The Pot Noodle Effect

At the time of writing this column, the English national football team has just crushed Panama six goals to one, and despite my very best efforts not to, I’m wondering if there’s not a path to the World Cup final after all. I’ll likely be eating these words by the time you read them. But there are few things more inalienable to an Englishman than Queen, country, and an undying faith in the ability of the England squad to make it all the way in the World Cup, despite all odds and empirical evidence to the contrary.

My friends and I call this the Pot Noodle effect. If you’ve never had the pleasure, Pot Noodles and their own-brand supermarket derivatives are responsible for sustaining roughly three quarters of the UK’s student population and a good chunk of its early-20s males. Essentially, they are freeze-dried noodles with a scattering of flavored powder mixed with some indeterminate colorful things that once longed to be vegetables. Pot Noodles are truly horrific.

And yet, every few years, you start to question if they were really as bad as you now remember them to be. Maybe this time, it’ll be different—you’re older and wiser, after all. A fresh perspective is undoubtedly what’s needed. So, boiling kettle in hand, you pour it heartily into the round white plastic receptacle of Lovecraftian culinary madness, wait the prerequisite few minutes while nodding sagely with your mates about exactly the right amount of time to let it stew, and with much anticipation, that first bite.

It’s just as horrible as it always was, of course, much like England was always going to go out in the knockout stages without getting close to touching gold. It’s unsurprising—anyone who thinks that rejuvenating necrotic noodles with some boiling water is going to be a delicacy is an idiot. Yet, the US seems to be having a Pot Noodle moment of its own.

What’s Old Is New Again

Increasingly, zero-down mortgage loans are being made, and subprime is in its rudest health since, well, the subprime crisis. Added to this is the proclivity on the part of influential House committees to strip back key regulations from the crisis era in the name of “freeing up the US economy.” The Volcker Rule has taken a battering, and last I read, Congressmen in leading positions were urging banks to make small-dollar, short-term loans to their customers—payday loans.

It’s all got a whiff of that old irrational exuberance. The economy is doing great by most measures, the stock market is roaring. Technology is back, baby, and it’s brought its little brother along—you remember fintech, right? He’s old enough to come to the bar now.

Ask anyone about this and they shake their heads, as if indulging an irritable child. No, don’t be silly, they say, they’re rolling back the worst parts of Dodd–Frank. The ones that didn’t make sense, those that stopped banks from loaning money out to Main Street. Yet that argument rings hollow for anyone who has a basic grasp of risk or finance and understands how loans are actually written and accounted for. It’s okay, though. The House is debating stuff that really matters, like the Fintech Leadership in Innovation Program, as part of the Financial Technology Protection Act.

It’s risk the banks want, after all. Nobody ever got rich over people responsibly paying their debts. Likewise, in the capital markets, it’s hard to make a buck without some kind of arbitrage going on, whether that’s measured in microseconds or how many leaves of paper Dodd–Frank is left with by the time the current administration is through with it.

The thing is, nobody has really learned. Reforms are opposed at every measure, and even when implemented, the financial sector has an infinite appetite for a fight to see them rolled back. The industry as a whole, however, just needs to be careful that it doesn’t go too far. If they thought public anger was bad the last time, just wait for the next. 

NB: At the time of writing, England’s future was as uncertain as the choice to pick a chicken or beef-flavored Pot Noodle. At the time of publishing, however, football is definitely coming home.