Welcome to Crisis: Expect Less

-I am not very funny. So, if you want to have a good time,
Comedian at the Comedy Strip Club in New York City

People often ask me, “How is the crisis? What’s new with the crisis?”

I am not quite sure what to tell them. I am afraid that I simply not knowledgeable enough. And I am also very skeptical that we will be talking about the same thing, as people understand crisis differently. I looked up the term crisis in the storage of all human wisdom, Wikipedia!

So, there is a “crisis” definition from the Wikipedia.org: It may be a traumatic or stressful change in a person’s life, or an unstable and dangerous social situation, in political, social, economic, military affairs, or a large-scale environmental event, especially one involving an impending abrupt change.

Now, let’s try to make some sense out of it. The crisis is a change. We got that. But how much of a change does it have to be to become a crisis? Let’s take a look at the problem on the personal level.

I used to love to go to Vietnamese take-out kitchen for lemongrass soup. It was wonderful! Spicy but not too much, with flavors of the right herbs… Ah… Anyway, for one reason or another business failed and they closed. And there was no one around who made this soup well enough! So I have to go from wonderful soup to no soup at all. From one (yes) to 0 (no). That is that drastic traumatic change they were talking about! That is the crisis. That being said, you can guess that I survived that one. Thus we come to understanding that there are also degrees of crises.

Right now everyone is talking and worrying about global financial crisis. A lot of people got affected by it very quickly, others did not. What happened? What has changed so drastically and so quickly? I am not an expert; I just play one in my column. But let me speculate. The world lives on credit. I will borrow from John; John will borrow from Mike… We all know each other; trust that that the other has money to pay off when time comes. That belief is fundamental. That belief makes the financial world work. And as usually, the belief in prophet is stronger, the prophet himself. It appears to me that somebody came and said that famous line, “Show me the money!” And it turned out that the king is naked. Where is the money? There was no money. Our expectation was wrong. People never lost their money. They never had it. What they had is a wrong expectation. So, what has really changed is a ratio of expectation to reality.

So, here is my résumé. While we are all affected by macro-events, to avoid personal crises, keep your expectations down.