Veritas: It’s Jerry Maguire time – ‘Help me help you!
News that BlackRock’s Bob Doll has joined the list of those arguing the ECB should buy bad bank debt did nothing but make me think of key catchphrases from the mid-1990s rom-com Jerry Maguire.
1. ‘Help me help you!’
In this scene Jerry, played by Tom Cruise, asks his sports marketing client to buck up in order that he be able to negotiate a harder deal with the sportsman’s employer – an American Footbal team.
So, for the banks the scene is set to, ultimately, plead to the ECB that it should help them to help itself. That is, if the ECB makes an open ended committment to buy bad debt from stricken eurozone banks, they in turn will become stalwarts of a stable financial system forever more.
The problem, as is increasingly being feared, is that the balance between stopping Europe sliding into a Japanese style recession and generating unbearable inflation is not so straightforward. Mr Doll makes the observation that any ECB committment would require fiscal reforms. But that in turn simply makes me think of the piece of paper flutting in the wind in Chamberlain’s hand: governments may sign up to fiscal reform but if turfed out by voters at the first opportunity, those policies have an extremely limited shelf life (sort of like Jerry’s committment to his girlfriends – see the film.)
2. ‘Show me the money!’
In this scene, Jerry screams down the phone ‘Show me the money!’, in order to prove to his only remaining client that he is serious about negotiating a better deal with the client’s employer.
Although it is hard to imaging the likes of Josef Ackermann of Deutsche Bank yelling something similar down the phone to incoming ECB president Mario Draghi, arguably the precedent was set by the likes of Barclays who flogged themselves off at any price to Middle Eastern investors to avoid the clutches of UK taxpayers.
Of course, there is the joker in the pack, in the form of Merkozy, whose own feelings on the ongoing crisis could yet see another kind of pressure put on the ECB. Edouard Carmignac’s words to Jean-Clade Trichet in the past week may yet come to be seen as some of the kinder ones shared with the broader public, should the situation deteriorate much further.
From the taxpayer perspective, of course, the words ‘Show me the money!’ take on a completely different connotation. Did somebody whisper cross-border nationalisation?
3. ‘You had me at hello!’
In this scene, Jerry returns to his beloved after realising that true love shines forever. Despite a longsome speech, his girl simply blubbers that it was his first few words that turned her heart to slush.
Now, there are also rumours of the new business model, whereby if all else fails banks will tap up you and I to buy more of their own bonds to survive – sort of like the war bonds that were flogged by the bucketload in the UK during the 20th Century and which have never been paid off. Unlike the film, however, I suspect that when the banks finish their longsome speeches to us potential investors, our hearts will be swelling with something other than love.