I admit to him that I remain afraid of the downside risks given that the world feels very vulnerable. His comeback is reassuring. He reminds me that the world never feels safe, that when you feel safe it’s a mirage, that in mid-2001 folks felt safest in decades and it was right before the worst terrorist attack in American history. He reminds me of our youth where we had regular fall-out shelter drills in case of nuclear attacks. He reminds me of Sputnik and Bay of Pigs and the shock Americans felt after Pearl Harbor. That folks in the U.S. felt isolated from the world’s problems and safe in 1940 until the end of 1941. That in 1987 markets crashed, that in the early 1990s the S&L crisis threatened all financial institutions and drove us into recession, that Mexico almost dragged us down in 1994, that Long-Term Capital Management almost demolished the entire financial system in 1998 and that in 1999 folks predicted the end of the world with Y2K. The year 2001 brought the end
of the tech bubble and in the fall of 2008 we were close to heading into financial catastrophe.