“Yes, Grace.”

“Mr. Hardwinkle, phone call for you.”

“Grace, not now.  I’m trying to figure out how many of these loans could default in the next–”

“Sir, it’s the president.”

“Of what?”

“Of the United States, Mr. Hardwinkle.”

“Oh, my … okay, put him on.”

“Hardwinkle?  It’s the president.”

“Yes, sir.  How are you, sir?”

“I’m worried, that’s how I am.  I just read in the newspaper that the banks in your state are still looking at a huge number of loans that could go bad.”

“Well, Mr. President, that’s why–”

“Here I am, trying to quit smoking before someone in the press decides to stop worshipping me and snaps a picture of me holding a Marlboro, and then I read this stuff.  It’s not helping.”

“I know.  I was just working on–”

“You people in the banking industry need to stop all this free-market recklessness.  I’ve said that many times.”

“Yes, sir, I heard the speeches, but–”

“During the housing boom, you guys passed around loans like they were party favors, and then too many people couldn’t pay them back and created a big economic mess.  Now I’ve got to clean it up.  I need you to grab a mop with me, Hardwinkle.  I’ve said that many times.”

“Yes, sir.  A lot of loans went bad.  But, uh … you do realize we were threatened with prosecution by the Justice Department if we didn’t lower our lending standards.”

“Dang that George Bush and his cowboy economics!”

“Actually, Mr. President, it was during the Clinton–”

“Enough ancient history.  It’s time to look toward the future.  I’ve said that many times.”

“The future.  Yes, Mr. President.”

“No more reckless lending, you hear me?”

“We’re working on it, sir.  We’re really tightening up the standards.  Everybody is.”

“That’s the other thing I need to talk to you about.  You guys need to start lending more money.”


“The American people bailed you out with their tax dollars, and now you greedy bankers aren’t giving them the loans they need.  It’s shameful.”

“But … bad loans … uh … economic crash … the mop, and all that.”

“Yes, the mop.  I’ve said that many times in the past.”

“I KNOW!  I mean, sorry … uh … you see, Mr. President, we got into the mess because we made a lot of bad loans.  And like I said, we were encouraged and even ordered to do that by the Clinton– uh, by people in Washington.  So now we’re trying to just lend money to people we think can pay it back.”

“Look, Hardwinkle, we’ve got 10 percent unemployment out there.  I tried spending a trillion dollars to prop up a lot of failing businesses and arts organizations, but let’s face it:  it didn’t work.  So now I need small businesses to expand and hire more people.  But they can’t do that if you won’t lend them the capital.”

“Yes, Mr. President, I understand how it works.  But you see, to lend more money, we’d have to lower our lending standards again.”

“Okay, do it.  But no more reckless loans.  I’ve said that many times.”

“Mr. President, you’ve never actually worked in the banking industry, so I realize you may not be, uh, conversant in how these things work, but–”

“I know all about banks.  When I was an ACORN lawyer, I sued them.”

“Yes, I know.  You forced us to make loans to people with marginal credit.”

“I believe the term you’re looking for is ‘encouraging more affordable housing.’  Careful there, Hardwinkle.  You took the bailout money, so we can decide how much you get paid now.”

“Okay, sorry.  Anyway, we’re perfectly happy to lend money to anyone who we believe can pay it back.  Lending money is how we make a profit, after all.”

“So lend more of it.  Bigger profits.”

“Sir, what I’m trying to say is, we lend money to people with the best credit ratings first.  To lend more money, we have to start approving loans to people with not-so-good credit.  And to lend even more money–”

“Yes, yes, I understand.  Look, between you and me, I’d like to just spend another few trillion and make everyone who’s unemployed a government employee.  Talk about your loyal voters.  But we’ve got elections coming up in less than a year, and I’m afraid the rest of the voters don’t like that idea.  So I need small businesses to step up.  And that means you have to step up.  I’ve said that many times.”

“But … Mr. President, if the loans go bad–”

“For Pete’s sake, man, get with the program!  If that happens, we’ll bail you out again.”

“You mean after you blame our recklessness for creating a need for more bailouts?”

“Hey, that’s just politics.  I’ve said that many– no, actually, I haven’t said that.  But you know what I mean.”

“Yes, sir.  You want us to lend a lot more money, but stop making any more bad loans, correct?”


“Yes, sir, Mr. President.”

“Now you’re talking.  Bye now.”


“Grace?  Can you bring in glass of water and some Tylenol, please?”

Two articles caught my attention yesterday.  Banks still have a lot of potentially bad loans on the books, and Obama wants banks to lend more.  Only in Washington …

4 Responses to “More Bad Loans? Bank On It”
  1. TonyNZ says:

    Somebody should really explain the definitions of the words “sustainability” and “irony” to this man.

  2. Dan Hall says:

    This is what we get for letting the government “buy” into private enterprise. Once the government browbeats or strongarms banks into making more risky loans, then the government will have to bailout a new bigger group of failed banks. Of course this will be done by printing more money, that we actually don’t have. Where does it end?

    My cynical side says they want more banks to make bad loans. Then, when the government steps in to bail them out, they’ll use that an excuse to take over, impose new rules, set salaries, determine lending practices.

  3. Jesrad says:

    Tom, have you seen this article about how to make a billion dollars with no efforts and no risk ? Federal government is right now instrumentalizing the banks, at huge future taxpayer cost, to give itself an enormous credit leverage. Basically they’re offering a crazy interest spread (over 4% difference) between Fed loans to banks and long-term treasury bonds so the banks can be used to “launder” monay created from thin air back into the government’s budget. And the spread is covered by your taxes.

    Yup. With all this funny money, the government gets to keep spending, the big banks earn interest on money that didn’t exist until the Fed created it, and we cover the interest. Until I grasped how this all works, I couldn’t understand why families like the Rockefellers could be in favor of high taxes and big government. Now I know: it makes them even richer.

  4. Matt R. says:

    At this point, I’m just trying to protect my ASSets. If you’re interested, check out Charles Goyette’s new book, THE DOLLAR MELTDOWN. I think we’re in for a bad decade, maybe longer.

    With trillion dollar bailouts and a Congress inclined to keep spending trillions more, I’m afraid you’re right.

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