I’ve been writing children’s stories for a while, and decided to try to apply my childish impishness to the seriousness of banking. That’s a true FinTech approach where we integrate the parent and child. So, here’s my attempt to create an exciting moment in time: Barry Banker and the Market of Doom.
Barry Banker had worked for the Big Bank for many years. Barry knew all about markets and risk. He knew how there were many things that could happen which would take him down. He had seen colleagues betting on things that didn’t work out and they ended up in jail or, more often, promoted. He had managed to avoid the annual cull – where bankers were thrown out of the front door for not being able to kill the markets themselves – and he felt good about life. But then, for the first time since 2008, Barry faced the Market of Doom.
How did this happen? What happened? What is the Market of Doom and where is it?
The Market of Doom turned out to be called interest rates.
For years, Barry had dealt with a market that was certain. Everything was pretty stable, and he was happy. He made his annual bonus and knew that bonds and stocks were reasonably easy to predict. Then, suddenly, everything went to pot. Suddenly, interest rates were rising, governments were nervous, other banks were imploding, and everything was up in the air. Barry was worried. Barry decided to consult his long time hero Jamie.
Barry: what’s going on, Jamie?
Jamie: same as usual, Barry.
Barry: but this is unusual? Interest rates are rising! That just does not happen?
Jamie: well, Barry, it has and it does. It’s just the usual circle of financial life.
Barry: the circle of financial life?
Jamie: yep. Every few years we have a crisis. Don’t you remember 2008?
Barry: no. What happened?
Jamie: we had a financial crisis. Bankers went crazy for lending to people who had no money. It’s normal.
Barry: lending to people who have no money?
Jamie: that’s how banking works.
Barry: that’s how banking works?
Jamie: yes. We work on the idea that the more we can push people into debt, the more they owe us. The more they owe us, the more money we make.
Barry: that sounds like a gangster?
Jamie: no Barry, we’re called banksters.
Barry: so, what’s going on now?
Jamie: a financial crisis.
Barry: what’s a financial crisis?
Jamie: something that happens every seven years or so. Didn’t you see what I said to my daughter?
Barry: you have children?
Jamie: three girls.
Barry: but you can still work in banking and all the risks it involves?
Jamie: I’m good with risk.
Barry: so, what do we do about the Market of Doom?
Jamie: Gold. Move everything into stable assets when everything is unstable.
Barry: but if you look at Crypto, fintech, Silicon Valley Bank, Credit Suisse … everything is unstable. How will gold help?
Jamie: when everything is falling around you, make sure you have assets that are liquid and stable. Gold is the best one of those.
Barry: are you advising me to buy gold?
Jamie: as a financial advisor, I have to tell you that prices can go down as well as up.
Taking that advice on board, Barry decided the best thing to do was to get some gold.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...