Scene: A bank boardroom somewhere in the North of England. Eight bored-looking old men are sat around an oval table.
A sharply-dressed young MBA walks in, opens his laptop, and connects it to the video projector currently throwing a silent re-enactment of Derek Jarman’s ‘Blue’ onto the wall. A powerpoint slide flickers into view.
MBA: Right guys, so what we’re looking at here is the increase in the bank’s monetarizably leveragible resourcary instances this year. This is an annuitized fiscalistic product, a complex of offset and re-contextualized future elements with contingencies virtualized and re-incorporated. Now if you remember, my incentivisatory package stipulates that I will get a million pounds for every 100% increase in profits, so five million pounds are being wired to my account as we speak.
Old Man 1: I didn’t understand a word of that, so it must be good.
Old Man 2: And of course we get bonuses based on this as well.
Old Man 3: Wonderful. So let’s see the projections for next year.
MBA: The what?
Old Man 3: The projections. For next year.
MBA: Oh I see. Nope, I don’t have any.
Old Man 4: You don’t have any idea how the business will increase next year?
MBA: Look, you said to me “grow the revenue streams this year” and I have. It’s a bit late to start worrying about what you are going to do next year now!
Old Man 5: What do you mean?
MBA: Well I’ve just lent seventy billion pounds worth of mortgages to idiots who couldn’t afford to repay them if they sold their kidneys to Gordon Ramsey! How else do you think I got the arrangement fees so high!
Old Man 6: Ohhhhh…
MBA: Next year. Pffff.
Old Man 7: So, young man, how did you get the money for these mortgages?
MBA: Oh I borrowed it. Don’t worry, it’s only short-term loans so it won’t show up on the books as a long-term commitment and depress the share price.
Old Man 8: And what happens when these short-term loans expire?
MBA: Well that doesn’t happen until next year. So it really isn’t part of my remit.
Old Man 3: So what you are telling us is that you have caused this bank to take on a hundred and forty billion dollars of short term loans in order to get the arrangement fees from selling mortgages to people who cannot possibly afford to repay them?
Old Man 3: And you did this because you would get a bonus based on poorly chosen short-term indicators?
Old Man 3: Without any consideration that this might destroy not just this company but the wider economy?
Old Man 3: You do know you shouldn’t have done that…
MBA: Pfff. Based on which principle of microeconomics?