Harvard Law Grad Burns Diploma

A Harvard Law grad has burned his diploma and has quit the daily grind:

ABA Journal Article

http://adventuresinvoluntarysimplicity.blogspot.com/2008/10/follow-your-dreams.html

His blog is here:

http://adventuresinvoluntarysimplicity.blogspot.com/

I've also learned that there is something seriously wrong with law firm life. I've been blogging for five months now, and I am still surprised by the sheer number of e-mails I receive from other lawyers who are dealing with some of the very same issues I struggle with. I think there is a yearning out there for a way to reconcile the demands of a legal career with other life goals. Many lawyers feel that they have rejected important aspects of themselves in exchange for a life they no longer feel they want to live. They feel trapped because they have to pay a mortgage, student loans, private school tuition, etc. ... but have no idea how to get out.

I think it is important to emphasize that not every lawyer working at a law firm is unhappy. Some of my very best friends have thrived in that environment and are genuinely happy. If you derive genuine, meaningful pleasure from the profession and can overcome all the obstacles that this lifestyle places on your personal life, then you have it made.

Like most things in life, law practice is what you make of it, but there are definitely more workaholics in the legal profession. For me, it's not the practice of law that is problematic, but the 24-7 nature of the job. I feel discombobulated when I am not working because I am afraid I might miss important messages and phone calls; also, being a solo practitioner, it's almost impossible to take two week vacations. I've gone five years now without a two week vacation (and I'm not sure if I've taken any one week vacations, either, except one time when I was best man). I hope to take a two week vacation next year. A friend suggested San Luis Obispo, so I might go there for a simple, relaxing vacation.

Recession Hits Law Firms

Two major SF law firms have shut down:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/31/MNA113S07P.DTL

You know the economy's bad when lawyers can't find work. On the other hand, like most professions, certain subgroups do well even when an overall industry doesn't. For example, bankruptcy lawyers, especially those who can handle Chapter 11s, will have plenty of work. Family lawyers probably aren't worrying too much, either. As for me, a labor and employment attorney, I'm not sure how everything will shake out, but I'm not overly concerned.

It's Dues Paying Time

Carl Haefling has one of the best articles I've seen on the current economic crisis and its potential consequences:

Carl Haefling on Paying Your Dues

The hard lesson learned, and this seems to keep repeating itself, is that in a Capitalistic economy if there is a good idea that creates wealth quickly, it will be identified, copied and mass created until it creates failure. We have seen that happen over and over in the financial markets and with corporations who are successful for a period of time and almost inevitably fail. Demand destruction has effectively ruined Bear Stearns, Lehman Brothers, hundreds if not thousands of mortgage companies, and forced banks and related businesses into merger or bankruptcy. More and more companies will go out of business, the unemployment levels will expand, and there is little that Obama or McCain can do about it. The decisions made by the Bush Administration and the Fed have drastically reduced our choices in funding our financial obligations and the various programs that our citizens have become accustomed to.

It is now dues paying time.

Mr. Haefling also has some choice words for libertarians:

Libertarians for the most part believe that the higher nature of humanity will surface and ultimately allow for a free market to prevail. I believe that is naive at best.

Ouch. I don't think libertarians believe the "higher nature of humanity" will surface in a crisis. It's the other way around, actually. The lower nature of humanity will lead to mistakes, and we have two choices: one, increase government and its interference into our private lives; or two, accept the consequences of our mistakes without burdening those who did not participate in our follies.

NY Predicts 47 Billion Dollar Deficit

NY forecasts a budget deficit of 47 billion dollars over the next four years:

LA Times Article

Over the next four years, New York must confront a budget gap of $47 billion...Projected state budget deficits nationwide are expected to total at least $100 billion by fiscal 2010.

Almost sounds small when compared to 700 billion...almost.

Bill Fleckenstein on the U.S. Dollar

Bill Fleckenstein, a hedge fund manager, hates what we've done to the American dollar and says a weaker dollar won't fix our trade deficit:

http://moneycentral.msn.com/content/P93626.asp

We don't export enough to solve our trade deficit. What we need to do is stop consuming beyond our means and start saving, which is what will be forced upon us eventually.

Bill's Archives:

http://articles.moneycentral.msn.com/Commentary/ByAuthor/BillFleckenstein.aspx

Foreign Debtholders and National Debt

It's one day early, but Happy Halloween. If the above chart doesn't scare you, click on the link below and view the national debt:

http://perotcharts.com/home/

The Big Picture (apologies to Barry Ritholtz)

The stock markets went up substantially today and yesterday because the Fed cut interest rates to 1%. Interest rate cuts usually cheapen a country's currency, lower the available interest rates for CDs and regular savings accounts, and make commodities, like oil, more expensive. Thus, the joy of seeing your stock market gains should be tempered by the fact that in real terms, if you are a saver, your chances of losing to inflation have increased dramatically. One valuable lesson I've learned from the recent turmoil is to increase exposure to commodities if I know the Fed is going to cut interest rates. I had done so indirectly by investing in a Brazilian fund and it is now paying off handsomely--at least today. Who knows what tomorrow will bring? I had also recently invested a small amount in TIP, which may help as a hedge against core inflation.

As for directly saving, I had hoped to buy an ING 4.25% CD, but apparently Washington Mutual (now JP Morgan) places a five day hold on any transfers. The 4.25% offer still exists, and I am hoping ING maintains it, at least until tomorrow, when my transfer money is available.

Call me a young curmudgeon, but all of this strikes me as folly. The reason we got into this mess is because Greenspan lowered interest rates to 1% and held it there for too long, and now, to correct the problem caused by the lower interest rates, we are going to lower interest rates to 1%--the exact same action that got us in trouble in the first place. I can't help but think of the old saying that insanity is doing the same thing over and over again and expecting different results. We better pray Bernanke is good at timing the economy and will raise interest rates as soon as possible. Otherwise, we might be in for another pop in a new bubble five years from now.