Welcome to the first post of this blog!
I was hoping to post something really intelligent, perhaps set a precedent for ensuing posts; however, that invasive species, the Vampire Squid, caused my concentration to stray. So, with tempered indignation I have chosen to remind people about why the large investment banks are 'fondly' known as vampire squids. A recent article in the Washington blog - see HERE - offers substantial justification for the derogatory term. For banks with assets in excess of 10 billion dollars (Too Big To Fail in other words) credit availability has declined from $87 billion in December 2007 to $18.8 billion as of September 2010.
This is probably the inevitable consequence of the big banks attempting to re-capitalise, reducing their debts and improving their balance sheets in response to tremendous political pressure. But, whilst the TBTF banks continue to report massive profits and justify bonuses of audacious proportions, the smaller banks are continuing to lend to businesses and have increased their lending - 45% of banks with assets below $1 billion increased their lending in 2009. The community banks are playing a major role in supporting small businesses - see HERE.
We will be paying for the consequences of the TBTF banks' bail-out for decades. If they wish to award generous bonuses, despite the desperate economic plight we are in the midst of, then I say that 50% of that kitty should be given back to society. Such a grand sum would rival what the community banks currently loan to small businesses.
Vampire Squid - an undead creature that survives by sucking the life out of lowly citizens caught up between its slimy, stinging, globe-encompassing tentacles.
If you are offended in any way by the 'vampire squid' moniker, Goldman Sachs needs your help with its advertising campaign to make these creatures more endearing - see HERE.
