We had the book mostly done by mid-August. The one thing we had the most problem with was the title. Non-fiction books like this need two titles, a main title to catch people’s attention, and the sub-title to tell what the book was really about. You know, like Horny Sluts In Action: The Effect Of Birth Control On American Economic Productivity. Nobody pays attention to productivity; everybody pays attention to horny sluts. (Okay, that might be a little extreme, but not by much!) Our sub-title was pretty straight forward, America’s Crumbling Infrastructure And the Need To Rebuild It. What we needed now was something in the way of a title, and both Harry and I kept coming up with a blank.
First we tried The Coming Crisis, next came The Coming Collapse, then we were stumped for a bit, and went back to Crisis, and then on to The Looming Disaster. That one lasted a week before we both decided it really sucked. By that point it seemed like the real looming disaster was the book. Simon and Schuster sent back a first draft with more red edits than book. Fortunately, most of the red simply required us to move things around some and cut and paste some sections.
And then it became easy, because the publishing house named it. Our agent/editor went through the second draft and found it acceptable, and used something from the prologue.
Eat your peas!
That’s what you were told when you were little. Eat your peas and you’ll grow up big and strong. Maybe it was your Mom who told you, or your grandmother, or maybe Aunt Tilly, but they all told you to eat your peas. If it wasn’t your peas, it was your corn or your carrots or your green beans. Whatever it was, you had to eat it so that you would become big and strong.
Needless to say, you didn’t want to! That stuff was yucky! It was a weird color and tasted bad and was mushy. You weren’t going to eat it! They couldn’t make you! No! No! No!
What you really wanted to do was eat dessert. Dessert was fun! Dessert tasted good! Dessert three times a day was a great idea!
It didn’t quite work out that way. Mom or Granny or Aunt Tilly made you eat your vegetables — or else! No dessert unless your plate was clean. You might sneak a green bean to the dog occasionally, but they usually caught you and made you eat two for every one you dumped on the floor. Eventually you got to dessert.
At some point you grew up. By your teens you realized that vegetables could actually be tasty, and you knew they were good for you, and you were mature enough to work your way through them. Mom and Granny and Aunt Tilly no longer had to yell at you and could pass along their wisdom to your younger brother or sister.
Infrastructure is a lot like the vegetables at dinner. Nobody wants to eat them, but you have to, because they’ll make you big and strong. Everybody wants dessert, the fun stuff we do with our money — lowering taxes and raising benefits. The difference is that even though as adults we know to eat our vegetables at the dinner table, we don’t always know this the rest of the time. At home you know that if you only eat dessert, sooner or later your teeth will fall out and you’ll get weak and flabby and eventually you’ll get sick. It’s the same with infrastructure, the roads and bridges, the sewers and water treatment plants. If you ignore them, sooner or later a nation gets weak and sick.
So read this book and eat your peas! You’ll grow up big and strong!
So the book was titled Eat Your Peas! America’s Crumbling Infrastructure And the Need To Rebuild It. We sent our final draft, along with everything on diskette, to Simon and Schuster, and after it was accepted, Harry and I took our wives out to dinner in the Inner Harbor. We felt both exhausted and exhilarated. I had never done anything like this before, and neither had Harry.
It turned out that the next step involved printing and publishing, none of which either of us had to do anything with. We didn’t even have to find anybody to do a review of the book, so they could come up with the blurbs on the back cover. Simon and Schuster had some tame celebrities to do that. I mentioned to Harry that we would probably get tapped for that in the future on somebody else’s book. He just shrugged and nodded agreement. The cover art work involved a dinner plate full of peas and a fork. There would probably be a book tour in the late fall, but what that would involve nobody was sure.
In the meantime, I needed to make some money! Some serious money! We were on the verge of the biggest market ripple since the start of the bull market in 1982. Now, five years in, the market was about to take a serious nosedive, a major dump that would be called Black Monday. The problem was that I wasn’t sure when it would happen! All I remembered was the name, Black Monday, so I was reasonably sure it would happen at the beginning of the week, and that it had been in the fall.
So, what to do about it? First off, come up with a believable cover story! This wasn’t me betting big on silver or oil all on my lonesome. I now had a major operation watching me. Throughout the spring I had been commenting to some of the others, especially those involved in trading operations, that the market was getting overheated, that a correction was due. By the summer I was saying it louder, and in July I had Missy, Jake Junior, and our trading team sit down with me one evening and we developed a few strategies.
What happens if the market tanks? How much warning might we get? What do we do about it? With our money? With our clients’ money? What do we do after it tanks and we’ve hit bottom? We outlined some scenarios and I started paying close attention to the market. I knew it would be in the fall, but to me that meant September, October, or November. That’s a pretty big window.
It happened in mid-October, the 19th, and the trading team picked it up overseas first. The Hong Kong market collapsed first, followed almost immediately by Australia and New Zealand. The turmoil moved westward, smacking London and the other European markets next, before hopping the Atlantic and pummeling the U.S. On the plus side, American markets and exchanges had the most warning, and we were hurt least of all. Hong Kong lost over 45 % on their market, and the effects mitigated slightly as the tidal wave went westward. The American market, reflected in the Dow, only lost 22 %, a still horrendous blow.
Why did it collapse? Who knows why, but the fact was that after five straight years of stellar returns, something was bound to happen. The market had grown softer, certainly since the springtime, and was getting nervous. The American Navy was trading shots in the Persian Gulf with the Iranians for a few days already, and that had the energy markets spooked. There was some profit taking, some general correction to the market, and the automated trading programs went crazy, overreacting and forcing the rest of the system to overreact.
The Buckman Group did well, however. My motto is that there is just as much money to be made on the downside as there is on the upside. What made the difference was that everybody else only suspected a problem, and I knew it for a fact. It made our reflexes much faster. Missy and the trading team worked up some strategies to both take some profits and short some stocks when I called a ‘Code Red’. Then, when the market bottomed out, we could flip the switch, call a ‘Code Green’, and cover our positions and catch the rise. Another factor was that this wasn’t a long lived blip. The market would generally keep rising through the rest of the decade and right to the end of the ’90s.