Bottom feeders are circling |

Bottom feeders are circling

Banker's Hours
Pat Dalrymple
Glenwood Springs, Colorado CO
Pat Dalrymple

Hear the music? THRUM, THRUM, THRUM … The sharks and bottom feeders are circling.

Fortunes are being, or are about to be made, right before our very eyes, as scavengers and salvage experts buy low, with the comfortable assurance that, sometime, to someone, they will without a doubt sell high.

If there’s an underlying ecological balance to economics, blood in the water is the first sign of recovery. The scavengers, quite literally, clean up the environment so that the economy can bloom anew.

When the bottom feeders start buying, we’re tempted to breathe a sigh of relief, because it’s sure sign that some very smart money figures that a market has bottomed and better times are on the horizon.

Lest we get too giddy with expectation, it’s best to keep in mind that, if past busts and recoveries are any indicator, the buy low boys are going to be around for awhile, and quite probably the only ones. I know a board chairman who would love to sell his bank. When I enumerated some of the issues that I saw relating to the institution, he told me I was “thinking like a bottom feeder.” All I could say in reply was that only bottom feeders seem to be buying anything.

Intrinsic value isn’t yet an indicator of price. A seller can have an asset, be it bank, business or building and, having seen it depreciate in current value say, “Well, it’s worth a lot less than it was four years ago, but it’s clearly worth X now.” The shark then will lazily swim by and say, “Maybe to you, but not to me. Here’s my price.”

One thing’s for sure; it’s not been cheaper to leverage your money since the great depression. Banks are rushing to lend money to rich customers, and interest rates are at their lowest in decades. Sure, the loans are conservative with big equity positions required, but that’s not a big deterrent; those with cash aren’t earning much on their liquidity.

Reminds me of what an old rancher told me back when I was a kid working on ranches on Piceance Creek: “Don’t shoot the buzzards, son. They help clean things up.”

Pat Dalrymple is a valley native. He’s been in the mortgage and banking business since 1961. He’ll be happy to answer your questions or hear your comments. His e-mail is

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