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 THE
PLATINUM RULE
By: Suzanne Bledsoe
James W. "Jim" Brinkley, Vice Chairman of Morgan Stanley
Smith Barney Global Wealth Management, was with us today
to share his thoughts on where we have been, where we
are now and where we are headed in the economy. He also
peppered his talk with some life lessons learned as well
as rules for a life well lived. Jim started his career
at the predecessor to Legg Mason, where he was the
second employee and worked his way up to Chairman and
Chief Executive Officer in his 43 year tenure with the
firm. He has been involved in numerous industry,
regulatory and not for profit organizations in
leadership roles and has, no doubt, been a great
influencer and decision maker, given his deep and long
history in the financial services industry. He is a
graduate of the College of William and Mary as are his
three children and he is a long time supporter of Rotary
and all that we stand for.
Jim confirmed for us that over the past year, we have
been in the middle of the worst economic, credit,
housing and financial market disruption in our
collective lifetimes. All of the fear, angst, anger and
worry that we have been living with is justified. He
reminded us, however, that in weathering any crisis,
there are both challenges and opportunities. Many times,
the ultimate outcome is based 10% on what has actually
transpired and 90% on what we ultimately do about it.
Jim traced the beginnings of the current economic
environment to legislation and practices that were
instituted as early as 1978 with the Community
Reinvestment Act that promoted practices designed to
increase home ownership by those who were previously
unable to obtain financing. This was the beginnings of
the subprime mortgage debacle and it was enhanced in the
intervening years by regulations that allowed Freddie
Mac and Fannie Mae to house mortgages (primarily ARMS)
to low income homeowners. The end result, simply stated,
was that people were buying houses they could not afford
and an economic house of cards was being built that
would ultimately collapse with rising interest rates,
defaults and ultimately foreclosures. With that,
financial institutions, rating agencies and related
financial services organizations were in free fall. The
bubble that burst was widespread and one that impacted
not just the housing sector, but also energy and
commodities, all on a worldwide, global basis. A fine
mess, indeed.
Where are we now? At the same time that we are trying to
figure out what happened and why, we also need to work
on cleaning up the quick fixes-bailouts, stimulus
package, TARP, and, of course, huge government deficits.
Talk about the danger of unintended consequences…
Jim's advice to investors remains fairly tried and true:
diversify, understand the probabilities inherent in
selected investment strategies, understand your risk
tolerance and think globally. Look for opportunities to
harvest losses (generally can be viewed as money in the
pocket when offset against future gains). And, remember,
historically the steeper the fall and the deeper the
recession, the stronger the spring back.
Jim finished his remarks with some good old fashioned
advice: start each day anew, forgive yesterday, focus on
what matters most and what you can influence, do the
right thing, and do what you should do when you should
do it whether you feel like it or not. Follow not just
the Golden Rule (treat others as you would like to be
treated) but also consider the Platinum Rule-treat
others as they want to be treated.
Take care of yourself and others. Be a good Rotarian.
Head Table:
Harold Howell, Dale Harrold, Georgia Oakes, Ed Jackson,
Tom Smith, Helen Beach, Maxie Washington, Betty Gouch,
Les Davaz, Rich Sampson, Nora Lindenbeck, Bill Burnham,
Ken Cloaninger, Richard Pappas, John Snyder, Karen
Shore;
Invocation: Joe Morris; Song: Thomas Moore |
