Lenders Quotes

Neither a borrower, nor a lender be; For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry. This above all: to thine own self be true,   85 And it must follow, as the night the day, Thou canst not then be false to any man. Farewell; my blessing season this in thee!

The secret of high finance...if you really need a loan, you won't qualify. And if you don't need a loan, all the lenders will line up to give you money.

The borrower is slave to the lender.

Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States

Give thy thoughts no tongue, Nor any unproportioned thought his act. Be thou familiar, but by no means vulgar; Those friends thou hast, and their adoption tried, Grapple them to thy soul with hoops of steel, But do not dull thy palm with entertainment Of each new-hatched unfledged comrade. Beware Of entrance to a quarrel, but being in, Bear’t that th’opposèd may beware of thee. Give every man thy ear, but few thy voice; Take each man’s censure, but reserve thy judgement. Costly thy habit as thy purse can buy, But not expressed in fancy; rich, not gaudy; For the apparel oft proclaims the man, And they in France of the best rank and station Are most select and generous, chief in that. Neither a borrower nor a lender be, For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry. This above all: to thine own self be true; And it must follow, as the night the day, Thou canst not then be false to any man.

The criminalization of debt, then, was the criminalization of the very basis of human society. It cannot be overemphasized that in a small community, everyone normally was both a lender and borrower. One can only imagine the tensions and temptations that must have existed in a community—and communities, much though they are based on love, in fact because they are based on love, will always also be full of hatred, rivalry and passion—when it became clear that with sufficiently clever scheming, manipulation, and perhaps a bit of strategic bribery, they could arrange to have almost anyone they hated imprisoned or even hanged.

What was to be a relatively innocuous federal government, operating from a defined enumeration of specific grants of power, has become an ever-present and unaccountable force. It is the nation’s largest creditor, debtor, lender, employer, consumer, contractor, grantor, property owner, tenant, insurer, health-care provider, and pension guarantor. Moreover, with aggrandized police powers, what it does not control directly it bans or mandates by regulation.

Proverbs 22:7 "The rich rule over the poor and the borrower is slave to the lender." Galatians 5:1 "do not let yourselves be burdened again by a yoke of slavery.

Banks are nothing but old fashioned money lenders. They encourage you to borrow, to get in debt, and when you can't pay back the loan they take your home away. At least a money lender only breaks your legs.

I hate debt - except when I’m the lender.

Debt is not a tool; it is a method to make banks wealthy, not you. The borrower truly is slave to the lender.

The most famous lenders in nature are vampire bats. These bats congregate in the thousands inside caves, and every night fly out to look for prey. When they find a sleeping bird or careless mammal, they make a small incision in its skin, and suck its blood. But not all vampire bats find a victim every night. In order to cope with the uncertainty of their life, the vampires loan blood to each other. A vampire that fails to find prey will come home and ask a more fortunate friend to regurgitate some stolen blood. Vampires remember very well to whom they loaned blood, so at a later date if the friend returns home hungry, he will approach his debtor, who will reciprocate the favour. However, unlike human bankers, vampires never charge interest.

My life is on loan, like money borrowed from a bank. God is the lender, and He retains the right to call in the loan any time. Though I am responsible for taking care of it, I do not own this life; it is borrowed. Why should I fear its loss or the loss of anything else in this world when I must surrender it all anyway?

Proverbs 22:7: “The rich rule over the poor, and the borrower is slave to the lender

It is more profitable to be a lender than a spender.

Armaments, universal debt and planned obsolescence - those are the three pillars of Western prosperity. If war, waste and money-lenders were abolished, you'd collapse.

There is no such thing as good debt. The credit card is the cigarette of the financial world. The borrower is always a slave to the lender.

Lenders often consider a company's industry, market conditions, and competitive landscape in their risk assessment. Everything matters.

The rich rule over the poor, and the borrower is slave to the lender” (NIV).

Overborrowing or overlending? Lenders encourage indebtedness because it is profitable. Developing country governments are sometimes even pressured to overborrow ... Even without corruption, it is easy to be influenced by Western businessmen and financiers ... Countries that aren't sure that borrowing is worth the rist are told how important it is to establis a credit rating: borrow even if you really don't need the money.

Yet here, Laertes? Aboard, aboard, for shame! The wind sits in the shoulder of your sail, And you are stay'd for. There, my blessing with thee. And these few precepts in thy memory See thou character. Give thy thoughts no tongue, Nor any unproportion'd thought his act. Be thou familiar, but by no means vulgar. Those friends thou hast, and their adoption tried, Grapple them to thy soul with hoops of steel; But do not dull thy palm with entertainment Of each new-hatch'd, unfledged comrade. Beware Of entrance to a quarrel; but being in, Bear't that the opposed may beware of thee. Give every man thy ear, but few thy voice; Take each man's censure, but reserve thy judgment. Costly thy habit as thy purse can buy, But not express'd in fancy; rich, not gaudy; For the apparel oft proclaims the man, And they in France of the best rank and station Are of a most select and generous, chief in that. Neither a borrower nor a lender be; For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry. This above all: to thine own self be true, And it must follow, as the night the day, Thou canst not then be false to any man. Farewell. My blessing season this in thee!

Because the lenders sold many—though not all—of the loans they made to other investors, in the form of mortgage bonds, the industry was also fraught with moral hazard. “It was a fast-buck business,” says Jacobs. “Any business where you can sell a product and make money without having to worry how the product performs is going to attract sleazy people.

there is a decisive difference between the loans supplied by private lenders and the loans supplied by a government agency. Each private lender risks his own funds.

lenders to trade their long-term income streams for short-term cash. Say

The rich rule over the poor, and the borrower becomes the lender’s slave.” - Proverbs 22:7

the borrower is slave to the lender

Its dramatis personae are not so much the worker and the industrialist, but rather the money-owner (and money-lender), the wholesale merchant, the trader and the entrepreneur or ‘functioning capitalist’.

Regulatory compliance is crucial in corporate lending, with financial institutions having to adhere to various laws and guidelines. It represents another set of costs and risks that lenders have to consider.

Refinancing options are considered to optimize a business's financial structure, potentially lowering interest costs and improving overall financial health. But it has to be to the advantage of both the borrower and the lender.

Syndicated loans involve multiple lenders sharing the risk and funding a single loan. Sometimes these are good plays for both lenders and borrowers. If you’re a borrower experiencing difficulty getting approvals, maybe consider the syndication route.

Commercial lending is a vital component of the financial industry, supporting businesses in achieving their growth and operational goals. Without corporate lenders, the ability and rate at which businesses are able to grow would likely be considerably less.

In money-lenders’ capital the form M-C-M is reduced to the two extremes without a mean, M-M , money exchanged for more money, a form that is incompatible with the nature of money, and therefore remains inexplicable from the standpoint of the circulation of commodities. Hence Aristotle: “since chrematistic is a double science, one part belonging to commerce, the other to economic, the latter being necessary and praiseworthy, the former based on circulation and with justice disapproved (for it is not based on Nature, but on mutual cheating), therefore the usurer is most rightly hated, because money itself is the source of his gain, and is not used for the purposes for which it was invented.

Mezzanine financing combines debt and equity, providing lenders with additional security. If your lender is interested in doing this, just know that’s it’s a way for them to mitigate risk. On the flip side, it may sometimes be smart to come out the gate with this as your offering.

Lenders assess a company's creditworthiness before approving a loan, considering factors like financial health and repayment ability. So if you’re leading a business, it’s really important for you and your team to be proactive about establishing good credit health for the business.

The “evils of faction” theme recurs throughout our history, from the writings of the “muckrakers” at the turn of the twentieth century to the Democratic presidential primary campaigns of 2008 with talk of Halliburton’s contracts in Iraq and the shady practices of sub-prime mortgage lenders.

Banks, credit unions, and non-bank private lenders are common corporate lenders. But when you’re leading a company, it’s important to think carefully about which of these will be the right partner for your lending needs. Having the right lender may be as important as obtaining the right amount of money.

As economist Thomas Sowell has noted, middleman minorities typically arrive in their host countries with education, skills, or a set of propitious attitudes about work, such as business frugality and the willingness to take risks. Some slave away in lowly menial jobs to raise capital, then swiftly become merchants, retailers, labor contractors, and money-lenders. Their descendants usually thrive in the professions, such as medicine, law, engineering, or finance.

If you could really insure banks and other lenders against default risk, that might well unleash a great wave of capital into the economy.

The rich rules over the poor, and the borrower is the slave of the lender.

The rich rules over the poor,         and the borrower is the slave of the lender.

Interest rate risk arises when there's potential for interest rates to change, impacting loan costs. It’s a serious consideration for lenders.

His dick is an equal opportunity lender.

Lenders want to have peace of mind when it comes to getting their money back plus profit – collateral is one thing that gives that peace of mind.

In most cases, lenders are not interested in owning the collateral itself – they are only interested in the cash value of the collateral.

As a huge consumer of capital, I have always made it a mission to understand lenders’ motivations and the methodologies behind their credit structures.

Your business’ debt is a lenders investment and your business’ liability is a lenders asset.

Every lender is interested in the character of their borrowers.

These words are my mother’s, my father’s, my brother’s, my lender’s, my garbage man’s—the poem runs like oil on fire beneath this earth where we know each other. Witness the black smoke everywhere.

Currency risk is a consideration in international corporate lending, given fluctuating exchange rates. It represents another set of costs and risks that lenders have to consider when lending internationally.

I see that you have come to the last stage of human life; you are close upon your hundreth year, or even beyond: come now, hold an audit of your life. Reckon how much of your time has been taken up by a money-lender, how much by a mistress, a patron, a client, quarreling with your wife, punishing your slaves, dashing about the city on your social obligations. Consider also the diseases which we have brought on ourselves, and the time too which has been unused. You will find that you have fewer years than you reckon. Call to mind when you ever had a fixed purpose; how few days have passed as you had planned; when you were ever at your own disposal; when your face wore its natural expression; when your mind was undisturbed; what work you have achieved in such a long life; how many have plundered your life when you were unaware of your losses; how much you have lost through groundless sorrow, foolish joy, greedy desire, the seductions of society; how little of your own was left to you. You will realize that you are dying prematurely.

A serving-man, proud in heart and mind; that curled my hair; wore gloves in my cap; served the lust of my mistress' heart, and did the act of darkness with her; swore as many oaths as I spake words, and broke them in the sweet face of heaven: one that slept in the contriving of lust, and waked to do it: wine loved I deeply, dice dearly: and in woman out-paramoured the Turk: false of heart, light of ear, bloody of hand; hog in sloth, fox in stealth, wolf in greediness, dog in madness, lion in prey. Let not the creaking of shoes nor the rustling of silks betray thy poor heart to woman: keep thy foot out of brothels, thy hand out of plackets, thy pen from lenders' books, and defy the foul fiend. Still through the hawthorn blows the cold wind: Says suum, mun, ha, no, nonny. Dolphin my boy, my boy, sessa! let him trot by. Storm still.

Credit risk is a major concern in business lending, and lenders use credit scoring models specific to businesses. As an entrepreneur, you need to have a clear credit and distinct strategy for your business’s credit.

Cash flow analysis helps lenders assess a business's ability to generate sufficient cash to meet debt obligations. In terms of managing your business’s money, free cash flow is a good metric to keep front and center.

Corporate lenders play a vital role in supporting economic growth by providing capital to businesses. Without corporate lenders, the ability and rate at which businesses are able to grow would likely be considerably less.

The bottom line is that the government has artificially mitigated lenders’ risk, and it has done so on the perverse, altruistic premise that “society” has a moral duty to increase home ownership among low-income Americans.

We demand for every working man work and bread! For the people, a place to live. No democrat has the right to deny these. We want action! We demand war against the profiteers, peace with the workers! We demand a solution to the Jewish question. We Want all foreign races out of German life, We demand an end to the German parliament. We want a leader above the mob. We demand death sentences for crimes against the people! To the gallows with the profiteers and money-lenders!

Prosperity brings expanded lending, which leads to unwise lending, which produces large losses, which makes lenders stop lending, which ends prosperity, and on and on. . . . Look around the next time there’s a crisis; you’ll probably find a lender.

On the American Oligarchy "How about the United States?" a man yelled from the audience. "And what about it?" Martin retorted. "The thirteen colonies threw off their rulers and formed the Republic so-called. The slaves were their own masters. There were no more masters of the sword. But you couldn't get along without masters of some sort, and there arose a new set of masters–not the great, virile noble men, but the shrewd and spidery traders and money-lenders. And they enslaved you all over again–but not frankly, as the true, noble men would do with weight of their own right arms, but secretly, by spidery machinations and by wheedling and cajoling and lies. They have purchased your slave judges, they have debauched your slave legislatures, and they have forced to worse horrors than chattel slavery your slave boys and girls. Two million of your children are toiling today in this trade-oligarchy of the United States. Ten millions of your slaves are not properly sheltered nor properly fed.

If you had saved $20 per week for just ten weeks, you could have bought the scratch-and-dent model off the floor at the same Rent-to-Own store for $200! Or you could have bought a used set out of the classifieds or online. It pays to look past the weekend and suffer through going to the Laundromat with your quarters. When you think short term, you always set yourself up for being ripped off by a predatory lender. If the Red-Faced Kid (“I want it, and I want it now!”) rules your life, you will stay broke!

Now there was great rejoicing at the rumor of Alderic's quest, for all folk knew that he was a cautious man, and they deemed that he would succeed and enrich the world, and they rubbed their hands in the cities at the thought of largesse; and there was joy among all men in Alderic's country, except perchance among the lenders of money, who feared they would soon be paid. And there was rejoicing also because men hoped that when the Gibbelins were robbed of their hoard, they would shatter their high-built bridge and break the golden chains that bound them to the world, and drift back, they and their tower, to the moon, from which they had come and to which they rightly belonged. There was little love for the Gibbelins, though all men envied their hoard. ("The Hoard Of The Gibbelins")

When you lend someone money, you are in the position of power. But when you want to take your money back, you are powerless. Similarly, when you do the hardwork, you are in power. But when you want result of your hardwork, you are on the mercy of the universe. The result is not in your hand. The Paramatma - the supreme soul - is on the both side: He is in seeker as well as giver, employee as well as employer, lender as well as debtor. Closer you are to knowing the Paramatma, more powerful you feel in getting the result that you want.

From a broader money view perspective, however, September 2008 was the moment when the Fed moved from lender of last resort to dealer of last resort, in effect taking the collapsing wholesale money market onto its own balance sheet. But in the heat of the moment, no one noticed.

When individuals are exchanging present goods against future goods they do not take account in their valuations of Variations in the objective exchange-value of money. Lenders and borrowers are not in the habit of allowing for possible future fluctuations in the objective exchange-value of money.

Crises, especially severe crises, have a purgative effect. In the business world, insolvent businesses that adopted a bad strategy close down, and bad loans are written off. Then lenders can lend with a new confidence again. This is the process that Joseph Schumpeter celebrated as creative destruction.

Power at its worst is the unmaker of humanity—breeding inhumanity in the hearts of those who wield power, denying and denouncing the humanity of the ones who suffer under power. This is the power exercised by the money lender, by the police who ignore or protect him, by the officials who would rather not confront him. This power ultimately will put everything around it to death rather than share abundant life with another. It is also the power of feigned or forced ignorance, the power of complacency and self-satisfaction with our small fiefdoms of comfort. Power, the truest servant of love, can also be its most implacable enemy.

Serious businesses and lenders will tell you that managing your cash flow is one of the most important aspects in the health of any business. Managing you time flow is key to a healthy and successful life, because, Time is equal to Life. The quality of time expenditure is in direct proportion to the quality of life enjoyed.

The options also were a way of shifting enormous risk from Renaissance to the banks. Because the lenders technically owned the underlying securities in the basket-options transactions, the most Medallion could lose in the event of a sudden collapse was the premium it had paid for the options and the collateral held by the banks. That amounted to several hundred million dollars. By contrast, the banks faced billions of dollars of potential losses if Medallion were to experience deep troubles. In the words of a banker involved in the lending arrangement, the options allowed Medallion to “ring-fence” its stock portfolios, protecting other parts of the firm, including Laufer’s still-thriving futures trading, and ensuring Renaissance’s survival in the event something unforeseen took place. One staffer was so shocked by the terms of the financing that he shifted most of his life savings into Medallion, realizing the most he could lose was about 20 percent of his money.

Engaged in a new form of serfdom---only bound now to banks and mortgage lenders instead of to lords---her more highly leveraged neighbors pore over the business section of the newspaper each day looking for some sign that the government will soon step in to “freeze” their mortgage rates where they are before a scheduled adjustment hits.

Bankers throughout time have used what we call ‘‘The Five C’s of Credit’ as a basis of evaluating the worthiness of a potential borrower.

Second, it is also quite clear that, all things considered, this very high level of public debt served the interests of the lenders and their descendants quite well, at least when compared with what would have happened if the British monarchy had financed its expenditures by making them pay taxes. From the standpoint of people with the means to lend to the government, it is obviously far more advantageous to lend to the state and receive interest on the loan for decades than to pay taxes without compensation. Furthermore, the fact that the government’s deficits increased the overall demand for private wealth inevitably increased the return on that wealth, thereby serving the interests of those whose prosperity depended on the return on their investment in government bonds.

Actually, the remarkable thing about the statement “one has to pay one’s debts” is that even according to standard economic theory, it isn’t true. A lender is supposed to accept a certain degree of risk. If all loans, no matter how idiotic, were still retrievable—if there were no bankruptcy laws, for instance—the results would be disastrous. What reason would lenders have not to make a stupid loan?

We see money accumulating at the centers, with difficulty of finding safe investment for it; interest rates dropping down lower than ever before; money available in great plenty for things that are obviously safe, but not available at all for things that are in fact safe, and which under normal conditions would be entirely safe (and there are a great many such), but which are now viewed with suspicion by lenders.

The ARM, Adjustable Rate Mortgage, was invented in the early 1980s. Prior to that, those of us in the real estate business sold fixed-rate 7 or 8 percent mortgages. What happened? I was there in the middle of that disaster of an economy when fixed-rate mortgages went as high as 17 percent and the real estate world froze. Lenders paid out 12 percent on CDs but had money loaned out at 7 percent on hundreds of millions of dollars in mortgages. They were losing money, and lenders don’t like to lose money. So the Adjustable Rate Mortgage was born, in which your interest rate goes up when the prevailing market interest rates go up. The ARM was born to transfer the risk of higher interest rates to you, the consumer. In the last several years, home mortgage rates have been at a thirty-year low. It is not wise to get something that adjusts when you are at the bottom of rates! The mythsayers always seem to want to add risk to your home, the one place you should want to make sure has stability. Balloon mortgages are even worse. Balloons pop, and it is always strange to me that the popping sound is so startling. Why don’t we expect it? It is in the very nature of balloons to pop. Wise financial people always move away from risk, and the balloon mortgage creates risk nightmares.

Consider the recent financial crisis and its link to faulty reward systems. President Bill Clinton's objective of increasing homeownership by rewarding potential home buyers and lenders is one example. The Clinton administration "went to ridiculous lengths" to increase homeownership in the United State, promoting "paper-thin down payments" and pushing lenders to give mortgage loans to unqualified buyers according to Business Week editor Peter Coy.

He became the largest individual hog farmer in the North. And, in order not to be victimized by meat packers, he bought controlling interest in an Indianapolis slaughterhouse. In order not to be victimized by steel suppliers, he bought controlling interest in a steel company in Pittsburgh. In order not to be victimized by coal suppliers, he bought controlling interest in several mines. In order not to be victimized by money lenders, he founded a bank.

there are now methods that produce unbiased results according to several plausible and desirable definitions of fairness.39 The mathematical analysis of these definitions of fairness shows that they cannot be achieved simultaneously and that, when enforced, they result in lower prediction accuracy and, in the case of lending decisions, lower profit for the lender. This is perhaps disappointing, but at least it makes clear the trade-offs involved in avoiding algorithmic bias.

I found myself listening to Walter Bjork's fascinating radio program Bible Questionnaire (WFME, Orange, N.J.), and a caller asked where in the Bible one would find the statement "Neither borrower nor lender be." The poor host flipped like mad through his concordance without success. Naturally, since the quote is not from the Bible at all, but from Shakespeare's Hamlet! But it sounded biblical, so caller and host alike attributed it to scripture. Can it have been much more difficult to naively attribute wise sayings to Jesus?

How exactly did the Dutch win the trust of the financial system? Firstly, they were sticklers about repaying their loans on time and in full, making the extension of credit less risky for lenders. Secondly, their country’s judicial system enjoyed independence and protected private rights – in particular private property rights. Capital trickles away from dictatorial states that fail to defend private individuals and their property. Instead, it flows into states upholding the rule of law and private property. Imagine that you are the

Forcing new loans upon the bankrupt on condition that they shrink their income is nothing short of cruel and unusual punishment. Greece was never bailed out. With their ‘rescue’ loan and their troika of bailiffs enthusiastically slashing incomes, the EU and IMF effectively condemned Greece to a modern version of the Dickensian debtors’ prison and then threw away the key. Debtors’ prisons were ultimately abandoned because, despite their cruelty, they neither deterred the accumulation of new bad debts nor helped creditors get their money back. For capitalism to advance in the nineteenth century, the absurd notion that all debts are sacred had to be ditched and replaced with the notion of limited liability. After all, if all debts are guaranteed, why should lenders lend responsibly? And why should some debts carry a higher interest rate than other debts, reflecting the higher risk of going bad? Bankruptcy and debt write-downs became for capitalism what hell had always been for Christian dogma – unpleasant yet essential – but curiously bankruptcy-denial was revived in the twenty-first century to deal with the Greek state’s insolvency. Why? Did the EU and the IMF not realize what they were doing? They knew exactly what they were doing. Despite their meticulous propaganda, in which they insisted that they were trying to save Greece, to grant the Greek people a second chance, to help reform Greece’s chronically crooked state and so on, the world’s most powerful institutions and governments were under no illusions. […] Banks restructure the debt of stressed corporations every day, not out of philanthropy but out of enlightened self-interest. But the problem was that, now that we had accepted the EU–IMF bailout, we were no longer dealing with banks but with politicians who had lied to their parliaments to convince them to relieve the banks of Greece’s debt and take it on themselves. A debt restructuring would require them to go back to their parliaments and confess their earlier sin, something they would never do voluntarily, fearful of the repercussions. The only alternative was to continue the pretence by giving the Greek government another wad of money with which to pretend to meet its debt repayments to the EU and the IMF: a second bailout.

Most of the crime-ridden minority neighborhoods in New York City, especially areas like East New York, where many of the characters in Eric Garner’s story grew up, had been artificially created by a series of criminal real estate scams. One of the most infamous had involved a company called the Eastern Service Corporation, which in the sixties ran a huge predatory lending operation all over the city, but particularly in Brooklyn. Scam artists like ESC would first clear white residents out of certain neighborhoods with scare campaigns. They’d slip leaflets through mail slots warning of an incoming black plague, with messages like, “Don’t wait until it’s too late!” Investors would then come in and buy their houses at depressed rates. Once this “blockbusting” technique cleared the properties, a company like ESC would bring in a new set of homeowners, often minorities, and often with bad credit and shaky job profiles. They bribed officials in the FHA to approve mortgages for anyone and everyone. Appraisals would be inflated. Loans would be approved for repairs, but repairs would never be done. The typical target homeowner in the con was a black family moving to New York to escape racism in the South. The family would be shown a house in a place like East New York that in reality was only worth about $15,000. But the appraisal would be faked and a loan would be approved for $17,000. The family would move in and instantly find themselves in a house worth $2,000 less than its purchase price, and maybe with faulty toilets, lighting, heat, and (ironically) broken windows besides. Meanwhile, the government-backed loan created by a lender like Eastern Service by then had been sold off to some sucker on the secondary market: a savings bank, a pension fund, or perhaps to Fannie Mae, the government-sponsored mortgage corporation. Before long, the family would default and be foreclosed upon. Investors would swoop in and buy the property at a distressed price one more time. Next, the one-family home would be converted into a three- or four-family rental property, which would of course quickly fall into even greater disrepair. This process created ghettos almost instantly. Racial blockbusting is how East New York went from 90 percent white in 1960 to 80 percent black and Hispanic in 1966.

In short, there is no question that a country can run a stable paper currency without a gold standard, a central bank, a lender of last resort, or much regulation; and not only avoid disaster, but perform well. Bottom–up monetary systems – known as free banking – have a far better track record than top–down ones. Walter Bagehot, the great nineteenth-century theorist of central banking, admitted as much. In his influential book Lombard Street, he effectively conceded that the only reason a central bank needed to be a lender of last resort was because of the instability introduced by the existence of a central bank. The

Here are my simple rules for identifying market tops and bottoms: 1. Market tops are relatively easy to recognize. Buyers generally become overconfident and almost always believe “this time is different.” It’s usually not. 2. There’s always a surplus of relatively cheap debt capital to finance acquisitions and investments in a hot market. In some cases, lenders won’t even charge cash interest, and they often relax or suspend typical loan restrictions as well. Leverage levels escalate compared to historical averages, with borrowing sometimes reaching as high as ten times or more compared to equity. Buyers will start accepting overoptimistic accounting adjustments and financial forecasts to justify taking on high levels of debt. Unfortunately most of these forecasts tend not to materialize once the economy starts decelerating or declining. 3. Another indicator that a market is peaking is the number of people you know who start getting rich. The number of investors claiming outperformance grows with the market. Loose credit conditions and a rising tide can make it easy for individuals without any particular strategy or process to make money “accidentally.” But making money in strong markets can be short-lived. Smart investors perform well through a combination of self-discipline and sound risk assessment, even when market conditions reverse.

The most famous lenders in nature are vampire bats. These bats congregate in the thousands inside caves, and every night fly out to look for prey. When they find a sleeping bird or careless mammal, they make a small incision in its skin, and suck its blood. But not all vampire bats find a victim every night. In order to cope with the uncertainty of their life, the vampires loan blood to each other. A vampire that fails to find prey will come home and ask a more fortunate friend to regurgitate some stolen blood. Vampires remember very well to whom they loaned blood, so at a later date if the friend returns home hungry, he will approach his debtor, who will reciprocate the favour.

From 2000, Fannie and Freddie’s appetite for sub-prime loans increased markedly every year, encouraging a rich harvest of increasingly crazy loans by mortgage originators to supply this appetite. House-builders, lenders, mortgage brokers, Wall Street underwriters, legal firms, housing charities and pressure groups like ACORN all benefited. Taxpayers did not. By the early 2000s, Fannie and Freddie were well intertwined with politicians, donating rich campaign contributions especially to Congressional Democrats, and giving rewarding jobs to politicians – Clinton’s former Budget Director Franklin Raines would pocket $100 million from his brief spell in charge of Fannie. Between 1998 and 2008, Fannie and Freddie spent $175 million lobbying Congress.

The danger, of course, is that it is not always easy to distinguish between a default that was inevitable—in the sense that a country is so highly leveraged and so badly managed that it takes very little to force it into default—and one that was not—in the sense that a country is fundamentally sound but is having difficulties sustaining confidence because of a very temporary and easily solvable liquidity problem. In the heat of a crisis, it is all too tempting for would-be rescuers (today notably multilateral lenders such as the IMF) to persuade themselves that they are facing a confidence problem that can be solved with short-term bridge loans, when in fact they are confronting a much more deeply rooted crisis of solvency and willingness to pay

homeowner, and come away with $20,000 or $30,000 cash in pocket. Success in real estate required skills that Rob believed were some of his strongest: the work ethic to locate those homes, the social skills to negotiate with people ranging from rich lenders to working-class contractors to poor renters, and the desire to make money in crafty but fundamentally honest ways. And, at least in Rob’s idealized vision, he would be making a positive mark in the world. Because a house meant shelter. It meant heat. It meant security. Above all, it meant family. Some friends who knew about Skeet’s passing felt that something equally powerful drove him: Rob had lost not only his father but also the goal of releasing his father in which he’d invested so much work since high school. He’d achieved almost every objective he’d ever laid out

How can HOW help us repair our faltering global economy? Only by getting our "hows" right can we ensure that we are sustainable. This can only be achieved when we are rooted in, and inspired by, sustainable values. The global economic meltdown supplied a perfect, but painful, example of how sustainability cannot be guided by situational values. The economic crash occurred because too many financial companies became disconnected from fundamental values and long-term sustainable thinking. Instead of nurturing sustainable collaborations, banks, lenders, borrowers and shareholders pursued short-term relationships founded on situational values. More than ever we need to get out of this cycle of crises and build long-term success and deep human connections so that we achieve enduring significance in today's globally interconnected world.

Treating the cause of high prices and interest rates in low-income neighborhoods as the product of personal greed or exploitation, and attempting to remedy the problem through the imposition of price controls and interest rate caps. , it only ensures that people living in low-income neighborhoods have even less chance of accessing these services in the future. Just as rent control reduces the supply of housing, price and interest rate control can reduce the number of stores, pawn shops, local finance companies, and check-paying agencies willing to operate in costly neighborhoods. higher, when those costs cannot be recovered through legally permitted prices and interest rates. The only alternative for many residents of low-income neighborhoods may end up being to exit the legal market of financial institutions and ask for money from usurious lenders, who set even higher interest rates and have their own collection methods.

Instead, the battle is joined at the level of pure abstraction. The issue, the newest Right tells us, is freedom itself, not the doings of the subprime lenders or the ways the bond-rating agencies were compromised over the course of the last decade. Details like that may have crashed the economy, but to the renascent Right they are almost completely irrelevant. What matters is a given politician’s disposition toward free markets and, by extension, toward the common people of the land, whose faithful vicar the market is. Now, there is nothing really novel about the idea that free markets are the very essence of freedom. What is new is the glorification of this idea at the precise moment when free-market theory has proven itself to be a philosophy of ruination and fraud. The revival of the Right is as extraordinary as it would be if the public had demanded dozens of new nuclear power plants in the days after the Three Mile Island disaster; if we had reacted to Watergate by making Richard Nixon a national hero.

So far as variations in the objective exchange-value of money are foreseen, they influence the terms of credit transactions. If a future fall in the purchasing power of the monetary unit has to be reckoned with, lenders must be prepared for the fact that the sum of money which a debtor repays at the conclusion of the transaction will have a smaller purchasing power than the sum originally lent. Lenders, in fact, would do better not to lend at all, but to buy other goods with their money. The contrary is true for debtors. If they buy commodities with the money they have borrowed and sell them again after a time, they will retain a surplus over and above the sum that they have to pay back. The credit transaction results in a gain for them. Consequently it is not difficult to understand that, so long as continued depreciation is to be reckoned with, those who lend money demand higher rates of interest and those who borrow money are willing to pay the higher rates. If, on the other hand, it is expected that the value of money will increase, then the rate of interest will be lower than it would otherwise have been.

The subprime market tapped a segment of the American public that did not typically have anything to do with Wall Street: the tranche between the fifth and the twenty-ninth percentile in their credit ratings. That is, the lenders were making loans to people who were less creditworthy than 71 percent of the population. Which of these poor Americans were likely to jump which way with their finances? How much did their home prices need to fall for their loans to blow up? Which mortgage originators were the most corrupt? Which Wall Street firms were creating the most dishonest mortgage bonds? What kind of people, in which parts of the country, exhibited the highest degree of financial irresponsibility? The default rate in Georgia was five times higher than that in Florida, even though the two states had the same unemployment rate. Why? Indiana had a 25 percent default rate; California, only 5 percent, even though Californians were, on the face of it, far less fiscally responsible. Why? Vinny and Danny flew down to Miami, where they wandered around empty neighborhoods built with subprime loans, and saw with their own eyes how bad things were. “They’d

Which meant, if somehow GameStop did start to go up, the people who had shorted the company would begin to feel pressure to buy; the more the stock went up, the heavier that pressure became. As the shorts began to cover, buying shares to return them to their lenders, the stock would rise even higher. In financial parlance, this was something called a 'short squeeze.' It didn't happen often, but when it did, it could be spectacular. Most famously, in 2008, a surprise takeover attempt of the German automaker Volkswagen by rival Porsche drove Volkswagen's stock price up by a factor of 5 — briefly making it the most valuable company in the world — in two quick days of trading, as short selling funds struggled to cover their positions. Similarly, a battle between two hedge fund titans — Bill Ackman, of Pershing Square Capital Management, and Carl Icahn — led to a squeeze involving supplement maker — and alleged pyramid marketer — Herbalife, which cost Ackman a reported $1 billion. And perhaps the first widely reported short squeeze dated back a century, to 1923, when grocery magnate Clarence Saunders successfully decimated short sellers who had targeted his nascent chain of Piggly Wiggly grocery stores.

It was the German powerhouse Deutsche Bank AG, not my fictitious RhineBank, that financed the construction of the extermination camp at Auschwitz and the nearby factory that manufactured Zyklon B pellets. And it was Deutsche Bank that earned millions of Nazi reichsmarks through the Aryanization of Jewish-owned businesses. Deutsche Bank also incurred massive multibillion-dollar fines for helping rogue nations such as Iran and Syria evade US economic sanctions; for manipulating the London interbank lending rate; for selling toxic mortgage-backed securities to unwitting investors; and for laundering untold billions’ worth of tainted Russian assets through its so-called Russian Laundromat. In 2007 and 2008, Deutsche Bank extended an unsecured $1 billion line of credit to VTB Bank, a Kremlin-controlled lender that financed the Russian intelligence services and granted cover jobs to Russian intelligence officers operating abroad. Which meant that Germany’s biggest lender, knowingly or unknowingly, was a silent partner in Vladimir Putin’s war against the West and liberal democracy. Increasingly, that war is being waged by Putin’s wealthy cronies and by privately owned companies like the Wagner Group and the Internet Research Agency, the St. Petersburg troll factory that allegedly meddled in the 2016 US presidential election. The IRA was one of three

The American share of the crisis began with grossly improper mortgages provided to wholly unqualified borrowers, all directly caused and encouraged by government distortion of and interference in the market. The government’s market deformation and market intervention was in turn the result of two factors: political favouritism and Leftist ideology, on the one hand; and upon the other, corruption: the blatant cooption of such Friends of Angelo as Mr Dodd and of such bien-pensant Lefties as Mr Frank. The stability and efficiency of any market is directly proportional to the amount and trustworthiness of market information. The Yank Congress, for blatantly partisan and ideological reasons, gave out false information to the market, pushing lenders into making bad loans and giving out, with the appropriate winks and nudges, that Fannie (will Americans ever realise how that sounds) and Freddie, imperfectly quangoised, were ‘really just as good as the Treasury’ and were in any case ‘too big to [be let] fail’: which, as it happens, was untrue. Similarly, this moronic mantra of ‘too big to fail’ was chanted desperately and loudly to drown out the warning sounds of various financial institutions on the brink and of the automobile industry. Incomprehensible sums of public money were thrown at these corporations so that they could avoid bankruptcy, and have succeeded only in privatising profit whilst socialising risk.

French anthropologist Jean-Claude Galey encountered in a region of the eastern Himalayas where as recently as the 1970s, the low-ranking castes—they were referred to as “the vanquished ones,” since they were thought to be descended from a population once conquered by the current landlord caste many centuries before—lived in a situation of permanent debt dependency. Landless and penniless, they were obliged to solicit loans from the landlords simply to find a way to eat—not for the money, since the sums were paltry, but because poor debtors were expected to pay back the interest in the form of work, which meant they were at least provided with food and shelter while they cleaned out their creditors’ outhouses and reroofed their sheds. For the “vanquished”—as for most people in the world, actually—the most significant life expenses were weddings and funerals. These required a good deal of money, which always had to be borrowed. In such cases it was common practice, Galey explains, for high-caste moneylenders to demand one of the borrower’s daughters as security. Often, when a poor man had to borrow money for his daughter’s marriage, the security would be the bride herself. She would be expected to report to the lender’s household after her wedding night, spend a few months there as his concubine, and then, once he grew bored, be sent off to some nearby timber camp, where she would have to spend the next year or two working as a prostitute to pay off her father’s debt. Once accounts were settled, she return to her husband and begin her married life.

Equity financing, on the other hand, is unappealing to cooperators because it may mean relinquishing control to outside investors, which is a distinctly capitalist practice. Investors are not likely to buy non-voting shares; they will probably require representation on the board of directors because otherwise their money could potentially be expropriated. “For example, if the directors of the firm were workers, they might embezzle equity funds, refrain from paying dividends in order to raise wages, or dissipate resources on projects of dubious value.”105 In any case, the very idea of even partial outside ownership is contrary to the cooperative ethos. A general reason for traditional institutions’ reluctance to lend to cooperatives, and indeed for the rarity of cooperatives whether related to the difficulty of securing capital or not, is simply that a society’s history, culture, and ideologies might be hostile to the “co-op” idea. Needless to say, this is the case in most industrialized countries, especially the United States. The very notion of a workers’ cooperative might be viscerally unappealing and mysterious to bank officials, as it is to people of many walks of life. Stereotypes about inefficiency, unprofitability, inexperience, incompetence, and anti-capitalism might dispose officials to reject out of hand appeals for financial assistance from co-ops. Similarly, such cultural preconceptions may be an element in the widespread reluctance on the part of working people to try to start a cooperative. They simply have a “visceral aversion” to, and unfamiliarity with, the idea—which is also surely a function of the rarity of co-ops itself. Their rarity reinforces itself, in that it fosters a general ignorance of co-ops and the perception that they’re risky endeavors. Additionally, insofar as an anti-democratic passivity, a civic fragmentedness, a half-conscious sense of collective disempowerment, and a diffuse interpersonal alienation saturate society, this militates against initiating cooperative projects. It is simply taken for granted among many people that such things cannot be done. And they are assumed to require sophisticated entrepreneurial instincts. In most places, the cooperative idea is not even in the public consciousness; it has barely been heard of. Business propaganda has done its job well.106 But propaganda can be fought with propaganda. In fact, this is one of the most important things that activists can do, this elevation of cooperativism into the public consciousness. The more that people hear about it, know about it, learn of its successes and potentials, the more they’ll be open to it rather than instinctively thinking it’s “foreign,” “socialist,” “idealistic,” or “hippyish.” If successful cooperatives advertise their business form, that in itself performs a useful service for the movement. It cannot be overemphasized that the most important thing is to create a climate in which it is considered normal to try to form a co-op, in which that is seen as a perfectly legitimate and predictable option for a group of intelligent and capable unemployed workers. Lenders themselves will become less skeptical of the business form as it seeps into the culture’s consciousness.

One extreme possibility might be the situation the French anthropologist Jean-Claude Galey encountered in a region of the eastern Himalayas where as recently as the 1970s, the low-ranking castes—they were referred to as “the vanquished ones,” since they were thought to be descended from a population once conquered by the current landlord caste many centuries before—lived in a situation of permanent debt dependency. Landless and penniless, they were obliged to solicit loans from the landlords simply to find a way to eat—not for the money, since the sums were paltry, but because poor debtors were expected to pay back the interest in the form of work, which meant they were at least provided with food and shelter while they cleaned out their creditors’ outhouses and reroofed their sheds. For the “vanquished”—as for most people in the world, actually—the most significant life expenses were weddings and funerals. These required a good deal of money, which always had to be borrowed. In such cases it was common practice, Galey explains, for high-caste moneylenders to demand one of the borrower’s daughters as security. Often, when a poor man had to borrow money for his daughter’s marriage, the security would be the bride herself. She would be expected to report to the lender’s household after her wedding night, spend a few months there as his concubine, and then, once he grew bored, be sent off to some nearby timber camp, where she would have to spend the next year or two working as a prostitute to pay off her father’s debt. Once accounts were settled, she return to her husband and begin her married life.6

In his job as a financial educator, Keith had spent a fair amount of time breaking down the act — and sometimes art — of short selling, in a way that less savvy customers could understand. When a trader believed a company was in trouble, and its stock was overvalued, they could 'borrow' shares, sell them, and then when the stock went down as they'd predicted, rebuy the shares at a lower price, return them to whoever they'd borrowed them from, and pocket the difference. If GameStop was trading at 5, you could borrow 100 shares, sell them for $500; when the stock hit 1, you bought back the 100 shares for $100, returned them, pocketing $400 for yourself. You paid a little fee to the lender for their trouble and came out with a tidy profit. But what happened if the stock went up instead of down? What happened if GameStop figured out how to capitalize on its millions of nostalgic customers, who spent billions on video games every year? What if the stock went to 10 instead of 1? What happened was, the short seller was royally screwed. He'd borrowed those 100 shares and sold them at 5. Now the stock was at 10, but he still needed to return his 100 shares. Buying them on the market at 10 meant spending $1000. And what was worse, when he'd borrowed the shares, he'd agreed on a timeline to return them. There was a ticking clock hanging over his head, so he had a choice — buy the shares back at 10 now, losing $500 on the deal — or wait a little longer, hoping the stock went back down before his time limit was up. And what if he waited, and the stock kept going up? Sooner or later, he had to buy those shares back. Even if the stock went to 15, 20 — he was on the hook for those 100 shares. Theoretically, there was no limit to how much he could lose.

Collateral Capacity or Net Worth? If young Bill Gates had knocked on your door asking you to invest $10,000 in his new company, Microsoft, could you get your hands on the money? Collateral capacity is access to capital. Your net worth is irrelevant if you can’t access any of the money. Collateral capacity is my favorite wealth concept. It’s almost like having a Golden Goose! Collateral can help a borrower secure loans. It gives the lender the assurance that if the borrower defaults on the loan, the lender can repossess the collateral. For example, car loans are secured by cars, and mortgages are secured by homes. Your collateral capacity helps you to avoid or minimize unnecessary wealth transfers where possible, and accumulate an increasing pool of capital providing accessibility, control and uninterrupted compounding. It is the amount of money that you can access through collateralizing a loan against your money, allowing your money to continue earning interest and working for you. It’s very important to understand that accessibility, control and uninterrupted compounding are the key components of collateral capacity. It’s one thing to look good on paper, but when times get tough, assets that you can’t touch or can’t convert easily to cash, will do you little good. Three things affect your collateral capacity: ① The first is contributions into savings and investment accounts that you can access. It would be wise to keep feeding your Golden Goose. Often the lure of higher return potential also brings with it lack of liquidity. Make sure you maintain a good balance between long-term accounts and accounts that provide immediate liquidity and access. ② Second is the growth on the money from interest earned on the money you have in your account. Some assets earn compound interest and grow every year. Others either appreciate or depreciate. Some accounts could be worth a great deal but you have to sell or close them to access the money. That would be like killing your Golden Goose. Having access to money to make it through downtimes is an important factor in sustaining long-term growth. ③ Third is the reduction of any liens you may have against these accounts. As you pay off liens against your collateral positions, your collateral capacity will increase allowing you to access more capital in the future. The goose never quit laying golden eggs – uninterrupted compounding. Years ago, shortly after starting my first business, I laughed at a banker that told me I needed at least $25,000 in my business account in order to borrow $10,000. My business owner friends thought that was ridiculously funny too. We didn’t understand collateral capacity and quite a few other things about money.

If we take God’s Word seriously, we should avoid debt when possible. In those rare cases where we go into debt, we should make every effort to get out as soon as we can. We should never undertake debt without prayerful consideration and wise counsel. Our questions should be, Why go into debt? Is the risk called for? Will the benefits of becoming servants to the lender really outweigh the costs? What should we ask ourselves before going into debt? Before we incur debt, we should ask ourselves some basic spiritual questions: Is the fact that I don’t have enough resources to pay cash for something God’s way of telling me it isn’t his will for me to buy it? Or is it possible that this thing may have been God’s will but poor choices put me in a position where I can’t afford to buy it? Wouldn’t I do better to learn God’s lesson by foregoing it until—by his provision and my diligence—I save enough money to buy it? What I would call the “debt mentality” is a distorted perspective that involves invalid assumptions: • We need more than God has given us. • God doesn’t know best what our needs are. • God has failed to provide for our needs, forcing us to take matters into our own hands. • If God doesn’t come through the way we think he should, we can find another way. • Just because today’s income is sufficient to make our debt payments, tomorrow’s will be too (i.e., our circumstances won’t change). Those with convictions against borrowing will normally find ways to avoid it. Those without a firm conviction against going into debt will inevitably find the “need” to borrow. The best credit risks are those who won’t borrow in the first place. The more you’re inclined to go into debt, the more probable it is that you shouldn’t. Ask yourself, “Is the money I’ll be obligated to repay worth the value I’ll receive by getting the money or possessions now? When it comes time for me to repay my debt, what new needs will I have that my debt will keep me from meeting? Or what new wants will I have that will tempt me to go further into debt?” Consider these statements of God’s Word: • “True godliness with contentment is itself great wealth. After all, we brought nothing with us when we came into the world, and we can’t take anything with us when we leave it. So if we have enough food and clothing, let us be content” (1 Timothy 6:6-8). • “Those who love money will never have enough. How meaningless to think that wealth brings true happiness!” (Ecclesiastes 5:10). • “My child, don’t lose sight of common sense and discernment. Hang on to them, for they will refresh your soul. They are like jewels on a necklace. They keep you safe on your way, and your feet will not stumble. You can go to bed without fear; you will lie down and sleep soundly. You need not be afraid of sudden disaster or the destruction that comes upon the wicked, for the LORD is your security. He will keep your foot from being caught in a trap” (Proverbs 3:21-26). • “Don’t copy the behavior and customs of this world, but let God transform you into a new person by changing the way you think. Then you will learn to know God’s will for you, which is good and pleasing and perfect” (Romans 12:2).