from genius rhymes
The Bank Accounts Of London
From Bear Stearns to Lehman*
13/04/07
The bank accounts of London are collecting all the credits
Of a spree-incessant culture where not shopping is a sin
When you aggregate the value of transactions made per period
It’s more than the sum total of the money going in
Now the bank is overdrawn because take-outs exceed deposits
So the LIBOR** short-term lenders fund the loss
They have the clout
But the money being paid back to them on any given weekday
Is the square root of the total of the money going out
So it sells the debt at wholesale
To a merchant bank, percentaging
The liquid asset value of a threshold in the bin
This investment bank repackages and markets the security
As mortgage-based investments
So the money’s coming in
But the total credit buys of institutional investors
Minus brokerage commissions
After any market bout
Equal less than what the bank’s bank got
Pre Securitisation
For the whole debt in the first place
Too much money’s going out!
So they’re targeting the cream accounts
Of private wealth investors
Selling Triple A securities
But margins are so thin
That the interest rates are tracking
Fiscal movements in the gilt markets
But treasury debt’s not fool's gold
And the money’s coming in
Only not enough, so now we’re selling
Property Derivatives
That allocate a fund based on
Repayments in the chain
But deriving future value of a mortgage loan is tricky
When we’re selling things we haven’t got to fund the loans again
Selling things we haven’t bought yet
For a mark-up we sure hope to make
Is what we call a “future” and the market’s kicking in
With the trading floors of Holborn
Banging futures out in billions
Its not too hard to ridicule
The state the country’s in
But don't blink 'cause here comes arbitrage
The takeover Goliaths
Who are shorting all the white knights
Cashing in on falling stock
When the yields on credit default swaps
are soaring soon enough
We will be stuck between a hard place,
AIG and Northern Rock*
It all but caved in three years ago
But as the sun was setting
On our all night fiscal orgy
In came China with a wedge
Of cheap money it had thus amassed
From western household exports
So we sold them on as teaser loans
We’re living on the edge!
Now derivatives, commodities, new stock, and bonds and wealth funds
Corporate equities and CDO’s
And sub-prime “liar loans”
Are all monitored by spread-betters
They’re trading on the certainty
That someday soon
The two point fours get kicked out of their homes
Hold your hats! Here come’s the government
It wants you to save harder
But with half an eye on May the fifth
It’s difficult to trust
With it’s starter homes and tax-free loans
And bullshit worthless catch phrases
Like "tax needn't be taxing" and a pension is a must
Why can’t I walk the street these days
Without a good haranguing
From a jumped up sales “advisor”
Screaming “Come Talk To Your Bank” ?
Well I did but they ain’t listening
They gold-lined all the pockets
Of the lower working classes who have zero credit rank
The bank accounts of London are collecting all the credits
Of a spree-incessant culture where not shopping is a sin
If you aggregate the value of transactions made per period
It’s more than the sum total of the money going in
(gknapton / copyright)
* verse 8 and poem sub-heading added in Dec 2009
remainder written in April 2007
sublime prescience courtesy of Economist magazine
**LIBOR is the London Inter-Bank Offered Rate, the main market where retail banks lend to each other
By borrowing short-term and lending long (mortgages) banks profit from the requisite disparity in interest rates
