Day-after-Halloween scary banker stories? Hmmm...
A friend asked me: "What does a workplace accident even look like in your world? Are you gonna fall on your pencil?" But this true story is very scary for those involved. Approving a loan is like Christmas, declining them is Halloween without candy.
A seasoned banker might couch his decline in the most sensitive terms possible. He could say something like: "I'm so very, very, very sorry sir. We have carefully reviewed your proposal from several different angles trying to find a way to write this loan for you. Here is the data compared to our lending criteria. Please correct any errors we have made. It appears that we are not going to be able to lend you the money. We want to wish you all the success in the world. We have identified some alternative lenders for you to consider here..."
No matter how gently he delivered the bad news, invariably what the client hears is: "We are a rich powerful bank. You have been measured and found an insignificant crumb on our table of plenty. Shoo-shoo now. Go crawl away some place where we won't have to witness the spectacle of your irrelevant life. "
The most frightening thing about banking in a small town is the complete lack of anonymity, juxtaposed with this sometimes adversarial work.
One of our young bankers accepted a promotion to branch manager, and took his little family to a small B.C. resource town some 20 years ago. Over the next few months they bought a home in a cozy neighbourhood, put their three young children in school, and joined local service and sports clubs, making lots of friends in the community. After about a year, it really started to feel like home.
Then one day he was he was referred an angry customer. A subordinate bank officer had declined his loan request, and (see above) the client felt hurt - which is hard to avoid.
Our bank manager did his job holding firm to our banking standards, while gently showing the customer where his request fell short, and even outlined some possible ways to bridge the gaps in the request.
But this was some sort of breaking point for the (former) client), who went home steaming mad, and not much later, called back with a death threat directed at the banker's family. He took his rifle and headed out the door.
In a town this size, the angry would-be borrower knew the precise house, and even the names and ages of our banker's wife and children, just as a matter of course. He would have had to make an effort not to know them.
Fortunately the local RCMP were just a local call (not a call centre) away and also knew all the relevant parties, the colour of the assailant's truck, the location of both homes, and so forth. They too were transferred in to town with young families, one even played softball with the banker. The cops descended on the bad guy like wasps on a chicken wing. I don't think he even got to out of his own neighbourhood before a full take down squashed his effort.
Simultaneously, another squad car went to the children's school and ushered the children to safety, while still another crew guarded the family home, meeting the banker there.
That very hour, the banker and his family left town and never returned. The bank relocated them, sold their home, moved their stuff, and found him a new position. They also provided professional counseling for years afterward. So, yeah, banking has its scary moments too.
Happy (day after) Halloween.
Do Markets Fear October?
In truth, markets have had some frightening Octobers over the years, and although not severe, this one has also had its moments. There's even a name for it: "The October Effect." Several significant market corrections have occurred in the 10th month, but this, like so many other tendencies, is not reliable, even if this month has spooked a few of us. Most of the past several Octobers has seen the broad-based S&P 500 tick upwards, and even though this October is definitely down, we are ending the month something other than a rock in the goody bag.
To close off the month, today the S&P 500 is in the green with all sectors except for the utilities, the real estate and the consumer staples sectors, making positive gains at midday.
According to one RBC analysis this morning: "There is nothing in the data that is consistent with the idea that there are cracks in the fundamental foundation of the US economic backdrop... consumers have not used (up) the tax benefits (yet). Labour markets are exceedingly tight (and we have) more job openings than unemployed."
So don't run away. The sun will come up tomorrow!
--Mark Ryan is an Investment Advisor with RBC Dominion Securities Inc. (Member-Canadian Investor Protection Fund), and these are Mark's views, and not those of RBC Dominion Securities. This article is for information purposes only. Please consult with a professional advisor before taking any action based on information in this article. See Mark's website at: http://dir.rbcinvestments.com/mark.ryan
