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  • Writer's pictureVinny Clevenger

Maintaining Composure in Turbulent Waters

What world lies beyond that stormy sea I do not know, but every ocean has a distant shore, and I shall reach it.

-Cesare Pavese

Maintaining Composure in Turbulent Waters for Balance Sheet Managers

ALM Strategy | Liquidity | Capital

The ability to remain composed and to make practical decisions are the most critical factors in navigating a boat in turbulent waters. The terms of your voyage are dictated by the sea. You have to orient the vessel in the optimal direction which gives you the best opportunity to progress to your destination without placing additional stress on your vessel or crew.

The most severe stretch of weather I had ever encountered was on a 60-mile trip from Portland, ME to our home port in Newburyport, MA. It was a beautiful Sunday in the middle of August and we were returning from celebrating a friend’s wedding. Conditions are generally benign that time of year in New England, and nothing in the marine weather forecasts we examined led us to believe otherwise. Only a few miles south of Portland, we discovered we would be in for wild ride. Unlike calm weather conditions when the boat is running on “autopilot,” we had to make several adjustments to our speed and course to make it back.

The storm caused by COVID-19 and the subsequent closure of the US economy have placed balance sheet managers in the unenviable position of having to make