At 2:00 today, there was a sudden whiteout at Microsoft’s Redmond campus. Huge snowflakes fell quickly. It was accumulating on the roads, on the tops of cars, on the tree branches. Beautiful, really, but not what most commuters like to see. (My iPhone picture doesn’t do it justice, but this is the view from my office window:
Even though we knew there wasn’t supposed to be significant accumulation (at least not on the Microsoft campus, and certainly not in downtown Seattle), it was so easy to get caught up in both what we saw outside and in the reaction of everybody else. Over the span of 15 minutes, everybody who could either afford to take the afternoon off or who could work from home (which includes most everybody who works at Microsoft) was headed out the door. Nobody wanted to get stuck in a multi-hour commute home due to snowy roads. Which turns into a self-fulfilling prophecy: even if the snow isn’t that bad, the day can turn into a multi-hour commute home, because everybody is leaving at once. It becomes a race to see who can get out fastest.
For a while, I was tempted to ride out the storm. It came on suddenly, I felt it would end suddenly, and nothing much would stick to the roads.
But what if I was wrong? We did have to get over the bridge in time to pick up our kids from daycare. If things didn’t get better, or if the self-induced traffic jam kept getting worse, then we might not be able to get our kids. We didn’t have the luxury of waiting as long as it took.
It turns out, this is just like a financial panic. First, something bad happens, like snow falling. It’s so easy to get caught up in watching the snow falling, and it’s easy to get caught up in others’ reactions to it. Then, you realize that a little self-destructive spiral gets set up. For the commute, it was people getting afraid of being caught in a long commute, which caused people to leave at once, which created a long commute, which threatened to get more people leaving and making the backup worse. And for us, we had that trigger. Even if we wanted to be more “rational” than the hordes leaving the campus, we had to make sure we made it to daycare. So we joined the destructive spiral and left right at the peak of traffic. In today’s financial markets, I’m sure there are plenty who wanted to ride out the downturn, but retirement/college/whatever is looming, so eventually you can’t risk it any more and sell while the market’s on the way down (further depressing prices, feeding the spiral, etc.).
In this little story, our commute wasn’t that bad. The weather & traffic cleared up right past 405, and once we got into Seattle the pavement was dry. If only the financial panic passed so easily.