Thursday, October 29, 2009

The Bankers I

Moral: Wherein we have to ask: how hard can this role be? The banker one, that is.


Let us see. In the old days (1800s or so), the banker was the guy in the suit who exuded some aura of stability and who stood up for the right. You know, the backbone of the community. Oh, wait, that was some caricature from the movies. Actually, in some westerns, the bankers cowered as bullying bad guys shot up the town and ran off with the bank's safe (or its contents).

There are some real tales, though, of the town's people helping save a bank, such as Northfield, MN and Coffeyville KS. This is real stuff, folks, and there are probably many other examples from frontier stories. How many such stories will there in the future be about these times?

We now have bankers that think that their rates (way beyond usurious -- 29% and above) are not so bad because they're legitimate (that is a long story and will require more analysis at some point, gosh, thanks Lawmakers, way to go). For now, these same bankers are sending out their (somewhat CYA-ish) letters about the new rules which will be in effect soon. The tone of the letter is ominous, actually it's irritating. What makes them think that we want their money (or credit) anyway?

For instance, one may be on their rolls because some merchant company decided to out-house its accounts receivable processing. Oh, we know, that was considered a step up at the time of the decision. Except, it was not in many cases. Have we not heard, of late, that all sorts of decisions were less than what we would expect of those who (ought to) think about fiduciary duty? How much fraud has been associated with this type of out-housing? Does anyone know? What cut does the bank take? That is, are the merchants making as much as they thought that they would?

There are all sorts of banker types to look at. Even Big Ben is one, albeit somewhat indirectly as his academic self has been thrust into a role of managing our trust (yes, of the American people) and of trying to control all those who want their fingers to be in the pot. Sorry state of affairs, one might think, yet we supposedly have the best system, since the industry is so full of the best and brightest.

We'll get back to all this soon and look at how banking ought to be and not to be (not be involved, at all, with casino capitalistic gaming, for instance). Of course, there will be a look at what is, to boot.


12/19/2009 -- Dead peasant, indeed.

12/15/2009 -- Requiem for the dollar (WSJ) and responses.

12/09/2009 -- The Street loves Ben who loves 'em back: The Street utterly loves the Fed's largess, earning massive profits from trading unstable currencies, the carry trade (borrow short-term dollars near zero, buy longer-term assets abroad), and the high-margin process of transferring America's capital abroad.

11/10/2009 -- Glass-Steagall, again. Why not? Also, more on the gab standard.

10/30/2009 - Of course, we're just doing a little jaw-boning, in the beginning. Listen to these following views from FT. Gives one pause.
  • Banks borrowing at 0 and making oodles - some of which they want to pay out as dividends or bonuses (we know, two different types of payouts), yet, the economy is in the dumpers except for a few fat cats who are rolling in their take.
  • Big Ben redefining profligacy - he ought to have unwound long ago, we thought. Ah, yes, someone said, oh, yes, Alan, finance is at the heart of the economy. Oh, that's the particular physiological piece? We thought differently.
Modified 12/24/2009

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