Hedge-Fund Managers Bullish on MREs, Guns, Inflatable Lifeboats


When markets fall, a young stock trader's thoughts turn to water purification tablets and meat gel. Here's a snip from a feature in New York Magazine about freaked-out workers on Wall Street who gazed into the abyss with a closer view than the rest of us, and made survival plans:

In his book Wealth, War, published last year, former Morgan Stanley chief global strategist Barton Biggs advised people to prepare for the possibility of a total breakdown of civil society. A senior analyst whose reports are read at hedge funds all over the city wrote just before Christmas that some of his clients are “so bearish they’ve purchased firearms and safes and are stocking their pantries with soups and canned foods.” This fear is very much reflected in the market–prices of corporate bonds have been so beaten down at various points that they suggest a higher default rate than during the Great Depression. Meanwhile, while the overall gold market has fluctuated, the premium for quarter-ounce gold coins–meaning the difference between the price for gold you can hold in your hand and that for “paper gold,” such as exchange-traded funds–rose to an all-time high of 20 percent. “Gold is transportable, it’s 100 percent liquid, and it’s perfectly divisible in the context of ounces, bars, or coins,” says the head of a California research firm who keeps a supply of it, along with food, water, and guns, on hand. “And most important, there’s no counterparty”–i.e., it’s an investment beholden to no one, and perhaps one of the few assets that will retain value if the financial system collapses.
While it may look like these Wall Streeters are betting on such a collapse, their embrace of survivalism is an outgrowth of their professional habits of mind: Having observed the economy’s shaky high-wire act from their ringside seats, they are trying to manage their risk and “hedge” against a potential fall. “It’s like insurance,” says an investor who has stockpiled MREs and a hand-cranked radio. “And by the time you need it, it’s way too late.” Leave it for others to weep for the collapse of the social order. These guys would prefer to be in a high-speed boat or ex-military vehicle, heading off toward their fully provisioned compounds in pursuit of the ultimate goal: to win the chaos.
What's Making Hedge-Funders Paranoid (NY Mag)

Image: Here is what an MRE (Meal Ready to Eat) looks like when you are ready to eat it. The Flickr user who shot and uploaded this, Adam Henning, says "This is Chicken with Salsa, one of the better (yes, I said better) MREs that they Army makes."

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  1. For the record, Biggs’ book is called Wealth, War, and Wisdom.

    Also for the record, I would wager over 50% of BB viewers believed that image to be a bag of puke. I’m not sure how wrong they’d be.

  2. I would be more worried if hedge fund manager types had been right about anything in the last several months

  3. Given the record that hedge fund managers have I’m not that worried. These people have been spectacularly wrong on almost every issue. Odds are they’re wrong yet again.

    Being a greedy, sociopathic f*ck doesn’t make you smart. Even if you think you are. It’s the CEO disease: “I was lucky to be at the right place at the right time, see how brilliant I am?”

    I blame John Galt.

  4. Also, for the record, if they really thought society was headed for complete collapse MRE’s and hand cranked radio’s aren’t gonna do it.

    They would be taking some time to familiarize themselves with hatchet use, trapping small game, hunting, simple woodwork, fishing, wilderness food preservation, primitive fire starting, etc. etc.

    Who knew hedge fund managers didn’t really know anything?

  5. Frankly, pour that over rice and I bet it’d be pretty good.

    Also: “Barton Biggs”? Seriously? His parents should’ve just named him “Punch Me In The Face”. Certainly would’ve been appropriate considering his career choice.

  6. Survivalist or sane, having _some_ emergency supplies on hand is a good idea for anyone. Fires and floods and extended power outages do happen from time to time. I believe the Red Cross has some good advice on what’s worth keeping on hand.

    I used to keep a large tin of WWII surplus stuffed cabbage. It wasn’t really practical as emergency supplies unless you needed to feed at least five people at once. I finally did cook it, and it was no worse than most cafeteria food.

  7. MREs aren’t that bad if you’re really hungry. They are super calorie dense and all a little too sweet because of that. It’s what happens after you eat them that the real unpleasantness starts….

  8. Ditto what Technogeek said. It’s common sense. I accumulate canned food and such when there are sales; I give away boxes of it to the food bank at the end of the year and start again.

    What the wall street losers don’t get, maybe can’t get: The greatest survival tool is a community . . . friends and neighbors you trust and can count on. The best way to get these is being someone who is trustworthy and can be counted on.

    The worst thing that happened to business in this country is the professional MBA. It’s one thing to have a solid background in management and accounting and such. It’s another to get deep-fried in the world of spreadsheets and supply/demand graphs, never learning or wondering much about how industries actually work.

  9. @Antinous:

    you’d have terrible breath problems afterward and so would your descendants, up to the 7th generation.

  10. heh! People who horde food, guns and gold will last as long as their horde. People with community will survive.

  11. This is just a group of people who have seen their small part of the world collapse and assume that the rest of it is going to follow. They can’t see anything beyond their profession.

    I’m pretty sure that the rest of us will figure out a way to continue living without the hedge fund market.

  12. @Stefan Jones:

    Precisely!

    The image of the over-fed yuppie waving a gun they’ve never fired at people to “Protect what’s mine!” is almost a cliche of post-apocalyptic movies and literature at this point.

    Yes, you can pull up stakes, move to rural Idaho and live in a yurt chowing down on MREs, or you can pitch in NOW and contribute to making a better world. Perhaps consider investing your gold stockpile in renewable energy research, sustainable urban agriculture and infrastructure re-building?

    There’s nothing wrong with making provisions, but the notion of flotillas of Hedge funders casting off in dingies loaded with canned goods and gold floating down the hudson to the promised land is delightful farce.

    Being prepared is wonderful. Survivalism is greed.

  13. Depends on your community. How many farmers do you know? If things get to the point where MREs start looking tasty, most “communities” will just be collections of hungry mouths and empty stomachs. The value of any given community will largely be the extent to which its individual members stockpiled… MREs, guns, and gold.

  14. For the record, MRE’s are DELICIOUS. They give you a burst of energy unlike most food I have ever eaten. We had these after Hurricane Ike and I don’t know what these soldiers are complaining about. It’s not home cooked food, but it’s better than most of the crap people shove down their gullets every day here in America.

  15. Hey, don’t knock MREs. They aren’t dinner from the Whole Foods hot section, but they actually aren’t bad. We actually ate pretty well on MREs when I was down in MS. in 2005 helping with the Katrina recovery. The Pad Thai was pretty good and so was the steak IIRC.

  16. Looks now worse then any of the $1 frozen food meals….

    It doesn’t really look that bad either, reminds me of most takeout chinese food, minus the rice..

  17. I’ll also vouch for the tastiness of at least the vegetarian MREs (the only kind I’ve had the pleasure to sample), and they do give you a huge bang for your buck calorically.

    Pre-digested and processed food aside, community really is your best bet for survival. People got along just fine before sedenterized civilization using it, and that precious mix of skill sets will be what saves them after it goes away.

  18. What stuck out the most for me here was ‘gold’. Gold is almost completely useless. You can’t eat it, you can’t forge weapons with it, you can’t build with it, you can’t make machinery with it. It’s malleable and shiny so you can make kick-ass bracelets and necklaces and such. It is only slightly more useful than paper money. At least you can use paper money as kindling to start a fire.

  19. I am afraid to say, no matter how civil the world would come in a post-apocalyptic event, I’d open hell up on a floatilla of hedge-funders if I ever saw it.

  20. So basically, after 8+ years of living under an apocalyptic/”the rapture is near…” administration, the “future” of investments is investing in… apocalyptic/”the rapture is near…” concepts.

    Ugggh.

  21. What does MRE stand for?

    Meals Rejected by Everybody.

    A wee bit of personal history on MRE’s. They have gotten much better since I was last in (1998) but it still pays off to use the tabasco sauce and to trade accessory packets. I may trade my peanut butter for your jelly or cheese etc.

    A single serving or two of MRE’s aren’t bad. Even a few days worth is bearable. Its when they have been the only thing you’ve eaten for weeks on end that it gets bad. I think it’s because of the preservatives that your sweat begins to smell of MRE’s. Not to mention the days and weeks without showering that can happen. It all gets pretty rank.

    MRE’s do come with WAAAAAYYYYY more poundcake than they used to and much more variety. They have vegetarian ones and kosher ones as well.

    The arctic MRE variation is better and worse. It’s a bigger pouch that actually contains all the day’s food. The worse part is that it is dehydrated because if it wasn’t you would first have to warm up your meal to unfreeze then eat it. As a bonus the oatmeal bars are of cardboard consistency and the peanuts are okay. You add in hot water and let one of the pouches sit kind of like a military cup o soup dealy. Cup o soup tastes better though. Getting hot water when you need it in the arctic / cold weather is problematic so you get by on eating it mushy cold.

    Back on the topic of hedge fund managers and how ill equipped they are to survive…

    Most people are ill equipped to survive off the land without power and or gas.

    To paraphrase Connections, it all comes down to you finding land you can plow with seed so you can grow crops to survive the winter. Anywhere in the plow (whats that and how do you handle oxen? for that matter what does an ox look like?)/sow seeds (what kind and when)/harvest (whats this threshing bit about?)/ Survive the winter (how do you store the food to keep it from rotting? So you grew wheat.. Know anyone with a flour mill? ) then repeat.

  22. I wonder how long until Post-Apocalyptic Warlordship for Dummies appears in the Business section of bookshops.

  23. I gotta say, I am pleasantly struck by the sense of community that already exists here at BB and that apparently would continue on in the post-Apocalypse. Group hug everyone!!

  24. It’s funny because when society collapses these will be the first people we eat and then we’ll move into their sweet digs…

  25. Darnit, just after I finished eating the last of my Y2K stash, you tell me NOW I’m going to need it!

  26. Damn, I was wondering if there were vegetarian MREs, and you all answered before I got around to asking!

    I love me some BoingBoing commenters!

  27. Hm, post apocalyptic communities? That’s gonna be hard. I’m staring down the barrel of roving gangs of street thugs coming to my house looking for food, as gangsta as they feel they need to be.

    But my wife and I have a plan, though I think the apocalypse has already begun a few years ago, and it is almost complete. For me at least.

    For those lucky enough to live near a Trader Joes, they sell these Indian foods packaged like MREs. With rice, it makes a small meal for two, and I think they are $2. Great for office camp-outs, when the sodium of the instant noodles gets to be too much.

    I used to be afraid of this kind of scenario, where I’d need tools and hoarded food. Now I know I can live almost anywhere, and get by on very little. I am easily amused.

  28. My friend Ron likes to categorize people as
    “in the bunker” or “out of the bunker”. His premise is that persons who would be a viable, productive part of a post-apocalyptic community would be welcome in a hypothetical survival bunker, but persons who would only be a drain on the bunker’s food supply while awaiting re-emergence must be kept out, by force if necessary, for the community’s common good.

    So at some point I asked him if I was in the bunker, of course.

    He said I was, and I sort of smugly said something like “because of my many useful skills and abilities, eh?” and he replied, “No, because you have the demonstrated ability to accomplished the damnedest things using the most unlikely methods imaginable, so in the interests of preserving genetic diversity you will be included to represent insane people who aren’t totally useless”.

  29. South Park hit the nail on the head in the “Goobacks” episode. People would rather have a big gay orgy then do anything practical to make a better future. These hedge fund jerks just think the whole world has their same myopic attitude and are adjusting themselves accordingly.

    1. People would rather have a big gay orgy then do anything practical to make a better future.

      Could you provide a URL for that? Or an address and time?

  30. Hey johnny action some of us have the knowledge to hunt the land.
    We can live where the earth has never known a plow.

  31. While the economy sucks and the markets have hit the skids, there is still opportunity. You may see these out of work analysts, i-bankers and MBAs starting hedge funds this year. While raising money will be difficult, the current times present an interesting opportunity for those willing to go through the hedge fund start up process.

  32. Bah, MRE’s are great!

    I just completed Marine Boot Camp, and they had us eat them all the time. Other then sucking up lots of the h20 in your system they were quite nourishing. All you had to do was drink a few extra canteens a day.

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