There's been a bit of generational divide in reaction to last week's blog about "gray and wrinkles"--early 1990s experience coming in handy as we get ready to confront the ugliness in institutional real estate and mortgage portfolios. The younger crowd shouldn't take offense just because they haven't had the opportunity to work through a cyclical low. And the older crowd has no reason to be smug--most went along for the ride in the last few years, as it turns out right off the cliff. I know of a few veterans who told me they were pulling back in '07 and warned others to do the same. But not many. And look at all the big "old" names facing defaults and losing properties with more to come. There are a few celebrated cases of Dads turning over the company reins and seeing their sons leverage up and overpay in '06 and '07,threatening carefully built family empires. But typically Dad wasn't saying no after sending his boy out to test his mettle. Out of control exuberance for making money (is that another way of saying greed?) has no age boundaries.
 
In that spirit, a lot of people begin to get excited about making a next killing in the work out arena. Banks put together swat teams to handle their toxic assets--some erstwhile real estate CEOs sign up and stand ready to move into action when called. Other former company heads put together teams to take over troubled portfolios from pension funds. Former private equity shops convert into workout advisors. No doubt there will be plenty of opportunity for Generation Xers to get in on the action, if they reinvent themselves.
 
No doubt, some players will make big money over time. And "over time" are key words here. Since most  forecasters predict an extended decline and slow recovery, cashing in quickly may not be easy. Just figuring out what is in some of these securitized portfolios may require the patience of Job combined with the perspicacity of Charlie Chan. In addition, I haven't met too many people who get an adrenaline rush negotiating often torturous workouts. And will a vibrant market suddenly regenerate with the banking system in such a shambles?
 
The graybeards understand that it will be a really tough slog before a turn around takes hold. As the sub 40-set is finding out--that lesson is all part of character building. We earn every one of those frown lines.    

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