The Bank Accounts Of London

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