and had been transpiring all year, why didn't you just go to cash and take it easy the rest of the year? . . . Further, you are probably thinking, "I am less concerned about what specifically happened in October than I am about the poor business judgment you have shown in general." To these charges I plead guilty by reason of youth, inexperience, greed, hubris and temporary insanity. There are simply no good answers to the questions posed above.
No good answers: it depends on one's definition of "good." However dramatic and abrupt the events of September were, when Lehman failed and the government rescued Fannie Mae, Freddie Mac, and A.I.G., the meltdown was not so sudden. The pace of upheaval slows and accelerates, although the underlying conditions—crushing debt up and down the food chain and all around the world—remain relatively constant. The difficulties manifest themselves, one after the other, as their effects ripple through the system. In September, very few people, around here at least, were aware that more than half of the mortgages in Poland were denominated in Swiss francs, not zlotys, and that, if the zloty collapsed, Poland's homeowners and their lenders would be devastated. Yet the precarious arrangement was there all along, for anyone who looked. The dance of revelation and recognition is not well synchronized.
This thing we're in doesn't yet have a name. It is variously called, in placeholder shorthand, the global financial meltdown, the financial crisis, the credit crisis, the recession, the great recession, the disaster, the panic, or the bust. It long ago metastasized beyond the subprime mess, which was merely a catalyst—the first whiff, the last straw. A text-friendly acronym, ITE, for "in this economy," has started to get around, in sales pitches and head-count meetings, but it doesn't do the work.
This thing is enormous and all-pervading, evolving and ongoing, history-altering yet in many respects banal. It is a persistent state, like the weather, or a chronic illness. In some circles—financial professionals in Manhattan, regulators in Washington, central bankers in Europe, or the owners of cash-strapped businesses, to say nothing of the millions of people who have been laid off or whose houses have been foreclosed on—this thing is, in its various incarnations, pretty much the only subject of conversation. The loss of a job, a home, a college fund, or one's dignity is both a symptom of the collective disaster and a contributor to its deepening. People assess their own exposure first and then, gradually, the implications for their friends, their town, the social fabric, and, in the darker hours, the fate of the American experiment.
In a way, the financial crisis is like a plague or a war, except that the pestilence and carnage are metaphorical. Some have compared it to Hurricane Katrina, but Katrina occurred suddenly, and then all was aftermath. In this case, it's as though the levees failed anew every day. We stay on the porch, carrying on with our card game, in water up to our necks. War (putting aside the question of whether it's the inevitable result of all this) fails as an analogue, too: there is an enemy to shoot at, and the destruction is so gruesome that it is hard to mistake wartime for normalcy. An economic meltdown can camouflage itself in the commonplace. It is more like radiation. It's everywhere, but you can't see or smell it. And then a neighbor loses her job or her hair.
"Do you have any organic bullets?"
We are a visual species. In an economic crisis, in the early stages, at least (and we are likely still in the early stages, in spite of all the recent happy talk), the visible effects are subtle, if they are present at all. Maybe there are empty seats at the game. It is a mathematical predicament, an abstraction that expresses itself in dreary reports that don't affect you, until they do. Deferred dreams aren't news. Even the worst consequences—homelessness, hunger, untreated illness, everything short of civil unrest or outright revolution—aren't spectacles. The history-making developments—the collapses of great or at least large institutions, the government's deployments of sums beyond imagining, the exchange of gigantic liabilities for even more gigantic ones in the future, the effects these things have on geopolitics—are difficult to picture. People grasp at anecdotal observation: store closures, idle spouses, a rash of attacks by a mugger (a mugger!) with a pipe. The immigrants are going home.
Pictures from the thirties of breadlines or dairy farmers pouring out milk mean something to us now because we have a name for the Great Depression, and a discrete sense of the whole. This doesn't look like anything yet. The cities aren't crumbling; the Plains aren't turning to dust; your four grandparents are not sharing a bed, like Charlie Bucket's. Business-section editors settle for pictures of brokers on the floor of the New York Stock Exchange, choosing subjects whose facial expressions best capture whatever mood it is that the commentators have decided to blame or credit for that day's market fluctuations. Never mind that the guys on the floor don't always make money when the market goes up, or lose it when it goes down, or that they are the vestigial human practitioners on an otherwise mostly electronic exchange that represents but a sliver of the capital markets. You may as well have a photograph of a man fixing a flat tire or a child with a skinned knee.
A piece of corporate jargon sprouted up recently: "optics," as a synonym for "appearances"—something that looks good or bad, in a public-relations sense. When a broken-down bailout recipient like Citigroup tries to pay its top executives gigantic bonuses or to acquire a new private jet, it has failed to consider the optics. Jets and junkets can be visualized, as can bonuses, if only as pallets of cash in a Swiss bank vault, and so they make better targets for popular resentment and politicians' umbrage than some more arcane allotment mechanisms, like special-purpose vehicles and side pockets. (Of course, spending fifty million dollars in taxpayer money on a new jet looks bad because it is bad.) The news that A.I.G., the most egregious bailout pit of them all, was giving out a hundred and sixty-five million dollars in bonuses and "retention payments" stirred civilian outrage and drew a rebuke from the President. Heinous optics. But the sums were tiny in comparison with those likely to be deployed for the purchases, by private investors and the government, of toxic assets on the ailing banks' books. These are assets that the banks have been unable or unwilling to unload on the market. In other words, for the plan to work, the government must allow itself to be gulled. But the arrangement doesn't look like anything yet. It has no optics.
Similarly, we are fixated on Bernie Madoff, the money manager who admitted to running a multibillion-dollar Ponzi scheme, because, in part, he is larceny incarnate. He embodies many of the meltdown's traits—the illusion of expertise, the belief in getting something for nothing, the mirage and subsequent evaporation of wealth. But Madoff is in some ways a distraction, cover for the quiet crooks. It's telling, the way that people take his thin-lipped grin for an unrepentant smirk, instead of, say, a nervous tic. It's his face—and his Upper East Side penthouse—that people have come to resent, rather than the culture of easy money and magical thinking that allowed him to thrive.
By now, most of the systemic flaws have been identified, explained, and lamented, if not yet collated or changed. In congressional testimony, the disgraced C.E.O.s of failed institutions—Richard Fuld, of Lehman Brothers; Martin Sullivan, of A.I.G.—talked about a "financial tsunami" that caught them unaware, as though they had not figured in the plate tectonics. Their obliviousness is half credible; they may not have understood, or wanted to understand, the assets and the risks that lurked on (and off) their firms' balance sheets; but the potential for catastrophe was clear to see, for all who had eyes to see it, and men like Fuld and Sullivan were paid tens of millions of dollars to have or hire such eyes. There were people inside those firms who knew exactly what they were up to. So to claim ignorance or helplessness is to admit to negligence, or to tell a lie. It grated when, last fall, Donald Trump tried to get out of paying debts by claiming that the economic meltdown was a "force majeure"—the legal equivalent, basically, of an act of God—and not a logical outcome of a set of observable circumstances. The real-estate bubble was not a great secret.
What's most vexing is that those who saw trouble didn't do more to stop it, and that those who failed to see trouble were ever paid anything at all to run financial firms. One of the central flaws of the system is that naysayers were silenced. If you worked at an investment bank and made a stink about the level of risk, you were likely pushed aside. If you managed money and eschewed leverage, your returns sagged and investors went elsewhere.
This crisis is the culmination of events and trends reaching back, depending on your perspective, four, seven, seventeen, twenty-two, twenty-seven, thirty-eight, sixty-five, or a hundred and two years. The subprime-mortgage meltdown, the subsequent collapse of the wider real-estate market and then of securities based on real estate, and of the firms and funds holding those securities, and of the companies selling insurance against the failure of those firms, and, potentially, of the insurers' counterparties, and so on: you could say that all this is merely the finale to a multi-decade saga set on Wall Street and Main Street, in Washington, Riyadh, and Tokyo. The causes are technological, mathematical, cultural, demographic, financial, economic, behavioral, legal, and political. Among the dozens of contributors and culprits, real or perceived, are the personal computer, the abandonment of the gold standard, the abandonment of Glass-Steagall, the end of fixed commissions, the ratings agencies, mortgage-backed securities, securitization in general, credit derivatives, credit-default swaps, Wall Street partnerships going public, the League of Nations, Bretton Woods, Basel II, CNBC, the S.E.C., disintermediation, overcompensation, Barney Frank and Chris Dodd, Phil Gramm and Jim Leach, Alan Greenspan, black swans, red tape, deregulation, outdated regulation, lax enforcement, government pressure to lower lending standards, predatory lending, mark-to-market accounting, hedge funds, private-equity firms, modern finance theory, risk models, "quants," corporate boards, the baby boomers, flat-screen televisions, and an indulgent, undereducated populace. All these factors, very few of them mutually exclusive, conspired to make possible skyrocketing leverage, misperceived risk, and spectacular collapse. To tell the story of them all, in the proper context and detail, will require an Edward Gibbon. The fall of Rome, by comparison, was a local event. Much abridged, a few familiar words will do: debt, greed, hubris.
After Lehman went under, I began calling around, looking for rabbis. Many were happy to talk but not on the record, even though they generally saw their own enterprises as unfairly maligned or above reproach. (This did not always hold true for the employees, past and present, of Bank of America and Merrill Lynch.) The Gnostics of finance are predisposed to secrecy. It's often hard to tell whether their discretion is valorous, mendacious, guilt-ridden, grandiose, or merely vain. It's a guise for all seasons. Even candid acquaintances dispense big-picture bromides ("This too shall pass," or "We're screwed"), rather than reveal whatever furtive transactional trickery they may have witnessed.
It can be startling to discover how many offices in Manhattan have spectacular views. The first time you gain admission to an aerie in the G.M. Building or some other blue-chip tower and look out across Central Park, SoHo, New Jersey, or Queens, you think that this particular office must be the finest in town, the seat of secret power, the heart of the plot. But the city is full of them. It's one of the things about tall buildings: you can see a lot, such as other office towers of different vintages, commenced in past booms. The takeoffs and landings at the airports, the shipping lanes, the humans below reduced to units: it is easy to begin to think abstractly about the armature of empire. Sitting up there and talking for hours about pools of securitized debt, and seeing them depicted on dryboards or PowerPoint slides as rectangular blocks, divided into tranches, you can find yourself viewing the buildings out the window as manifestations of that debt—the conversion of financial cunning into steel, brick, and glass. You also happen to be looking at the collateral.
I heard versions of the same story, emphasizing the elements that most flattered the teller's ideological or professional bias. He tended to say, "It's very simple," and then after twenty minutes chuckle a bit as the threads unravelled and his narrative became "Tristram Shandy." It could be exhilarating to take on the welter of causation and consequence, but clarity was fleeting, more of a mood than an all-encompassing grasp; there must be an endorphin that's triggered by the call-and-response recapitulation of a giant variegated clusterfuck. When it dissipates, you're left only with the conviction that our troubles are deep.
A prevailing belief is that there has been some conspiracy on Wall Street to bilk people out of their money. If there was a conspiracy, it was an extremely broad, disorganized, decentralized, and, in some measure, inadvertent one. In other words, there was no conspiracy, unless that's what you call the establishment of an oligarchy, over several generations and with the assistance of a blinkered populace.
One day, a hedge-fund manager in Europe suggested that I talk to a man named Colin Negrych. He had got to know Negrych a decade ago, when Negrych was the host of an informal nightly gathering for financial eccentrics and renegades at Bice, an Italian restaurant in midtown. "I'm a macroeconomic and geopolitical strategist disguised as a bond salesman," Negrych told me, when I called him. "I write my clients Bloomberg messages and tell them what they should do." (He also said, "Every time I read some financial guy talking in the press, I just think he's a self-aggrandizing asshole. Why would I want to do that?" Eventually, he decided to talk to me, out of the conviction that the dire moment called for candor.)
Negrych is part market philosopher, part screen savant—a nexus of market intelligence. Among his clients are some of the most venerated investors in the world, who prize his discretion and his idiosyncratic advice. He has helped them make billions and has shaved off a bit for himself, most of which he has given away. His employer is a small, privately held broker/dealer called Barclay Investments (which bears no relation to the British Barclays that bought parts of Lehman Brothers out of bankruptcy).
Eleven years ago, Negrych, who is fifty-one, was given a diagnosis of lymphoma, and since then he has worked at home, most recently in a town house he rents near Washington Square Park. He has not gone to the office since at least 2000. (According to Negrych, the firm has made "extraordinary efforts to meet and exceed every compliance requirement related to allowing me to work from home.") The first time I visited, the door to the street was open. I walked up to the second floor, where I found him in a sparse, dimly lit room, sitting at a giant desk, staring at a pair of computer screens. He had on a plaid bathrobe, moccasin slippers, a baseball cap, and owlish eyeglasses. He was pale and a little fleshy, with a goatee and kind eyes. A colonnade of prescription pills occupied a corner of the desk. He was smoking a cigarette. A humidifier spouted mist.
"There are two things about human beings that I know for sure," he told me. "One is that everyone wants to be the center of the universe. And the other is that they all want to see what they own go up in value all the time."
Negrych, I quickly surmised, is not all human: he welcomes a ritual re-pricing with the relish of Colonel Kilgore smelling napalm at dawn. Negrych was the first person I talked to who advanced the notion, which later became more popular, that letting Lehman fail was neither a mistake nor a cause of anything, any more than Pearl Harbor was the cause of the Second World War. For him, the fault lies with the facts—unquenchable debts and the attempts by Lehman and the entire financial system to obfuscate their existence—and not with any capitulation to those facts, however sloppy that capitulation got. Just because it cost a lot of people a lot of money didn't make it wrong. As he later summed it up to me by e-mail:
Folks were shocked to find the U.S. government unwilling to throw good money after bad at Lehman. This discovery caused market participants to question whether the government would support other large financial entities which they knew to be, or strongly suspected of being, in financial distress, when this support had previously been taken as a given.
Lehman and its bad positions were akin to a dog stumbling around with a chunk of uranium dangling from its collar. It was just cruel to allow it to remain in misery and be a threat to others.
Or, as he put it, quoting the country songwriter Robbie Fulks, "It's a full-blown chore overlookin' what's plain to see."
The markets were plummeting, and the public's consternation was in some respects, to Negrych, a disappointment. "There seems to be an unwritten rule that this can't be allowed to happen," he said. "So much effort is put into sustaining the stock market and home prices. This whole culture has been set up to see stocks and homes as annual riskless investments. They most assuredly are not." He had taken off his moccasins; as he talked, he responded to the chirps of incoming messages with flurries on the keyboard. The screens' glow lit his face and made it appear almost to be floating over the desk.
"Banks are going under because they are undercapitalized. People are going bankrupt. Assets are dropping in value. There is too much debt," Negrych said. "Jim Grant"—the financial writer—"had a phrase: 'the incessant degradation of the stigma of debt.' Debt is the story."
He went on, "What constituency is there for pessimism? People believe optimism is necessary, an American right. The presumption of optimism is the problem. That's what creates the debt we have now." (As a well-regarded French investor said to me one day, with a sigh, "There is no spirit of resignation in the American people." Most of us would probably regard this as a virtue.)
Negrych moved to the town house in 2005, after selling a capacious Upper West Side penthouse apartment to a television actor for far more than he had paid for it, in 2002. Around the time of the sale, he ran into an acquaintance, a laid-off baker working part-time as a bicycle messenger, who told Negrych that he'd bought a co-op in Brooklyn. A bank had lent him not only the full purchase price but also enough to cover five years of interest payments. "This was a guy who used to complain to me about the price of shampoo," he said. It didn't take long for Negrych, a man of skeptical inclinations and immersive habits (to check up on me, he not only read everything I'd ever written but somehow got hold of my wife's undergraduate thesis and read that, too—something I've never done), to conclude that this was a bubble. He started pressing his clients to short housing-related assets in early 2006, and stocks in 2007.
"What Wall Street offers is the continual rationalization that ever-increasing indebtedness is sustainable," he told me. "It concocts believable, defensible arguments for the prices that they think things ought to be. Financial engineering fills the gap between people's desires and their wherewithal. So what you have is optimism buttressed by pseudo-science and statistical legerdemain."
Night had fallen. Negrych, sepulchral in the glow of his screens, had settled into an epigrammatic rhythm—"Wall Street is a roach walking around on a dinosaur"; "It's the symptom, not the disease"—which, after a while, prompted him to apologize for incoherence. He had taken some morphine. "I'm in massive pain," he said. "I have a tumor on my spine. I need to get it burned away."
The roach may survive, but not in the way we have come to know it. It is now commonplace and not entirely bombastic to declare that Wall Street is dead. This refers to the extinction or mutation not only of the old bulge-bracket firms but also of the caste that has found haven and easy riches there, the hundreds of thousands of workers, many of them neither extraordinarily skilled or highly trained, who perhaps mistook the fruitions of cheap credit for proof of their own acumen and flair. What has also run aground is a revolution in finance dating back to the nineteen-seventies.
The term "Wall Street" refers, often, to the matrix connecting the shrinking operations in Lower Manhattan with practitioners in Greenwich, Chicago, London, Geneva, the Canary Islands, Hong Kong, and Shanghai. Or else it stands for an array of firms that now, after the convulsions of last fall, exist in such diminished and altered condition that the term has ceased to mean what it used to. Lehman Brothers, Merrill Lynch, and Bear Stearns are gone, and Morgan Stanley and Goldman Sachs have morphed, technically at least, into bank holding companies—granting them better access to government capital in exchange for more regulatory oversight. Over the past four decades, the old firms had already undergone a tortuous process of consolidation, and transformed themselves from private partnerships into publicly traded companies. They did this to raise equity capital, and to enrich their executives and employees—that is, they found a way to cash out.
The abandonment of the private partnerships was a key ingredient in the world-destroying self-immolation of the last few years. In a partnership, you owned a share of the firm, and therefore a stake in its long-term well-being. In a public company, you were paid each year according (more or less) to your profits or fee generation, regardless of the outcome, down the road, of the deals you did or the loans you made or the assets you took on. You had an incentive to generate inflated or ephemeral gains, and, often, little incentive not to. The amazing thing about the piggishness of the last decade is that, in a certain light, most people, according to the strictures of their self-interest (whether enlightened or not), behaved rationally.
One day, I went to see David Beim, who retired from Wall Street in 1990 to teach at Columbia Business School. He started, in the mid-sixties, at First Boston, during the era of the Nifty Fifty—a frothy time in the markets which hardly left a mark on the culture at large. (Among the icons of 1968, Alfred Winslow Jones may not be the first to spring to mind.) Investment banking was a placid business; the cream went into medicine or the law. It was value added just to call a company's finance officer, in Cleveland or Tulsa, to tell him his stock price. There were no desktop computers. People used graph paper and calculators, pencils and rulers.
Still, investment banking (underwriting securities, advising companies) was sexier than commercial banking (making loans). In 1977, Beim went to work for Bankers Trust, a commercial bank that was desperate to become an investment bank. "My Wall Street friends were appalled," Beim said. "It was so second-rate." Bankers Trust was one of the pioneers at pushing the limits of Glass-Steagall, the Depression-era law that separated commercial and investment banking. At the time, Citibank and J. P. Morgan were quietly trading a new product called interest-rate swaps, which are a form of protection against unforeseen swings in rates. This was among the earliest derivatives, one of the original structured products. Beim said to himself, "This is fabulous. We could make a lot of money with this. I wanna do a swap." Derivatives made many Bankers Trust executives and traders very wealthy and then, after a series of scandals and bad trades in the mid-nineties, contributed to the firm's demise. A pattern emerged.
By that time, modern finance theory—the notion, borne of some elegant mid-century mathematics, that one could use models to value contingencies—had taken root in the world of financial practice. It gradually obscured "the sheer brute fact that the results of human activity cannot be anticipated," as the economist Frank Knight wrote in 1921. Yet anticipate it people did, or tried to, on trading desks and conference calls, amid what Beim called "a rise in complexity." Mathematicians and physicists, cut loose by the decline of the space program, gravitated to Wall Street and began devising ways to measure, price, and package risk. It was a kind of decentralized Manhattan Project.
There were other factors at work. On May 1, 1975—recalled now as May Day—Wall Street abandoned the practice of charging customers a fixed commission to trade stock. In the past, the firms had taken forty cents for each share traded, regardless of the customer or the size of the trade. Under competitive pressure from discount brokerages like Charles Schwab, firms began lowering their commissions until trading itself was no longer so lucrative. They sought profit in other lines—fancy ways of trading and financing things. An arms race evolved, in which firms developed ever more sophisticated proprietary products, options, swaps, and derivatives. In time, the banks became glorified hedge funds, trading these things for themselves.
In the late nineteen-seventies and the early eighties, a few pioneers, chief among them Lewis Ranieri, at Salomon Brothers, and Laurence Fink, at First Boston, invented and evangelized new methods of securitizing debt. They pooled assets that yielded a regular flow of payments (mortgages, car loans, credit-card receivables, etc.) and then divided the pool into tranches, ranked according to the order of repayment. Pieces of each tranche are sold to investors as securities—a claim on a portion of the payments. The senior tranches get paid back first but yield less. The equity tranches, last in line, get paid more to take on the higher risk of not being paid at all. The idea is to spread and therefore mitigate the risk of lending, and in turn lower the cost of borrowing.
Securitization, invented on Wall Street to make the people who worked there rich, made it much easier for Americans, and America, to borrow far more than they had before. It helped banks get their loans off their balance sheets and free up capital, so that they could lend, and therefore earn, more. It established a new lending apparatus, via the capital markets: the so-called "shadow" banking system. It begat more borrowing, which begat more buying, which begat higher asset prices, which begat more borrowing. In the annals of invention, securitization, on impact alone, ranks somewhere between air-conditioning and irrigation. The price of things came to be determined largely by how easily they could be financed. A long-term decline in interest rates, promoted and abetted by the Federal Reserve, helped create a perpetual-motion machine that encouraged people to borrow, buy, and borrow some more. The savings rate plummeted.
A few years ago, I was signing a check with a blue translucent ballpoint pen stamped with the logo of Commerce Bank, and I realized, suddenly, that these pens were everywhere. I wondered about it for a second and then let it pass.
Commerce, a retail and commercial bank based in New Jersey, was founded in 1973 by Vernon Hill II, who had developed sites for McDonald's. He aimed to bring the brand loyalty of the fast-food business to the local bank. The branches, which he called "stores," stayed open seven days a week, often well into the night. There were no fees, and free lollipops and dog biscuits in the lobby. He aimed for what he called "a unique brand of WOW." The bank was very successful. Hill built for himself and his family one of the biggest private homes in the state of New Jersey. In 2006, the bank gave away twenty-eight million pens, which found their way into the kitchen drawers and jacket pockets, as well as into the collective doodad mind, of consumers up and down the Northeast coast.
The margins in commercial banking are fairly tight. Commerce paid low interest rates, but, still, how was it able to afford the generous service and buckets of free pens? It turns out that the bank had on its balance sheet an unusually high number of mortgage-backed securities. The secret behind the WOW was M.B.S. The pens were, in a way, a precipitate of the shadow banking system, a by-product of securitization. Finding one was a little like stumbling on an empty crack vial in a public park.
In 2007, after regulators took issue with business that the bank was doing with entities controlled by Hill's family, Hill was forced to resign, and Commerce was sold to TD Bank Financial Group. Commerce is gone. You may still come across a pen now and then.
"I have some esoteric ideas," Simon Mikhailovich told me. We were in a conference room in his offices, facing the Empire State Building. Mikhailovich, who emigrated from the Soviet Union in 1978, is an investment-fund manager who specializes in distressed structured credit, including collateralized debt obligations (C.D.O.s), formerly high-flying and now leaden assemblages of securitized debt. He was among the pioneering misfits who, in late 2005, sensed that the loans underlying many C.D.O.s, subprime and otherwise, were lousy and unlikely to be repaid. "Leveraging overpriced assets never worked for anyone," he said.
He applied the analogy of poultry. You can turn a bunch of whole chickens into packages of chicken parts, of ascending quality, from gizzards to breasts, and charge a premium for the best cuts. The butcher gets paid, and the shopper gets what he wants. The problem was, eventually, that gizzards were packaged as breasts. And then there was the salmonella. This reminded me of a cruder fowl-related C.D.O. critique: "You can't make chicken salad out of chicken shit."
Mikhailovich's roster of culprits begins with the desktop computer, which encouraged tweaking the data and models until they said what you wanted them to. "If the numbers didn't work, then you made them work," he said. "There is the seduction of those huge profit projections in the last column."
Mikhailovich reserves his greatest scorn, however, for the ratings agencies—principally, Moody's, Fitch, and Standard & Poor's—the ones that determine a debtor's creditworthiness. Their work is necessary; no one would be able to root through the contents of every C.D.O. on his own. Banks and bondholders need food tasters. But the ratings agencies were paid by the packagers of the C.D.O.s to issue the ratings that made the C.D.O.s attractive—and they routinely put AAA, or almost zero-risk, ratings on tranches of C.D.O.s which consisted of loans or mortgages that soon went bad. It is true: the peddlers of the chicken shit paid to have it magically pronounced chicken salad, a conflict of interest that most investors ignored. The recipe may have originated in the mathematical models of the banks, but it acquired its irresistible allure with the acquiescence of the raters, whether it was winking or pie-eyed. "They were the ultimate fulcrum, the enablers," Mikhailovich said.
One reason that the ratings were so important—besides laziness—was that the regulators declared them so. A series of regulatory refinements, culminating in 2004, in a set of rules known as Basel II, enshrined the raters as semi-official arbiters of creditworthiness. According to the regulatory regime, banks could take on more leverage with less capital in reserve if their assets were rated AAA. "Banks developed an insatiable demand for AAA credit risk," Mikhailovich said. "But there are only so many companies out there that qualify for AAA rating." And so the international debt cartel built laboratories for the creation of synthetic debt—credit-default swaps, which weren't debt but, rather, bets on other debt. These were also pooled and sliced into tranches that, too often, acquired the AAA stamp. Securitization had turned into alchemy.
"Financial engineering tapped into a strain in the investor's mind by replacing uncertainty with the appearance of certainty," Mikhailovich said. Certainty came in a guise of inscrutability; the products designed to reassure also happened to befuddle. Many of the people responsible for evaluating the engineering considered their mystification to be further proof of its brilliance. They were, like Bernie Madoff's investors, comforted by their own ignorance.
The shadow banking system went haywire during the housing boom. Each firm had its structured-product samurai, the latter-day equivalents of the Milken-era junk-bond evangelists. The mathematical models indicated that there was very little risk, even if common sense said otherwise. The dot-com bubble of the late nineties was, in retrospect, a lesson in what happens when markets defy reasonable metrics or common sense—when the participants mistake a run of speculative good luck for, as Alan Greenspan memorably put it, "a new paradigm." The C.D.O. machine that flourished in the middle of this decade took the tendencies but not the lessons of that period and applied them to the housing market—and thus to the core of our credit system, and our lives. It sucked in ordinary Americans. "Securitization is like fertilizer," Mikhailovich said. "You can grow tomatoes, or blow up buildings."
"Sweetie, words have the power to hurt. I'll teach you some of the most effective ones."
Mikhailovich believed that you could still invest in C.D.O.s; you just had to do your own work. "Have you ever seen an indenture?" he asked me. I pictured Gordie Howe putting his teeth in a glass for the night. Mikhailovich let a bound sheaf the size of an old stereo receiver drop on the table with a thud. "I'm pretty sure not too many guys read these." It was the C.D.O.'s governing document, detailing what's inside it, and who gets paid (or not paid) when and how—a configuration called "the waterfall." Mikhailovich's maxim was "Know your waterfalls." It was the key to getting the right poultry parts at the right price.
I thought back to something David Beim, at Columbia, had said about securitization: "We built all of these elegant projections. They were good ideas. But they were never designed for bad paper. Having started as a way to make banks safer, they became a machine that said, 'Feed me.' "
And so debt was created to sate the machine. "We've created more assets than there are hands to hold them," Beim said. "And we cannot all de-leverage at the same time."
The banker had come to Barclays, the London-based bank, to help build its investment-banking business in New York. After Lehman went bankrupt, Barclays bought Lehman's North American investment banking business. The Lehman guys started getting rid of the Barclays guys. For the banker, it grated to be supplanted suddenly by the refugees, the ones who, in his reckoning, had destroyed their own firm and with it the global financial system.
After a few weeks, the banker was called in for an interview with his new boss. When he walked in, the new boss was watching a congressional hearing on television. The witness was a Wall Street executive. The new boss held up his hand for a moment, so that he could listen to the executive make a point. The banker, hoping for his new boss's undivided attention, and perhaps an irony-free interview, suggested they reconvene later.
"No, sit down," the new boss said, and then asked, "So what do you do?"
The banker began to explain why he, who had been at Barclays for years, should be employed at his own firm. Before he could finish, the phone rang. It was a personal call, having to do with golf. As the boss talked, the banker watched the executive on TV: tsunami.
When the banker was fired, a few weeks later, his first reaction was relief: it's better to know than to wait. Then came frustration and anger. "Part of my termination agreement is I can't do any harm," the banker said. He had taken to calling his wife "my new best friend." He was trying not to infringe on her routine.
A debate has roughly formed between those who blame the meltdown on the system, rigged up over years and decades, and those who vilify the people who most egregiously exploited the flaws in that system, however substantial those flaws may have been. Both sides may be in agreement that, in the end, human nature is to blame, but the question remains whether, ultimately, our predicament arises out of the venality of the many or of the few. Was it Wall Street in general—or even its clients, and the debt-hungry masses—that behaved abominably, or just a scattering of scoundrels?
Margaret Atwood, in her recent book "Payback: Debt and the Shadow Side of Wealth," notes that in Aramaic the words for "debt" and "sin" are the same. When we ask for forgiveness from our trespasses or call Christ the Redeemer, we are employing, as she puts it, "the language of debt and pawning or pledging." She goes on, "The whole theology of Christianity rests on the notion of spiritual debts and what must be done to repay them, and how you might get out of paying by having someone else pay instead." (By this standard, America really is a Christian nation.) She adds, "It rests, too, on a long pre-Christian history of scapegoat figures—including human sacrifices—who take your sins away for you." For the repayment of our debts, we look to the government; the TARP, you might say, is Jesus.
As for expiation, we endeavor to find the worst offenders, whose transgressions can stand in for everyone's. Atwood discusses a medieval character called a Sin Eater, an outcast who took on the sins of the dying and bore them until another Sin Eater—the greater fool—came along to take them off his hands. (If Sin Eaters existed now, someone would securitize them.) So far, Bernie Madoff, John Thain, Dick Fuld, Joseph Cassano, and even Jim Cramer, to name a few who have been cast in the role, have proved insufficient. Their own trespasses aren't nearly broad enough to take on the whole burden of the fraud, avarice, arrogance, and misjudgment that has laid low the world.
There are other candidates and conspiracy theories. One concerns Goldman Sachs and the Treasury's dispensation of bailout funds in the firm's direction. Goldman may be the closest thing we have to an Illuminati. The signs of favoritism, on the part of Henry Paulson, the Treasury Secretary and former Goldman C.E.O. (toward not only Goldman but also Merrill Lynch, run by a former Goldman colleague, and A.I.G., now run by a former Goldman board member), may merely be coincidental, or simply a product of affinity and proximity, rather than a plot, but it is no less infuriating to the taxpayers, to say nothing of the employees of Lehman and Bear Stearns, who watched the government, directly and indirectly, fork over to Goldman (which has continued to claim that it does not need help) sums that might have saved these other firms. But even the most extreme rendering of any alleged skullduggery there, or at A.I.G., or at Lehman, or at Bear Stearns, captures just a portion of the blame.
In my corner-office conversations, the finger often wound up being pointed into space, in the general direction of the natural order. If mistakes were made, not all of them could have been innocent, but few people inside the business seemed to have the stomach for the sorting, as though it might lead to an indictment of free-market capitalism, and of their own happy place inside it. "I had a fiduciary responsibility" can sometimes sound like "I was just following orders." Several people I talked to predicted that there would be show trials but then faltered at the thought of who the defendants could possibly be.
But we try. One afternoon, I went to see Michael Steinhardt, the hedge-fund pioneer who came to prominence in the late sixties, and who shut down his firm in 1995, although he still has an office of people to oversee his own trading and investments. I'd heard that he was on a mission to assign blame. When I arrived at his office, he was flipping through a gardening catalogue while keeping an eye on a trading screen. "Unless the public understands why this happened, until it can identify the villains, you can't recover from it," he said. "If you don't have someone to blame, other than some schmucks with fancy bonuses, you won't have a recovery."
Like many financial titans, Steinhardt favors a catechistic conversational mode, so it was hard to get him to throw out names. My opening propositions were unsatisfying.
"Alan Greenspan? He may have been stupid but not pernicious," Steinhardt said, recalling that Greenspan, in the late sixties, as a consultant, used to make presentations to his firm. "I didn't find him to be anticipatory or perceptive," Steinhardt said.
I brought up Sanford Weill, who built Citigroup into a financial-services giant and incrementally circumvented, and then led the push to repeal, Glass-Steagall. "I was at a party with Sandy Weill," Steinhardt said. "I said, 'Sandy, who are the villains?' He said, 'Huh? I didn't do anything wrong. I just picked the wrong successor.' " Steinhardt smiled.
He was quicker to indict the political class. The ignorance of politicians in matters financial is a source of constant contempt on the Street. One discovers that Wall Street is as keen to blame Washington as Washington is to blame Wall Street, which suits them well as co-dependents. Each knows the corruptibility of the other, even if each often seems to misunderstand the other's ways and aims. Each is persuasive.
During the fall and into the spring, I went to see Colin Negrych once a month or so to listen to him talk about macroeconomics, market dynamics, and human frailty. His ruminations became a kind of bass line against which most of the events of these months began to make some kind of sense, or no sense at all. I sat on a couch, opposite his desk, while he kept his eyes mainly on his computer screens, absorbing Bloomberg headlines, messages, and graphs. Sometimes the sound of a clarinet would drift up from the apartment downstairs of a jazz musician, who records for a label that Negrych owns.
Negrych's background is unusual, even if you allow that Wall Street isn't quite as homogeneous as all the blue shirts and fraternity haircuts lead you to suppose. He was reared in Toronto. When he was ten, his mother died of cancer and his father, also ill, moved to a nursing home, and Negrych became a ward of the province. He ran away from his group home and, after some years on the streets, went to work in a nickel mine in northern Manitoba. Back in Toronto a few years later, working as a bouncer at a bar, he met a girl who was heading to New York for college, and he followed her there. He got jobs in restaurants and bars—for a spell, he was on the night shift at Serendipity 3. One weekend, on a visit to a new girlfriend's parents' house, in Connecticut, the family gave him a hard time for not having read "Moby-Dick," and he decided that he'd better go to college. With a high-school equivalency degree, he wandered up to Columbia, where he found himself in the School of General Studies. Negrych resolved to study mathematics.
"I said come alone."
Like many bright and hungry young men and women of the era, he instead wound up in the training program at Salomon Brothers. He joined the class of 1985, the one that Michael Lewis described in "Liar's Poker." After Salomon, Negrych went to First Boston, where he worked in fixed-income arbitrage with Dexter Senft, who helped invent the mathematics behind mortgage-backed securities. Negrych went on to work, in various capacities—proprietary trading, modelling exotic derivatives—at Lehman Brothers (for less than a day), C.I.B.C., U.B.S., Société Générale (where one of his bosses advised, "The clients are like the geese. We stuff their livers"), and another French bank, called C.C.F. The French eventually tired of him—"I'm what's known as a management challenge"—and so, having made a pile of money, he took some time off. During this period, he patented a screwtop-controlled viscous-material dispenser. In 1997, he joined Barclay and decided to focus on making macroeconomic bets. "You only had to get four trades right a year," he said. Then he got sick. Told by his doctors that he was likely to die, he gave the rest of his money away. But he didn't die. This was good, except that he had no money left. "People never tell you to save for a sunny day," Negrych said.
He made an arrangement with Barclay that gave him a share of the money he generates for the firm. It has been lucrative, though unspectacular by the standards of the age. He's made tens of millions since the Nasdaq crash of 2000. He decided, some years ago, that making money for its own sake was no longer interesting, but he loved the markets and felt he had a gift for interpreting them.
In his days at other firms, Negrych had cast himself as an impediment to unsaintliness, "someone to look out for people, not in the sense of helping them get rich in a bull market but in that of preventing them from hurting themselves and others. The sad thing, I realized, is that there was no way to achieve this." He developed a dim view of human behavior in times of prosperity. "I decided to profit from them to the greatest extent possible to give myself the wherewithal to deal with the agony that they would ultimately produce." He decided to be Robin Hood, rather than Mr. Spock.
Negrych belongs to a recondite dispersion of market intellectuals who have an affinity for the ideas of the Austrian school of economics (of von Mises, Schumpeter, Hayek, et al.), such as the axiom, long scorned but now more widely appreciated, that credit booms must necessarily lead to credit busts—that there is such a thing, basically, as gravity. Some, but far from all, of his views may be familiar to readers of economists such as Robert Shiller and the Nobel Prize winner Paul Krugman, at least as to the nature of the ailment, although Krugman thinks that the stimulus has been too small, rather than, say, a step on the way to hyperinflation, the blind printing of money. (One investor told me that he had looked into buying the private Swiss company that makes the ink used on dollar bills: "They told me, 'We no sell eet.' ")
Negrych believes that there is a commercial-financial complex, analogous to the military-industrial complex (merchants of debt, rather than of death), which promotes borrowing and spending, and spins indebtedness into fool's gold. You cannot borrow your way out of debt. Printing dollars to prop up failed or failing institutions is a waste of time and money. The government should stick to guaranteeing deposits and regulating the markets properly. It should have let A.I.G., among many others, go bankrupt. The people and the institutions that took foolish risks should be forced to suffer the ill effects. The banks should get back to being "boring"—take deposits, make loans, and give up on financial engineering and speculation. The government should be encouraging its citizens to save, not to lend, borrow, speculate, and shop. The culture has come to favor—even demand, if you consider the middle-class dependence on home equity and 401(k)s and 529s—financial speculation as the cornerstone of a strategy for prosperity, at the urging of the government. People will need to sell stocks to pay off their debts. The "equity culture" is dead. And, finally, this: The current course of "denial and disinformation" will, if not corrected, produce a real depression—the cleansing we need and deserve.
As the weeks went by, Negrych sent me hundreds of e-mails, cantankerously relating bits of news, data, or commentary. The pace of his e-mails accelerated when the market was rallying. He regarded up days as reflections of mass delusion ("Even a few days without bad news quickly leads to the nucleation of assumptions about endless days of good news to follow") or of official intervention; he was not immune to the conspiracy theory, whispered by some noninterventionists, that the government, in the interest of national security, may have established some kind of secret program to buy stocks, to juice the indices. All those late-session comebacks: Negrych smelled a fix. As he wrote me one day, when the global markets seemed to turn on a dime, "Clearly, someone has decided to take a stand right here in the major stock indexes. We'll find out soon what weapon they possess, brick or bazooka."
I happened to go by Negrych's on the day after Bernie Madoff was arrested. A snowstorm gave the Village an anachronistic, muffled Café Wha? air. When I arrived, Negrych, thinking of Madoff, quoted a line from a friend: "Wall Street takes your money and their experience and turns it into their money and your experience."
It wasn't hard to guess what had compelled Madoff's investors to trust him. "The willing suspension of disbelief," Negrych said. It was a high concentrate of what had gripped the financial markets during the boom. "The idea that you can have something for nothing—it's human nip. It's the hereafter, here on earth." Less clear was what had driven Madoff. If it had been money alone, what had he done with it, and why had he not run off with it? Madoff apparently hadn't taken fees, a dubious abnegation. No one on Wall Street forgoes his piece, be it rightful or not. What Madoff craved most of all, Negrych surmised, was prominence, of the kind that can only be bought. "There's an innate tendency among the élite to idolize men who make a lot of money," Negrych said.
Our soaring debt isn't entirely a moral or temperamental failing, a flaw in our national character, or a Wall Street scheme. One afternoon, on a visit to the offices of a money-management firm (view north, overlooking Central Park), I was introduced to a Columbia professor and economist named Bruce Greenwald, who has been called "a guru to Wall Street's gurus." As I began to recite some of what I'd come to believe about America's native appetite for indebtedness, and our struggle now to get free of it, Greenwald cut me off. "De-leveraging is a slogan," he said.
He explained that we are, in some respects, the victims of a structural imperative reaching back to the waning days of the Second World War. The Great Depression in Britain, he said, started in the late nineteen-twenties, owing to structural deficits in the nation's balance of payments, a result of the pound sterling's traditional role as the world's reserve currency. Bretton Woods, the global economic conference in New Hampshire in 1944, replaced the pound with the dollar.
This meant that debts tended to be denominated in dollars, and other nations had to hold dollars in reserve, to pay them off. Not having dollars would expose your country to the risks of currency fluctuations. And so other countries coveted dollars. To get them, they sold goods. There was, therefore, in the Bretton Woods arrangement, a structural demand for current-account surpluses, and for someone to eat up all those surpluses. We had to be the consumer of last resort. "We've been living beyond our means for the sake of the world," Greenwald told me. "Where else would all that crap go?"
Barclay Leib, a derivatives trader and hedge-fund consultant, told me that some years ago his son, who was five at the time, asked him what his job was. Leib thought about it for a moment, and then pointed down the street. "You see that Toyota? Well, we pay the Japanese twenty-five thousand dollars for it. Daddy's job is to get the money back." As he told me, "The Japanese invest it here and make mistakes." He added, "Mrs. Watanabe was then and still is groping for yield."
They make, we take. And then we find ways to pay for it all. Our prime asset, over time, became our financial acumen. It represented an ever greater part of our economy, our political system, and our interaction with the world. "What's our best export?" Leib said. "Scrap metal? No. Hedge-fund managers. Financial creativity. We're good at it. We keep the cycle of money going."
This flawed arrangement may be nearing its breaking point, thanks to our reckless spending, expanding debt, and increasingly questionable creditworthiness. A few recent Treasury auctions went poorly, and China has floated the idea of an alternative global currency.
I recently revisited Morris Bishop's concise history of medieval Europe, which begins with a winsome rejection of the "unfortunate term" that gives the book its title, "The Middle Ages." Bishop observes that the people of the period "did not know that they were living in the middle; they thought, quite rightly, that they were time's latest achievement." The Middle Ages began with the fall of Rome. "Whatever the cause, the later days of the empire were marked by discouragement and fear, by what has been well termed 'a failure of nerve.' The Roman Empire was like a declining business, whose program is retrenchment and retreat, whose ventures are desperate, whose employees can only shrug their shoulders and hope that the old enterprise will last out their time."
The salesman was an English major without an M.B.A., a burner of both candle ends, who, in his mid-twenties, submitted to the lure of Wall Street. He rose quickly; he was bright and personable, competitive and cocksure. After a few years, he settled in at one of the big firms, where he helped develop a profitable line in equities. In 2003, he used an offer from Merrill Lynch to dramatically increase his pay. Not long afterward, Merrill offered to raise it again. It was hard to resist. A high-ranking Merrill executive invited him to breakfast at the Ritz Carlton in Battery Park City, where Merrill was based. The executive was seated in the middle of the restaurant, waiting at a table for two. He didn't stand to greet the salesman or, when he indicated that it was time for the salesman to go, to see him off. As the salesman was walking out, he saw the waitstaff reset his half of the table and usher in another prospect. He realized that he was just one unit in a robo-hiring spree. Merrill was ramping up.
"Tell them that hilarious story about your colonoscopy."
The salesman's boss at his old firm was a trader who in matters of personal finance preached extreme risk aversion. At bonus time, he'd tell the salesman, "I'm not going to pay you unless you promise to sell your stock [in the firm] as soon as you can and buy munis," meaning municipal bonds. When the salesman told him about Merrill's latest offer, the boss said, "Go. Take the money. The guy's an idiot. He's paying you too much. Either they're really stupid or they have so much money it doesn't matter." Being the former, they mistook themselves for the latter.
People who have worked on or near a trading desk tend to refer to any decision, any commitment, any choice in life, as a trade. "I did the trade for money, so I deserve what I got," the salesman recalled recently. What he got was a window on the end.
Once Lehman Brothers went under, it became clear that Merrill, too, was in deep distress. Its chief executive, John Thain, sold the firm, in order to save it. The buyer was Bank of America, a giant bank based in North Carolina that aspired to Wall Street dominance. As the fall wore on, and the economy soured, and the share prices of banks and brokerages, including Merrill's supposed white knight, collapsed, the salesman and his colleagues began to realize that this was not likely to end well. They consoled themselves by cheering Lehman's demise, out of Schadenfreude and superstition that its death might appease the gods. Then a guy on the desk did a spreadsheet analysis of the firms' relative predicaments, and they all realized that the Lehman guys still had jobs, while the Merrill guys were about to lose theirs, and their stock price was fast approaching zero. It was Schadenfreude's revenge. As luck would have it, the salesman had shorted Lehman—he was forbidden from shorting his own stock—and invested the proceeds in a hedge fund. But then the hedge fund got clobbered.
By Christmas, the salesman and his colleagues had become zombies. There was less and less work to be done, and little sense in currying favor. Some guys were going to the gym twice a day. The salesman occasionally snuck out to the Regal Battery Park 11, the movie theatre across the street from the firm's headquarters. He saw "The Curious Case of Benjamin Button" and "Gran Torino" and "Slumdog Millionaire."
The firings accelerated. There was a tradition on the trading floor at Merrill to stand and applaud colleagues who had been fired—or RIFfed. (RIF stands for Reduction in Force.) After a while, these impromptu tributes were breaking out several times an hour, State of the Union-like, and the ovations grew queasy and halfhearted.
The salesman's boss was jittery, but he urged his charges to hang on and hope. The salesman thought of "The Trial," when Josef K., on the verge of execution, has a self-generated fantasy of rescue—"Who was it? A friend? A good man? Someone who sympathized?" The boss quickly veered from denial to abject self-pity, and began pestering the salesman for scuttlebutt and support: "What are they saying about me on the floor?" The boss, called in by his bosses to discuss which of his charges he'd fire, had picked up on chatter that he'd go down himself, which would mean death for the salesman. The boss came out of the meeting visibly distraught. "What am I going to do?" he moaned. "I'm going to have to move to Minneapolis. What's my wife going to say?" The salesman thought of "Richard II": "My large kingdom for a little grave, a little little grave, an obscure grave; For God's sake, let us sit upon the ground and tell sad stories of the death of kings." He grabbed his boss by the shoulders and told him to get control of himself, thinking, Behold, the world's unhappiest millionaire. As he comforted the boss, he overheard his secretary lamenting the monthly commuter-bus pass she'd just bought; if she were fired, too, that cost was sunk. He was ashamed.
Diminished pay and government oversight had rendered the miseries and indignities of investment banking no longer endurable; it was hard enough to will himself to do it when he was making millions. For a couple of hundred thousand, forget it. His stock was worthless; the work had dried up; the firm had degenerated into a job-preservation free-for-all; and he and his peers were being depicted everywhere as crooks and thieves.
On the day that the salesman was fired, he came home, prepared to finesse a conversation with his children, but his six-year-old daughter had overheard her mother talking with a friend on the phone, and so, when he walked in, she announced to a playmate, "Daddy's coming home today because he got fired and his firm is going bankrupt."
The most frequent responses were "Let me know if there's anything I can do" and "I don't know what to say." This last one annoyed him, because of the way it seemed to conflate joblessness with death or disease. He said he felt liberated, but the old question of where do you see yourself in five years left him stumped. There was a part of him that wanted to move to Brooklyn or to another state—he could be a teacher and a coach. His wife preferred that he get an interview at Goldman Sachs. He tried to persuade her to put their apartment on the market, if only to gauge its value, and then learned that there were six others for sale in the building. He had missed the trade.
Michael Cembalest, the chief investment officer at J. P. Morgan, writes a weekly memo, called "Eye on the Market," which the firm sends its clients. Usually, Cembalest discusses various investment and market issues, but one morning in February, before getting on to the "really terrible economic news of the week" (home prices, consumer confidence, layoffs, earnings—down, down, up, down), he discussed what he called the Conversation, a term he'd learned from a client.
The Conversation can take place between a husband and a wife, or a parent and a child. Its subject is affordability; its only requirement is honesty, and rudimentary math. In some cases, the Conversation, or the underlying reality, can lead to estrangement or divorce; an absence of money will expose differences in values and taste.
In his memo, Cembalest enumerated, as a guide to his clients, his own household expenses, which, relatively speaking, were modest. He divided them into the categories "mandatory" (mortgage, taxes, transportation), "discretionary" (distilled spirits, gym memberships), and "frivolous" (electronics, jewelry, art work). He concluded, "Like the federal government, mandatory spending made up seventy per cent of our total. So to make an impact, we decided to reduce discretionary spending by fifty per cent and frivolous spending by eighty-five per cent." (He later emphasized to me that he and his wife made these decisions together.) Cheaper booze ("non-brand name spirits are half the price"), cheaper jewelry ("this year I bought a 'Reef Fish Identification Guide' for my wife's birthday"). He advised that "a numerically based discussion was more productive than a rhetorical one."
These numbers do not lie or flatter. Up and down the line, obligations loom and prospects dim. Wall Street's tribulations have brought drastically straitened circumstances to nearly every profession. Whether you work for a contractor, a vender, a hospital, a restaurant, a transit system, a high school, a newspaper, a charity, or yourself, the Conversation likely involves a new and irreconcilable calculation of commitments: perhaps even an abandonment of a college education or the loss of a health-care plan.
As for the co-op classes, the Wall Street set, it can seem that the loss they fear most is the loss of face. No one seems to want anyone else to know. In one sense, there is less shame in failure now, because it is widespread and undiscerning. Still, it smarts. There are successful circles in which success (to say nothing of money) isn't everything, but without it you'd better bring something else. Charm, wit, talent, kindness, and generosity certainly help, but only if they complement characteristics that could be more readily converted into social or professional capital. Without the fancy job or the big nut, it gets harder to hang around.
Economists like to draw lessons from Japan's lost decade—to see in its example of zombie banks, futile half-measures, mass denial, and a moribund Nikkei a primer in how denial doesn't pay. But human nature holds sway, down even at the level of the neighborhood. In Japan, during the long stagnation, men who had lost their jobs but couldn't face the shame of telling their neighbors would dress for work and then spend the day in the library or the park. Around here, the social pressures are more subtle; men are not afraid to appear at private-school pickup, in jeans, although they often make a show of maintaining BlackBerry vigilance. See them at soccer practice, pacing the sidelines, gesticulating into their earpieces. Confidence is essential to job-seeking.
Already the value of their skill set is in steep decline. There will be fewer seats at the table. That means that a lot of college-educated well-off white-collar professionals will have to find something else to do. People will have to work harder for less. Some Wall Street exiles find themselves interviewing for jobs that pay one-eighth as much as their old one. When your self-worth is based on your salary—a correlation as well observed as it is widely denied—it's hard to adjust to being 12.5 per cent of the man you used to be.
"I'm running late—some people were waiting for my table so I had to take my sweet time."
It has been fashionable in recent years to use the terms alpha and beta, which in investing refer, respectively, to absolute performance and relative performance, in ordinary conversation (as in, "We always give the beta"). Well, beta-wise, things look a little better, in the self-evaluation department. Whether we're talking nations (the United States economy is a disaster, but others are even worse) or neighbors, beta is the more reassuring approach these days, and is what allowed people to say, this winter, "Down thirty is the new flat." Alpha-wise, however, the wreckage is widespread. John Maynard Keynes had this to say about the appropriate temperament: "A 'sound' banker, alas! is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him."
By spring, the conventional wisdom had quickened. Self-preservation masqueraded as common sense. In the wranglings over solutions, members of the political establishment sought tactical advantage, and yoked popular opinion to their career calculations, drumming up outrage when it suited them (A.I.G., Chrysler) and then ignoring it when it did not. The asset-owner class conjured whatever conviction it could to protect the remaining value of its decimated investments. Both sought, by all means necessary, to reflate risk-asset prices—houses, stocks—as though the low prices were the disease itself, rather than a symptom. Above all, they promoted confidence.
The wires were rife with attempts to bury the bad and turn up the good. Regulators were softening the widely resented mark-to-market accounting provisions that had, in effect, compelled banks to acknowledge, rather than obfuscate, how toxic their toxic assets might be. When Secretary Timothy Geithner announced the details of the Treasury's plan for financing the private sector's purchase of toxic assets from the banks, the Dow rose more than four hundred points. The warm reception suggested flawed conception; Wall Street liked the plan because it was generous to Wall Street. That it might also be a transfer of wealth from future taxpayers to incompetent or opportunistic financiers—an extreme instance of privatizing gains and socializing losses—did not trouble the equity markets, which generally don't fret much over fairness.
One afternoon not long ago, I asked Colin Negrych if there had been any capitulation, among market participants and ordinary citizens, to what he and other dour prophets continued to describe as a catastrophe of epochal proportions. "No," he said. "People are still inclined to view this as a temporary disruption." Even peers who were predicting dire outcomes didn't seem to believe that they would come to pass. Decades of experience had taught them to buy on the dips. "People are clinging to the idea that there is some 'they' out there that can reverse this, that the Fed will arrest and reverse this," he said. "Having this thing normalize is the worst nightmare for the powers that be.
"The bear market is integrity," Negrych went on. "It's honesty, transparency, and common sense." This was as much a moral declaration as a mathematical one. Truth in accounting—the proper recognition of losses and liabilities, the acknowledgment of inconvenient facts—is a kind of virtue. Credit relies on a foundation of trust, which comes of honesty and fair dealing. The bull market, we've learned, did away with these things. Enthusiasm, in the presence of lucre, tends toward rapacity.
It became hard to argue. People kept sending me grim research reports from investment firms—the financial world's equivalent of viral YouTube links. One of them, from Bridgewater Associates, spent ten dense pages enumerating the conditions common to depressions, and then declared, "That, in a nutshell, is our template." Nutshells, these days, are the size of swimming pools.
In spite of such tidings, the stock-market rally held. Optimism sprouted. How was one to reconcile the dismal fundamentals and statistics, and the private pessimism, with the assertions by the banks, the Feds, and the media that deliverance might be at hand? Houses were starting to sell in Sacramento. The rise in unemployment was slowing. The banks, for the most part, had passed their stress tests, albeit with gentlemen's C's. (There was also a matter of seventy-five billion dollars.) Women's Wear Daily put smiley faces on its front page. The salesman had found another Wall Street job. Might the paper that we'd laid over the abyss be sturdy enough to convey us across?
The market scolds saw the positive signs as jabberwocky, or else mere accounting tricks. (Goldman Sachs, for example, had, as part of its conversion into a bank holding company, changed its fiscal year, so that its results for December, a gruesome month, vanished from its earnings calculation. Abracadabra.) The skeptics worried that the crisis was mutating into a virulent strain of delusion, a pretext for the preservation of the old status quo. The presumption was that staving off near-term pain would lead to ever more spectacular collapse. But who knows? Maybe it won't. Divination is fraught, facts being merely what we make of them.
Another morning in the sky, another corner office—a view south and east. The occupant was a financier at a prominent private-equity firm. He was drinking herbal tea, feeling worn down. The office was large and typical—caricatures and tombstones commemorating old deals, a computer screen filled with figures more red than green. When I asked him about the price of a particular stock, he gave me a sickly look and said, "You're still in equities?"
Personally, he'd been short the market for two years. The trendy trade, and the one he was fond of, was ticker TBT, a way of shorting the twenty-year Treasury, in anticipation of inflation. ("There is nothing as inflationary as the whiff of deflation," one fund manager told me.)
The issue of the day and the week and the season was the insolvency of the banking system. "When you are leveraged twenty-five to one, if your assets fall by five per cent, you are technically insolvent," he said. "The increase in leverage worked because, like a Ponzi scheme, it was ramping up the value of the assets that it was financing. That all worked, until it didn't."
It was time for a conference call with a hedge-fund manager who was particularly pessimistic, and had correctly called the subprime meltdown. "This guy is doom, doom, doom," the financier said. A succession of voices came out of the speakerphone device. The financier greeted everyone, and then pressed mute and began to wander around his office, as the hedge-fund manager laid out the familiar gloomy statistics: trillions of dollars of excess debt, not enough money in the world to soak it up.
"We all know how we got here. Let's talk about what's going to happen," he said. "Prices of all assets will decline, regardless of the stimulus." The silver lining, if you could call it one, was that the rest of the world was in worse shape. The financier occasionally nodded. He said to me that he expected the European Union to fall apart, and with it the euro. A voice on the speakerphone said that Swedish banks were struggling—bad loans in Latvia. The United States was using currency-swap lines to inject capital into other countries' ailing banks. "We're not only propping up our own mediocrity," the voice said. "We're doing it with the whole world. And as fiduciaries we can't invest in a market that's propped up."
"Mad Max time, baby," the financier said, before double-checking that the mute button was indeed on.
The voice went on, "If the long bond starts rising, we're done. That's the Armageddon scenario." Someone mentioned a jobless rate of up to twenty per cent. "How awful is that going to be?" one voice said. There ensued talk of riots in China and Greece, and the relative merits of gold and canned food.
There was no anxiety or even amazement in their voices, just a kind of war-room self-satisfaction. A voice said, "Capitalism without bankruptcy is like Christianity without Hell."
The financier had heard enough. He was eager for some air. Without signing off, he grabbed his coat and walked out. The streets were busy; nothing seemed amiss. ♦
Sourse: newyorker.com


text:
Hi all,
i'd like to call an object with a String but I haven't found anything about it, how to do that.
So, you have a process, and its result is, that you get a String (result) filled with the characters lets say "house"
You have an Object named 'house' too.
Now, I would like to call the 'house' object, because String (result) = house after.
If the process gives the result 'car', than the program should call not the house object but the car object.
So for example:
String result
car called Object;
process gives a result (it can be car, or house, or whatever, ((the result is random choice from a defined number of result possibilities)) )
String result = car
calledObject = new car(); // here is the point, i don't now if the result is car or house, so for me it would look like this:
// callesObject = new result(); - so that the call calles the objcetname which the process gives
So after a process I get a value for a String. And than I would like to call the Object whichs name is the same like the value of the String. How do I do that?
I hope you understand my issue, im total beginner, so sorry for the poor explanation!
Thank You very much in advance for replying!

subset: commoncrawl


text:
Parent Directory | Revision Log
|Links to HEAD:
|(view) (download) (annotate)
Added EHG_CHECKOUT_DIR to override checkout destination
Initialize cert_opt to an empty array instead of an empty string. Reported by Kristian Fiskerstrand.
Bug #467646 - Refer to /etc/portage/make.conf, not /etc/make.conf.
default to EHG_QUIET="OFF" (bug #461858)
added EHG_BOOTSTRAP (bug #340153), EHG_REVISION defaults to 'defaults (bug #380947), set web.cacerts (bug #431220), use auth when pulling (bug #432364)
Rename ESCM_OFFLINE to EVCS_OFFLINE, see bug #410469.
Don't die if hg pull exits with status 1.
Update copyright years in headers
Use --updaterev instead of --rev, thanks to Michał Górny (email@example.com), see bug #367481.
Bug 343993: use ${S} for working directory.
Export HG_REV_ID, see bug #339920.
Include Hg revision info in the einfo output for Hg live builds, to allow reproducability.
Allow changing store directory, update maintainers.
Move mercurial.eclass dep from dev-util to dev-vcs.
chmod is not critical, so do not die if it fails.
Mention hg help revisions in description of EHG_REVISION, see bug #300969.
Implement EHG_QUIET similar to EGIT_QUIET if you need more Mercurial output to see why a clone or pull is doing or failing.
Add support for ESCM_OFFLINE, see bug 280214.
Fix die message.
Cleanup eclass, add documentation.
Use clone --pull to fix bug #238314.
Use g+rw instead of o+rw #151063. Don't die when hg pull finds no changes #151010
Update mercurial.eclass per conversation with zzam, http://article.gmane.org/gmane.linux.gentoo.devel/38465
add mercurial.eclass, similar to cvs.eclass etc
This form allows you to request diffs between any two revisions of this file. For each of the two "sides" of the diff, select a symbolic revision name using the selection box, or choose 'Use Text Field' and enter a numeric revision.
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text:
By CAROL LEE ANDERSON
NEW HAMPSHIRE – When school teacher Dan Caron instructs in the classroom during the current school year, a new honor will have been added to his already impressive resume. He was chosen as the 2013 Civil Air Patrol Aerospace Education Teacher of the Year.
Caron, a technology and engineering teacher at Bedford High School, is also a member of the Civil Air Patrol (CAP). Additionally, he serves as the director of WinnAero's Aviation Career Education (ACE) Academy at Laconia Municipal Airport located in Gilford, NH. WinnAero is a youth-based aviation organization that promotes science, technology, engineering and math through the use of aviation.
The CAP's Teacher of the Year Award is a national-level award that recognizes a teacher member for outstanding accomplishments in aerospace education and for possessing the attributes expected from our country's teachers.
Caron was nominated by Col. William Moran, who is the New Hampshire Wing Commander of the CAP. He commented on why he chose to nominate Caron for the award: "Dan is energetic and dedicated to youth development especially in aerospace. He's trustworthy, well organized, and is a wealth of information. He constantly provides interactive processes for learning and knows how to teach and hold the students' attention."
Susan Mallet, CAP youth development program coordinator on the national level, described Caron as "the epitome of 'teacher' – passionately and professionally facilitating, partnering, and empowering youth for a future that will bring pride to themselves and benefit the nation."
She explained why his nomination stood out above all the rest: "Dan works not only in his school but with youth during the summer. He has garnered the support of the community and has facilitated alliances with the aviation community to propel his programs ever onward – and he allows youth to be a part of the learning process – from design and creation to flying and experimentation themselves."
Caron didn't have a goal of becoming a teacher when he graduated from high school. A competitive swimmer, he was mainly concerned with finding a college that had a good swim team, and at the time, Keene State College in Keene, NH, had one of the best. He enrolled and soon after starting his freshman year, he began the search for a major that interested him. He became fascinated with technology and engineering when he saw his roommate returning with interesting projects he had constructed for his technology and shop classes. Soon afterward Caron decided to become a teacher and focused on the subjects that interested him: science, technology, engineering and math (STEM). He graduated with a degree in industrial education.
Since earning a degree, he has held various teaching positions in the East. While employed as a teacher at DuVal High School in Maryland, a project he was involved with gained national attention. Working with the school's biology teacher, Caron and his students designed a science experiment that went into space aboard the space shuttle Discovery in the fall of 1998. It was the same mission that carried astronaut John Glenn.
He and his students were faced with the challenge of building a habitat for an insect of their choice to be housed within a five cubic foot canister, which would then be added to the payload of the Discovery. The students did their research and chose to send cockroaches into space mainly because it was already proven that the not-so-popular insect can withstand a ride into weightlessness as well as the tremendous G-forces of a trip into space.
With the assistance of a technician from the school district's science center, Caron and his numerous classes constructed the habitat over a number of years. In total, the experiment took almost nine years to prepare, and over 150 students and 100 adults participated in its creation. The group made history when some of the roaches arrived back on earth alive, a first for an experiment prepared by a civilian group.
Although a teacher in the Bedford school system, students in the Lakes Region of NH have also reaped the benefits of working with Caron. As director of the ACE Academy based at Laconia Airport, he brings his innovative teaching style to the classroom there.
He explained on how much he enjoys being involved with WinnAero and the programs they offer: "Having WinnAero located at Laconia Airport is fantastic. The kids get to fly with pilots at Skybright. The Civil Air Patrol, the Experimental Aircraft Association, and the Laconia Airport Authority are all right there, and they are all a tremendous help. Diane Terrill, who is the airport manager, is always very willing to help us in any way. I can't imagine trying to run an ACE Academy that is not located at an airport and one that doesn't have so many helpful individuals who assist the program."
Caron is no stranger to being honored with awards and designations. He has a long list of awards on his resume including numerous awards for teacher and program excellence, including being named the National Air Force Teacher of the Year in 2004. In his spare time, he became an author and curriculum specialist for EngineeringbyDesign through the STEM Center for Teaching and Learning.
The unpretentious school teacher says he is tremendously honored by being named as the CAP's Teacher of the Year. His face lights up when he talks about being a teacher. "I love teaching. It's never the same; there's always something different I can work on," he said.


text:
Teacher resources and professional development across the curriculum
Teacher professional development and classroom resources across the curriculum
Teacher-TalkForce is the email
discussion list for Science in Focus: Force and Motion. Participants
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Use this space as an area to share information and pose questions
about the workshop and get to know your colleagues.
To sign up for this list, please enter your email address here.
You will receive a confirmation email shortly after submitting your
To post a question or reply, you can send an email to [email protected].
© Annenberg Foundation 2017. All rights reserved. Legal Policy


text:
|Product code
|articolo 127
|DUE QUALITY lighting
|More items available upon order
Fitting In Beaten Iron Realized In Handicraft Way with the Hands, Color Rust (Bronze / Gold) And The Particular In Gold, With two glass, Covering Light bulbs led ATTACH E27 OR LIGHT BULBS Á. BASSO I CONSUME. YOU CAN ALSO BE FURNISHED WITH THE DISHES IN CERAMICS . All electrical parts are made in THE RESPECT OF THE REGULATIONS C.E. The chandelier is working, and comes complete with chain, rosette and electrical system.
Our creations are shipped with a Certificate of Guarantee to confirm that the item is made entirely by hand, both in the ceramics, in the painting and in the workmanship of the beaten iron. Small and inevitable differences personalize every piece making it only, to testimony of a handicraft artistic workmanship.
All of our article are realized near our handicraft factory, therefore we give the possibility, to our clients, to be able to choose the colors of the fitting among the following finishes; RUST (BRONZE / GOLD), ANCIENT GOLD, LEAF GOLD, ANCIENT SILVER, GREEN ANCIENT AND SPRING. We can also realize any article on application of our clients with a photo or with a sketch.
Registered users can share their experience with this product. Register to access all of the benefits reserved to registered users or click on login if you are already registered.
|25 May 2019
|Quality chandelier, great service, kind person
|giovanna tagliarini


text:
Denver beauty blogger Kristie Burnett takes mystery out of makeup
With three of her four sisters in the beauty business, it was natural that tricks of the trade rub off on Kristie Burnett.
But the 30-year-old Denver mother of three finds herself immersed in the field in a different way these days, as a beauty blogger. Burnett is one of 15 finalists in Allure magazine's first annual beauty blogger competition and is now taking on weekly online challenges and seeking support via the magazine's contest website, blogger-awards.allure.com.
A panel of editors and the public are voting each week until a winner is named.
Burnett began her journey innocently enough, doing image styling, makeup and then photo styling. She felt she had something to share with other women, so she started Blushing Basics about three years ago. The strength of her advice is that it's easy to see and follow, thanks to the many photos and video tutorials she posts.


text:
Swimming Pool Blog
by Sean Griffin, January 5, 2012
Pool Filter Repairs and Maintenance
Without proper filtration even the most chemically balanced pool water will eventually become cloudy and un-swimmable. Your pool pump is the heart of the swimming pool equipment and your pool filter is the kidney (you only need one). Both are vital to properly maintain clarity in any body of water. Every filter on the market, regardless of the media being used, will require maintenance and from time to time may call for a repair. For most homeowners the difficulties in ensuring your pool filtration stays optimal lies in diagnosing a water filtration issue when it occurs. Knowing what to look for and timelines on certain filtration components that need to be serviced or replaced will help save you some time and money and instill the confidence you need to make the repair yourself.
Every pool owner should be proactive instead of reactive when it comes to ensuring pool water quality. Preventing problematic water will prevent excessive and costly chemicals that may be needed to restore pool water that has become unbalanced and unfiltered. Knowing the limitations of your pool filter and the ability of the filtering media within will be key in keeping things crystal clear.
Filtration of water using sand dates back to 2000 B.C. Sanskrit writing outlined water purifying methods before bacteria and micro organisms were known to man. These same principals associated with water filtration have been incorporated across the world throughout time.
Modern sand filters for commercial and residential pools commonly use #20 Silica sand or Zeobest. Zeobest is an alternative to sand with a higher surface area which allows you to use less within the filter and also achieves a higher microscopic filtration rating.
Routine maintenance will include backwashing the filter once the sand bed has captured particles and the pressure within the filter tank has climbed 5-10 psi. How often you will need to backwash your pool filter will depend on what is introduced into the pool water. Backwashing is performed by reversing the flow of water to force out the unwanted filtered particles.
The most obvious sign of a problematic sand pool filter is sand entering the pool. You may notice a massive amount enter the water after backwashing your filter or it may be less significant and may take time to build up to even be noticed. The sand within your filter tank is not intended to enter the pool water. Sand entering the pool can mean a couple different things. Laterals that lay beneath the sand bed may have become brittle and cracked allowing the sand to flow through the filter. Sand itself over time can erode under pressure and create smaller particles of sand which the filter is not capable of retaining. Every pool is slightly different but the media inside a sand filter will need to be changed every 5 or so years.
Another sign the filter may be having an issue is water clarity. Sand filters are subject to mud balling and channeling. An even or flat sand bed means ideal filtration. Things that are introduced into the filter like lotions and oils can cause coagulation of the sand particles which will allow water to flow more freely, bypassing some of the filter sand. To diagnose you may have to open up the filter and inspect the sand bed.
Early indications of sand filter issues can be cloudy, unclear and unfiltered water. The tank pressure will not rise properly as contaminants are not being removed. Before you look into your sand filter you will want to rule out a pump or valving issue. Make sure the pump flow rate is correct and the multiport or push-pull valve is not allowing water to bypass the filter.
Replacing the filter sand, cracked laterals, or a damaged stand pipe can easily be achieved by a DIY pool owner. If you have a top mount sand filter it is recommended to have unions on all connecting lines so you may access the interior workings. If you have to cut any plumbing make sure to add some unions so you don't have to deal with it again in the future.
A cartridge pool filter will utilize a paper element filter that will capture the particles that are forced through the filter. Although similar in design to a sand filter the maintenance and repair issues differ from that of a sand filter. A cartridge filter will build up pressure internally just like every pool filter. A cartridge filter does not utilize backwashing and reversing the water flow through valving is obsolete. Instead manually cleaning a cartridge filter is necessary once the filter build up pressure due to capturing those pesky particles. The lifespan of a filter cartridge will depend on routine maintenance as well the demand that is put on the filter.
Cleaning your cartridge filter can be achieved several different ways. For light debris and sediment that falls off the element fairly easy a high pressure hose nozzle or water blaster can quickly get your filter cartridge back to looking white and clean. Cartridges are often subject to organic staining which will require a filter cleaning chemical or a muriatic acid to water mixture to burn off the brown staining.
The most common of cartridge issues is the deterioration of the paper element filter within. Over time, under constant pressure and exposed to the affects of pool water chemistry a cartridge can collapse and water passing through the filter will not run evenly between the individual pleats. Signs of a problematic filter cartridge are usually visible on the cartridge itself. A consistent high pressure even after a cleaning is a good indication the filter cartridge needs to be replaced. If a cartridge has collapsed or has been stained to the point of clogging, you can actually do more damage than good by using the filter cartridge.
Diatomaceous Earth
Arguable the best filtration method, D.E. filters have the capability of filtering down to the smallest micron. An internal grid assembly that consists of several filter elements is coated with diatomaceous earth. This media, which is similar to crushed up sea shells, filters out all unwanted particles. When the pressure rises within the filter the media has been exhausted and will need to be flushed out and replaced. From time to time it may be necessary to manually remove the grid assembly and clean with a high pressure water nozzle. Signs of damage to the filter grids can be staining of the material, a collapsed skeleton (the lattice of the grid), and frayed or torn material.
Most home owners will notice diatomaceous earth return to the pool when the filter is in need of a repair. If the multi-port or slide valve is functioning properly this means the media is bypassing the filter. Common places to inspect should be the grids themselves, the grid manifold, and where the manifold rest on the standpipe. I have seen pool filters that have run for an extended period of time at a high pressure that can cause the manifold to implode inward, cracking, and allowing DE to bypass the filter. Another common route for the DE to make its way back to the pool is an internal air bleeder that assists trapped air to make it to the top of the pool filter and escape. Make sure any air bleeder tube or assembly has not become dislodged or damaged.


text:
SC BASKETBALL - The Sheridan college Generals beat the College of Great Falls Friday night 117-37 to go to 7-2 overall, the Generals finish up the Lions club tournament tonight against Colorado Northwestern tip off is scheduled for 7:00.
The Lady Generals blew out the College of Great Falls as well Friday night 91-39 tonight it's a big step up in competition when they take on the 2nd ranked team in the country North Idaho tip off is at 5:00.
COWGIRL BASKETBALL - The Wyoming Cowgirls beat Seton Hall 55-45 Friday to go to 3-0 Kayla Woodward had 12 points and 10 rebounds, Fallon Lewis had 5 points and 7 boards.
COWBOY BASKETBALL - The Wyoming basketball Cowboys are at home tonight hosting Cal-State Bakersfield pregame starts at 6:30 the tip is at 7:00 on KWYO and 87.7 FM.
COWBOY FOOTBALL - The Wyoming football Cowboys wrap up their season today at home against San Diego state. The Cowboy pregame will start at 12:30 with kickoff at 1:30 live on KWYO and 87.7 FM.
BRONCO FOOTBALL - The Denver Broncos have a road game at Kansas city tomorrow we will have it live on KWYO and 87.7 FM Bronco pregame will start at 9:05 kickoff will be at 11:00.


text:
so wat ds that show?
int yel= 1;int blue= 0;int in=9;void setup() { pinMode(yel, OUTPUT); pinMode(blue, OUTPUT); pinMode(in, INPUT);}void loop() { if(digitalRead(in)==HIGH) { for(int i=1;i<=5;i++) { digitalWrite(yel, HIGH); delay(1); digitalWrite(yel, LOW); delay(1); digitalWrite(yel, HIGH); delay(1); digitalWrite(yel, LOW); delay(1); digitalWrite(blue, HIGH); delay(1); digitalWrite(blue,LOW); delay(1); digitalWrite(blue, HIGH); delay(1); digitalWrite(blue, LOW); delay(1); } }}
circuit is just ardui itself
By the way, if you could take the trouble to write proper English rather than txtspk it would be appreciated.
i created a program to just check the pin 8 gets a i/p so that the pin 9 will give some output...unfortunately even without the i/p its showing o/p...subsequently i found that wen we shake the uno its giving output!:(....so wat ds that show?