The Ghost of Credit Past visited Wall Street on September 18. The dark figure pointed to the interest rate board. The Reaper asked, "What did you sow?" He laughed scornfully at their reply of "Money?"
"Watch!" the visitor implored. Investment bankers saw their woefully inadequate efforts to price risk. Blinded by the greed of commissions, fees, and incentive executive compensation, they packaged credit bombs, sold at a premium. The scene replayed a credit rating expert saying, "I hope the house of cards collapses after my retirement."
With a wave of the Reaper's scythe, interest rates reset to cover the errors of past deeds and current market risks. The numbers on the rate board ticked up. They stopped at:
30 year fixed mortgage 15%
Credit card APR 29%
CCC rated corporate debt 20%
Investment bankers wailed at the horror. Chief executives donned their golden parachutes and fled to the rooftop heliport. His work done, the visitor left the building.
The Ghost of Credit Past had no idea another Reaper was nearby. One thousand feet above, a remote killing machine fired a Tomahawk missile at the karma enforcer. Despondent investment bankers watched their tormentor vaporize in a fireball.
On the big board, interest rates began ticking downward. When they returned to pre-visit levels, Uncle Sam barged in. "Don't worry boys, I've got it all under control. All those sins the Reaper tried to make you pay, I'll take 'em off your hands, and at premium prices to boot!"
Investment bankers cheered! A sole janitor interrupted the celebration. "Well, that might help with past sins, but what about your current ones?" Everyone discounted his question. After all, he was just a janitor.
"Watch!" the visitor implored. Investment bankers saw their woefully inadequate efforts to price risk. Blinded by the greed of commissions, fees, and incentive executive compensation, they packaged credit bombs, sold at a premium. The scene replayed a credit rating expert saying, "I hope the house of cards collapses after my retirement."
With a wave of the Reaper's scythe, interest rates reset to cover the errors of past deeds and current market risks. The numbers on the rate board ticked up. They stopped at:
30 year fixed mortgage 15%
Credit card APR 29%
CCC rated corporate debt 20%
Investment bankers wailed at the horror. Chief executives donned their golden parachutes and fled to the rooftop heliport. His work done, the visitor left the building.
The Ghost of Credit Past had no idea another Reaper was nearby. One thousand feet above, a remote killing machine fired a Tomahawk missile at the karma enforcer. Despondent investment bankers watched their tormentor vaporize in a fireball.
On the big board, interest rates began ticking downward. When they returned to pre-visit levels, Uncle Sam barged in. "Don't worry boys, I've got it all under control. All those sins the Reaper tried to make you pay, I'll take 'em off your hands, and at premium prices to boot!"
Investment bankers cheered! A sole janitor interrupted the celebration. "Well, that might help with past sins, but what about your current ones?" Everyone discounted his question. After all, he was just a janitor.
