May 23, 2005
The Master's Program
The Point of View - A Weekly Commentary by Bob Shank

Dear Marketplace Friend, 

      There are bubbles, and then, there are bubbles. Not all bubbles are created equal, apparently.

      My honeymoon - in 1971, nearly 34 years ago - was my first time on an airplane. That was the start of my frequent flyer life. Within a year, Cheri and I earned a promotional trip through my business activities that took us to Hawaii. That was my first taste of bubbles.

      Not "taste," really: it was, in fact, an encounter with bubbles. Not real bubbles, either: it was a song about bubbles.

      Back then, Hawaii was Honolulu ... and you couldn't land in Honolulu as a tourist (boy, were we tourists!) without catching the evening luau show that featured Don Ho.

      What Wayne Newton is to Las Vegas in '05, Don Ho was to Honolulu in '72. Good thing he wasn't allergic to exotic flowers: he lived with a lei around his neck, a guitar that looked like a ukulele on steroids hung across his front section, and an Aloha Shirt setting the whole ensemble off. His set wasn't finished ... until he crooned a few verses of "Tiny Bubbles" (Tiny bubbles, in the wine, make me feel happy, make me feel fine ...) The crowd waiting at Honolulu International for their jet ride home had boxes of pineapples on their laps, and "Tiny Bubbles" on their lips. We were too young for the wine ... but the song had us hooked.

      Not all bubbles are created equal, though. About five years ago, the singin' stopped. Bubbles weren't fun anymore, after Nasdaq broke our hearts. From a high in the 5000's, the tech composite crashed like a coconut blown out of a palm tree, finally landing around the 1100 mark in 2002. Alan Greenspan and other conservative voices had clucked about "irrational exuberance" from the sidelines ... and their predictions came true. Bubble poppin' was now a sport for smart guys who still wear ties ...

      Someone came up with the Top Ten List for Financial Crises ... but could only name nine: Dutch Tulip Bulbs in the 1630's; the South Sea Bubble; the Mississippi Bubble; the Florida Real Estate Bubble of the 1920's; the Crash of '29; the Crash of '87; the Nikkei Bubble; the Barings Bank Bust; and, the Nasdaq debacle. Their list begs a tenth entry ...

      Alan Greenspan spoke on Friday at the Economic Club of New York. His topic was the soaring rise in median prices for America's residential real estate. His view? "We don't perceive that there is a national bubble, but it's hard not to see ... that there are a lot of local bubbles." Eventually, he said, "home prices will decline because the underlying pattern is unsustainable." That's comforting: the mobile homes in Arkansas will hold their value while the single family homes in Atlanta and Anaheim drop like lead balloons. I'll sleep better knowing that ...

      Bubble: anything that is ephemeral or insubstantial; any idea, scheme, etc., that seems plausible at first but quickly shows itself to be worthless or misleading (Webster) Bubble: what you're countin' on ... that, ultimately, doesn't count at all (Shank). Those bubbles don't ... "make you feel happy, make you feel fine ..."

      When he was down here on Earth, Jesus made even more predictions than Alan Greenspan does now. He said that a day would come when "worldly wealth" - what we spend our lives trying to amass, and then to protect - would disappear. How could we protect ourselves from that bubble-burst experience? "I tell you, use worldly wealth to gain friends for yourselves, so that when it is gone, you will be welcomed into eternal dwellings." (Luke 16:9).

      If you're a person driven to achieve, you'll spend your life in pursuit of something. Shooting for success is great ... as long as what you're shooting for isn't a bubble destined to explode on acquisition. So, what's the solution? Should we just throttle back and stall out?

     Here's a thought: instead of pursuing riches in life ... pursue richness of life. The wealth that comes from relationships with friends, a spouse, family ... and God; the abundance that attends experiences that can't be bought; the character that gives you value beyond valuables: there's never been a bubble reported for the things that matter most. A life given to those initiatives reflects rational exuberance!

Bob Shank

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