doomers and haunted houses
So there are a lot of very, very good pieces on Silicon Valley Bank, the repercussions it will have for how the financial system operates, so many discussions of borrowing short to lend long, the Fed’s response etc etc etc. I’ve been taking notes in my Notion document here that should serve as a decent walkthrough for what’s gone down (also have done two YouTubes here and here and a skit here) but I kind of wanted to reserve space in this specific newsletter for talking about what happened.
Not what went down (the links in the Notion document are from topic experts and are far better than anything I could produce) but the more visceral, emotional toll that stuff like this takes on us. Like we are all these funny little economic entities that are wandering around, we are all people, and we are bearing witness to some pretty gnarly stuff right now.1
I want to first talk about doomerism, and then address haunted houses.
One thing that has been startling (although it shouldn’t have been) was the number of Very Hot Takes on Things Going On. In fact, some of the Very Hot Takes arguably led to the bank run that happened to Silicon Valley Bank2.
Oh, the beauty of human emotion.
Then there is the concept from Oscar Wilde that “most people are other people.”
We are scrapbooks of those around us, and parts of us will always be engraved by those we’ve spoken to. So when really bad things happen, it makes sense that as communal creatures, we would seek each other. I don’t even think we realize we are doing it. It’s this subconscious search for connection in a time of deep fear.
And of course, some people try to benefit from that. They post doomer porn, proclaiming that the World Ended Yesterday and if you subscribetotheirnewsletteryouwillbeoneofthesavedjustsubscribetoday and that sucks. When things are confusing, it is very easy to make more smoke than to simply clear the air.
This is what we might call the Takeconomy - when opinions become assets, collateralized by volume and traded openly and aggressively.
There is a LOT to unpack with all-caps tweeting crowd, specifically through the lens of language3. Number one, digital language and digital bankruns and social media risk is just a whole new thing to account for.
Number two, I think a big thing that people end up wanting during a Time of Crisis like we just experienced is someone telling them 1) How to Feel or that 2) Their Feelings are Okay. Like, how bad is this seemingly really bad thing going to be? Is it really build a bunker and grab the Cheerios bad, or are things going to be alright?
Unfortunately, we run into two problems here.
People will tell you How to Feel. But they are usually trying to sell you something or sell something from beneath you.
People will try to hit the Panic button and cause pandemonium because that is unfortunately a profit seeking opportunity.
And then of course, how we actually convey things is incredibly difficult and ripe for bad actors. Language is strife with misunderstanding and mishearing and missed jokes and broken threads.
I actually wrote more in depth about this a few months ago:
A lot of what we do ties back to language. Communication can be physical, verbal, visual, written, etc and we engage in it constantly. Language is the foundation of how we interact with each other, especially in an online world.
And a very long time ago, in our caveman era, we developed these linguistic abilities for the first time. This came at the cost of our visual acuity and memory as this research paper describes. We had to give stuff up in order to begin talking to one another.
This radically changed how we interacted with the world. Rather than having detailed and lovely cave paintings, language enabled a deeper level of human to human interaction. And to this day, of course, language still shapes how we see the world through linguistic relativity - our language is our universe.
Language is this really beautiful thing, that is often totally misconstrued and fragmented and can lead to things being more confusing than they need to be. And we saw this with SVB! We are seeing it still! People are taking advantage of the gaps in knowledge, inserting their own words, and addressing that as a fundamental Truth.
Everyone has to have a take on everything, all the time. The stock market is essentially monetized opinions, right? We all like being right. So what if that means we need to mold the narrative to fit what we are trying to say? So what if we are lying? So what if we mislead thousands of people?
This is objectively bad for a myriad of reasons.
Truth is already hard to come by. As Ludwig Feuerbach once wrote:
But certainly for the present age, which prefers the sign to the thing signified, the copy to the original, representation to reality, the appearance to the essence…illusion only is sacred, truth profane. Nay, sacredness is held to be enhanced in proportion as truth decreases and illusion increases, so that the highest degree of illusion comes to be the highest degree of sacredness.
Like, there isn’t a fundamental capital-T-Truth for a lot of the stuff that happened. There is a lot of nuance. For Silicon Valley Bank, it was the VCs, it was the lack of hedging, it was the Federal Reserve, it was their customer base, etc etc etc. To try and pull on one of the threads requires looking at the entire sweater of circumstance.
But there is money to be made in spinning one of the threads, in pulling on it so the whole thing frays. There is a LOT of that out there.
The Takeconomy unfortunately awards those that scream fire in the crowded theater. In a world driven by illusion, it’s much easier to mold a subjective Truth to whatever version of reality you want to inhabit versus actually helping others understand what is happening. I don’t have any words of wisdom beyond be careful out there.
Language can be used as a tool to disconnect us, but it’s also what brings us together.
The reason that Coraline by Neil Gaiman is so scary is because Coraline doesn’t go to any random haunted house in the story. She goes to a copy of her own house. With people who look like her parents called “Other Mother” and “Other Father”. She is living a nightmare in the backdrop of everything that she knows.
The reason that is terrifying is because a “home” is theoretically supposed to be safe. It’s supposed to be a place of comfort and warmth, most of the time4. Stable.
What happens when it becomes haunted?
That concept, something that was meant to be stable and good and okay, and ends up being this haunted and broken thing, is kind of what happened with Silicon Valley Bank. To be clear, banks fail all the time. Like 563 bank failures happened from 2001 through 2023. But it’s supposed to be this money house, this place of guaranteed safety against the world.
But of course, nothing can be for always.
So when bad things happen, we use our limited tools of language to try and fix everything, which is hard. There are so many miscommunications that thread into our world. We can never really say what we mean. There’s loneliness to that, something that we all carry as we watch the world kiss the flames in front of us for the nth time in so many years. And how do we even begin to talk about it?
How do we begin to address the frustration that comes from these things that just keep happening? From the policy response, which is quick and sometimes measured and sometimes not. From the yells of those with misaligned incentives. From the endless news articles, from the market volatility, from the blur of pixels on the screen as you try to piece together, once again, what is happening and what it means and why why why why why why.
When we live in a state of panic, we end up losing connection to most things, including our own body. It has trouble telling us to get to safety or warn us of something else happening. We end up feeling removed from ourselves. It is hard to brandish a sword every single day.
When you sit down and talk with people, like really really talk to them, you begin to realize that everyone is carrying this sword. The one thing that unites us is our constant defense, the pain that we weaponize to protect ourselves, we all have it. This is not a novel or new or unique revelation, but it’s a good reminder.
Sad things can’t always be explained.
As Paul Aster wrote:
“Impossible, I realize, to enter another’s solitude. If it is true that we can ever come to know another human being, even to a small degree, it is only to the extent that he is willing to make himself known. A man will say: I am cold. Or else he will say nothing, and we will see him shivering. Either way, we will know that he is cold. But what of the man who says nothing and does not shiver? Where all is intractable, here all is hermetic and evasive, one can do no more than observe. But whether one can make sense of what he observes is another matter entirely”
Going back to the haunted house - we all carry so many rooms, so many spaces within us. Some of the rooms are dark. Some of the rooms have beautiful windows, decorated with memories and reminders. Hallways littered with photographs, with trinkets, with invisible footprints, each a reminder of “I am here”.
As Muriel Rukeyser wrote
Say it. Say it. The universe is made of stories, not of atoms.
I don’t know. These things are scary. They are big. It’s important to be there for each other and not scream loudly in search of a few extra dollars of profit. That’s all.
Language shapes our reality, for better or worse. It’s reflexive. It is the world that we all wade into, the trees shaped by words, the lakes a pool of paragraphs. Language is also how we see each other. How we learn of each others pain and vulnerabilities. For as much as it breaks us, it can also connect us.
Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
Gnarly here being quite subjective, in the grand scheme of Terrible Things That Happen, this is not very high at all. However, there is still an element of emotional turmoil that’s important to explore
Important to note that not all homes are stable or safe, but this is more addressing the aggregate