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A glimmer of sense…

A glimmer of sense starts filtering through… Banks still tightening loan standards

The article suggests

Many banks have made it harder for borrowers to obtain all kinds of loans over the last three months despite a $700 billion federal bailout program and a flurry of other bold moves to stem the worst financial crisis to hit the country since the 1930s.

yet brimming within you had to have detected the hardly restrained despair over the perceived double cross – It reads, “They (banks) take our money and refuse to lend it out…”. Expect the nonsense to get a whole lot more shrill just as sense was beginning to take hold.

This vindicates the following: Sense is as delicate as nonsense is compelling.

As bankers return to the norm (after that last mania has died), the question that remains really is what is the norm for a politician? Draw that norm and you have made some distance in setting the expectation of how bad this mess is going to get. There is a plethora of danged and damned danged stuff out there that form the repertoire of a seasoned interventionist (You might appreciate that the US government, and every other government in the world as well, is in full interventionist mode) – Price controls, wage controls, nationalization, funky money, funkier money, generic stimulus, targeted stimulus, “Dang, I hope this works” stimulus, quotas, protectionism, tariffs, Buy American – (What is American anymore?), unemployment, adjusted unemployment, severely one time adjusted unemployment, “we just stopped counting” – unemployment, war, senseless wars, senseless wars made sensible… In short, there is nothing sensible when it comes to politicians or the government.

So what does that mean to the supply chain at large. I can think of two possible impacts immediately.

1. Increased pace (perhaps tending to the frenetic) of lobbying efforts – When the government enters the playing field (and as of now, it is hovering and peddling influence at the periphery) as I expect that it will, firms up and down the supply chain will have to expend considerable lobbying influence to either keep the playing field as is or towards favorable terms. Naturally, the firms with deep pockets will benefits immensely from this whereas the smaller players in the supply chain (be it services such as 3PLs or carriers or actual suppliers of raw materials or intermediary products) will lose out unless they get their collective pockets together. Of course, frantic money encircling government begets not efficiency of investment (perish the thought) but beggars scandal – expectation of many money scandals is now firmly on my screen.

2. Stimuli – Can anyone put forth the reasoning behind the stimulus? Why stimulate anything in the first place and why does the government have to do the stimulating? The second part first – only the government has the “magical ability” to create something out of nothing – in other words, when the government says, “Let there be money.” Poof!! “And there was money.” Let

About me

I am Chris Jacob Abraham and I live, work and blog from Newburgh, New York. I work for IBM as a Senior consultant in the Fab PowerOps group that works around the issue of detailed Fab (semiconductor fab) level scheduling on a continual basis. My erstwhile company ILOG was recently acquired by IBM and I've joined the Industry Solutions Group there.

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