A Billion Here, A Billion There, And Pretty Soon You’re Talking Real Money
Posted @ 12:35 am - Filed under Check This Out, Financing
Everett M. Dirksen was said to have made that comment to fabulously successful oil tycoon, H. L. Hunt.
I quote Senator Dirksen to make the same point he made so sarcastically well. We’re talking about real money here people. Imagine a 11.5 billion stars. Now make the stars dollars. Kind of a lot, isn’t it?
40 banks combined to loan $11.5Bil to a lender they all know is clearly in trouble. Are they all stupid? Have they been hoodwinked? Is there some grand conspiracy?
Or are they all completely unaffected by the pabulum put out by most so-called journalists? Could it be because they know the facts, and the facts aren’t even in the same universe as what’s being reported?
Uh, ya think?
These banks are not Red Cross volunteers. They lend money to borrowers who come through their risk analysis looking as if they might just be able to pay it back. (Yeah, I know, pretty ironic to say the least.) This decision was made by some very serious folks. This isn’t a game to them.
This isn’t a home loan with no docs to a middle school teacher claiming to make a $150,000 salary.
They didn’t just get a phone call asking them to send over a guy with a huge bag of money.
Will Countrywide default on this loan? 40 votes are in. So far the vote is unanimous — no. Now we all know of many cases where the majority just knew something was true, but turned out to be dead wrong. This could be one of those cases. This isn’t about believing the earth is flat though. This is about 40 humungous banks making what I’m sure we can all agree, was a pretty objective decision here — and not made lightly.
Was self interest a factor? You bet. They probably factored in how bad it would be if they didn’t loan them the money. Still, if they thought Countrywide was already floating face down in the water, that same self interest would have caused them to pass. They charged an interest rate they judged would cover the risk factors they perceived.
Bottom line? Unless you seriously think these banks are either colossally stupid, or have all signed a financial suicide pact — you have to believe they thought it made financial sense to part with the dough. We tend to become somewhat numbed by big numbers these days. They loaned billions of dollars — and they ain’t playin’ Monopoly folks. Every single one of those dollars has a picture of a dead president on it.
So, as I’ve been saying for a couple days now — step back and look at the facts, the reality, and not the hype. Journalists are not interested in the facts first. So many want glory, to see their name in the byline, and the recognition. I’m not trying to lump them all together here, but you see my point.
Here’s an example of journalistic financial acumen.
A friend of mine was contacted this week by one of the most respected 
financial newspapers in the world. Their questions were so inane, and so devoid of any real knowledge of the current Countrywide situation, they should have been embarrassed. The problem? They didn’t know enough to be embarrassed. My friend just shook his head and chuckled as he told me the story yesterday while in my office on business.
The answers to the questions they’d asked him were dang near public knowledge already, or could have been gleaned from what’s been well known for almost a week now. It was classic. I’m guessing it wasn’t a call the reporter talked about at the bar after work. They literally asked him, after he’d given them some pretty solid information to back his answers — “Do you have insider information?” I’m not kidding. That’s just too silly to make up.
People read these reporters on a regular basis, and believe everything they write, based on the paper publishing their stories.
When are we gonna realize the mainstream media has been printing money by crying wolf? At what point do we, the public, begin to deeply discount their words?
It’s my contention most of them couldn’t organize a one man picnic, much less report on something as complicated and sophisticated as what’s going on now. I don’t mean this post to be either unkind, or mean spirited — but enough is enough already. There are some incredibly smart, honest, and hard working journalists out there. There’s just not enough of them to go around.
I realize this is somewhat out of character for me. And it’s not my intention here to offend anyone. (OK, maybe mainstream media) But my audience is you, regular folk. And I’m sick to death of the careless writing passing for objective journalism. I realize nothing’s gonna change. But I sure wish the public would start calling them on the carpet a lot more often.
There — I feel better now.
This entry was posted on Saturday, August 18th, 2007 at 12:35 am and is filed under Check This Out, Financing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
, I think the world can change, one person at a time.