Historical Fair Value
Last week I needed some money to fix a small personal credit crunch. A few $1,000 would have been fine.
So I went to my local Deutsche Bank outlet and asked for a credit. I have a long-term brokerage account with them and planed to use the stocks I hold as collateral.
But the Deutsche Bank clerk said no. He said that the stocks I hold for long-term profits were worth too little given their current market value.
"That's a stupid view," I rejoined. "I have kept these stocks for nine years by now and I plan to hold them forever, like two more years or so."
"Therefore," I explained, "you can't judge the stocks value by today's quotation. You have to look at their historical fair value, not their current price."
The clerk didn't get it. After an hour of brisk discussion I left without the money I urgently needed.
Stupit me. I gave up to early. I should have talked to the clerk's boss:
The proposals on “fair value” accounting by the Institute of International Finance, an alliance of 300-plus companies chaired by Josef Ackermann, Deutsche Bank’s chairman, would enable financial companies to cushion the blow of financial crises by valuing illiquid assets using historical, rather than market, prices.
Under the plan, which has been obtained by the Financial Times, banks that decided to keep assets on their balance sheet would also be freed from the requirement to hold them to maturity and would be able to sell them after two years.
So Ackermann agrees with me. Pets.com stocks bought at $11 a share still have their 'fair value'.
Maybe I should try again?
Posted by b on May 26, 2008 at 13:58 UTC | Permalink
b,
there are two sets of rules, one for those who borrow small sums and others for those who borrow billions.
Posted by: | May 26 2008 14:49 utc | 2
The clerks just apply the latest directives, ‘rules’ for lending or going into the scarrrlet (red) as my papa used to call it have been stiffened all over (though I did read that in some parts of the US a sort of subprime thing is getting going again on foreclosed properties, because they are so cheap, go figure...). Of course the banks’ hedgy attitude towards long time, small, legit clients, is just a symptom of their disarray and power-flexing muscles facing the only ppl where it can fly (small business owners are the worst off), the minions showing they obey those who pay their salary and actually don’t even understand the powerpoint presentations.
Anyway, you should try again, B, and you should go to other banks, tell the other banks that you will close your account with X bank, and transfer (how that works in your case, if you hold bank products, I don’t know), and tell your own bank this is utterly unacceptable and you will leave and tell everyone why you are doing so. (No argument about their policies, etc., they, or some personnel, won’t understand it anyway and it will just make them feel small, stupid whereupon they will react badly.) Bluster is the thing.
All banks in Europe will give special rates to trusted, favored, 'legit' customers (Afaik. But this perception from Switz. may not be correct.) All banks today are looking for new customers, if only to tot up “plus one” on the books.
I have been looking to borrow money as well... maybe a ‘local’ bank?
Posted by: Tangerine | May 26 2008 17:46 utc | 3
All part of "screw" society (from prison slang). We enjoy our privilege of personal autos and public coffee houses only at their royal pleasure. Repos are selling well because there are so many zeks willing to rent their families into slavery for the American Dream. Only until you've been reduced to a zek, just what you can carry,
food, shelter only after a sermon and twelve hours, seven days a week hard labor,
will you understand truly how the "system" really works. And it's our money!!
THE CONQUEST OF BREAD, CHAPTER I, OUR RICHES
Try a Wells Fargo credit card, b, they'll lend you US$1,000.
Posted by: Adam Smith | May 26 2008 18:08 utc | 4
Not that I know, but to add insult to injury, I hear that in the States, being turned down when asking/applying for credit, will ding your credit rating even that much more. Kinda, like a slap in the face after and already humiliating experience. In other words, just so you know your place the ptb, make sure you know they are in charge, by penalizing you for their decision of denial of said credit.
Some have even said, they were charged a fee, for being turned away. Which, I at one time would have found hard to believe, but wouldn't surprise me anymore.
Posted by: Uncle $cam | May 26 2008 18:51 utc | 5
@Tangerine 3 @Adam Smith -
Thanks for the advice, but the part of me asking for credit was fiction.
(Sorry, thought it was obvious - north German dry humor:
>A Texan rancher talks to a north German farmer. He brags "When I drive my car along my property borders it takes a whole day to be back to the point where I started."
Replies the north German 50 acre farmer: "Yeah, I once also had a car like that."<)
I just find it astonishing how people like Ackermann now come up with such stuff. The hypocrisy stinks to heaven.
:) ... I guess because my mind is on borrowing money...so bluster as advice for handling fiction was not ridiculous..
Slightly OT.. When foreignors enter the US the border authorities (or immigration) have the right to demand access codes, passwords, (etc.) to be able to read everything you have on your computer. As if it were a book, in the days when customs peered at your tomes to check that your History of Flight was not concealing James Joyce.
I don’t know on what directive, rule, or law these powers rest on, and didn’t attempt to find out. People believe it, it has happened, that is good enough. There is nothing you can do; if you are detained at immigration or entry, you are not arrested, don’t get your one phone call (or only courtesy of the authorities), you can’t be ‘represented.’ So Swiss bank employees travel to the US with empty computers - games and family photos and a G-mail account, and pick up the data they need there, or have it send through the intertubes! Schizophrenic..
Posted by: Tangerine | May 27 2008 15:17 utc | 8
The comments to this entry are closed.
Actually b, you should be the clerk's boss, and the clerks' boss. But that's not the system.
Posted by: plushtown | May 26 2008 14:22 utc | 1