These are turbulent financial times in which the daily market headlines leave many feeling confused and anxious. Turmoil that began in the mortgage market has spilled over into the banking sector and has initiated some significant changes in American banks and markets. In an attempt to provide some broad understanding of these changes, Jeffrey Brown [on a broadcast of The Lehrer Newshour, aired September 22nd] conducted an interview with Andrew Ross Sorkin of the New York Times who is covering the monumental changes that have taken place in the Wall Street banking industry over the last couple of weeks. Sorkin was asked to address the announcement this week by Goldman Sachs and Morgan Stanley, the last of the five major New York investment banks, that they are converting their businesses from “investment banking” to “bank holding companies”. To most of us who are not familiar with the inner workings of Wall Street investments these words mean little, but in truth they signal a significant shift in American banking away from high flying investment banks who conduct their business with relatively little interference from the federal government toward commercial banking whose practices are more closely watched by government regulators. The end results of this shift are impossible to predict with any specificity, but one thing is for certain; the lives of many who are employed in brokerages and investment houses have radically changed. Many of the institutions that were thought to be unassailable have proven surprisingly vulnerable.
During the last twenty years, banks such as Lehman Brothers, Goldman Sachs, Merrill Lynch, and Morgan Stanley came to symbolize the fast lane of American financial business. The money they invested was big, the risks they took were just as big, and the profits that both investors and brokers stood to make were bigger still. But, according to Andrew Sorkin, many of those investors and brokers have had their wings clipped; perhaps permanently. Sorkin describes it this way, “You know … the culture of Wall Street, the lavish bonuses, the amount of money people have made over the years isn't going to happen anymore. It really is a very, very different world.” Much of the profits generated by the Wall Street investment banks were because they could borrow enormous amounts of money while having relatively little collateral to put against their loans. As long as their investments paid off, things were terrific. Investors received handsome dividends and brokers and bankers were rewarded with generous commissions. AS LONG AS THEIR INVESTMENTS PAID OFF. That was the catch. The investments, however, did not continue to pay off and so, according to Sorkin, “… something radical has happened overnight .” In the last two weeks, three of the five major investment banks were either bought out or bankrupted and the final two have fundamentally retooled their businesses toward a more conservative direction.
As Congress and the Treasury Department deliberate on how best to stabilize financial markets, and as the doomsday predictions begin to come in with ever greater frequency it is important for disciples of Jesus to seriously consider the basis of our security. Economic success, both personally and corporately, can allow us to indulge the fiction that we exert far more control over our destiny than we actually do. It can also tempt us to invest our hopes and dreams in places that will never be strong enough to make them secure. The Lord warns us of this tendency in Deuteronomy: “Be careful that you don’t forget the Lord your God … When you eat and are full, and build beautiful houses to live in, and your herds and flocks grow large, and your silver and gold multiply, and everything else you have increases, be careful that your heart doesn’t become proud and you forget the Lord your God who brought you out … of the place of slavery … Otherwise, you may say in your heart, 'My power and the strength of my hand made me this wealth.'” (Deuteronomy 8:11-14 [HCS] & 8:17 [NAS]) Making prudent financial provisions and seeking adequate employment are essential elements of the business of living life in this world, but they are only tools that are used to sustain us. It is the hand of God that wields them to make provision for us and to test us and to grow us. I realize that financial times are tough for many in our fellowship and that things may yet get worse before they get better, but let me encourage you to not forget the Lord your God. Remember Him as you read the financial headlines in the newspaper. Remember Him as you listen to the latest gloomy economic forecasts. Remember Him as you listen to politicians talk about how they are going to fix the problems. Remember Him as you hear the latest price of a barrel of oil. Remember Him as you decide where your money is and is not going to go. Finally, remember that the greatest asset that you have has been purchased by God at tremendous cost to Himself and is currently in the safest of safe deposit boxes: “Let heaven fill your thoughts. Do not think only about things down here on earth. For you died when Christ died, and your real life is hidden with Christ in God.” (Colossians 3:2-3 [NLT])
Jeffrey Brown’s interview of Andrew Sorkin can be viewed at http://www.pbs.org/newshour/bb/business/july-dec08/newwallstreet_09-22.html.
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