The First Great Bank Run of 2011

Letter to the Bank #72 (Being Jacked and the Beans Talk)

Dear my very own (all mine I tell you! Mine! MINE!) personal, assigned to me, focused on me, concerned only for me and my particular situation vis-a-vis...money—Mr.Bullrider, my Bank Manager,

Guess what? I’m uncovering vats, hoards of letters I’ve written to you over the past few years that never saw the light of day. Writing to you became an obsession, one I might add that has worn off of late as the wisdom, brilliance of my magical thoughts on finance become common currency. What is remarkable is how relevant the same things stated over and over again remain! Each letter more or less repeats the essence of the previous one only in a slightly different way. Writing them feels like polishing and organizing the arsenal so that it will be ready the day we need to bring out the big guns—the perfect sentence that says it all—that sort of thing. I’m sure you’ve missed them so here goes—one such letter with some spontaneous additions. More to come later:

“Dear BM,

Just to be clear now—it is not your piñada I’m bashing when I get all vitriolic and mad at the banks. I’m the first to admit to a terrible habit of conflating all institutions and/or individuals who make obscene amounts of money using cruel, sharp and vicious financial instruments and outrageous numerical methodologies. Smells like middle aged angst! I’d suggest that is perfectly appropriate on the 20ieth anniversary of Nirvana’s Nevermind.

I’m all too inclined to roll the whole kit and caboodle into one big bundle: The Banks (commercial, corporate, community), Wall Street, Hedge Funds, Mortgage Brokers, I could go on and on and on. To me they are all Bouncy Bankers. They all started with somewhat imaginative career aspirations as chemists, philosophers, dancers and even poets but then saw no money (anywhere—not what they’d cal money) so switched to finance and gleefully fell into that big black hole where greed festers and white swans never see the light of day. In that underverse they thrive! They even float. Indeed they fly. Pop them they patch themselves back together with ease. Bash them with your pitchforks and clubs until all the candy falls out, they’ll still find a way to syphon it all back in and fly. Their balloons cannot be popped. They may wobble but, as I have noted before, they will never fall down. The basic assumption is that somebody has to handle the money preferably an expert who can make it grow. These days these magicians will not give you magic beans for your scrawny cow. They prefer to throw the beans through the window and reap the rewards to be found in the giant’s castle for themselves. They might lack the courage or the cunning but they don’t need either. They have massive unregulated instruments to work with, financial tools so big they can even make a giant feel small and, because they are unencumbered by scruples, they can come at him from behind and stab him in the back with small print that proves the chicken that lays the golden eggs belongs to them and take everything. Criminal right? They argue before Congress that they are being unjustly maligned. They look aggrieved and are affronted by a public that fails to comprehend the burden they carry but somehow the pain in their eyes carries no weight.”

Again I should stress that as you are my bank manager I keep coming back to you and I trust (as I must) that you are one of the sensitive ones. Why else would I trust you with my finances, you who are in essence the mortgagee of my children. And why else would I share with you my magical financial thinking?

Sincerely,

Kristian Witherkay

Spring in Town-1941

Grant Wood papers, 1930-1983. Archives of American Art, Smithsonian Institution

A typed list by Grant Wood, painter of the classic “American Gothic”, features columns containing the start and end dates of all economic depressions ever to have taken place in American history, ending with the Great Depression—the time during which Grant lived and worked. At the bottom of this list, Wood adds, “all [depressions] came to an end except this one, mebbe [sic] this will…”. This desperately hopefully message, and the whole list itself, emphasizes the drastic conditions out of which Wood’s work emerged, breathing new air into the now-staid, iconic characters in his paintings.

I was at the Morgan Library, NYC, to check out the thoroughly enjoyable Exhibition: "Lists". I was too cowardly to take my own cell phone pictures thanks to a particularly vigilant guard but found this at The Art Blog whom I thank most sincerely for having overcome said fear and posted the above. Go to their site for more on the "Lists" exhibition.

Would You Trust This Man?

BANCOPHOBIA-A Definition

A Lot in The News Blogosphere About Bank Runs These Days!

A bank run (also known as a run on the bank) occurs when a large number of bank customers withdraw their deposits because they believe the bank is, or might become, insolvent. As a bank run progresses, it generates its own momentum, in a kind of self-fulfilling prophecy (or positive feedback): as more people withdraw their deposits, the likelihood of default increases, and this encourages further withdrawals. This can destabilize the bank to the point where it faces bankruptcy.^[1]
A banking panic or bank panic is a financial crisis that occurs when many banks suffer runs at the same time. A systemic banking crisis is one where all or almost all of the banking capital in a country is wiped out.^[2] The resulting chain of bankruptcies can cause a long economic recession.^[3] Much of the Great Depression's economic damage was caused directly by bank runs.^[4] The cost of cleaning up a systemic banking crisis can be huge, with fiscal costs averaging 13% of GDP and economic output losses averaging 20% of GDP for important crises from 1970 to 2007.^[2]
Several techniques can help to prevent bank runs. They include temporary suspension of withdrawals, the organization of central banks that act as a lender of last resort, the protection of deposit insurance systems such as the U.S. Federal Deposit Insurance Corporation,^[1] and governmental bank regulation.^[5] These techniques do not always work: for example, even with deposit insurance, depositors may still be motivated by beliefs they may lack immediate access to deposits during a bank reorganization.^[6]

Above copied word for word from Wikipedia

Extremists

Toxic

Artists and Money-Art Thinks About These Things

Letter to the Bank #71 (The Bouncy Banker meets Inspector Clouseau)

Dear Bank Manager,

Oh the weight of the load you carry. I know your job involves so much more than this but would you say the following is a fair description of what your responsibilities are vis-a-vis the customer?

“The bank manager is responsible for increasing or maintaining the deposits on hand at the bank. This may mean developing incentive programs to increase the customers that use the bank or developing programs that encourage the savings of existing customers. Bank managers work closely with the bank president and marketing team in developing these programs. The bank manager may also work on increasing other aspects of the bank's business such as the loan department, the investment consultants, or even the mortgage and finance divisions of the bank.”

I pulled this job description off the web and I accept that it may not do you justice. From this description I get no sense that your customer is regarded as any more than a cash machine. There is no emphasis on making your client’s funds grow or helping them manage the octuple draws on their meagre savings. Rather the emphasis is on getting as many poor saps to give up their money so you can invest it for your bank’s own benefit. No wonder we regard that extended hand and gold tooth smile reservedly.

Now most artists are probably smart enough to avoid biting the hand that feeds them but I seem to have somehow developed the habit of doing quite the opposite. Picture that cartoon of Inspector Clouseau at the beginning of the Pink Panther movies. I see Clouseau holding with both hands the large wrist of a poor, unsuspecting central banker, cufflinks gleaming, a massive gold band on the ring finger, and nibbling at it like a corn cob—though corn on the cob is not something the French relish. In France they feed corn to the pigs. Huh. I see Clouseau being severely reprimanded by his boss, the ever compromised Dreyfuss who always is stuck playing both ends against the middle, himself.

When I was growing up there was a toy called the Weeble. “Weebles wobble but they won’t fall down!” That is you! You may wobble, you may even crash, flop, flounder for a while but in the end you’ll always bounce back. You’ll get up, brush yourself off, buy a new suit if you must. You’ll lose everything on paper but it is only paper and miraculously it’ll all come back restored by an uptick in optimism contrived by lobbyists, corporations and politicians. They hold a gun to the temple of that pessimistic economist who now turns round and declares a run on diapers as a sure sign that consumer confidence is up. The Government, also feeling pessimistic but oh so dependent on the banks that so brilliantly create wealth if given enough rope, gives them rope. With a gentle slap on the wrist, that immortal wrist that clutches that never ending purse, the government says (between pursed lips): “next time we let you fail”. Both the government and the banks know full well that’ll never happen. They stay afloat together or go down together albeit long after the rest of us have already sunk down in oceans of debt never to be repaid. Given the inevitability of this I feel compelled to repeat my brilliant but utterly ignored although to me compelling idea we should erase ALL debt. Imagine the worldwide sigh of relief! Everyone would suddenly be presented with the chance to start over from scratch. Optimism, that foundation stone of a functioning market would be restored, and if that in turn were built on a real bedrock of regulation perhaps we could all start over on the right foot, or the left.
 One day you’ll thank me for being so upfront and straight with you. I make no bones about the fact that I find your operations quite sleazy. I find them dubious to say the least. I mistrust your institutions. There. Note: I am not being rude to you—here there will be no name calling, no killing the messenger. If I am rude in any way it is a polite rude. That is my specialty! That said if corporations are people as both the Supreme Court and Mitt Romney would like us to believe then I guess what I say is offensive. Tough. I’ll refer to bricks and mortar, and the wads of paper, the signage that declare you are now facing or confronted with a corporation, any way I wish. Honestly if I can find chinks in the armor, and hurt the feelings of a corporation, I’d be thrilled! But I digress. Why would I bother writing this unless I held out some hope you might listen to me? That is trust. I’m trusting you’ll engage with me despite my niggling notes. I trust you’ll see beyond my school boyish way with a metaphorical handheld catapult. Instead of swatting me away as I kick furiously at the shins of the massive redwood tree that is you, I hope you’ll bend down and hold out your hand extending the flat of your palm toward me. I’ll sit next to the throbbing blue ulnar artery of your fine institution and we’ll finally hash a few of these things out—together.

Gosh this was a long one. I get so caught up in the language, the metaphors, similes and idioms. I SO need the discipline a writing workshop, or the limitations of Twitter might provide. Until I get going on those fronts bare with me.

Sincerely,


Kristian Witherkay