Wall Street Apocalypse: The World of the Doomsday Investors
In the last few years, however, something strange has happened. While there is no lack of survivalists stockpiling cat food and rifles, some of the direst thinkers are now working on Wall Street, where a combination of fear and foresight has many of the country's money men contemplating their escape routes.
Patron Saint of Dire Predictions
The patron saint of the Wall Street apocalypse society may be Barton Biggs. The leader of Traxis Partners, a multibillion-dollar hedge fund, Biggs has gained a reputation for his dire predictions, particularly those of his much-quoted 2008 analysis of World War II, Wealth, War and Wisdom. At the end of the book, Biggs offers his conclusions from his brief study of history, suggesting the likelihood of a future era in which "People with wealth" will face "another time of cholera when the Four Horsemen will ride again and the barbarians unexpectedly will be at their gate."
Biggs offers some interesting advice for hedging the apocalypse. In addition to prescribing a highly diversified portfolio heavily invested in equity instruments, Biggs also advises that his readers buy farms to which they can retreat when the hammer drops. The hedgie touts the joys of the natural life, noting that "landowners seem to find considerable psychic satisfaction just from the knowledge of possession. There are few things as fulfilling as having drink [sic] in the sunset and looking at your fields and cows."
This bucolic perspective seems to owe more to Little House on the Prairie than to any actual experience on Biggs's part. Although the author briefly worked as a schoolteacher and a semiprofessional soccer player, his New York-Yale-Wall Street career track doesn't seem to have left much time for tilling fields and milking cows.
Stock Essentials Like Food, Medicine, Wine...
But this doesn't stop Biggs from telling his readers what they need to do in order to wait out the end of the world: "Your safe haven ... should be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson." He goes on to suggest that, when the post-apocalyptic hordes attack, the survivalist money man should shoot first and ask questions later: "A few rounds over the approaching brigands [sic] heads would probably be a compelling persuader that there are easier farms to pillage. Brigands tend to be cowards."
It's amusing to contemplate Biggsland, where starving gangs of "brigands" can be frightened away by a shot from his boom stick and precious food space can be taken up with wine. For that matter, while it isn't hard to imagine Barton gazing upon his fields and cows, the image of the soft-palmed money man slopping out stalls or picking cabbage stretches the imagination.
Ayn Rand and Jim Rogers
In Biggs's dark suggestion that wealthy people build rural fortresses, he references another popular Wall Street touchstone: Ayn Rand's Atlas Shrugged. Towards the end of the book, as frightened mobs become feral, one of the "looters" runs away: "'[Chick Morrison] has a hideout all stocked for himself in Tennessee,' said Tinky Holloway reflectively, as if he, too, had taken a similar precaution and was now wondering whether the time had come." While Wall Street's objectivists don't see themselves as villains, many seem more than willing to follow the lessons of Rand's demonic bad guys.
Biggs isn't the only one offering visions of impending economic apocalypse. Every so often, Jim Rogers repeats his prediction that America will be rocked by "civil and social unrest" within the next three to five years. Then again, Rogers has long since abandoned his homeland. In 2007, the famed investor sold his New York mansion and relocated to Singapore, stating that "If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York, if you were smart in 2007 you moved to Asia."
However, if Rogers was hoping to escape an impending American meltdown, it seems that he may not have gone far enough away. After a visit to India, he wrote, "India as we know it will not survive another 30 or 40 years. This of course does not have to end in disaster, but it probably will."
Invest in Farmland and Precious Metals
Marc Faber, another doom and gloom prognosticator, is also based in Asia. Famed for his dark perspective, the financial adviser recently suggested that fund managers should invest heavily in farmland and precious metals -- the first, because it provides a safe haven, and the second, because they are portable and liquid. A fan of dark humor, Faber previously advised spending stimulus cash on "prostitutes and beer, as these are the only products still produced in the U.S."
Jokes aside, Faber's prognostications don't seem to have protected him from making some questionable choices. After all, he built offices in Hong Kong and Thailand. The first place was subsequently handed over to Communist China, while the second has recently found itself embroiled in a coup, martial law and violent protests. Faber's followers may want to take his political and real estate advice with a grain of salt.
For some companies, predictions of apocalypse have been good for business: Post Peak Living and Transition United States have both used dark visions to build a compelling business model that can convince the gullible and frightened to fork over cash for useless advice.
As for Biggs and company, their fanciful vision of the future provides an interesting glimpse into the darker corners of the Wall Street id. Whether Biggs's dark predictions are a reflection of his deepest fears or fondest hopes, his unresolved guilt or continuing belief in his own exceptionalism, his advice suggests a world in which exploitative chickens truly come home to roost.