This Little Piggy...

Piggy Bank

1) For many of us, the little piggy shown here was our first bank. We all learned the fundamentals of saving by putting our spare coins into the slot. Later, when certain adults made a point of trying to impress us by giving us a dollar, or, in the rarest of rare cases five dollars, we learned to pull little piggy apart, or remove the cork from underneath and insert the paper bill.

This latter move, of course, also taught us about something called borrowing; once we had the knack for breaking into piggy, we had a little taste of credit.

Sadly, we outgrew our piggy banks and graduated to small savings accounts in big bank buildings, many made of brick or granite, supported by huge columns. The bulk was to make us all feel secure about putting our money inside a place too big for a thief to carry around. These banks had names like First National City Bank, Chase Manhattan, or even Chemical Corn Exchange and each one had its own armed guard inside.

Who would have thought that, after all these years, little piggy would once again prove to be a very sound alternative to those same big bulky stone banks...

Bank Piggy/DSK

2) The French banker, Christine Lagarde, is the head of the IMF, a kind of bank of banks. She recently replaced another French banker who is so famous he is known only by his initials, DSK, who resigned after having an unseemly, at best, liaison with a maid in his New York hotel (naturally, he blames the maid, puritanical Americans, and a conspiracy for his troubles).

Ms. Lagarde has been chiding her Euro partners to get going on baling out Greece and other countries, which cannot pay their debts and are in danger of default. Collectively, these countries are rather conveniently known as PIIGS (Portugal, Italy, Ireland, Greece and Spain). Not making it up.

In case you have not been paying attention, Greece sold many $billions of bonds to banks in France, Germany and other countries, so that Greeks could continue to provide a swell vacation spot for other euros without having to pay taxes. Then the banks bought insurance in case these bonds went bust, which they assuredly will if the same banks don't lend Greece more money.

If this sounds familiar to an American audience, especially if you are unemployed, have had your home foreclosed upon, or can no longer afford health insurance, it should. Greece is playing the role of home buyers who got mortgages they could not possibly repay from banks like Countrywide, who then sold a piece of the mortgage to other suckers, who then insured the worthless stuff with the same insurer, AIG. You know the rest.

Questions: why are there so many French bankers? Why don't they teach bankers that it is not a good idea to buy bonds from Greece, instead of sound investments like ouzo or feta cheese? Why don't we let children run the banks and the IMF: even they know not to buy from Greeks bearing bonds!

3) For some years we have had an account at a certain Swiss bank. In 2008, while said bank was losing about $38Billion, we actually made more money than they did. Considering that we were unemployed at the time, this was quite a feat and made us wonder why the bank did not hire us to manage them.

This week, the banking world was shocked...truly shocked ...again to find out that a lone trader at the same bank had run up losses of $2.3Billion (so far) without the loss being detected. These kinds of traders are always called "rogues," which is a way of banks saying that all is okey-dokey because there was only one. They think this makes clients feel a lot safer.

The bank has said,"The true magnitude of the risk exposure was distorted because the positions had been offset in our system with fictitious ...positions..." In other words, we can't be blamed or fired for not knowing since the guy made up stories to cover the bad stuff and our system can only find the bad stuff, not made up stuff.

Well, okay, we feel much better about our account now; and, this also explains why there is no minus sign on the Swiss flag; always accentuate the positive.


4) At least that "rogue" trader will go to prison; we can be assured of that. But, what about all of these other jamokes, who pompously, arrogantly, deceitfully, dishonestly, stupidly and, yes, piggishly baled out their pals at our expense?  The Taliban would be too good for them.

It turns out that the little piggy bank was a very good idea after all. Oink.