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How To Protect Yourself From The Next Bubble

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By Alyce Barry

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"I think in hindsight, it's easy to see there was a bubble. But you know, when you're at a party having a good time, sometimes it's hard to stop and leave the party." — Michael Petrucelli, Senior VP, Lehman Brothers
In September 2006, in issue #16 of this newsletter, Shadow Work® founder Cliff Barry wrote for the first time publicly about a new model he'd been developing for some time.

As Cliff said in that article, the Shadow Work® Model he developed in the early 1990s is a space model. That is, it divides the "space" inside the human psyche into four regions, or archetypal energies: the Magician, the Sovereign, the Lover and the Warrior. The Model offers a facilitation map with four directions, similar to the maps we use to navigate physical space.

But human beings don't operate only in space: they operate also in time. Cliff's new model is a time model that divides the growth cycle of an individual or a group into seven steps or phases. During each of those seven phases, the individual or group moves back and forth between two archetypes in a motion that looks like a loop. When you've got four archetypes, there are six possible loops. The Six Loops Model offers a map for understanding cycles of growth. When the two models are used together, it becomes possible to help a group that's stuck in a certain phase to get unstuck.


This week, I was watching an episode of the PBS show Frontline called "Inside the Meltdown" when I realized that the person quoted above, who worked for the now-bankrupt investment bank Lehman Brothers, was referring to Phase Four of the cycle. Which meant that what we call a "bubble" is one way to describe what inevitably happens during that phase of every growth cycle.

Normally, when I talk about a growth cycle, I'm talking about personal, emotional, or spiritual growth. As an investment bank, Lehman Brothers was interested in financial growth. Political entities like the United States are interested in growth, too: growth in wealth, certainly, as well as growth in security, reputation, influence, and so on. The growth of a nation is often considered "progress." I think most people like to believe that the actions we take as a community, a nation, and a world make progress toward a better world and a brighter future.

Which brings me to the mortgage crisis. I think most people believed, as the "housing bubble" grew, that we were making progress toward home ownership and prosperity.

If I'm correct, that a "bubble" is what happens in Phase Four of every cycle, then bubbles are inevitable.

That doesn't mean, however, that we can't protect ourselves from their impact. The way to do that, I believe, is to understand how and why bubbles develop, by understanding all the phases of the growth cycle.

This article will, of necessity, provide the briefest of snapshots of the Six Loop Model.


Words that describe Phase One include Support, Inspiration, Vision, and Hope.

In Phase One, we get an inspiring idea that offers a new vision of how life could be. We are so inspired that we idealize that vision, and our inspiration motivates us to move ahead with it. In order to be willing to move forward, however, we must ask for what we want and put our hopes on the line, which requires a degree of vulnerability. Phase One is a loop between the idealization and motivation of Sovereign energy and the vulnerability of Lover energy.

In the case of the housing bubble, Phase One happened when mortgage rates were low, real estate values were rising, and more and more people seemed capable of qualifying for a home mortgage. Mortgage lenders had a vision of selling mortgages to nearly everyone. Prospective buyers had a vision of life being better by owning a home.

"Hey, look, it costs almost nothing to own a home!"
"Hey, maybe real estate values will always go up!"
"Hey, maybe everybody can own a home, even if they don't have much income!"
"Hey, maybe owning a home can offer not just security but significant wealth!"


Words that describe Phase Two include Safety, Container, Guidelines, and Trusting Relationships.

In Phase Two, we begin to figure out how to make the vision a reality, by forming the necessary relationships that will nurture the vision and developing strategies to keep us safe. We try out new relationships, see how they feel, figure out how to make them safe enough, and open ourselves to change so that we can proceed. Phase Two is a loop between the vulnerability of the Lover energy to risk and change, and the objective analysis and strategizing of Magician energy.

In the case of the housing bubble, Phase Two happened when investment firms figured out which financial tools and strategies could make it possible to offer mortgages to just about anyone. Magician energy offered a variety of alternatives to the traditional 30-year mortgage with 20% down payment: ARMs, subprime rates, credit default swaps, and so on.

"How can we make this work?"
"If we do that, are we still at risk?"
"How can we reduce that risk?"
"Once we've managed risk, to whom can we sell these mortgages, and how?"


Words that describe Phase Three include Commitment, Action, Assessment, and Accomplishment.

In Phase Three, we've developed enough strategies for moving forward that they form a coherent approach we can give a name to. When we commit ourselves to that approach, we're ready to take action. We get down to business. As we go, we occasionally step back to assess how we're doing, make any necessary adjustments, and then resume work. Phase Three is a loop between the activism of Warrior energy and the objective assessment of Magician energy.

In the case of the housing bubble, Phase Three would have happened when financial institutions — and in particular, investment banks — developed and applied policies for home mortgages that took advantage of new tools and strategies and then packaged and sold these mortgages as securities to other institutions. Institutions sold mortgages, analyzed what seemed to work and what didn't, adjusted their strategies accordingly, and continued selling mortgages.

"We'll call this our XYZ Plan."
"The XYZ Plan will set us apart from our competitors."
"We'll sell these securities to our trading partners in the US and abroad."


My favorite way to describe Phase Four is the phrase "pedal to the metal."

Phase Four is when the bubble appears, grows, and eventually bursts.

The bubble begins when we believe that our actions are going well, and we idealize our success. That idealization motivates us to do even more, and more, and more. Phase Four is a loop between the idealization and motivation of Sovereign energy and the activism of Warrior energy.

"If X is good, then X+1 must be better."
"If X+1 works out, let's try X+2, then X+3, then X+5, etc."
In Phase Four, we accelerate what works until we've got the pedal to the metal. Anybody who stands in our way had better get off the road. Our confidence in our success grows until we're eager to pulverize any opposition.

But acceleration eventually runs the vehicle out of gas. Excess eventually brings about a betrayal. To mix metaphors, what goes up must come down. We crash to the ground and get rudely reacquainted with reality.

"Hey, if a little of this works, a lot will work even better!"
"The sky is the limit! We are masters of the universe!"
"Why would you do anything different?!"
"You'd be a fool not to get in on this!"
"You can't have too much of a good thing!"
"What do you mean, the bottom is dropping out of the market?"
"We didn't realize . . ."
"Uh-oh . . ."
Phase Four is painful but necessary before we can proceed to Phase Five.


My favorite way to describe Phase Five is, "Back to the drawing board, where among the drawings I rediscover the divine plan."

Phase Five, in the aftermath of the bubble, is when we feel the shame of failure and allow that shame to teach us what to do next.

The pain of the betrayal at the end of Phase Four takes us back to the drawing boards to figure out what went wrong. Was our failure the result of others, or of forces beyond our control? Or was our failure the result of our own actions, our own arrogance? Does our failure mean we're bad and can't be trusted? If we are indeed bad, how do we go on safely?

We begin to question our assumptions about success and failure, good and evil, life and death. We remember precepts from long ago that, in the heady acceleration of Phase Four, we put disdainfully on the shelf. We thought we knew better, and now we learn that there are elders among us who knew the safer path all along. We relearn sacred laws long forgotten, such as thrift and caution. Phase Five is a loop between the objective reassessment of Magician energy and the meaning and reassurance of Sovereign energy.

"Guess we got carried away by our own good fortune."
"We didn't realize we would carry everyone else with us."
"Perhaps financial regulation has its place."
"Maybe there's something to be said for thrift."
"Those old-fashioned rules don't look so old-fashioned any more."


My favorite way to describe Phase Six is, "Connect. Differentiate. Repeat."

In the aftermath of the bubble, Phase Six is when we take our reacquaintance with divine law and our magical new perspectives from Phase Five and recommit ourselves to working for the benefit of ourselves and of others simultaneously. Phase Six isn't easy, but it offers the ultimate satisfaction of the greatest reward from the hardest work.

In Phase Six, we alternate between two diametrically opposed energies: the connection of the Lover and the differentiation of the Warrior. We find each other and yet demand our own individuality. We connect, we separate. We come together, we part. One image I like for Phase Six is the blood in our circulatory system rushing toward the heart where it gets refueled before hurtling out toward the extremities, changing from red to blue to red to blue. The Lover and the Warrior are opposites, yet we can alternate between them in a continuous stream of connection and differentiation.

"We will listen to input from our financial partners."
"What we do affects the entire global economy."
"No one is asking us to sacrifice our own self-interest."
"What benefits each of us, benefits the whole."
"We'll take it one step at a time, and do what works."
Finally, in Phase Seven, we have a chance to rest briefly before plunging into the next cycle.


In the last decade, we've seen a dot-com bubble and a housing bubble, to name just two.

There will be a next bubble, for at least two reasons.

  1. The bubble is a predictable manifestation of Phase Four and will therefore occur in every cycle of growth.
  2. In my judgment, people in the worlds of Wall Street and politics aren't in the habit of doing deep-level emotional and spiritual growth work. If they were (again, in my judgment), they wouldn't be in the worlds of Wall Street and politics.
I believe that how conscious we are as we go through the seven phases of a growth cycle has an enormous impact on what the cycle accomplishes. The more conscious we are, the more likely we are to get what we want from the cycle, and to do good along the way. The less conscious we are, the more likely we are to fail in getting what we want and to do harm along the way.

So the way to protect yourself from the next bubble is to become as conscious as possible, by doing your work. Shadow Work®'s method for becoming conscious starts with finding out what you want, then looking at what's at risk for you to get what you want. Once you see the spots, you honor the reasons for them and decide which ones you want to take.

I think the Shadow Work® I've done has helped protect me, in a number of ways.

  1. It has opened doorways inside me to archetypal sources of support, intuition, connection and strength.
  2. It has improved my relationship with my Risk Manager, the part of me that's on the lookout for risks, with the result that my Risk Manager is more attuned to risks coming my way and more able to help me assess and navigate those risks.
  3. It has given me opportunities to learn from life events, from the frustrations, the triumphs, and the mysterious conundrums. I've come to believe that the more proactive I am in learning from life — the more I invite life to teach me what it will — the less life will be forced to bring me hard lessons from events like stock market bubbles. Staying open to learning from life isn't always easy, but it seems to be easier in the long run than encountering lessons that I previously tried to dodge, which have a tendency to increase in scope and intensity.
Beyond these broad guidelines, I want to offer a few thoughts — far from comprehensive — about how to protect yourself during each phase of the cycle.

In general, in each phase there's a risk in going from one end of the loop to the other, meaning you can get stuck there. When you do, the place you're stuck gets inflated or extreme because it isn't balanced by the energy at the other end of the loop. Knowing what phase you're in can help you detect when you're stuck, as can knowing what's at risk to go to the other end of the loop.

In Phase One — when you're inspired by a new idea and hoping it will help — you can get stuck either in the idealized vision or in the vulnerability of hope.

  • If you get stuck in the idealized vision, look at the risk in being vulnerable enough to ask for what you want. Maybe there's a part of you that's afraid you'll get hurt or be left alone. If so, it's likely you've been hurt or left alone in the past, and if you heal from that experience there will be less of a risk.
  • If you get stuck in the vulnerability, look at the risk in believing you can get what you want. Maybe there's a part of you that's afraid you'll be betrayed by your hope, as you've been betrayed in the past. Maybe there's a risk of finding out that you're not good enough to get what you want. It will help to get that part of you some unconditional support.
In Phase Two — when you're analyzing relationships and opening yourself to change — you can get stuck either in the analysis or the openness.
  • If you get stuck in the analysis, look at the risk in opening yourself to change. Getting hurt? Being rejected? If so, it's likely you've been hurt or rejected before. If you heal from that experience, there will be less of a risk.
  • If you get stuck in the openness to change, look at the risk in analysis. Losing connections to others? Finding out you're bad and can't be trusted not to hurt people? You'll most likely find that you have yourself been hurt more than you know.
In Phase Three — when you get down to business and assess your progress as you go — you can get stuck either in mindless activity or in thinking without acting.
  • If you get stuck in mindless activity, look at the risk in assessing how you're doing. Judging yourself as a failure? Finding out you're not real? Chances are, you were hurt by judgment earlier in your life and learned to avoid it because it just caused you pain.
  • If you get stuck in thinking without acting, look at the risk in taking action. Failure? Hurting somebody? Acting out of control? You'll most likely find that you've already been working harder than you knew.
In Phase Four — when things go well and you put pedal to the metal — you can get stuck either in the intoxication of the bubble or in belligerence toward those who want to stand in your way.
  • If there's a part of you that doesn't want to leave that exhilarating high, find out why. Does it give your life a sense of meaning and purpose that it doesn't normally have? If so, work on seeing the meaning and purpose in your daily life.
  • Is there a part of you that wants to save the world with your glorious vision? If so, find out why. Is it because you believe that "savior behavior" will make you worthy of love? If so, get some unconditional support for that part of you.
  • Is there a part of you that rejoices in conflict with those who disagree? If so, look to see where that comes from. Is it a need for identity, for a sense of self? If so, chances are your sense of self was brutalized or invalidated when you were younger.
In Phase Five — when we feel the shame of failure, go back to the drawing board to examine what went wrong, and reframe what happened as all for the best — you can get stuck either in examining what went wrong or in the reframing.
  • If you get stuck in self-examination, look at the risk in believing it happened for the best. That the belief might betray you? If so, you've probably been betrayed in the past. Is the risk that others will judge your belief to be foolish? Or that you might live in a dream world or become arrogant? If so, chances are you've been shamed for your beliefs or for thinking "too well" of yourself.
  • If you get stuck in the belief that all happened for the best, look at the risk in examination. Is it that you might be evil? That you might learn that instead of saving the world, you're perpetrating on it? If so, predator work can help you transform the part of you think is bad and get the gold from it.
  • When feeling shame, remember that shame is essential to reaching higher awareness. If you never felt shame, you'd have no reason to grow. If a part of you feels shame, there are at least four things you can do: you can get it some love and support; you can learn if it's your way of loving somebody and choose a new way of loving them that will be less painful than feeling shame; you can set a boundary with it and gain some strength and sense of self from the battle; and you can transform it to get the fuel from it.
In Phase Six — when you're working at both bonding and individuality — there are risks of getting caught both in the connecting and in the differentiating.
  • If you get stuck in the connecting, look at the risk in being a separate self. Being abandoned and alone? Chances are that you have yourself been abandoned in the past. If you heal from that abandonment, there will be less of a risk.
  • If you get stuck in the individuality, look at the risk in connecting. Getting hurt or rejected? If so, you were probably hurt or rejected in the past, and healing from that will help. Is the risk that you might lose yourself? If so, chances are your identity was under attack earlier in your life, and it's no wonder you feel the need to fight for it.
  • Getting caught at either end of this loop may be your way of loving somebody, either another person or a younger you. If so, you can do a Tombstone process give back this way of loving symbolically and take a new way of loving that will enable you to both connect and be a separate self more easily.
I haven't talked much about Phase Seven, which can be called Rest or Grace. Even in a state of rest or grace, there can be risks. One risk in resting is that you might not want to go on to another cycle of growth, because this cycle was so hard. Chances are you need more rest before continuing. No one, the divine included, wants you to do more than you want to do. You may also benefit from looking at the meaning of the last cycle, perhaps from the point of view of your higher power, so that you can get blessing for your efforts that will motivate you to go on.


Alyce Barry is a Certified Shadow Work® Group Facilitator and Coach in Evanston, Illinois, a suburb of Chicago. She is the author of Practically Shameless, available in paperback and on audio CD. Read more about Alyce.

This article originally appeared in our free email newsletter in December 2008. To subscribe, visit our subscription page.

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