In a stunning interview that left the reporters stunned, and perhaps a little shocked and awed, today the head of the largest banking cartel in this solar system explained the recent collapse of our worldwide financial system.
"You see," he said, "some time ago, all of us bankers, using our various decision-making processes, arrived at the conclusion that real estate loans in the United States were the most reasonable, judicious investments for the capital available from our investors, patrons, and partners; however, those loans are no longer viable."
One reporter asked how such investments had all gone bad at the same time.
"You see," he said, "all of us bankers, using our various appraisal skills, arrived at the inevitable conclusion that real estate in the United States is now worthless, and the borrowers are a collection of sub-prime deadbeats, so we have taken write-downs, losses, and charge-offs to accurately reflect on our balance sheets this sad state of such a sorry business."
Noted columnist, Ziff Nada, asked if the real estate was still there--as in "are the homes still standing on their lots, do people live in them, are the borrowers making payments?" and so forth.
Mr. Big Head of Banking responded, "You see, all of us bankers, using our various analytical formulas, have determined that, even though the underlying properties are still in existence and occupied, it is highly unlikely that the borrowers living in them will be able to make the payments over the next 15 to 40 years and will, in fact, default on the loans. So we have taken prudent steps to re-assess the safety of these soon-to-be worthless loans and accordingly lowered the values of our portfolios."
Ziff Nada asked, "Have these borrowers stopped making their payments?"
Mr. Big Head replied, "You see, all of us bankers, using our various income measuring methodologies, have noticed that a nominal percentage of these borrowers are not making payments, presently, and that more of them will cease to pay in the near future because of impending economic downturns."
Another journalist questioned "How do you suddenly just de-value the properties in such a short timespan?"
Mr. Big answered, "You see, all of us bankers, using our various valuation techniques, just go to the computer and divide all those numbers by two. Thus, a $400,000 home in Poughkeepsie, New York, is now worth $200,000 and a $600,000 place in Van Nuys, California, is now worth $300,000 and so on, across the board and our $2 billion USA loan portfolio is now worth $1 billion."
Ziff Nada said, "But nothing happened."
"You see," said Mr. Big, "that's the beauty of it. All of us bankers go to our central banks and our governments, hats in hand, weeping and wailing and gnashing our teeth over these tremendous losses. Then those rocket scientists, with their 93 IQs, sitting on the boards and in the legislatures and in the seats of political power, feel sorry for us and our investors. They grant us huge, new tax breaks. They make extremely low interest, or even no interest, loans, grants and bail-outs available to us so that our banks can survive this terrible, horrible, incomprehensible crisis. All of us bankers then post substantial losses and our companies become presumably insolvent, even though all of the firms actually still meet or exceed the required and legal risk ratios which keeps our investors and regulators happy. Banks may now go two or three years without showing a taxable profit as a result of these fabricated losses. And of course, in the background, at the traditional 99.7 percent successful loan ratio, the people in Poughkeepsie and Van Nuys continue to make their monthly mortgage payments to all of us bankers. Our real profits increase, our taxes drop, and we prosper."
A business reporter asked, "Mr. Big Head, aren't you concerned that the central banks and governments will investigate and impose all manner of new legal controls, new regulatory agencies, and extremely strict oversight, so that it becomes impossible for all of you so-called bankers to produce this type of crisis in the future?"
Mr. Big stood up and, as he left the conference room, replied: "It is the task for each new generation of bankers to devise their own scheme, scam, skim, or flim-flam to fleece the governments and taxpayers of free money. All of us bankers, in my unusually creative group of colleagues, brought you both the savings and loan debacle of the 1980s as a sort of beta test, if you will, and then this sub-prime crisis of the 2000s as our rip-off to get rich and not risk going to prison. Cheerio, au revoir, auf wedersehen, adios, ciao, sayonara, so long to all of you lazy, un-curious media flaks. You see, thanks to all of us bankers, now even real estate is not a safe investment."
"Mr. Big, Mr. Big," Ziff Nada bellowed. "What investment do you recommend?"
"Swiss francs, Mr. Nada. Only Swiss francs."
In his noted column posted that evening to scores of newspapers around the world, Ziff Nada took note of the facts that Mr. Big Head of Banking had retired, activated his golden parachutes, collected about 400 million in Swiss francs, bought a condo in Phuket, Thailand, and signed up for 3 months of SCUBA diving lessons, all in the last 48 hours.