Bill Gross: Investment Outlook (July 2013)

Bill Gross: Investment Outlook (July 2013)

sinking ship

The Tipping Point

by William H. Gross, PIMCO

I’ve spun a few yarns in recent years about my days as a naval officer; not, thank goodness, tales told by dead men, but certainly echoes from the depths of Davy Jones’ Locker. A few years ago I wrote about the time that our ship (on my watch) was almost cut in half by an auto-piloted tanker at midnight, but never have I divulged the day that the USS Diachenko came within one degree of heeling over during a typhoon in the South China Sea. “Engage emergency ballast,” the Captain roared at yours truly – the one and only chief engineer. Little did he know that Ensign Gross had slept through his classes at Philadelphia’s damage control school and had no idea what he was talking about. I could hardly find the oil dipstick on my car back in San Diego, let alone conceive of emergency ballast procedures in 50 foot seas. And so…the ship rolled to starboard, the ship rolled to port, the ship heeled at the extreme to 36 degrees (within 1 degree, as I later read in the ship’s manual, of the ultimate tipping point). One hundred sailors at risk, because of one twenty-three-year-old mechanically challenged officer, and a Captain who should have known better than to trust him.

We survived, and a year later I exited – the Diachenko and the Navy for good – theirs and mine. I think I heard a sigh of relief as I saluted the Captain for the last time, but in memory of those nearly tragic moments, let me reprint an article posted on wikiHow, outlining exactly how to go about abandoning ship should you ever venture into the South China Sea or anywhere close to Davy’s infamous locker. The article is a bona fide and serious attempt to instruct would be passengers in a Titanic-like disaster. I found it, however, as comical as yours truly pretending to be a chief engineer in 1969. Judge for yourself…

wikiHow: the how to manual you can edit

How to Escape a Sinking Ship

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The Basics: Before Setting Sail

1. Understand the mechanics of a sinking ship. Water usually enters the lowest point of a ship first, the bilge area.

2. As more and more water enters the ship, it will start to heel significantly. From this point on, sinking will occur quickly. Abandon ship.

If Sinking is Imminent

1. Think about your sense of etiquette. What will you do if push comes to shove?

2. If you’re in charge of the sinking ship learn how to send a Mayday. Read “How to call Mayday from a marine vessel” on the attached internet link.

3. Stay calm and don’t panic.

4. If you see someone with fear, yell at them.

5. While still on deck, watch for catapulting objects coming your way. Large items can kill you.

Abandoning Ship

6. Find a lifeboat. The best scenario is to enter a lifeboat without getting wet.

7. If jumping off the ship, always look first.

8. If you survive, be ready for the reality that others may have perished. Seek counseling.

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