When regular loans

Don't earn enough to suit us

Maybe bad loans will.

I'd never heard of Haiku until a Wall Street Journal article in the early 1990's described a large group of financially strapped Japanese businessmen gathered in an auditorium taking turns singing the blues, as it were, in classic Japanese Haiku. It was sad–sad and lonely–and eloquent.

I looked it up, but decided Haiku was too sophisticated for a country boy, with its rigid syllable count, its absence of rhyme, but the presence of an undefinable zen quality. Not rhyming, I'm told, is sophisticated in the same sense as art that doesn't look like anything. I can imagine enjoying it, but how would you judge it? I can at least imagine learning the rules of rhyming, but what are the rules of not rhyming? Not everyone agrees, you might be surprised to learn, that rhyming is low-brow. I think it was Robert Frost–no Bubba–who said that writing prose was like playing tennis without a net. But my first Haiku, like Buck Owens acting sad and lonely, came naturally:  

 Japanese Haiku

Is too sophisticated

For a country boy.

What stirred all these memories up was another WSJ article about the financial blues expressed in verse, but these blues were made in the USA.  What is it about financial distress and poetry? As the current subprime crisis developed, my mind did turn to a poem from my early years that dealt with risk management and moral hazard. Its author, Joseph Malins, describes a town's dilemma over what to do about a dangerous cliff that had already claimed a number of lives.  The question before the community was whether to build a fence at the top of the cliff or place an ambulance at the bottom. Here is the first verse of A Fence Or An Ambulance:

'Twas a dangerous cliff, as they freely confessed,

Though to walk near its crest was so pleasant;

But over its terrible edge there had slipped

A duke and full many a peasant.

So the people said something would have to be done,

But their projects did not at all tally;

Some said, "Put a fence around the edge of the cliff,"

Some, "An ambulance down in the valley." 

It was a close vote, but they finally chose the fence with the following rationale:

"To rescue the fallen is good, but 'tis best

To prevent others from falling."

Sometimes a rhyme can capture the essence of mundane business matters like, say, Sarbanes-Oxley, or, in this case, the endless "attesting" requirements of COSO.  Those attesting requirements were anticipated by Ogden Nash in The Python.  See if you don't agree: 

The python has, and I fib no fibs,

318 pairs of ribs.

In stating this I place reliance

On a seance with one who died for science.

This figure is sworn to and attested;

He counted them while being digested.

Ogden Nash understood banking and finance.  Banks current reluctance to lend, except under ideal circumstances, was captured by his poem, Bankers Are Just Like Anybody Else, Except Richer. Bank customers probably appreciate it more than bankers, however.  Here is an excerpt: 

Most bankers dwell in marble halls,

Which they get to dwell in because they encourage deposits and

 discourage withdralls,

 And particularly because they all observe one rule which woe

 betides the banker who fails to heed it,

Which is you must never lend any money to anybody unless they

 don't need it.

Texas style cowboy poetry has fewer references to evil bankers and other money lenders than one might expect since running money is a lot like running cattle. In both cases it pays to look back occasionally to see if the herd is still with you. Investors can learn an important lesson in herd behavior that cowboys already know: If you are following a cow, chances are it's following a cow too. 

I've seen one cowboy poem devoted to the contemporary issue of collateral, but I can't find it. Anyway, it starts of with the banker requiring collateral from a cowboy–his cows–for a small bank loan. The cowboy was insulted by the implied lack of trust and the banker's unwillingness to make him a character loan. So, when the cowboy paid the loan off, on time, and the banker urged him to keep his deposit account in his bank, the cowboy asked the banker what he would be using as collateral. Life does have its small satisfactions. 

I'll leave you with one more subprime verse: 

My house is under water, for sure,

And my car is upside down, you bet,

But I'm going to get me a consolidation loan

And finally get out of debt.

It's not Haiku, but it'll do. After all, as Ogden Nash put it so eloquently,

Purity

Is Obscurity

Happy New Year Everyone! 

                             Bob McTeer

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