Everybody in the pool

You wanted a financial system that works for everyone? You got it.

Hello and welcome back to Late, a newsletter about whatever trends, ideas, stories, or complaints I haven’t stopped thinking about.

If someone sent this your way or you found this letter through Twitter or other channels, make sure you sign up below so you never miss an issue. We publish each Sunday.

Last Sunday’s unpublished newsletter was all about the stock that ended up being this week’s big story.

We decided not to send it out for a few reasons, not the least of which was a sense that the story had barely begun.

And so here we are.


Events in markets of late have been strange. 

Accompanying these odd times has been a certain amount of religiosity that is hard to ignore, both this past week and in others

In Homeland Elegies, Ayad Akhtar writes:

...there was no way to turn back the tide of what had begun in the 80s. Our ideas had changed. Yes, money had always been central to notions of American vitality, but now it reigned as our supreme defining value. It was no longer just the purpose of our toil but also our sport and pastime… 

The market had seeped into our language; we sought upside and minimized our exposure and worried about the best investment of our sweat equity. Even suffrage was monetized, true political power lying not in the ballot box but in one’s capacity to write a check. We were now customers first and foremost, not citizens, and to buy was our privileged act. No longer ruled by a personified abstraction, Zeus or Yahweh, we now appeased a material one: the Economy. We feared its humors; we were grateful for its dispensations; we tended to its imagined well-being with our ritual purchases. When the Economy was well, we were a happy people; when the Economy faltered, premonitions of doom were never far. (pp. 240)

A guiding line of inquiry for this newsletter is that everyone knows everything and anyone can know anything.

And this past week’s events show the public — “everyone” — knows what Akhtar writes is true — The Economy is all there really is.

The American myth has had many lives and will have many more. But today’s foundation is The Economy, a sharpened faith that the pursuit of wealth is the main project of citizenship today, the means to an end that never arrives. The main event in modern life is the accumulation of financial matériel to solidify one’s place in a society that empowers and rewards consumption above all. 

Jeff Bezos, the world’s richest man, is famously quoted as saying his competitors’ margins were his opportunity. Because it isn’t the production of a good or service but the wedging of oneself between those with goods or services to sell and those ready to consume them where The Economy’s most potent rewards are harvested. The real opportunity, in other words, is derivative, a claim on the work of someone else. 

This past week’s main character, Keith Gill, has enjoyed a remarkable increase in his personal net worth as the result of hard work and patience on an investment idea. Of course, buying and selling stocks is itself a derivative play on real businesses with real employees selling real goods and services. Let us exercise restraint with the hero’s narrative. There is also no doubt: Gill will pay dearly for this success. The derivative plays on what the public incorrectly believes Gill accomplished last week will force him to answer for the sins of others.

But what The Economy teaches and rewards, what “everyone knows,” is the lesson taught by Jeff Bezos, not the example set by Keith Gill. The Economy demands from its followers accumulation. Derivatives offer leverage. What is Aggregation Theory if not an answer to The Economy’s call for more, faster?

Martijn Konings writes that, “failure can just mean failure pure and simple, sheer disintegration. But in modern capitalism it often enough doesn’t: once a bank has positioned itself as a key part of the infrastructure of social life at large, its failure or merely the threat of it will activate forces that seek to secure it… To say that leverage allows financial institutions to expose society to the risk they take on means that they are in a position to shift risk away from themselves and onto others.” 

The claim that everyone knows everything speaks as much about the particulars of an issue as it does the structures that frame things we might agree are True. And what’s True today is that The Economy matters first, second, and third. Everyone can see it, everyone knows it.

As Konings argues, capitalism is designed prevent dissociation, is designed to make impossible the ability to live a so-called Real Life while being unaware of the ebbs and flows of The Economy. And every crisis, every drama, makes fuller the presence of this force within our lived realities.

Which is why it seems this week’s events captivated and ensnared us all, why the whole deal seemed to demand our attention despite its clear lack of import or relevance to what we might consider Real Life. The synthetic change in the value of a few stocks and the spreadsheet-induced stress at businesses already embedded in the financial system does not have meaning, does not teach a lesson. It is simply a thing that exists.

The divergent priors of those who so quickly rallied to the ball at the height of this week’s mania reveals the episode as little more than a grifters paradise, a spontaneously formed archipelago of mutual opportunism in a sea of disparate special interests. The whole thing stinks to high heaven.

And yet there also seems to be some there there, some kind of higher meaning to be called out from call options, a squeeze not in vain but as power for, of, and by the people. I think it is okay to believe that grand visions of “common man empowerment” are deluded while accepting that the public’s fascination with financial oddities is the result The Economy demands.

“In this era of capital’s unquestioned amoral supremacy,” Akhtar writes, “the only course-correcting moments of clarity — what passes for comeuppance, that is — are drops in stock price.” (pp. 171) 

These lines tell the story of the past week, but inverted. The celebration and frenzy was not so much of or about The Economy, per se, but of the possibility that our common god appeared to present. A possibility that Konings is wrong about The Economy’s demand for a leveraged pound of flesh from all followers, that the weight of institutional expansion we feel pressing down on all of us could be lifted by a sheer force of popular will. 

The details make clear, of course, that no conclusion could be more wrong. As veb notes, there is no excuse for the lack of interest in what has really gone down. There are rules and they were followed. And this whole thing will unwind along those lines.

After all, anyone can know anything; the excuse for not knowing rests with you alone. 

In a recent interview, Akhtar said, “In some cases, as with finance, people seem to be starting to catch up to understanding how important these systems are to our lives, and they're trying to find ways to tell stories about them. But it's going to take some time before we get a story that really cracks it for the wider audience and gets them to really understand how much people's lives are being determined by interest rates, say.” 

This week was perhaps a start. Flares went up that The Economy was experiencing an Event: our god had been disturbed.

That the energy released this week fizzled into a familiar pattern of misinformation presented alongside regulated facts about financial market infrastructure should be of little surprise. Popular misconceptions exploited by overlawyered vested interests is a core commandment of The Economy’s teachings. 

And we remain open to the possibility that this week’s events come and go meaning nothing, teaching no lessons, the detritus of a period in which ample time met ample capital for a brief, anomalous moment in modern American history. This might even be the most likely outcome. It is no doubt tempting to write off this event as unimportant when so many unholy alliances were forged on an issue that remains so deeply misrepresented. 

But it should not pass without remark that this week revealed a public understanding that The Economy is all there is, or at least all there seems to be.

The quote that begins this piece is not said by Akhtar’s narrator, but is relayed by a financier with whom his narrator develops a close relationship. A man raised as an immigrant in Scranton who later becomes a New York financier with a townhouse looking out on the East River. These lines are delivered not with affirmation but resignation. Relayed as the cynical truth about his homeland our narrator hasn’t yet been able to see. 

It’s not clear to me, however, that we are resigned to that same cynical knowing. 

Because while the conspiracy of intra-firm coordination that took off this week is plainly not true, it is true that markets are adept at coordinating seemingly unrelated energies to a common cause. And it’s true that just about anyone can get involved. 

It’s still a free country, right?