Tuesday, March 31, 2009

Bill the Banker Explained

Well, Macro Man thought that Bill the Banker might stir the pot, and he was right.

Bill is, as readers immediately twigged, a fictional banker. He is not, however, a figment of Macro Man's imagination. Rather, Bill is amalgam of people that he knows in the market, the "silent majority" of anonymous finance workers who have seen both their reputations and their net worth obliterated over the last eighteen months.

While they garner no sympathy from the populace at large, the anger that Bill and his ilk feel is real. Virtually every element of Bill's rant is a quasi-verbatim quote from one of Macro Man's acquaintances from some time over the last three months. To be characterized en masse as "leeches" or compared to Nazi prison guards devoid of morality, as was the case in the comments, is unpleasant enough. To confront the prospect of physical violence on the basis of one's profession is another thing altogether.

While Macro Man may not agree with every sentiment in Bill's article, he wholeheartedly endorses the right to free expression...as long as it does not damage the person or property of someone else. But freedom of expression goes both ways; while the public has the right to (peaceful) protest, so, too, do the unpopular City workers have the right to have their persons unmolested and their concerns heard.

In the absence of any other forum, Macro Man stepped in to fill the breach, articulating the frustrations he has heard, as they were expressed, to the best of his ability. While it may have been provocative, surely it was no more so than some of the slogans and tactics emanating from the protest camp. In any event, while Macro Man is hardly an impartial observer, he thought he had established some credibility for critical assessment of the finance industry.

He deliberately abstained from commenting to let the chips fall where they may. Suffice to say that the results were.....interesting.

In any event, he trusts that readers of all persuasions will join him in hoping for a peaceful series of demonstrations this week. But if it all kicks off tomorrow, perhaps Bill the Banker will give you an insight to why some in the City choose to fight back.

Regardless, normal service will be resumed tomorrow. Roll on Q2!


Anonymous said...

War is hell.

Anonymous said...

Well said MM. Most of us working in the City do it because we enjoy our work and work hard at that. Enjoying working with some pretty great and incredibly sharp people.

We are not for the most part ego crazy, just happy to provide for our future/families.

However I seem to remember the last time someone meddled. Anyone else remember the IPE....

Anonymous said...

My theme for this month to drill into all the zombies out there is....PRODUCTIVITY.

Bankers are like lawyers. In fact, one in the same. And often, snake comes to mind.

Neither one contribute much to the productivity of a region or country, or the planet for that matter. There job is fleecing. Their livelihood is based on distortions, mistruths, misrepresentations and the like. How is a banker, or an individual working for IB, productive? Because he is able to outfox the bidder? Because he can naked short or some other insidious method to achieve his results? because he closed a deal on false premise or distortions??

How does sitting in front of a computer trying to outdeal the other guy based on some privilege of having key information make you more productive? Not only is it non-productive, it takes away the productivity of his opponent.

Capitalism, bankers and the like, and lawyers contribute a mere pittance to the productivity of this world, and have more recently, destroyed the confidence in such a model of finance.

New thinking will prevail and people are tired of the bullcrap that is dished out about the significance of finance. The model is utterly flawed and recent events reveal the fraud, greediness, robbery, extortion and arrogance of those that run the business.

To hell with them all. They designed a flawed model which has wreaked havoc on everyone. If they choose to stand by that model because they can not be productive in offering a more progressive solution, then I say...


Macro Man said...

Your ignorance is truly breathtaking. I can only wish you a speedy journey back to the halycon days before modern capitalism and banking. You know, the good 'ol "productive" days when every village produced no more or less than what it needed. The glory days of subsistence living, when the life expectancy in Western Europe was 40 years old, that of China was 32 and that of India was 25.

For you, perhaps, a paradise. For the rest of us, a much more damnable hell than anything you can muster.

Anonymous said...

Anon @ 2206hrs.

There is little point to try and convince you but my friend read this and good luck:-


Ultimately we'd like to provide for ourselves nice and quietly but do remember most in the City have 30 years worth of good square meals inside us and regular trips to the gym.

Anonymous said...


Anonymous said...


I have nothing against technology, and the use of it for increasing productivity. That is my wish...for increased productivity.

Your ignorance is obvious since you missed the point.

I'd say more, but I can see you are predisposed.

Anonymous said...

This kind of things are never resolved through a discussion… MM. At some point the masses, the unfortunate ones must be either appeased or subdued. In the present climate, appeasement may require giving up some comforts and income. So, if it’s the latter, better budget for a security detail.

As to modern finance being modern, there is something to that saying that there is nothing really new (except perhaps some technology, actual technology not financial) under the sun. Derivatives – been around here and there since 1900 BC (see links below); the borrower taking on too much debt and unable to pay – debt forgiveness - 1788 BC King Rim-Sin of Ur “issued a royal edict declaring all loans null and void, wiping out some of history’s earliest known moneylenders”; lenders being greedy and demanding a pound of flesh – well, read Shakespeare...

As relating to life expectancy, I would find it laughable to link longer life expectancy to finance. Things like antibiotics and sanitation come to mind. Anyway, wealthy have always lived longer lives, and present time not being an exception… it may be like subsistence living for the extremely poor even now…



Anonymous said...

macro man....you sound like Gordon Brown. Such hypocrisy and unwillingness to face the music. Maybe your time has come.

Anonymous said...

thanks to the wonderful finance system, the smaller farmers will produce less, because they must endure ever higher cost for fertilizer and water. i had thought natgas and oil were down at least 60%...gee I guess it doesn't matter anymore. You will pay what we say you will.

doorknob said...

A tradesman's wage is determined by the market. Banker's wage should be determined the same.

If shareholders see fit to give outsize pay packages, fine. The problem is that the public is now the shareholder and they may see things differently.

So now you have bankers whining like women demanding equal pay for equal work. Of course, equal work is determined by some faceless bureaucratic committee. Would you suggest an arbiter to determine what fair is? The arbiter will no doubt find that "we came in last with you, we can come in last without you."

If you are not happy with the pay package, leave. Find a better one. You probably can.

Anonymous said...

"and their net worth obliterated"

Isn't this a tad bit melodramatic?
Let's use a lookup table..

Proper Description of Net Worth Loss:

"Substantially weakened" >15%
"Shat upon" >30%
"Sodomized" >40%
"Torn to shreds" >50%
"Severely decimated" >70%
"Obliterated" >90%

Most of my Bill the Banker friends were either shatted upon or sodomized in '08, a few torn to shreds. A couple undiversified Lehmanites were perhaps severely decimated. No one I know has been obliterated. Please MM, let's keep things in perspective.

IF said...

"as long as it does not damage the person or property of someone else"

Isn't that the problem? People believe they were harmed by bankers. How about a little jail time for the worst offenders? Or maybe shooting an admiral or two. It might make life for the rest of the bankers safer.

Diego said...

MM,is that all investment bankers have to say after they collectively did it again?

Quite disappointing, to say the least.

Anonymous said...

Maybe you fooled us MM :)
Anyway could we leave this subject and get back to business. One day and I'm tired of this Kindergarten discussion already. As usual all sides are imprisoned in their own small world of beliefs and preferences. A neutral discussion on progress, environment, intergenerational solidarity and social system is impossible.
On top after getting irritated by the Santinelli video a while ago, I got utterly irritated by the following one. They really have to stop this!
Progress or not, where's civilisation?

Macro Man said...

Anon @ 1.27, my interpretation of "General Patton"'s screed was a condemnation of finance specifically and capitalism generally. While it is clearly ludicrous to suggest that banking is responsible for increased lifespans, I think it is equally ridiculous to suggest that modern industrial society and globalization are NOT. Sanitation and vaccination do not grow on trees after all.

@4.24, OK, OK, you got me. I should have said "financial net wealth". And while perhaps only a few have been "obliterated" on your scale, I know many who were torn to shreds or severely decimated...and not just those at LEH.

@IF, well, as Cassandra highlights, many, many people benefitted from the era of easy money. Were banks the most high profile? Yes. Did they err most spectacularly? Uh-huh. Were they the only ones who screwed up? Not by a long shot. Moreover, the majority of City employees did not "screw up" any more than the average Joe. And yet they are universally excoriated as cigar-smoking plutocrats, despite the fact that many are making the same lifestyle cutbacks as the average citizen.

While that doesn't merit a special award, of course, by the same token it doesn't merit the blanket opprobrium that's been directed their way. And that was the point of the original post...not, as some have bewilderingly intpreted, that bankers deserve to get paid more.

Macro Man said...

Geert, amen. Normal service resumes today.

Anonymous said...

I actually didn't have much of a reaction to the post. It seemed slightly below average in terms of interest (neither finance-related nor particularly clever), and while I agree with most of what "Bill" said (particularly regarding the idiot protesters, and the great fraud known as global warming), I am afraid I don't have much sympathy for him either.

Like the shareholders who invested in finance companies, he made choices (about his career and accepted his current firm's offer of employment), so he needs to accept the consequences, even if the outcome isn't his fault. Life is very seldom "fair."

I know a bit about opprobrium, having worked in an obscure area of DBL during its disintegration two decades ago. I (as I am sure many others would share the same sentiment) wish I had made some different choices in the past as far as my career goes, but (unless one is a politician) one tries to direct efforts towards figuring out the best way to get to a desired situation in the future, while putting the past in the past.

Diego said...

MM, no violence is acceptable, we all agree on that. I would surely be much angrier than you towards protesters if I felt physically threatened, so I will read your latest comments under that light.

However, one thing is to suggest that almost everybody benefited from the good times, another thing is to put the blame on all beneficiaries. For those not saving and getting heavily indebted were just following their banks' recommendations: those "but your debt level is too low", those other "you can get another loan, why don't you?" and so on and so often heard by visitors at the bank.

Financial stability is the banks' responsability, not financial illiterates'.

anon1.27 said...

MM: "Sanitation and vaccination do not grow on trees after all"

Neither are they magically pulled out of the P&L sheets. Finance has its place, but with too much of a good thing, even water is poisonous. (http://jessescrossroadscafe.

I don't blame finance alone for the present mess. Many other people have made very bad decisions. And by many I mean almost everyone, from “ordinary folks” to wealthy clients of the hedge funds. Some would say that speculation in land and paper is as American as apple pie. This does not change the fact that there is a need for reform, a reform in essentially everything including finance, which needs to go to its historical average. The alternative is a slow dissent into a kind of third-world-ism and a calamity.

Macro Man said...

Anon, there is a difference between capitalism and traditional banking (taking deposits and making loans, providing trade finance and working capital to encourage investment, innovation, and growth) and speculation in BBB tranch residential mortage CDOs.

True, the latter was subsumed as a subset of the former. And I don;t think anyone is disputing that that shouldn't continue in the way it has. But it seems to me that many, both in the public domain and in the comments of yesterday's posts, are unable to distinguish between the inappropriate activities of some and the valuable role that tradional banking plays in driving economic growth and, yes, human welfare.

vandalsstolemyhandle said...

Keynes said it best:

Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. The measure of success attained by Wall Street, regarded as an institution of which the proper social purpose is to direct new investment into the most profitable channels in terms of future yield, cannot be claimed as one of the outstanding triumphs of laissez-faire capitalism — which is not surprising, if I am right in thinking that the best brains of Wall Street have been in fact directed towards a different object.

Finance as the handmaiden of enterprise fulfils an invaluable role. But finance as dominant enterprise doesn't do society any favours. Rising financial profits / GDP in last ten years should have set off alarm bells. Finance jumped the shark many years ago...the problem has been diagnosed, but trying to reverse the process in a way that Fonzie doesn't become fish food is proving a tad tricky.

IF said...

I was thinking for a while, why your reply did upset me a bit. (I've read Cassandra before and thought she was reasonable.) I understand your reply as a variant of the Nuernberg defense. Yes, many people appeared to have profited. To different degrees. But some (maybe many) where genuinely harmed. I am sensing a general lack of culpability. This is making a lot of people really angry. Maybe a change of strategy is required? Albert Speer managed to escape the noose by accepting responsibility. (Yes, I know: Don't mention the war.)

Anonymous said...

One reason why the bonuses at investment banks went to totally stupid levels was this highly treasured concept of secrecy. If all firms were mandated to disclose their bonuses we would not be in such a mess. As then the market would be outraged at some stupid sales twit making 4 bux a year.