Davos the Dragonslayer

What will Iron Bank do if NW doesn't pay debts?

39 posts in this topic

 

On 11/10/2017 at 0:34 AM, Lollygag said:

 

:bang:I don't know why you're even replying to me. I only care about character motivation in regards to the agreement just made. If you want to discuss the ACTUAL repayment of the loan at some point in the future, bring it up with someone else. I don't see a point in discussing ACTUAL repayment because everything will go to **** as you've said and we weren't told the terms of the agreement and Jon called it fishy.

 ...

I'm not sure what your on against. I haven't seen "character motivation" mentioned in-thread thus far...

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I see the Iron Bank as having exclusive rights to sell "NW certified" chunks of the Wall as souvenirs.

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16 hours ago, Wild Bill said:

 

I'm not sure what your on against. I haven't seen "character motivation" mentioned in-thread thus far...

The loan to the NW makes no sense if viewed as exclusively as a profit-maker. So why did the IB offer the loan? What did the IB want? Why did Jon see it as fishy? Those are my motivation questions.

You weren't doing this so I'm sorry if my response came across as being at you. Should have split it into two different posts.

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I wonder he's put the Gift up as collateral.There's always value in land, and it would give the Iron Bank a small chunk of Westeros they could sell to some richer Westerosi to recoup thier money

Good thread though

 

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This is crackpot but I once read someone else' post about the sign of Braavos starting to sink due to the rising sea level and how the city itself is based on the real world counterpart of the Netherlands and Venice. Is it possible that the FM and Iron Bank knew about this and planed to move from the sinking city? Maybe their moonsingers foretold it. What better way to acquire a new land than to get the Gift or the New Gift, the huge piece of land not owned by any lord? That should explain the feeling Jon had, as well as why the FM focused on Arya.

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On 11/11/2017 at 6:47 PM, Lollygag said:

sThe loan to the NW makes no sense if viewed as exclusively as a profit-maker. So why did the IB offer the loan? What did the IB want? Why did Jon see it as fishy? Those are my motivation questions.

You weren't doing this so I'm sorry if my response came across as being at you. Should have split it into two different posts.

Hmm, thread seems to have died. Pity...

To rephrase an earlier response of mine, the IB did not make a loan to the NW as a profit maker, but as an hedge. They are worried that Westeros will go to hell (profit-wise) if the entire continent is depopulated. So, they see the NW as an important bit that might protect their investment(s), even if they lose money on their specific loan to the NW.

Meanwhile, speculatively, Jon (no great high-stakes, uber negotiator) cuts a deal with IB very easily where he gets the wherewithal to sustain the NW for some time. Jon's worry about it being "fishy" is simply of being a newbie and worrying that he's made a bad deal in the long run, or that he has misinterpreted the context of the deal (basically the same thing). 

Which he might of done, or not, from the perspective of NW finances. Machts nix.

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21 hours ago, Wild Bill said:

Hmm, thread seems to have died. Pity...

To rephrase an earlier response of mine, the IB did not make a loan to the NW as a profit maker, but as an hedge. They are worried that Westeros will go to hell (profit-wise) if the entire continent is depopulated. So, they see the NW as an important bit that might protect their investment(s), even if they lose money on their specific loan to the NW.

Meanwhile, speculatively, Jon (no great high-stakes, uber negotiator) cuts a deal with IB very easily where he gets the wherewithal to sustain the NW for some time. Jon's worry about it being "fishy" is simply of being a newbie and worrying that he's made a bad deal in the long run, or that he has misinterpreted the context of the deal (basically the same thing). 

Which he might of done, or not, from the perspective of NW finances. Machts nix.

I think the bolded is a possibility, but I still hold based on all of the "Iron Bank gets its due" and that they're extremely ruthless with people who don't pay that whatever they have planned, they expect their books to balance out in the end which means somehow, some way, they'll get their money back. It may take time, it may be in a convoluted way, but they'll find it. If the Wall falling is being factored into their decision, it means that the IB (and FM?) are more in tune to the north-of-the-Wall goings on than most Westerosi. It would also indicate that they give the situation more gravity than most Westerosi and I would wonder why if that's the case.

In addition to all of the IB gets its due being emphasized throughout the series, the hedging works for me if it's the IB being creative and long-sighted about fully recouping their investments, but it fails for me if it's being suggested that the IB is writing off loses. That goes against what we've been told about the IB as I quoted upthread.

Hedging defined as writing off losses also doesn't work for me because it's too esoteric and real-world for a fantasy series. It's also very first-world and I don't think it works in this series unless the concept was laid out elsewhere and it wasn't. Too many readers around the world wouldn't follow this idea either due to nationality, economic class, age or just a lack of interest in financial matters. This nuanced financial information is also missing from the series.

Jon thinking the loan is fishy adds nothing to the story if the loan isn't actually suspect in some way. It would only be filler or artificial tension if the loan is called out so literally and yet nothing comes of it. To make it even worse, we already know that the IB is playing games with Westerosi politics so calling the loan fishy with nothing to come from it would amount to a wild goose chase for the more careful readers. I just don't think the author is doing this to the reader.

 

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47 minutes ago, Lollygag said:

I think the bolded is a possibility, but I still hold based on all of the "Iron Bank gets its due" and that they're extremely ruthless with people who don't pay that whatever they have planned, they expect their books to balance out in the end which means somehow, some way, they'll get their money back. It may take time, it may be in a convoluted way, but they'll find it. If the Wall falling is being factored into their decision, it means that the IB (and FM?) are more in tune to the north-of-the-Wall goings on than most Westerosi. It would also indicate that they give the situation more gravity than most Westerosi and I would wonder why if that's the case.

In addition to all of the IB gets its due being emphasized throughout the series, the hedging works for me if it's the IB being creative and long-sighted about fully recouping their investments, but it fails for me if it's being suggested that the IB is writing off loses. That goes against what we've been told about the IB as I quoted upthread.

Hedging defined as writing off losses also doesn't work for me because it's too esoteric and real-world for a fantasy series. It's also very first-world and I don't think it works in this series unless the concept was laid out elsewhere and it wasn't. Too many readers around the world wouldn't follow this idea either due to nationality, economic class, age or just a lack of interest in financial matters. This nuanced financial information is also missing from the series.

Jon thinking the loan is fishy adds nothing to the story if the loan isn't actually suspect in some way. It would only be filler or artificial tension if the loan is called out so literally and yet nothing comes of it. To make it even worse, we already know that the IB is playing games with Westerosi politics so calling the loan fishy with nothing to come from it would amount to a wild goose chase for the more careful readers. I just don't think the author is doing this to the reader.

 

I don't disagree. I'm really not sure what GRRM has in mind, other than the little sub-plot does have a solution for the NW to make sure they have some food for the long winter - since it has been emphasized that they do not (because of Stannis's presence, and the feeding of his horde, and of feeding the Wildlings).

Considering economics in isolation vs GRRM's writing. It is not something he dwells on. :D But since he seems to have mined European history, amongst other histories so much - for him to have neglected to have included the various bankruptcies, and the influence of the Fuggers or Medici, would be odd. We don't know if the Lannisters will go bankrupt and take a Fugger (or IB) down with them - a real risk for them. But we can guess that IB hedging is important, and btw, a minuscule risk with the NW is another hedge. I do take exception to the notion that the IB would never write something off - of course they would, that is the way of banking from its infancy to now - some losses are inevitable, and better to "cut your losses". (quoted and underscored to emphasize that the IB would not be the IB without doing that... ;))

Anyway, I don't think the loan is material to the overall story - Jon gets to feed the NW. The reader moves on, not particularly caring, other than our wall-heroes won't have to eat their boots. 

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49 minutes ago, Wild Bill said:

I don't disagree. I'm really not sure what GRRM has in mind, other than the little sub-plot does have a solution for the NW to make sure they have some food for the long winter - since it has been emphasized that they do not (because of Stannis's presence, and the feeding of his horde, and of feeding the Wildlings).

Considering economics in isolation vs GRRM's writing. It is not something he dwells on. :D But since he seems to have mined European history, amongst other histories so much - for him to have neglected to have included the various bankruptcies, and the influence of the Fuggers or Medici, would be odd. We don't know if the Lannisters will go bankrupt and take a Fugger (or IB) down with them - a real risk for them. But we can guess that IB hedging is important, and btw, a minuscule risk with the NW is another hedge. I do take exception to the notion that the IB would never write something off - of course they would, that is the way of banking from its infancy to now - some losses are inevitable, and better to "cut your losses". (quoted and underscored to emphasize that the IB would not be the IB without doing that... ;))

Anyway, I don't think the loan is material to the overall story - Jon gets to feed the NW. The reader moves on, not particularly caring, other than our wall-heroes won't have to eat their boots. 

We'll have to agree to disagree about the loan. I've no idea what's up with it so I can't advance any idea in particular. Guessing real Arya is the collateral, but that's my best guess and I'm not certain of that at all.

I know GRRM is deeply interested in European history and much of ASOIAF was inspired by it, but I don't think he included anything in the series which requires knowledge of European history to understand anything in ASOIAF.

I'll embarrass myself to make my point. My education isn't great but neither is it poor as I grew up in a rural area and could only afford a state school for college. I'm not interested in history beyond a few isolated subjects. I don't know what a Fugger is though I'm guessing from your post it (they?) has something to do with banking. My knowledge of the Medicis involves only their importance to the funding of some of the greatest works of Renaissance art. My other source of knowledge of the Medicis is the Netflix show Medici: Masters of Florence staring Richard Madden (show Robb).  It starts off slow but gets better later on. Dennis Hoffman is awful in it and the guy who plays Walder Frey in the show plays Richard's father-in-law. Ha! And being a fictional show, what I learned from it I have to take with a massive chunk of salt.

I just don't think GRRM is exclusively writing to the extremely well-educated here. I'd change my mind if you could find where this practice of the IB was laid out elsewhere in the series and I've just overlooked it. That they don't write off debt does require some suspension of disbelief given the real world, but I have to give priority to what was actually written in the books themselves.

 

Edited by Lollygag

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Only reason gift is abandoned is wildling raids and now with wildlings on this side of the Wall, well, there are orchards, some farmland, lakes, seas to  go fishing and whaling... Not to mention a huge forest north of the Wall and a nearby free city, which also houses the bank that gave the loan,  that is in need of it. NW will soon(after the winter) be richer than a lot of the great houses but they just don't know it yet.

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10 hours ago, Corvo the Crow said:

Only reason gift is abandoned is wildling raids and now with wildlings on this side of the Wall, well, there are orchards, some farmland, lakes, seas to  go fishing and whaling... Not to mention a huge forest north of the Wall and a nearby free city, which also houses the bank that gave the loan,  that is in need of it. NW will soon(after the winter) be richer than a lot of the great houses but they just don't know it yet.

Really? I must have missed that...

Though - you mention that using Wildlings to re-inhabit the Gift will invigorate the ecomonics of the area. Nice :) Assuming they live through the Long Night and such...

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23 hours ago, Lollygag said:

I know GRRM is deeply interested in European history and much of ASOIAF was inspired by it, but I don't think he included anything in the series which requires knowledge of European history to understand anything in ASOIAF.

I agree completely. And any notions of banking are not needed, or expected, to appreciate ASOIAF. :)

My precision is mostly related to OP, who brings up banking. I contend that bankers hedge their bets and are willing to lose money as a result. You seem to say that IB would never, ever, lose money in any circumstance. We agree to disagree.

As an aside, the best-seller lists of non-fiction books (In the US) have been dominated for decades with the theme of "how to run a successful company". Like that might be difficult? Hmm, I wonder what is the likelihood of IB to be perfect compared to our super-sophisticated modern enterprises?

To rephrase, this is a totally tangential topic and has small importance on the books as a whole. But is interesting to explore... :)

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The Iron Bank would destroy the Others. That takes away the purpose of the NW and destroys them. That's what they get for failing to repay.

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1 hour ago, Eiko Dragonhorn said:

The Iron Bank would destroy the Others. That takes away the purpose of the NW and destroys them. That's what they get for failing to repay.

I'm sorry to say that over-draft fees and such might not stop the Others. A minimum balance fee might be a problem for the Others, though we don't know enough about their finances to be sure..,

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On 11/9/2017 at 10:31 PM, Lollygag said:

The NW are dying, even by Westerosi standards their quality of life is lousy.

The second part of this is not necessarily true.  By the standards of the Westerosi we meet, their quality of life is lousy.  But I think it's Chett who says that his father used to wade into pools and let leeches attach to him, and that was his living.  The NW has a much higher standard of living that that.  Compared to the smallfolk, the Night's Watch isn't so bad off.  It's super cold, sure, and there's the whole "celibacy" thing, but for the most part they eat on time, have some small amount of respect in the North, and get a roof over their heads.

On 11/9/2017 at 10:31 PM, Lollygag said:

Even to save the kingdom, they've not had the wherewithal to actually use any resources

Only for the last 250 years or so, though.  Their decline is directly related to the unification of Westeros; all of the resources that made the Watch a reasonably powerful institution in the past are still in place, plus some.

On 11/9/2017 at 10:31 PM, Lollygag said:

I'm not discussing what only the readers know, just what Tycho wrote, what he intended, and what Jon knows and what he may not know. Character motivation has nothing to do with what only readers know. Not sure why you replied this to me.

Right, and I think everyone else is saying that Tycho Nestoris is completely vindicated in his decision.  Three centuries ago the Watch was ten times as large and had half as much land; clearly, there is a rich resource base here, especially for the timber-hungry Braavosi.  It's also worth nothing that Tycho Nestoris may be making a loan to the Watch as a way of shoring up support for Stannis' campaign (which, presumably, is many many times more valuable to the Bank) without directly putting too much resources into Stannis himself.  As in, if Stannis fails, the Watch still owes it's debt, but if the Watch helps Stannis win at all (which they clearly have, a lot), then they STILL owe the money but also help the Bank make good on an additional, far larger investment.

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18 hours ago, Wild Bill said:

My precision is mostly related to OP, who brings up banking. I contend that bankers hedge their bets and are willing to lose money as a result. You seem to say that IB would never, ever, lose money in any circumstance. We agree to disagree.

As an aside, the best-seller lists of non-fiction books (In the US) have been dominated for decades with the theme of "how to run a successful company". Like that might be difficult? Hmm, I wonder what is the likelihood of IB to be perfect compared to our super-sophisticated modern enterprises?

I try to be very wary of assumptions but since we know so little about the IB they are quite unavoidable. Just elaborating a bit on where I'm coming from.

My underlying belief about the IB is that it bears little resemblance to a bank as we know it. This is based on their history with dragons, formerly secret cities, and other magical forces. Their origins are also tied to slavery. I do think they're in it for the profit just like modern banks, but that the profit is used for the zealous pursuit of eradication of or at least the containment of slavery. At this point, I think the IB's resemblance to rl banks ends. To these ends, you are correct in that I think they let go of no debt. However, I do think their collections (fairly often?) follow the path of their attempts to collect from the IT: boomeranging from plan to plan perhaps over decades until they hit on something that balances the books. For me anyhow, I think any money they write off is seen as a point for slavery and as a potential weakening of their own freedom hence their zealous and ruthless collection practices.

In support, I only have quotes about the IB always getting its due and their collections practices which are not restrained by the laws which rl banks must obey. I concede this is rather weak, but it's all that's found in the text. If you are still unconvinced, I can't really blame you given that we're told so little about the IB and that in itself is difficult to swallow. :dunno:

I would have a much easier time running a successful company if I didn't have any pesky ethics laws to obey and was further pushed to ambition by a possible the-ends-justify-the-means cause like slavery. Having FM would also be very useful. But it depends on where you think GRRM is headed with the books. I just think the IB's resemblance to a rl bank doesn't extend much beyond the word "bank".

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5 hours ago, cpg2016 said:

The second part of this is not necessarily true.  By the standards of the Westerosi we meet, their quality of life is lousy.  But I think it's Chett who says that his father used to wade into pools and let leeches attach to him, and that was his living.  The NW has a much higher standard of living that that.  Compared to the smallfolk, the Night's Watch isn't so bad off.  It's super cold, sure, and there's the whole "celibacy" thing, but for the most part they eat on time, have some small amount of respect in the North, and get a roof over their heads.

Yet they still can't get hardly anyone to join the NW willingly beyond the families who honor the tradition. Even the people who live in horrid places like Flea Bottom apparently won't volunteer. I get your logic here about steady meals and shelter paid for by cold and celibacy, but if the Westerosi saw things this way, the recruitment problems wouldn't be so dire.

5 hours ago, cpg2016 said:

Only for the last 250 years or so, though.  Their decline is directly related to the unification of Westeros; all of the resources that made the Watch a reasonably powerful institution in the past are still in place, plus some.

I addressed this argument upthread. Potential =/= Actualization. The NW's 250 years' decline and Westeros' thousands of years of stagnation is directly linked to their inability to capitalize on resources. Something's up with the loan. It's 2+2=5 so something's missing here.

 

 

5 hours ago, cpg2016 said:

Right, and I think everyone else is saying that Tycho Nestoris is completely vindicated in his decision.  Three centuries ago the Watch was ten times as large and had half as much land; clearly, there is a rich resource base here, especially for the timber-hungry Braavosi.  It's also worth nothing that Tycho Nestoris may be making a loan to the Watch as a way of shoring up support for Stannis' campaign (which, presumably, is many many times more valuable to the Bank) without directly putting too much resources into Stannis himself.  As in, if Stannis fails, the Watch still owes it's debt, but if the Watch helps Stannis win at all (which they clearly have, a lot), then they STILL owe the money but also help the Bank make good on an additional, far larger investment.

I suspect the loan is at least in part about propping Stannis' campaign, though I'd guess it's more about backing Jon personally who will in turn back Stannis.

If the IB don't believe in the Others, then Stannis' supporting the Wall doesn't factor as most Westerosi don't take the NW mission seriously.

If the IB do believe in the Others but have bad information as to how much of a threat they are, then it may have factored into their decision here. It just doesn't seem likely that the IB would be so careless about this assumption, so I think this option is unlikely.

If the IB do believe in the Others and have correct information as to how strong the threat is, then adding Stannis' army is better than only the NW and the wildlings, but not near enough. The IB would have to ensure some other steps to happen to strengthen Stannis at the Wall and that has some major implications as to the IB possibly being more active in the North than we think.

Jon himself seriously doubts their ability to repay the loan as I quoted upthread. I agree with him.

Edited by Lollygag

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On 11/17/2017 at 7:23 PM, Lollygag said:

.Yet they still can't get hardly anyone to join the NW willingly beyond the families who honor the tradition. Even the people who live in horrid places like Flea Bottom apparently won't volunteer. I get your logic here about steady meals and shelter paid for by cold and celibacy, but if the Westerosi saw things this way, the recruitment problems wouldn't be so dire.

I addressed this argument upthread. Potential =/= Actualization. The NW's 250 years' decline and Westeros' thousands of years of stagnation is directly linked to their inability to capitalize on resources. Something's up with the loan. It's 2+2=5 so something's missing here.

 

 

I suspect the loan is at least in part about propping Stannis' campaign, though I'd guess it's more about backing Jon personally who will in turn back Stannis.

If the IB don't believe in the Others, then Stannis' supporting the Wall doesn't factor as most Westerosi don't take the NW mission seriously.

If the IB do believe in the Others but have bad information as to how much of a threat they are, then it may have factored into their decision here. It just doesn't seem likely that the IB would be so careless about this assumption, so I think this option is unlikely.

If the IB do believe in the Others and have correct information as to how strong the threat is, then adding Stannis' army is better than only the NW and the wildlings, but not near enough. The IB would have to ensure some other steps to happen to strengthen Stannis at the Wall and that has some major implications as to the IB possibly being more active in the North than we think.

Jon himself seriously doubts their ability to repay the loan as I quoted upthread. I agree with him.

The only tangible thing I see in in recent posts is the notion that NW might not be able to repay their loan... And with prior posts that the IB, never, ever, loses money. Rephrasing myself from up-thread...

Yet IB was very willing to offer terms to the NW... Why does IB extend a loan that, on its face, will never be repayed? Because they are faced with the Lannisters defaulting, and the lose of $$$$, but separate investments in NW and Stannis might reduce their loses to $$ - this is how the Medici operated 600 years ago and how modern financiers operate now. Things are bad - cut your loses. Hells, bells, if you're lucky you might actually profit after all. :) but otherwise you cut your loses and move on...

Cheers,

Edited by Wild Bill

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