The Constancy of Crisis

Are we living in a continual state of crisis?

Ever since Adam and Eve walked out of that Garden, it seem like we’ve been living in an age of transition. Whether it’s higher energy prices, collapsing housing prices, a global savings glut, or new accounting standards, every time you turn around there’s some sort of crisis both here and just around the corner.

Is it just the media? Does the need to papers turn our news into alarmism? I tend not to think so. Keynes notes that we’re forced to act even when our information and expectations are imperfect. Emotional people acting on imperfect knowledge will make mistakes, some of them zingers. And as the world grows larger and flatter at the same time, more and more mistakes affect more and more of us.

Does that mean we’re doomed to suffer the slings and arrows of outrageous fortune? Sort of. But we can plan ahead and be sure our institutions have enough capital to outlast the next storm and enough humility to return capital to investors when it’s not needed.

Douglas R. Tengdin, CFA
Chief Investment Officer
Leave a comment if you have any questions—I read them all!

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