'...pass out on the deck furniture in a puddle of her own urine as fuck.'

Perhaps drunk as fuck?

Once again I enjoyed this clip thoroughly, for 10 minutes I forgot I'm in a cubicle with a view of the scaffolding on city hall. Thanks

PL: Actually, the sentence is supposed to read as it is, but you're correct that it is an unusual construction.

"You could meet a woman there, sure, but she was just as likely to vomit and pass out on the deck furniture in a puddle of her own urine as fuck."

The confusion accrues from the fact that I refrained from using "you" again at the end because I had already used it at the start, leaving the verb "fuck" hanging at the end. I'm not sure my grammar is correct there, but the gist is, "She was as likely to do X as fuck (you)."

Apologies on the awkwardness of it. I like to play with the structure from time to time and sometimes things come out a little less coherent than they could be. It's all in service of keeping a rhythmic flow.

Thanks for the feedback.

I love this series. It rings truer than anything you've ever written. Talking to coworkers is a strange exercise -- I have had the EXACT same thought process as to why I don't really talk to certain people at the office. I'm not even graduated yet, but thankfully the internships I've done have shown me that I need out before I've really gotten in.

Here's to being unable to relate to 95% of the population on any meaningful level.

PL: Thank you, but if I might offer one cautionary note, you'd be surprised how large the five percent you relate to are. A lot of people quietly reach a lot of the same conclusions I've articulated here.

I think the syntax of your Godfather quote is kind of fucked up:

"...If the people we need to do what we need them to do..."

I also found the beginning of this paragraph to be kind of confusing:

"Harris was renting a place in Avalon and he'd invited Bennett and I to spend the weekend. He told us his housemates were friends from high school and technically that was accurate. The only problem was, they weren't his only housemates. The tension in the place was palpable the minute I walked in the door. On one side of the main room were Harris and Bennett, drinking and laughing, watching a videotape of Dolomite on the television next to the fireplace, backs turned away from everybody else. On the other were a group of a people who looked like a missionary group, the males in jorts and sneakers, the women with that female serial killer hair - a cross between Dana Plato's Diff'rent Strokes cut and a shortened version of Mel Gibson's mullet in Braveheart."

So these jort wearers lived there along with him and his friends in high school? The first time I read that paragraph I thought you introduced these people as his friends, but then you go on to say how they had absoltely nothing in common, and I got confused.

And lastly, a Google search for "jorts" displays this as the first hit:

Welcome to Jorts.com | www.Jorts.com
Jorts.com is a place for jorts enthusiests to share their jean short photos and stories.

Huzzah!

PL: Yeah, that sentence in the middle should read "The only problem was, those friends from high school weren't his only housemates."

Again, I skipped over a proper construction to attempt to make the paragraph read more quickly. Good call on the formal grammar.

As to the first sentence, I intended that to read as is and even removed a comma last night to make sure it flowed seamlessly, even if it was a bit of a tongue twister.

Thanks for the critical eye.

Don't apologize!

Tell Greg to learn how to read.

PL: He had a point I could see.

"...If the people we need to do what we need them to do..."

this quote was questioned in an earlier comment, but i loved it. though i admit there were times i had to read some parts a second time, i'd say this post was still very intelligible and equally enjoyable. nice work.

i used to work at a subway restaurant before i left for school. i was there for two years. about two months before it was time for me to take off they fired me insubordinate conduct with the management. at the beginning of my shift, the regional manager came in and told me someone had told him i didn't "care" about this job. told me if i didn't care i should go home now. so i did. the whole way wondering how anyone could possibly care about a job like that.

ironically, i recently learned that he was demoted to manager of one of the smaller stores about two years later. i actually feel kind of bad for the guy.

p.s. what's it like having fans?

PL: I don't think of myself as having "fans." I know it sounds unduly modest to some, but I think of myself as someone who's merely saying what a number of people would like to say and don't or can't. In that regard, I'm just a megaphone with a bit of writing talent. We don't have the discussion about how horribly wrong it is for people to toil at minutiae all day - how inhuman it is - and we should.

"Jeffery'd stopped and I was still running, and they don't make translators to cover the dissonance between those points on the curve."

I just wanted to say that I love this sentence. Carry on.

PL: You just put a Kansas song in my head... You bastard.

Hey Page,

Good stuff.

As feedback, I had no problem with the "just as likely to vomit and pass out on the deck furniture in a puddle of her own urine as fuck. " sentence, and didn't realize it was an issue until I saw the comments.

Enjoying the stuff. I bolted from my desk job a few years ago. Took two years of part-time classes to make the transition, but it's been worth it. Really enjoying your stuff. Been reading since the blogspot.com days, and looking forward to your book.

PL: Thanks, and so am I. Do me a favor, will you? When it's out, tell people to follow the message in it. I'd hate like hell for it to become some silly piece of salacious "reality TV literature" and the point about doing what you want for a living and maximizing the time we have here to be lost in a discussion of its more prurient angles, as celebrated as they may be in the text.

"You can't seriously want this, the life of a flesh and plasma computer - worked to obsolescence, depreciated to zero then shipped off to West Palm Beach for the inevitable 'recycling'."

As I get closer to starting my career, I've been thinking about this a lot. How I'm going to be stuck with this monotony for the rest of my life. Sometimes I imagine making a run for it and never looking back, then I come to and go back to what I was doing.

PL: There is always a Door #2.

"Harris was renting a place in Avalon and he'd invited Bennett and I to spend the weekend."

That should be: "Harris was renting a place in Avalon and he'd invited Bennett and me to spend the weekend."

Harris invited me. Harris invited Bennett. Harris invited Bennett and me.

Can't blame that one on spell check....

PL: No, I can't. That's Gin.

"If you had that kind of power, if you could stop a floor of white collar employees dead and bring them to those considerations well, hell, somebody in charge would have to kill you."

Love it. I've been reading your site for the past year or so, and it's brought an unbelievable amount of clarity to my life to know that I'm not the only one who thinks this way. Good luck to you, sir - I'll be buying your book.

PL: Best of luck to you, and thank you.

Tessio gets taken out in The Godfather, not in Part II.

Maybe it is raised expectations from the excellent Part 2, but this entry was not one of your best. None of the three story lines were developed enough to matter to me as a reader. I feel the best part of your stories are the asides. Although they were good in this entry, they rang hollow. The smoking/drinking tangent in part 2 was great because it was funny, true (there is a reason why we have the term social drinker but not social stoner), and importantly, moved the plot (Otto getting droned and being socially retarded leading to your expulsion from the house). The asides in part 3 were funny and true but failed to move the story lines to a fulfilling consclusion. As a result they felt like jokes without punch lines and lost their effect.

Despite that criticism, I loved the part about being a snob because you will not socialize with your coworkers. Why is it so difficult for people to understand having friends outside the work place? Somehow I am the anti-social loner because I choose to hang out with long time friends rather than join boring coworkers of 6 months for a small dinner party at someone's apartment.

Keep up the good work. I look forward to the book. And for the record Madam's Organ is still open and serving Guinness in a mason jar.

PL: The inherent problem in a story/essay like this is they kind of just fade out... If they know what they're doing, people pass out and it's over at some point. The thrust of this piece has to do with the concept of conclusion, but not exactly as one would normally expect.

On the Tessio thing, nice call. Will fix. For some reason I thought they offed him outside the lake house which was in Part II.

Since everyone's quoting passages...

"'You realize there's no divider on this road.' I didn't want to steal Chris's confidence, but someone had to the end the argument. The combination of the bickering and the horrible Samples album playing on the car stereo was driving me insane. Either was tolerable alone, but working in concert they might as well have been the sound collected by a parabolic mic aimed at a saw mill."

Up until then I was kind of watching from outside, but that passage really grabbed me and put me in the car with you.

PL: The parabolic thing was a moment of inspiration. And I hated the Samples.

As to quotes, here's one of my favorites of all time:

"Well, let's see: First the earth cooled. And, then the dinosaurs came, but they got too big and fat, so they all died, and they turned into oil. And, then the Arabs came and they bought Mercedes Benzes. And, Prince Charles started wearing all of Lady Di's clothes. I couldn't believe it, he took her best summer dress out of the closet, and put it on, and went to town."

Man, the Zuckers could write.

"A better grade of protein, Jeffrey. I needed the fuel for the trip. I was going, leaving - on my way to join the circus. You want to do that sometimes, don't you? Somewhere, on some basic level you barely remember you have..."

This is chilling stuff. I have a few friends applying to law school now and none of them is passionate about the field of law, they just want a safe route to take. You're writing has definitely made me feel better about my decision to look for another way. Can't wait to see how this all comes together.

Just to nitpick, Tessio was killed in the first Godfather.

PL: Somebody beat you to the punch on Tessio. If they'll read it, give your friends this site. Nothing I'd like better than to keep people from a mistake I made. Never, ever go into law unless you absolutely love it. And by "love it" I mean be excited by endless hours of dry as dirt research, tolerating some truly challenging personalities on an almost daily basis and exceptionally long, lonely hours. If you're an extrovert who needs to move around a lot and likes to switch projects all the time never go into law.

Obligatory kiss ass: I love your writing and I'll be buying your book.

But dude, Tessio got whacked in One, not Two.

PL: Thanks, but on the Tessio thing, you're a little late. By the way, don't feel the need to kiss ass. No one should. Just say, "Douchebag, how the fuck could you not realize Tessio was whacked in Part I?" For that egregious an error, I deserve it.

Footnote 1: "Yeah, greed fuels the engine of industry, but the gears are greased with ignorance."

I am really curious about what was Jeff's door # 2? What if Jeff wasn't interesting or funny enough to write like Tucker, or Diablo Cody, or you?

You state, however, that you realize, "[they] all can't run, flail at [their] nagging passions. [They] just have to keep the desire in [their] head, even if it's only subconscious."

I imagine PL that most them do. But at the point where the law can keep them in Avalon, and away from weekend rentals in Wildwood among the "barnies" (boardwalk carnies) and south philly fudgey-wudgey men, maybe your colleagues are just a little less contemptuous than you.

PL: The Door #2 is doing something he likes. I don't know jack for certain, but I've learned one thing the hard way - you will never "succeed" at something you don't enjoy. He's younger. He has the ability to take chances. I can't in good conscience tell him, "play it safe, man... though you're not sure about the career and you're young enough to try something else without any adverse consequences, take the path most followed..." He wouldn't have said what he said if he didn't have doubts. I remember being that person and I decided I wanted to get "the stuff" instead of chasing the career I wanted. I've paid for not having guts when it mattered.

I say when you're young, why not take a chance? We're all one wrong heartbeat or cluster of cancer cells from maggot salad. If you have doubts, work them out before you pick a career track you'll be stuck with for the rest of your life.

By the way, though I appreciate the compliment by association in your second sentence, I'm not in that league. Right now, I'm just a guy with a website. But thanks. And I appreciate your criticism. I actually enjoy having someone take me to task, even lightly. Keep it up.

How do you reccomend someone taking door #2 when saddled with the enormous amount of debt that comes from paying for law school?

PL: You can always restructure debt. In today's market quite liberally. I foresee a future where, due to numerous economic maladies you're seeing in the papers today, there will likely crop up varieties of new vehicles allowing for debt restructuring, particularly in regard to grad school debt such as that taken on to pursue a career in an industry like law, with a future of slowly diminishing returns for all but a very select few.

You'll never be ale to undo the folly of spending $120k on a law degree only to find out you don't like the career or can't make money in it. All you can do is find the career you want and chase it. If you really, really want it and you don't have a family or huge accessory expenses to pay for, I remain a believer that you can find it.

And fuck the people who say "Oh, you're being foolish. Stick with the sure thing. A job's not supposed to be fun." If you take a chance and you fail, you can always go back. You just have to offer the right story. F.Scott Fitzgerald drew our collective national neuroses perfectly in Gatsby, but he couldn't have been more dead wrong when he said there are no second chances in America. They're endless and frankly, the more you explore, the more rounded out you'll be, and what's the better measure of winning in the end but how many things a man has seen, learned and experienced?

You know what drives me craziest about life in general? The fear I'll never have the full balance of time I want to spend with friends and family and see all the things I want to because work considerations will always rule the day. Sure, that's the human condition, but that doesn't mean it's a good one, or something not worth trying to avoid.

The ultimate truth is if I could talk to the person I was years ago I'd have said, "Have some balls. Try for a job in finance and shoot for a bucket of money so maybe, just maybe you can quit and spend the majority of your life experiencing life." Then again, I wouldn't have met my wife but for being a lawyer, so I guess on balance I can't complain.

Nobody got rich - existentially or, for the most part, otherwise - writing his hours in a tablet. You control your debt or it controls you. People get a lot worse diagnoses than "in debt" from doctors every day. They find a way to move forward.

Currently I'm a university student in Australia and I quite enjoy your writings thus far; they resonate deeply with my numerous escapades and bring much joy on my part. Of course I still lament the idea of graduating but your stories have given me some hope in the form that I will still hold on to some of my more hedonistic uni friends to relieve the pain and stress of everyday, working life. I'm an engineering student so admittedly I don't quite relate to your dealings with studying law and it's staunch students, but luckily the engineering guild actively supports drinking much to my luck.

Can't wait for your book release; I've already set aside what little funds I have left, that haven't been poured into cheap beer and wine for this semester, to purchase it.

PL: Thank you. I understand that sacrifice, and it is not small. I hope I can make it worth your while.

Get yer ya yas out as much as you can before you graduate.

PL, I started reading your stories about two years ago. Your ability to take so many people's (not just 5 percent) underlying, yet incommunicable thoughts and illustrating them clearly and creatively, without being overly cynical, has always impressed me. Until recently, however, your writing was basically a temporary getaway - a humorous critique - of my plans/reality of Playing It Safe. I loved your message, like many others, but just couldn't find it in me to apply it to my life. That changed in May; I began chasing my Door No. 2, full-throttle. I still have a year of college left and have the freedom of being only 21, granted, but my life - both this summer and undoubtedly after I graduate - has truly been altered by your writing. Though you're surely not the first to preach the 'Do What You Love' mantra, your style seems more capable of influencing people to bring the message from occasional mind play to Action than anyone else's that I have (or anticipate) coming across.

And yes, jorts are one of the irrefutable sins of our time.
http://www.kniese.id.au/images/jokes/KingMullet.jpg

PL: Piece of advice, if I may... Don't listen to the pragmatists. Your view - not theirs or mine - is the right one. Best of luck.

My style is simple. I'm saying what people are thinking.

I've read everything you've posted on this blog and am among the ranks of those eagerly awaiting the release of your book. Your outspoken tales of sometimes-not-so-quiet desperation strike a chord with me, although as a law student, I realize that I've seen just the beginning of the whole process. My hope is that in another ten or twenty years, the part of me that shares your sentiments won't be dead.

I'm spurred to comment now because of a minor nitpick that I'd initially chosen to ignore, but have instead chosen to mention because the passage containing the relevant sentence has already been put at issue by a previous commenter: "Harris was renting a place in Avalon and he'd invited Bennett and I to spend the weekend."

It should be "Bennett and me."

I justify the mention of this nitpick based on you being a professional writer who presumably cares about these things, and that's about the most constructive sort of comment I can make. Content-wise, your writing is well beyond my ability to criticize.

Looking forward, as ever, to the next update.

PL: I appreciate the criticism and technically you are right. However, because as my editor and I recently noticed, this mistake is an accidental homage (however subtle) to a legendary piece of literature related to the subject matter of the piece, we've decided to leave it as is.

My editor thinks it might have been subconscious. I'm undecided on that, considering I haven't read the book at issue in a long, long time.

By the way, as you wished, I yanked your second, later comment noting that the mistake you spotted had previously been flagged. I figured I'd already written so much in the response to this one, well, why waste it? I'm a windbag like that.

i actually commented a little earlier, asking what it's like to have fans. i know you consider yourself to be just like the rest of us: trapped in a world of obligations and pleasantries. well, you are, but you're certainly not just like the rest of us and surely you must agree you do have fans. i mean, i check your blog every day (even when i'm pretty sure there won't be an update) just to see what philalawyer had to say about his week in the office or hear a story from his rambunctious college days.

i don't think your relation to the common man or the fact that you are merely echoing the thoughts we are all thinking between nine and five necessarily means you are not worthy of (or receive, for that matter) praise from an adoring public. you write well, you present thoughts and stories to us that reminds us of our own lives in an entertaining fashion. we ARE your fans. some of us even ask for and (at least try to) follow your advice.

anyways, this wasn't so much meant to be a brown-nosed piece as it was an acknowledgment of the reality of things. anyways, keep up the good work! can't wait for the book.

PL: Thanks. I am flattered, considerably, and wasn't trying to brush off your compliment earlier. As to advice, what ideas I can provide are great, but as a long time reader, you know my strongest suggestion - in the end, always think for yourself. I think our country's on the verge of a national nervous breakdown because we're confused, listening to too much biased, second rate media and wanting some bubble or self help tome to guide us out of the mess. Seems a rebellious idea to make your own decisions these days, or even have independent thoughts... "I didn't know the loan papers said my rate would go up! I've been hoodwinked!" "Barack Obama is a Muslim, I tell you. Heard it on the news." "Katie Couric says I might have ass cancer, and Michael Savage says autistic kids are just faking it. I'm so fucking confused..."

Look at the disasters sitting in Dr. Phil's studio every day, people buying "The Secret" or the loons into those "Left Behind" books about The Rapture (an utterly fictitious pile of nonsense made up by a terminally drunk and I think defrocked Irish priest in the 19th century).

We have a Museum of Creationism in this country where exhibits show paying visitors - most of whom, sadly, are not rubberneckers going for macabre laughs - how man lived with dinosaurs. We have people who believe a presidential candidate's "fist bump" with his wife is a secret terrorist signal on one side and a pack of shrill Socialists with the politics of fifteen year olds on the other. Our Justice Department just wasted hundreds of thousands of dollars to indict a geriatric senator for false statements and nobody - nobody - is spending jack to find out which short sellers spread the rumors that crushed Bear Stearns. We have no energy policy, no saving bubble on the horizon and the only thing Joe Sixpack can cry for over and over is universal health care.

Who's going to pay for that? It's not going to be free, and it's not going to be cheaper. Will Bernanke open the overnight window on extended terms to the new bureaucratic leviathan running that fiasco when it goes three times over budget? Why not, right?

A lot of this nation should be required to submit to a basic intelligence test before they're allowed to vote this fall. Nothing crazy - just a few questions to know they're running an IQ in the triple digits. Or at least the high twos.

Wow, that last comment was phenomenal. I think that should be the updated Platform 2008

PL: I'll do another piece like Platform before the election.

Morrison once said, "Each generation wants new symbols, new people, new names. They want to divorce themselves from their predecessors." Your social commentary truly captures this generation. I've been reading your work for some time now and you have not seemed to hit the point of diminishing returns. Your work is always crisp and hilarious, better than any contemporary writer around (in my opinion).

PL: When I was back in seminary school there was a person there who said you could petition the lord with prayer... Petition the lord with prayer.

You cannot petition the lord with prayer.

But you can write a shitload of amusing truths out of all the silliness and posturing in the systems around us.

PL,

I have been reading your blog for a while now but this is my first post. I'm about to enter my last year at a school where creating a smooth path to white collar slavery seems to be their end goal. It is refreshing to see that my inability to find the fun in being trapped in a cubicle all summer doing meaningless work, isn't too bad of a problem.

Although I am younger then you, I relate in many ways to your writing. It is nice seeing a lot of my feelings and thoughts reinforced by the message in your work. I can't wait to get my hands on the book, a twelve pack, and some free time. I just hope people find the real meaning of your writing and don't try to pass if off as simply another drunk frat guy talking about sex and drugs.

Thanks for everything and best of luck.

PL: So do I. So do I. Sadly, that might not be the case. But for those who get it, the endeavor is worth it.

I've been reading your site since before you became part of the Rudius network and I really look forward to your posts. Furthermore, while I feel that I'm part of the world that you lament, I also believe that some of the criticisms we share are due to time spent in Philadelphia (a city that I love).

I believe that Philly, for whatever reason, breads a species of hyper-jerk, who because they've become part of the system, thinks that they're entitled to be an asshole. The type of person that I'm referring to wears blue shirts with white collars, leases his 3-series BMW, tries to pick-up secretaries at the Capital Grill on Broad Street, and wants nothing more than to be mentioned in the "Society" section of Philadelphia Magazine.

The simple fact that I've been able to separate myself (I now work in finance in NYC) from THAT species has given me great comfort. Via grad school and a new job, I believe that I have stepped away from the social structure that you, and I, find so appalling. I still have visions of fleeing to St. Thomas once I've accumulated the necessary asset base, but life with my fiancé no longer seems so finite. I have seen the 3am darkness, and my reflection in the mirror is the manifestation of my inner self; the faceless, dark profile of my subconscious and my outward facade are in agreement. Happiness can be found in routine, so long as you believe that your movements are meaningful.

Well, what I wanted to say, 300 words ago, was that I love your writing and that I cannot wait for you book. The line, "Who's still alive inside? Raise a hand" , conjures a beautiful image. I see a high school teacher, 15 years later, talking to her class, which now consists of doctors, lawyers, housewives, homemakers, and mechanics, with only the class clown, who's still in his Hawaiian shirt, raising his hand.

P.S. I have to point out that Bear Sterns was crushed because they invested in securities that no one else currently believes have value; they were the "greatest fool" in the market. Their demise is the result of leveraging themselves 30X and then having no way to pay back their creditors, not some change in accounting practice due to rumors.

PL: Your description is spot-on. Philly is a good town, but a lot of people there have an aggression that stems from some neuroses I don't want to understand. I think that pathology and a certain narrowness of view accruing from geographic isolation breeds the people you describe. Really its more a Pennsylvania thing than anything. The state has no identity and is torn between the start of the Midwest and New York and DC sandwiching it on the East. There's an absence of significance to it, a notion its something to drive through and not much else.

I've practiced a lot with lawyers in New York and New Jersey and don't find as much of the "fight, fight, fight" attitude you get in Philly. It's not a bad thing when you're young and you think it's cool to have people threatening you all day long but it gets old real quick.

As I've said before, the town gave me my wife so I'm forever indebted to it, but I have never felt connected to the legal community in it - which is about half of its industrial base right now - and that was by design, and a good thing. It's a hard place to be a reasonable person. The endemic grifter's mentality that permeates the litigation culture there can drive a person mad. I never understood why so many there need to fight all the time. Life's too short.

An odd side note in response to your comment, something I'll write about in greater detail later... I have also looked in the mirror and realized the fault of not enjoying my career lies with me as much as the job. You're right one can find fulfillment in the routine, but I think going forward, to the extent I remain in any routine, I am going to find it by trying to make people's lives better. To help them avoid the ugliness and shystering of the legal process. There's a business model out there counseling people on how to watchdog lawyers and cut costs and shelter their assets from the personal injury vultures.... How to settle disputes like humans and not engage advocates to lie for them. I may be naive in that thinking, but I feel there's a niche there somewhere and as you can see from my writing, I know the holes in most lawyers' arguments. It's not enough to write a book about fucking, drinking and getting loaded while avoiding a horrid daily routine. What better way to benefit society than to help it marginalize all the bad lawyers out there?

AS to Bear Stearns, I don't know as much about it as you do, but didn't they have something like $18 billion on hand when they went down? I thought they got crushed because the liquidity rumors caused a bunch of lenders to cut them off en masse. Granted, you are correct that ultimately they'd have a major problem because of the fundamental unsoundness of what they were holding, but these meltdowns are all a matter of timing and cash flow, aren't they? They could have lived to see a different bailout a quarter or two later, couldn't they?

"Have some balls. Try for a job in finance and shoot for a bucket of money so maybe, just maybe you can quit and spend the majority of your life experiencing life."

That's funny you should say that because that is exactly what I did. I took a risk and chose to goto Europe straight out of Uni this year, to take on a role at a trading firm and it is the best decision that I ever made. I find it fun, its challenging, there is none of the politics, bureaucracy and paper-pushing of the type you describe in law, all I have to do is do what I enjoy and trade. Oh, and I don't have to wear a suit either.

Spending the last couple of years following a lot of what you and Tucker had to say adds up to a lot of what made me comfortable with my decision. I look forward to reading your book when it is released.

I think you are right about Bear Stearns by the way. There were too many rumours floating around regarding the firm before they collapsed to think that it was anything but premeditated.

PL: Thanks. That something I wrote contributed to a decision that made someone happy in what they are doing makes the endeavor worthwhile on an very important level.

I don't know if I ever had the technical mind for finance, but I wish I'd tried. The damn writing and speaking ability pushed me into law. Those are cheap skills. If I could go back twenty years I'd slap that asshole kid who cheated on his science tests and skirted through math classes and tell him to pay attention. Numbers are everything in this world. And being fast with them at 22 is ten times more valuable than being a quick tongue at 30, however self aware you might be. But then, there are as many second chances in this life as their are explanations, so who knows? Maybe I'll wind up in finance someday. Never say never.

Oddly, one of the best codifications of the evidence of nefarious conduct by short sellers is a Vanity Fair piece from one or two months ago. I recall being at the gym one day running and seeing this asshole on CNBC saying that Bear Stearns was going out of business. The comment was totally ridiculous. He offered nothing except vague allusions to the company's inability to develop "new forms of revenue." I thought it sounded like gonzo financial hyperbole and paid it little mind and kept running. Low and behold, a week or so later Bear is all but dead in the water. And then come all the stories about how vacant comments like his started the ball rolling. Amazing, really. The VF piece goes through the meltdown in much finer and more accurate detail. It's really a cool piece of journalism. Somebody needs to write a book on that disaster. You could almost do it in real time, with a chapter devoted to a four or five hour block of time for each incident that helped to drive the bus off the cliff.

By the way, are we in the eye of the hurricane in the credit crisis or actually coming through it? The rumblings about the men in black suits readying to take over a certain enormous bank or banks haven't let up yet. I think there's an enormous soft spot in the jumbo mortgage market that hasn't fully hit yet but I'm just a layman. If you have an opinion I'd be interested to hear it.

Your point about Bear Sterns and Cash Flow is correct; they ran out of money because they lost their credit lines. This happened because of my earlier point, which was that they had invested their assets poorly, which 1) eroded their capital base, and 2) caused their customers, most notably the hedge funds who used their prime brokerage service, to move their assets elsewhere. Point two was likely the most devastating because it eliminated a major future revenue stream, which was perhaps the reason the banks finally shut off the faucet...Now that I think about it, I guess we're both right.

If Bear Sterns had been able to hold out for all of three more days, they may have survived. JP Morgan was brought in because Bear simply didn't have the cash to holdout 72 hours. JP offered $2 per share (became $10) because they couldn't offer $0. In the end, they got a great building in Mid-town Manhattan and Bear's prime brokerage business, which JPM consolidated with the shop it bought from BofA not too long before.

I too hope that someone writes a book about this, like we got from Enron and RJR Nabisco.

As for the current credit crisis, I think there is going to be more bad news...perhaps a lot of it. Citi still has $25 billion in potential write-downs and both Lehman and UBS could be in serious trouble. The good news is that as I walk the streets of New York, I hear a lot of European accents and languages. This tells me that the strong Euro is being spent here in the U.S. and I believe that the main reason we won't go into a recession is that currency fluctuations have made American goods (and vacations) affordable and desirable. Additionally, my employer (a large bank) is still lending money for deals, so the debt markets are not as dead as some may believe.

PL: Oh, there will be books... I predict you'll see some from some of the biggest investigative journalists in the country. It's really an amazing scandal and outlines the precarious position of some of these entities in the current market - how they're standing on a cliff at all times with wild gains inches away and the ultimate Black Swan nipping at their feet.

But the real book ought to address how people as bright as O'Neil, Prince and Cayne were hoodwinked by their own people. The guys packaging the mortgage-backed stuff knew it was shit and were just riding the wave, grabbing all they could and hoping to get enough to be set before the cash train stopped. And beyond that fundamental weakness you also had a bunch of brilliant minds and all their risk hedging models getting totally taken by a pile of unscrupulous mortgage brokers and crazy lenders like Golden West and Countrywide. Mortgage brokers made a killing in the run-up and were on the front lines. They knew these liars loans were a bomb waiting to go off and they kept setting them up as fast as they could find suckers on both sides of the transaction willing to sign the papers. How didn't the decision makers on Wall Street know this? I knew it just seeing how lax the due diligence had become and I'm a layman merely observing the process. It never occurred to anyone on Wall Street that the game of musical chairs was going to end? That yes, one has to play along with the bubble to make money, but that maybe, just maybe, it's not a good idea to go in whole hog, betting it all on the notion that a model can be followed minimizing risk in what's clearly a house of cards market? Are the people near the top that disconnected from reality? Or were they so badly bullshitted by their subordinates who packaged these securities that they didn't see what everyone else in the country who wasn't stupid enough to grab an ARM knew was a nuclear meltdown coming down the road?

How? How the fuck did so many people think the housing market was a perpetual motion machine? I'm baffled. It's not simple mob-think. There's a queer suspension of disbelief here I'm lost for words to describe. Perhaps you can.

Jimmy Cayne...I'd say that he's a modern day George Custard, but that would be a disservice; General Custard was at least at the battle. Jimmy Cayne spent most of his time last summer either golfing or playing bridge. He also gave his assistant specific instructions that he was not to be contacted - this was during a major credit crisis. I don't know whether it was arrogance, ignorance or indifference, but Cayne's lack of leadership certainly played a part in the collapse of Bear Sterns.

As for the credit meltdown, I believe that it was very similar to the technology bubble of the 1990s, the junk-bond meltdown of the 80s or the tulip bulb market of the 1600s. No one believed that there was a ceiling. Home flippers believed that they would be able to sell before their ARMs adjusted; traders never thought they'd have to hold their positions and professional investors believed that since they bought these securities in batches, there was no way enough loans would default where it would significantly impact that value of their portfolios. Of course, there were many people who were ignorant about the terms of their loan. I attribute this to the fact that the amount of credit that average American carries has ballooned in the past 20 years, which has made Americans, on a whole, less sensitive to the stigma of bankruptcy. All-the-while, the notion of homeownership has increased in prestige; so, when someone offered an Administrative Assistant $500k to buy his/her dream home, he/she simply said "I deserve this."

At Bear, I believe it was the portfolio theory that did them in. Whoever was the Credit Risk Manager (a VERY senior person) simply chose to believe his traders/financial models, which said that failure was a .001% chance. This is the same thinking that brought down Long-Term Capital in the late 90s. Additionally, the senior folks at Bear, presumably not including Jimmy Cayne, decided to increase their bets at the outset of trouble by putting more money into their troubled hedge funds. One problem with this was that they failed to tell the man ultimately in charge of managing the funds, Chief Investment Officer Rich Marin. He simply wasn't able to anticipate why or how things would get worse and couldn't unwind the positions fast enough.

I estimate that in my lifetime, which hopefully spans at least another 40 years, we'll see another 3 "once-in-a-lifetime" events that disrupt the market. The mob rules the market. Whenever you get a group of highly educated individuals together, who collectively think they're too smart to be wrong (a.k.a. Wall Street), you can get drastically inflated values. This time, Bear Sterns went down; in the 90s it was LTC; in the 80s Mike Milken and Drexel. It will happen again (I believe we're seeing this in Oil right now, but that's a different discussion).

Whenever you hear of a famous financier paying an outrageous amount for something, such as Jimmy Cayne buying a mega-penthouse in The Plaza last July, listen for the sound of a bubble bursting.

PL: A friend was telling me yesterday just how many trades are automated - made entirely by computer models - these days. That's truly frightening. The amount of reliance placed in notion that all swings of something as irrational as a market can be reduced to math is astonishing. You can never replace the actual hands on research of digging into businesses, examining the players, their roles and the deconstructing the pieces. Would you buy a business purely on numbers? Can anyone evaluate anything purely on numbers? I'm sure many people would say "absolutely" and some would be right in certain instances, but then I look at the contrarian bets made against the housing market and their spectacular returns and think, "There were some guys who were really reading the details."

I wonder if Cayne and Schwartz doubled down on those funds just to look strong for the the street.

I don't fault Cayne exactly because he was getting baked and playing gin at the time (wonderfully enjoyable complimentary activities, BTW), but Bear's upper management, all of whom were "men from the street" sorts, should have seen that this housing market was a joke.

I may have asked this before, and I apologize if I am being redundant, but do you think Wachovia is going under? It's looking like that is a real likelihood before year's end. Any opinion?

Automated trading dwarfs manual execution. Hedge Funds have the capacity to move into and out of positions in less than the amount of time it take someone to click a mouse. Some Hedge Funds entire strategies are designed around being the fastest guns on The Street; they even choose their offices based on proximity to Internet routers.

As you point out, they're not doing real research into the stocks they buy. This is because they do not look at their transactions as buying a piece of a business; the Hedge Funds have zero interest in the fundamentals. Their decisions are being made based on where the quant model says the stock will be in .00001 seconds. Telling quantitative Hedge Funds that a company's EBITDA has improved 12% over the past four years and that a new international opportunity just opened up is a waste of air. If computer trading truly proves to be a major issue, the exchanges simply have to say that if you buy a security you can't sell it for 15 minutes.

I personally do not believe quant trading is a problem. Regulations are already in place that prohibit electronic trading if certain events occur, such as a dramatic market decline. Additionally, for each sale, there must be both a buyer and a seller; so, the quant models are mostly trading with each other. It's still a zero-sum game.

Wachovia - interesting question. If the Fed got involved with Bear Sterns and Countrywide, they would certainly step-in for Wachovia. More likely, I'd guess that another firm buys WB. One good hypothesis is that Goldman Sachs buys them so they have the option of using the universal banking model (an investment bank combined with a huge balance sheet). The notion of GS with $650 Billion with which to finance deals is interesting, to say the least.

PL: True, but the problem with the quant model is it's actually nothing more than exploitation of the electronic ability execute transactions in the thinnest slice of time. Timing's of course the most important issue in buying and selling anything, but on a basic, simple level - removed from consideration of the necessarily amoral nature of all of what Wall Street does - you're effectively turning the business of trading into a set of ruthless algorithms that make increasingly larger and larger sums of money for fewer and fewer people while simultaneously changing the perception of the business from one where people made bets on a broad array of fundamentals. For a lack of a better analogy, what you've described sounds a lot like supercomputers making millions of off-track bets a minute on every race at every dog track on the planet. It takes a business many assume involved careful scrutiny of numerous elements of various industries and companies and turns it into a pure statistical math game. I don't think there's anything wrong with doing that. In fact, I applaud those who find new ways to beat amazing dollars out of any market. But as that becomes more of the norm, I can't help thinking we're going to see more of the debacles we saw in the mortgage backed securities market. Math can do a lot, but it's not much for hedging against the irrational and malevolent.

It'll be interesting to see how the credit card factors have hedged against the tornado of defaults headed in their direction in twelve months (I assume a jumbo mortgage crisis, more home equity freezes and massive auto defaults over the next nine months, after which consumers will exhaust their last line line of financing - credit cards). It will be interesting to see how their models hold up.

I wonder if regulators are already pushing Wachovia to start selling off pieces.