Last week, we shared Eric Hazard’s recollection of a phone call that signaled the beginning of the credit default, and the financial crisis. Today and Wednesday, we share more stories from our colleagues.
In Vegas, it was disquieting
Binna Kim, President
I remember being at the American Securitization Forum in Vegas, which at the time was THE industry conference for derivatives like mortgage-backed securities. I’d been also the year before, a year when money was still flowing despite the cracks in the housing market and the lines at the casino’s tables were a foot deep with traders (the hubbub of which was a scene in “The Big Short”). I remember that year strolling around the casino with an editor at The Economist and his absolute shock at the picture of this eerily profitable derivatives market and these traders going wild at the craps tables, a story which he wrote not long after.
In February 2008, the conference was like a graveyard, somber and quiet. Countrywide had failed and news began to spread around the conference that Bear Stearns was going to be sold. The sign? The Bear Stearns booth was practically empty – and people were grabbing Bear Stearns beanie babies out of the box as they walked by, perhaps predicting these would truly be a vintage item one day.
I remember feeling so much disquiet – that all of these people had been involved in creating and selling these CDOs without thought, making millions of dollars – and that maybe it was finally time to get this damn conference out of Vegas.
They ended up moving it to DC not long after.
But today? It’s back in Vegas.
In the UK, it showcased instability
Elspeth Rothwell, UK CEO
For me the financial crisis very much became reality with the first run on a bank in the UK in 150 years; in September 2007, the BBC broke the news that Northern Rock had approached the Bank of England for liquidity support. As pensioners formed queues around the block to get their money back, the panic in the media and on the streets reminded me why I chose the career I did. As I shouted at the television for inflammatory reporting, my career north star – of helping to increase understanding of the financial system – was very much brought home.
The following year astounds me now in how quickly the landscape shifted – I remember pitching for firms who shortly thereafter went through crises, and meeting Lehman Brothers in August 2008, just weeks before the collapse, to discuss potentially supporting them. As I took over the running of the financial services team at my then-agency, I wondered whether it was the job of my dreams or a fool’s errand and how I could lead my team with confidence in such unstable times.
Personally, the crisis years were great years for me – I hit 30, got married, bought a new house – getting a mortgage with relative ease as the Mortgage Market Review hadn’t yet been commissioned, and was appointed to the board of my firm. But as a business leader I’d say that they certainly shaped how I work with financial services firms in an indelible way. My values bedrock of consultancy with honesty not consultancy to please; of questioning and understanding and questioning some more and of forever balancing confidence with caution were certainly all developed from this time, but what it taught me most was that thinking holistically has to be a reality, not a lipservice. A decade on, integrated communications may be mainstream but those financial crisis years certainly taught me that messages meant for one audience travel very quickly to others and that siloed thinking should be a consigned to the history books.
In the Bay Area, it prompted “funemployment”
Kevin Trowbridge, CTO
I was working with a startup, and at the time this company did not make money, not at all. When the crash came, the hope of raising any more money just evaporated. And so, the whole thing fell apart in slow motion. It was an unpleasant experience as, we were all friends and had spent a great deal of time together.
In the San Francisco of 2008-10, this is the last I remember it seeming “economically depressed” – with shuttered storefronts on Valencia Street. This is when I encountered the concept of “funemployed.” I was stubborn and holed myself up in my rental bedroom, collecting unemployment and spending my savings.
But this is when I first started working properly as a “software developer” instead of bouncing around in tangential roles like QA, Product Management, etc. This is when I created Snailmailr. In a way it was good because, it forced me to just, do what I really wanted to do, which was to geek out on programming and build something. I just sat in my apartment, and made something, purely for myself and the joy of it. What lies underneath jobs and careers and destinies, is folks’ passion—or lack thereof. When people started hiring again, I was able to find a job fairly easily, and doing what I wanted to be doing.
Software tends to lead the economy, so the financial crisis hit it early, and then software recovered very quickly. Within a year and a half we were entering into the current “bull market” for software which, really has been one of the most incredible professions to be in, anywhere, at any time in history.
In North Carolina, it meant unemployment
Ali Wells, Chief Creative Officer
I actually bought my first house in Canada in 2006 for $450k and I was making $35,000 a year. Pretty ridiculous that someone would give me a mortgage for almost half a million dollars, a month after I graduated college and had more student loan debt than annual salary. I guess my mortgage and many others like them (given out willy nilly to people who couldn’t afford them) were part of the reason the financial crisis occurred.
I moved to the US in 2008 and found it impossible to get a job. I was living in North Carolina, where jobs weren’t aplenty to begin with. But after the financial crisis no one would dare give a precious job to a non-American. So I moved to NYC, the land of immigrants, and found it equally hard to get a job. Luckily, I interviewed with two wonderful people — one an immigrant and one the daughter of immigrants (hint: Dan and Binna) — and was able to get a job in the summer of 2009. Despite the financial firms’ fear of spending money, the smart ones knew to invest in PR and marketing, so we thrived and grew.
In New York, it was eye-opening
Courtney Chennells, Vice President
I was in the first year of my finance degree when the financial crisis hit. My professors went on and on about it, calling it one of the most hard-hitting market events of our lifetime. It came up in almost every finance class. But because I was in South Africa, our economy was pretty sheltered from the fallout out, my family’s finances were ok, I had no student debt, and I was a naive student who didn’t yet really “get” what this meant for the U.S. and the global economy.
I only really began to grasp the impact on people’s livelihood, job prospects, attitude towards financial institutions, and course of their lives when I moved to New York. It affected my friends, coworkers, and fueled the homelessness I witnessed every day. It was pretty eye-opening.