Anyone who has ever had a long term relationship knows the feeling when things are no longer working and there comes a need to have "the talk". The talk takes all sorts of styles and incarnations. Sometimes it is just a realization that the relationship has run its course and the breakup is inevitable. Sometimes there is agreement and talk of making everything work again.
How do you ever get to the point where the talk becomes necessary? It's really quite easy, because life keeps chugging ahead no matter what you are doing. Sometimes jobs take more time than they used to, or kids or the sex just becomes boring. One thing is certain, there are always warning signs, but there is also a decent possibility that everyone hates to look at the obvious warning signs.
What got me thinking about shoddy relationships on the skids? This line from Time Magazine, "Regulators shut down two banks in Florida and one in California on Friday, boosting to 123 the number of U.S. bank failures this year as loan defaults rise in the worst financial climate in decades."
It got me to thinking. What is the average number of bank failures when the economy and the nation is not slowing dying? Well, in 1999 there were less than 10. There were 6 in 1995. There were no bank failures in 2005. That's OK, we are more than making up for it now. There were 25 last year and for 2009 we are on a run.
Bank failures and bad relationships have a lot in common. The writing has been on the wall for a long time and yet we just kept thinking that things would naturally work themselves out. This never happens in our personal relationships and these 123 bank failures for this year is clear proof that it will not easily work out on a financial scale either. As with failing relationships, talk will only make things worse.
In my experience, when it comes time to end a relationship and you instead go to therapy, it buys you time, but not much. The concept of allowing failing banks to hold on by using bailouts and other federal programs is the exact same thing. The dying relationship needs to be killed off as soon as it is on its last legs. The same is true for a failing bank.
For the most part a bank failure often comes back to the brains of the operation, same as a relationship. If you do not change the bank leadership, which never happens, then the bank is dead on arrival. Even banks who have survived threats of insolvency this past year, Citibank and Bank of America and AIG (not a bank I know) did not do the bright thing, which is a brain transplant. If brain transplants were possible, I would still be married. If regulators had the balls and the laws, they would move to kill off some of these banks and others would just lose the management who drove the bank into the ground.
What has been appalling during this past year of economic chaos is the unwillingness to remove the leadership of financial institutions that by corruption and incompetence drove their once profitable businesses into the netherworld. None lost their jobs. None were sent to jail. None were just let go. How can this happen?
I have a friend who has been "happily" married for 15 years. The day before his wedding he tried to talk me into picking up some "easy women" (prostitutes). That was the day before he got married. Whenever I saw him over the last 15 years he was alone, his wife at home. He was on the prowl, always in search of something new. In my mind the relationship was doomed from day one, but they remain married, in their own way. Bank leadership is as mystifying to me as his marriage is. It seems from almost any rationale point of view to be ruined, damaged and built on lies. His marriage continues and the leadership of most failed or failing banks have hung on, thinking everything would work out if you could just get one more shot.
All relationships are strange to me. I have no clue how some work and some do not and many are just built on a need to not be alone and thus flawed from day one. Banks? I have no clue why imbeciles and idiots continue to wear nice suits to work, only to lose millions more. Sometimes you have to man up and call it a day. Does no one have shame anymore?
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