The ongoing dispute about banks lending or not lending is nothing but a shoal of red herrings; discussing the absence of trust amongst the banks itself applies to the same category as covering up obvious tracks; the serious difference is that the first headline, when discussed in business circles offers the brilliant opportunity for obstructionists amongst the crowd to make themselves important. “I hear they are lending again” marks the innocent entree of what banks crave; it demonically supports the banks’ head quarters compulsory slogans issued to their infantry and trumpeters like: “Keep up our image!”, “Keep them quiet!” and “Spread optimism”, what harm to predicate “We do indeed lend!”.
What causes good vibes for the obstructionist(s) provokes immediate feelings of bad conscience amongst the remaining listeners as to whether they or their business proposal or model might be insufficient, impotent or just unworthy; what else could be the reason for their most recent bank discussions to have failed so badly?
Being an entrepreneur or the average need-to-be- bank-customer take comfort in the thoughts below:
Obstructionists are not bad people in general; they are basically stupid, selfish and ignorant, but not bad.
Banks are quite the opposite; they are bad which they insist to be in parts (of their papers at least), only; that is why they need Bad Banks. They are intelligent, ego-centric and all but ignorant. Aware of their past gambling routines, the risks and the potential losses they need to make sure that there is scorched earth all around them. They believe this will make the cover-up and the traceability afterwards of what caused the disaster and who played the major roles much more difficult and hopefully of nobody’s interest as everybody should then have taken the same Titanic journey.
The old saying that a bank will always lend you their umbrella when the sun shines but take it back when it rains might soon be your daily line of defence when getting rid of those bankers following you for business. What else is left for them to do other than return to the original bank business model of lending money to the ones that make money for them? Speculation will be restricted and strictly monitored; gambling – at least for the years to come – will be relocated to where it belongs; casinos and the back rooms of dark gin palaces or onto race tracks.
It remains to be proven that the desperate trials to obtain business for the banks will feed the remaining masses of bankers, meet their bonuses or only pays for the palaces to be illuminated and polished as before. The once so honourable objective of 25% return on investment that had underpinned the banks’ superiority over the average hard working but sub-profitable entrepreneurship and had paid for all that glamour will be history – for some time to come.
No arrogance and Schadenfreude: Red Herrings are neither sustainable nor efficient.
Carpe diem!
P.S.: At a meeting today we were told by bankers that they are actually lending more than before the credit crunch; that undoubtedly explains why car and house sales are down 60%, why construction industry has shrunk dramatically and why in entirely general terms the economy is going down the drain.
Simon,