Provides a layperson-friendly, non-drowsy explanation of how the credit crisis came about
Suggests the single most important thing you can do to protect yourself and your interests during the credit crisis (and in fact, any crisis, including being laid off during a credit crisis)
Don’t let the article’s apparent length scare you off — read it! Yes, it’s ten screens, but it’s set in a narrow column. If you’re still skittish about reading that much, shame on you, and here’s the part on which I want to focus:
Whatever the case, the best thing you can do to protect yourself and your interests is to make friends. The more we are willing to do for each other on our own terms and for compensation that doesn’t necessarily involve the until-recently-almighty dollar, the less vulnerable we are to the movements of markets that, quite frankly, have nothing to do with us.
If you’re sourcing your garlic from your neighbor over the hill instead of the Big Ag conglomerate over the ocean, then shifts in the exchange rate won’t matter much. If you’re using a local currency to pay your mechanic to adjust your brakes, or your chiropractor to adjust your back, then a global liquidity crisis won’t affect your ability to pay for either. If you move to a place because you’re looking for smart people instead of a smart real estate investment, you’re less likely to be suckered by high costs of a “hot” city or neighborhood, and more likely to find the kinds of people willing to serve as a social network, if for no other reason than they’re less busy servicing their mortgages.
I think Rushkoff’s got the right idea, and I’d like to torque it a little further. Forget for a moment the more fanciful ideas of printing your own “Canadian Tire Money”; when he says “local currency”, I want you think of these things:
Reputation,
Goodwill,
and most importantly, Luck.
Among the many things that I’m churning in my brain right now — along with updating the resume, finding a place to put all the stuff that I used to keep at the office and getting that eye appointment with Dr. Heeney before my work-provided insurance coverage expires — is real-world testing an idea and writing about it here. That idea rests on two principles, namely:
Having friends and being friendly makes you lucky. I’ve always suspected it, and Marc Myers wrote a book on the topic.
I’d rather be lucky than smart. It’s the mantra of my all-time favourite financial planner, whom I shall refer to as “P. Kizzy”. If I get even a tenth of P. Kizzy’s business acumen, I will be a very happy man.
Watch this space, ’cause I’m going to expand on those ideas!
The ad on the left is a skin cancer ad, which reminded me of a term I’d only recently encountered: the “sun scare industry”. It was a term used in a news release by the Indoor Tanning Association (yeah, I went “Really?” too) that saluted Sarah Palin for putting a tanning bed in the Alaska governor’s mansion. The last line of the release quotes Dan Humiston, President of the Indoor Tanning Association and it’s a real gem:
“Kudos to Governor Palin for standing up to dermatologists and other members of the sun scare industry who are trying to frighten Americans away from UV light.”
Those pesky busybody skin doctors! No wonder dermatologist is synonymous with buzzkill.
Yearly statistics for the Accordion Guy blog, courtesy of StatCounter.
StatCounter says that sometime within the half-hour before I wrote this, The Adventures of Accordion Guy in the 21st Century got its 2 millionth page view for 2008. My thanks to all of you for making this possible!
Hint, Hint…
Hey, web advertisers! I get 100K pageviews/month and in the Technorati 5K. I can get you clicks! Email me at joey@joeydevilla.com and let’s see what I can do for you!
Hey, tech companies! Looking for a Guy Kawasaki or Robert Scoble, but who can also code? Think of me as the budget version of those guys. Or better yet, think of Guy Kawasaki and Robert Scoble as overpriced Joey deVillas. Once again, email me at joey@joeydevilla.com and let’s see what I can do to put you on top!
It’s Rosh Hashanah, the Jewish holiday often referred to as “Jewish New Year”, is the start of the civil year in the Hebrew calendar and the beginning of the Days of Awe. Like many other cultures’ new year traditions, it’s a time to reflect on the past year and make plans and resolutions for the upcoming one.
In honour of this holiday, here’s one of my favourite Shabot 6000 comics. Enjoy!
Click the comic to see it on its original page.
P.S. Big thanks to Rochelle for inviting us to celebrate with her family tonight!
When the news is filled with talk of credit crunches, bank bailouts and poorly-thought-out metaphors, you can be certain that every business is adjusting their plans to ensure that it doesn’t go under. Cutting spending is one of the most important of these adjustments, and since employee salaries are expenses, companies are laying off the employees they believe they can do without and slowing down (if not stopping) their hiring.
This is not a good time to look for a job nor lose one.
What to Do?
Losing your job is a shaming, stress-inducing, heart-rending, and even frightening experience at the best of times. Losing your job at the start of what some people in the media are calling the New Great Depression is far worse, even if you think they’re exaggerating for effect.
In the time since I posted the article in which I announced that I had been let go, I’ve received about a dozen emails from people who’ve said that they’re in the same situation. They have no idea what to do and asked me what I was doing and if I had any advice.
I have some observations and suggestions, some of it from my layoff experience back in 2002 and some of it from the past few days’ experiences, and I’ve written them below.
You Will Know When You’re Called in for “The Meeting”
I knew I was being brought in for the “your services are no longer required” meeting the moment I was invited to it.
Many people dismiss intuition, but in experience, I have found that a well-trained intuitive sense will often serve you well in those situations where the situation is murky or when rationality is following the wrong path. I susbscribe to the theory that intiuition is your brain doing some massively parallel processing, subconsciously “filling in the missing pieces” when you are presented with incomplete information. That’s why Poincare said “It is through science that we prove, but through intuition that we discover.”
It might have been something in the Director of Tech’s voice or his body language. Perhaps it was that there’d been little for me to do in the past little while because of the overlap between our jobs. Maybe the fact that the meeting had been called up out of the blue with no explanation as to what it was about was the tip-off. All these hints would be clear to a detached observer, but to someone right in the middle of the situation, they might not be so apparent. Thanks (or no thanks, perhaps?) to a flash of intuition, I had a pretty good idea of what I was in for.
A quick aside: I believe that intuition is not independent of learning and experience, but enhanced by it. When intuition “fills in the missing pieces”, it has to get those pieces from somewhere. Without learning, and even more importantly, the regular application of that learning, intuition is no better than flipping a coin.
You Have Moments to Get a Grip
Armed with that intuitive flash, I had the twenty or so seconds’ travel time between my desk and the meeting room to collect myself. At this point, I only had a vague sense that this was my termination meeting; intuition isn’t a straight-forward thing like a warning light on your car’s dashboard or a pop-up window on your computer:
Do whatever it takes to steel yourself for the bad news. Whether it’s deep breathing, couting to ten, reciting your own personal mantra or firing up your “poker face”, you want to get ready to conduct yourself at the meeting with as much grace, aplomb and professionalism as you can muster.
The Second Most Important Meeting You Might Ever Have with Your Employer
I’ll admit that my termination meeting wasn’t as uncomfortable as this one.
(In case you were wondering, the most important one is the job interview.)
I used to work as a DJ at a popular campus pub at Crazy Go Nuts University. Both the atmosphere and the vantage point offered by the DJ booth gave me the opportunities to witness many breakups from a detached third-party point of view, whether I want to see them or not. Even at their best, breakups are pretty rough; when they get ugly, you can’t help but feel shame for the couple.
No matter what you’re feeling at the meeting, you want your termination to be as good a breakup as possible. This means that you must handle the meeting professionally. The way you behave at this meeting will set the tone for your termination. If it is full of freak-outs and acrimony, they won’t be inclined to do you any favors. On the other hand, if you conduct yourself in a professional manner, you may gain some goodies such as extra negotiating leverage and a willingness on their part to do what they can for you.
If you can remember these questions through the stress of the meeting, you should ask questions like:
When is my last day?
What is my severance package?
How long will my company insurance coverage last?
When do I have to return the company laptop and Blackberry?
How long do I have to collect my stuff from the office?
What do you want me to do with my current projects and files?
Can I get a letter of recommendation and use you as a reference? (Naturally, if you’re being fired rather than laid off, don’t bother asking this question.)
Don’t worry about memorizing these questions — just remember that you should leave the meeting with a clear idea of what they expect from you and what you can expect from them.
If they’ve given you papers to sign, do not sign them yet. Ask for some time to “look them over”.
Take a Walk as Soon as Possible
This is going to sound terribly touchy-feely new-agey, but I’m going to say it because it’s an important step: at your first opportunity, take a break, get out of the office and go for a walk.
When this first opportunity comes depends on the sort of place where you were and the conditions under which you’re being let go. In some cases, you’ll be asked to pack your things and leave immediately, sometimes with a minder assigned to you so that you don’t go pilfering office supplies. In my case, I was asked to say on for a few days to be debriefed and help with the transfer of responsibilities.
Since I was at the office for a few more days and since it was the sort of place where they’re pretty cool about going out for a break, I went for that walk at the first opportunity. (Besides, what were they going to do, fire me?)
The walk is important because it gets you away from the office and to clear your head. Regular readers of this blog know that I’m usually an easy-going, “go with the flow” kind of guy who’s seen and done some pretty crazy things, and even I needed that walk. I felt twitchy and drained at the same time.
The walk gives you a chance to come down from one of the most stressful experiences you’ll ever face in your working life and come to terms with what’s happened. It is not the time for figuring out what your immediate next steps are; it is the time to collect yourself for figuring out what your next steps are.
Don’t do the walk in a fugue state. Take note of your surroundings. Chances are you’ll see things that you passed by every day but never noticed before. This is good, because it’s preparation for what you’re going to be doing for the next little while: seeing things differently.
Deal with the Shame
No matter how good a job your were doing or how well you served the company, being let go will make you feel like thie cat pictured below:
It will feel as if you had been weighed in the balance and found wanting. In fact, that’s what probably happened. Perhaps you weren’t found wanting as a person or an employee, but when the bean-counters did the books, either you went or the company did.
Thanks to evolution, being let go feels terrible. It feels like getting dumped, which feels terrible because it means that you are failing your biological imperative to keep the species going. Without this feeling, we don’t have the drive to reproduce and thrive, and it’s “goodbye species”.
You deal with the shame, using whatever constructive coping mechanisms work best for you. In my case, I hit the gym, did a little writing, played a little music on the ol’ squeezebox and got involved in some very severe rocket-launcher-assisted altercations in Grand Theft Auto IV.
If you must, have a drink or two but don’t go beyond that. You want to take the edge off, not go on a binge.
You Must Come to this Realization
Crank up your computer’s speakers and enjoy the video below. It’s the Soup Dragons’ 1990 cover of the Rolling Stones’ I’m Free. Don’t be afraid to shake your booty if you feel the urge:
If you need to, play the video a couple of times just to make sure the song’s point soaks in: you’re free.
Once the initial shock of losing your job has worn off, consider this: the future has suddenly become a blank slate. That may sound scary, but you should think of it as liberating.
Think about it. That end-of-the-week progress report that management expects? Not your problem anymore! Getting a response from that contractor for the 50-page spec for that increasingly complicated e-commerce website that you’re responsible for? Somebody else has to deal with it now! Hunting down the bug in the credit card payment gateway? Rubbing an irate client’s belly? Putting new covers on the TPS reports? You’re free of all those responsibilities.
All the day-to-day stuff that you’ve been doing at work has just vanished. This frees you to stop worrying about the doing things for the company and start doing things for you. Without those things taking up your time and thoughts, both your calendar and your mind are free to concentrate on “You, Incorporated”.
In the Next Installment
The next steps, including what you can do with all that spare time.
What you may not know is that when artist Gil Kane was re-designing the superhero character Green Lantern in the late 1950s, he used Paul Newman as his template:
Life in a startup is full of adventures with its fair share of ups and downs. Budgets shrink and grow, teams shrink and grow and strategies constantly evolve. During these challenging economic times, it’s the companies who maintain their focus while controlling their spending discipline that will survive.
b5media lives and dies by these same rules, and those of us in the ad-driven internet business expect no less. In this current market environment, it is the mandate of a responsible business to look at ways to stretch their dollar and cut their costs.
My role at b5media as Nerd Wrangler, a.k.a. Technical Project Manager, overlaps too closely with the Director of Technology, and there just isn’t enough work to go between the two of us. The Powers That Be at b5 had to make a tough call, but they made the right one for the company: they had to let me go. My final day at the company will be Friday, October 3rd.
I’d like to thank Jeremy Wright and the rest of b5media for taking me on and for the experience at b5 over the past seven months.
My career has been shaped by what I like to call “hobbies that have spiralled out of control”. The first was computer programming, which I took up in the eighties. Accordion playing came in the nineties. In the “naughties”, after submitting suggestion after suggestion to Cory Doctorow to post in Boing Boing, he said “Joey, why don’t you start your own blog?”
I opened an account at Blogger and, when prompted for a name, I went with the stupidest thing I could think of — The Adventures of Accordion Guy in the 21st Century. “I’ll give it a real name later,” I thought.
Nearly seven years later, this blog has become my third hobby to spiral out of control. It’s paid off in ways I would never have imagined, and it’s gained a readership I wouldn’t have imagined either. StatCounter says that this year alone, it’s amassed 1.98 million pageviews. At the current rate, I’ll hit 2 million sometime next week:
While nowhere near as popular as Accordion Guy, my tech blog, Global Nerdy, isn’t doing too badly either. It should hit half a million pageviews by the end of the year:
I’d like to say “thank you!” to all of you readers, whether you’re a long-time reader or if this is your first visit either of these blogs. These numbers don’t happen without you.
I’d also like to say “watch these blogs!” because things look like they’re going to get really interesting.
The building next door to my workplace — 176 Spadina Avenue — is being demolished (presumably to be replaced by a newer, shinier building). It’s too close to the surrounding buildings to use a wrecking ball (which would’ve been cool) or explosives (which would’ve been even cooler) to take it down. Instead, they brought in demolition shears. They’re essentially giant pliers that are used to pull the building apart. The shears dismantle the building as if it were a pig roast, while an excavator scoops away the building chunks like so much pulled pork.
The demolition drew a crowd, which included Yours Truly. I took some photos, which you can see in this Flickr set or in the slideshow below.
I pointed a friend of mine who works in finance — I’ll call him “Senor Gumbo” — to my earlier post in which I explained “longing” and “shorting” to see if I’d explained it properly. He said that I’d nailed it, but he also said that I should more clearly explain what happens if you bet the wrong way when longing or shorting.
At first I thought that I didn’t need to do that, since that should be obvious. After thinking about it some more, I was reminded of something my buddy George likes to say every now and again: “there’s power in stating the obvious”.
So now, via the magic of dry-erase markers and boards, I present: Winning and Losing When Longing and Shorting.
Winning and Losing When Longing
A quick recap: longing is the intutively obvious way to play the stock market. You buy shares that you believe will increase in value over time and eventually sell them for more than you paid for them.
The dry-erase board chart below shows two generalized outcomes of longing:
You bet correctly and their price went up (the black line on the graph)
You bet incorrectly and their price went down (the red line on the graph)
If you bet correctly, the trend in your stock price will look something like the black line, which shows its value generally increasing over time (in order to keep things simple, neither trend shows wild fluctuations). The dashed line in the graph represents the price you paid for the shares, the black line shows the price of shares over time, and the money you gained at any point in time is represented by the distance between between those two lines.
In theory, the price of the shares can go up forever, which means that when longing your profits can go up forever (in theory; if you know of a stock like this that exists in reality, could you kindly email me once you’re done reading?). There is no limit to how much profit a stock can provide…in theory.
If you bet incorrectly, the trend in your stock price will look something like the red line. Once again, the dashed line in the graph represents the price you paid for the shares. The red line shows the price of shares over time. The money you lose at any point in time is represented by the distance between those two lines.
There is a practical maximum to the money you lose when longing. Since the lowest possible stock value is zero — that’s when the company goes under — the most you can lose when longing a stock is what you initially paid for the shares.
Winning and Losing When Shorting
As I mentioned in that earlier post, shorting seems like something from the Bizarro World, where everything is backwards. When you short a stock, you’re trying to make money by betting that its value will drop. You do this by borrowing shares in a stock from a broker and then immediately selling them. When their price drops, you buy an equivalent number of shares in the same stock and give them to the broker. You keep the difference between the price you sold the borrowed shares for and what you paid to buy the replacement shares.
The dry-erase board chart below shows two generalized outcomes of shorting:
You bet correctly and their price went down (the black line on the graph)
You bet incorrectly and their price went up (the red line on the graph)
Again, the black line on the graph shows the stock price trend if things are going your way; the difference is that when shorting, a drop in share prices is good. It means it costs less to “buy back” the shares you sold than it did to sell them, which means you make a profit.
Unlike longing, there is a practical maximum to how much money you can make by shorting. You hit this maximum when the share price drops to zero, meaning that the company has gone under, which in turn means you don’t have to return the stock to the broker. You keep all the money you made when you sold those borrowed shares (minus fees, including what the broker charged you for borrowing those shares, of course).
The red line shows the stock price trend if things are not going your way. It’s bad when the stock price is higher than when you sold those borrowed shares; it means that the cost of replacing them is higher than what you made when you sold them, meaning that you owe the broker money.
Here’s where the theoretical infinity of the stock value will nail you: if there is no (theoretical) limit to the price of shares, there is no (theoretical) limit to what you can lose by shorting. With longing, you can’t lose more on a share than what you initially paid for it; with shorting, you can lose way more than the share’s original value.
I hope that makes things clearer. If you’ve got questions or something to say, please feel free to put them in the comments. If I can’t answer your questions, I can always ask Senor Gumbo.
Back in high school, after reading Space-Time and Beyond for the umpteenth time and drinking one too many zombies with my friend Henry, we came up with a theory:
In the infinite set of universes, there had to exist a particular universe in which the events in our lives were being watched as a TV show.
We then made a solemn vow to live the kind of life that got high ratings.
