Wellington Leg: A tiny group of men and women are struggling to conceive a Bad Bank that will purchase toxic assets from other bad banks thus saving the economy by spurring lending. Perhaps a good example of what these stalwart government officials are facing may be found in literature where bad novel was created to clear a path for good novels by selling in large numbers creating what economists call Extra Money.
Bad Bank Should Look Bad: The elusive design of the Bad Bank begins with the lobby. Traditional Sound Bank marble should be replaced with crumbling fake marble. Portraits of ancient capitalists should be mass produced and hung from the walls at an odd angle. Lobby Popcorn? You know it’s stale. Remember this is a Bad Bank without a lobby seating area where geezers watch CNBC.
That’s Right, We Bad: Outside Bad Bank men in pork pie hats will hawk Collateralized Debt Obligations, Mezzanine Tranches, and Credit Default Swaps. I base this prediction on our own Piggy Bank, Wellington Leg’s baddest bank. Iggy Ban CEO of the Piggy has been operating sidewalk sales since the crisis began. “We hired a sushi chef a few years ago to slice and dice interest bearing instruments. He was such a hit that we moved him outdoors to attract depositors.”
It’s Not Easy Being Bad: Treasury officials are invited to come to Wellington Leg to see Bad Banking in action. Piggy Bank officials led a consortium of banks that loaned some ten billion dollars to nine year old Eugenia Phaeton whose show and tell project My Hedge Fund is now the fourth largest financial institution in the country. “A few years ago Eugenia unwound her yen position because Japanese trading begins way past her bedtime,” Professor Moriarty explains. “It was a brilliant move that catapulted My Hedge Fund into the big leagues.” Her collateral for the massive loan? A somewhat dubious mountain of gummi bears. Piggy Bank officials hope to sell the gummi bears to the Treasury in exchange for Extra Money.
T. Rex Love-Handles reporting for Wellington Leg Financial.