...And immediately all hell breaks loose in the house. My 125 pound hound starts baying, and woofing, and snorting. toenails clicking and sliding sideways on the hardwood floors while his too short legs lose traction, and he barrels head down, straight ahead--like the slowest guard on the football team-toward the front door to protect us from the FedEx guy.
"Dude," I say, grasping his choker collar with one hand and wiping the slobber from his jowels with the side of my jeans. "Act that way when they don't ring the doorbell." Like when they come through the basement window I want to say, but there is no need to expound. He's just a hound with a three or four track mind.
He's a big guy and needs fed a lot. When I cut back on his portions, eliminate the table scraps, or forbid the bisquits until he drops a pound or two, he's very put off. He's come to expect a lot of food on a regular basis. He expects a lot of attention. He's just like my bank. Just like them...
Maybe they got a little too fat, too quick. Maybe they made some wrong choices off the menu. Maybe they liked the restaurant so much (when they were flush with dough) that they bought and staffed it--the whole chain, perhaps. An entire sector.
They found investors overseas and lured them into the business model. They spent billions on land acquisitions, brick and mortar. They increased their payrolls, cut their rates and flooded the airwaves and web with promotion. They experimented with new, low-fat, low-interest cuisine. They found a way to feed anyone. They thought they could service everyone.
Then the media stuck their snouts into the soup and found that there were just too many cooks in the Kitchen. Hell, there were just too many kitchens. They discovered that a few Chefs (Chiefs?) at the top of the food chain were skimming the cream off the top of the vat. Customers began sending their meals back, skipping out on the bill, cancelling reservations, staying at home...Perhaps the cooks and busboys were here illegally and scattered into the gangways and alleys leaving their houses (and promissary notes) behind. What about E-coli, non-smoking sections, and foie gras? The investors overseas demanded a raincheck. The tougher ones demanded a refund. The banks looked into the mirror, studied the ugly sight, and went on a crash diet. They pledged to starve themselves back into shape.
Now even the best customers have to pay more. There's a shortage of product. "The credit is a little crunchy this month, don't you think?" we say to our Loan Originators as they stand before us, still willing to serve, and a little hungry themselves.
We asked for the check but our credit card was denied. We stopped making even our minimum payments. We stopped even looking for a parking space. The red coat valets and attendants fail to even show up. There are no cars to park. Things are lean. We start eating our young...
...But for how long? How long can a big, hungry beast like my dog go without food? Eventually he will find a way to settle his stomach. Same with the banks. They are a huge part of the GDP and it is only a matter of time before the purging stops and the yo-yo begins to sail up into the opposite direction. And just like all failed dieters, they will actually end up a little heavier than before the whole cycle started. You just wait and see. You can say 'I told you so' if, in 5 years, total reported banking profits, and the number of loans originated, aren't significantly higher than they are today.
There are a few weblogs on the subject of Lending I read with great frequency. One is Dan Green's The Mortgage Reports out of Cincinnati. The other is Brian Brady's Mortgage Rates Reports out of San Diego. And of course, I communicate on a weekly basis with the Mortgage Guru here in Chicago, Chris Hahn. And we all have a different take on the subject.
the image is not my dog