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

[Lollygag]

On 11/21/2017 at 0:09 AM, Wild Bill said:

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,

You're repeating yourself and I'd be repeating myself in turn by replying. Time to get off the hamster wheel.

[Lollygag]

58 minutes ago, cpg2016 said:

He has doubts because he's an idiot when it comes to finance and lending, the same as nearly every other character we encounter save Littlefinger and the actual bankers.

1. What is the point of bringing Jon's doubt about paying the loan if nothing is to come of it?

2. I ask you to substantiate the later part of the statement where "every other character we encounter save Littlefinger and the actual bankers" is "an idiot when it comes to finance and lending". None of the major families are in any financial trouble. As for Robert, he just doesn't care, and Cersei may or may not understand it, but she also definitely doesn't care. Not caring is not the same as not knowing.

1 hour ago, cpg2016 said:

Long story short, without evidence of some sort to the contrary, we should be assuming that Tycho Nestoris knows what the hell he's doing.

I completely agree that Tycho knows exactly what he's doing. What he's doing is just not what most readers are assuming.

1 hour ago, cpg2016 said:

Actually, you didn't.  I saw you noted that a longer post got eaten, so maybe you got into it there, but what you posted did nothing to address this.  Your point that the NW doesn't have the manpower to exploit their natural resource base is spot on, but guess who does?  The Braavosi, and we know the Iron Bank is far more directly involved and influential than any private bank (or even central bank) in modern society.  This isn't an instance where the Braavosi think there is untapped potential in the Gift/New Gift; they know it, because it wasn't that long ago (given the relative time scales of Planetos) that the Watch was capable of supporting expenses that were orders of magnitude greater than they are currently.

Do you have examples where the Iron Bank is involved with their clients beyond collections? I'm unaware that they offer consulting and aid services.

1 hour ago, cpg2016 said:

Tycho Nestoris, on the other hand, is a banker.  And like every banker who ever lived, he isn't lending solely against income, he's lending against collateral.  That sort of loan-to-own scheme is right on the border of ethical/legal in modern day society, but given the entire concept of deposing governments to collect on debts, is right up the IB's alley.

Now, there is a whole other issue of the ability to alienate land in a semi-feudal society, but presumably the Night's Watch is capable of doing it, given the unusual landholding structure within the demesne of the Watch.

 

I do suspect real Arya is the collateral here given the fArya plot line is running parallel to this and given the IB's connection to the FM. I don't recall any precedent in-series about the IB engaging in loan-to-own though I don't put it past them, so I don't think that's what's going on here in the sense that they're just acquiring stuff for the sake of acquiring it.

But it definitely is an interesting idea that the IB might want to control the Wall themselves (and arguably what's north of the Wall to some extent) given their history with Valyria and dragons.

[Lollygag]

AFFC Cersei VIII

A group of merchants appeared before her to beg the throne to intercede for them with the Iron Bank of Braavos. The Braavosi were demanding repayment of their outstanding debts, it seemed, and refusing all new loans. We need our own bank, Cersei decided, the Golden Bank of Lannisport. Perhaps when Tommen's throne was secure, she could make that happen. For the nonce, all she could do was tell the merchants to pay the Braavosi usurers their due.

 

The IB was cracking down on loans to the Westerosi yet lent the NW. Also shows that the Westerosi as a whole are at least reasonably competent when it comes to borrowing and repayment given that Westeros' merchant class seems quite stable given we hear little about it.

Also an indication that the IB doesn't generally engage in loan-to-own practices nor are they involved to any substantial extent in aiding in the success of their clients as they just want the money here.

[cpg2016]

13 minutes ago, Lollygag said:

1. What is the point of bringing Jon's doubt about paying the loan if nothing is to come of it?

From a Watsonian perspective, it is because Jon doesn't understand finance and collateral.  From a Doylist perspective, it's meant to heighten narrative tension, to further make the reader aware of the shaky ground Jon is standing on in his attempt to integrate the wildlings into the defense of the Wall; not only are the Sworn Brothers being asked to accept their traditional enemy, they're being asked to mortgage their future to do it.  And something has come of it; Jon was assassinated, and the man who led the mutiny is the guy typically trusted with NW finances!

17 minutes ago, Lollygag said:

None of the major families are in any financial trouble.

Au contraire, a great many of them are.  Half the Vale has slipped into genteel poverty.  The Iron Throne itself is vastly in debt, and no one can figure out why, which includes a great many intelligent people like Tyrion, Tywin, Jon Arryn, Ned Stark, etc (though Tyrion begins to grasp it).  We don't have a POV of Tywin thinking about it, of course, but he's aware of the debt the Crown is in.  That he isn't working through the reasons gets to the heart of my point; Tywin won't think about it because to do so is against the warrior ethos of his class.  In this case, not caring and not knowing are intimately intertwined.

19 minutes ago, Lollygag said:

As for Robert, he just doesn't care, and Cersei may or may not understand it, but she also definitely doesn't care. Not caring is not the same as not knowing.

As I said above, there are a great many powerful men who are perplexed by this.  And in some cases, not knowing IS the same as not caring.  Most of the men in Westeros don't care because Westeros is a martial aristocracy and coin-counting is looked down on all over.  So not caring is a social norm.  In other words, no one will know because there is a massive stigma against learning, and having anything more than a basic financial literacy.

22 minutes ago, Lollygag said:

Do you have examples where the Iron Bank is involved with their clients beyond collections? I'm unaware that they offer consulting and aid services.

Neither prince nor king commands in Braavos, where the rule belongs to the Sealord, chosen by the city's magisters and keyholders from amongst the citizenry by a process as convoluted as it is arcane. From his vast waterside palace, the Sealord commands a fleet of warships second to none and a mercantile fleet whose purple hulls and purple sails have become a common sight throughout the known world.

Being a keyholder of the Iron Bank means you are part of an extremely limited franchise in electing the chief executive of Braavos.

 

The Iron Bank is not ruled by the keyholders alone, however. Some of the wealthiest and most powerful families in Braavos today are of more recent vintage, yet the heads of these houses own shares in the bank

 

Additionally, this isn't an instance where a de jure powerful group is slowly losing de facto power to a newer group, but rather a society in which influence, wealth, and power determine the amount of control you have over the Iron Bank.  As we hear mentioned a couple time in "Mercy", keyholders of the Iron Bank occupy an extremely privileged social position, and keys to the Iron Bank are a sign of some prestige.  And the nouveau riche are joining the Iron Bank's board.

 

All in all, there is a convincing portrait that in Braavos, the interests of the Bank are intimately tied into the power of the State.  When the leadership and ownership pool of the Iron Bank is analogous to the leadership of the sovereign entity of Braavos itself, then who is to distinguish between the interests of the two?  It was Iron Bankers who negotiated the terms of the Uncloaking with Valyria, so bankers are being used as emissaries of the State, as well as members of the State almost uniformly being members of the Bank.

 

34 minutes ago, Lollygag said:

I don't recall any precedent in-series about the IB engaging in loan-to-own though I don't put it past them, so I don't think that's what's going on here in the sense that they're just acquiring stuff for the sake of acquiring it.

I mean, in a real sense, that is what they're doing with Stannis, or any other rebellious claimant they support.

Baseline, no, we never hear about the Iron Bank loaning to someone or some institution in order to get a claim on it's stuff (except maybe in the sense that the confiscated wildling goods are being posted as partial collateral for the loan), but it's such a basic principle of banking that I think it's okay to assume it.

[Lollygag]

17 minutes ago, cpg2016 said:

From a Watsonian perspective, it is because Jon doesn't understand finance and collateral.  From a Doylist perspective, it's meant to heighten narrative tension, to further make the reader aware of the shaky ground Jon is standing on in his attempt to integrate the wildlings into the defense of the Wall; not only are the Sworn Brothers being asked to accept their traditional enemy, they're being asked to mortgage their future to do it.  And something has come of it; Jon was assassinated, and the man who led the mutiny is the guy typically trusted with NW finances!

This is a wash for me as I agree that allowing the Wildlings en mass to become wighted is unacceptable. I know the Jon hater types (not sure about your stance on Jon) will disagree, but I and many others don't see Jon having a choice here. Also, Jon was given the same education as Robb who was to be Lord of Winterfell which isn't in any financial trouble that we've been told. You need to back up your assertion that Jon has little understanding of finance beyond that it supports your own conclusion. Jon noticing that the loan came easier than it should have and that Jon spent a great deal of time negotiating says to me that Jon knows more than what you're ascribing to him.

As to this motivating the attack, Jon doesn't tell Marsh about the loan a few chapters before his attack so it would be a cheap move on the reader to have Marsh find out about the loan off-page.

ADWD Jon XI

Bowen Marsh sighed. "If they do not slay us with their swords, they will do so with their mouths. Pray, how does the lord commander propose to feed Tormund and his thousands?"

Jon had anticipated that question. "Through Eastwatch. We will bring in food by ship, as much as might be required. From the riverlands and the stormlands and the Vale of Arryn, from Dorne and the Reach, across the narrow sea from the Free Cities."

"And this food will be paid for … how, if I may ask?"

With gold, from the Iron Bank of Braavos, Jon might have replied. Instead he said, "I have agreed that the free folk may keep their furs and pelts. They will need those for warmth when winter comes. All other wealth they must surrender. Gold and silver, amber, gemstones, carvings, anything of value. We will ship it all across the narrow sea to be sold in the Free Cities."

 

22 minutes ago, cpg2016 said:

Au contraire, a great many of them are.  Half the Vale has slipped into genteel poverty.  The Iron Throne itself is vastly in debt, and no one can figure out why, which includes a great many intelligent people like Tyrion, Tywin, Jon Arryn, Ned Stark, etc (though Tyrion begins to grasp it).  We don't have a POV of Tywin thinking about it, of course, but he's aware of the debt the Crown is in.  That he isn't working through the reasons gets to the heart of my point; Tywin won't think about it because to do so is against the warrior ethos of his class.  In this case, not caring and not knowing are intimately intertwined.

Do you have a quote for the bolded? I don't recall this at all.

They all know why the IT is in debt: Robert spends and spends. This was outlined when Ned couldn't stop Robert from having a Tourney for the Hand and was unable to convince him otherwise  Not sure what you're talking about here. Tyrion is unable to discipher LF's books. Are you referencing that? In which case that wouldn't be a matter of not understanding finance. That's a matter of not understanding LF's games which is not the same thing.

You haven't backed up the statement that Westerosi generally have an awful understanding of finance hence Jon's statement is based on a poor understanding of finance.

33 minutes ago, cpg2016 said:

Neither prince nor king commands in Braavos, where the rule belongs to the Sealord, chosen by the city's magisters and keyholders from amongst the citizenry by a process as convoluted as it is arcane. From his vast waterside palace, the Sealord commands a fleet of warships second to none and a mercantile fleet whose purple hulls and purple sails have become a common sight throughout the known world.

Being a keyholder of the Iron Bank means you are part of an extremely limited franchise in electing the chief executive of Braavos.

 

The Iron Bank is not ruled by the keyholders alone, however. Some of the wealthiest and most powerful families in Braavos today are of more recent vintage, yet the heads of these houses own shares in the bank

 

Additionally, this isn't an instance where a de jure powerful group is slowly losing de facto power to a newer group, but rather a society in which influence, wealth, and power determine the amount of control you have over the Iron Bank.  As we hear mentioned a couple time in "Mercy", keyholders of the Iron Bank occupy an extremely privileged social position, and keys to the Iron Bank are a sign of some prestige.  And the nouveau riche are joining the Iron Bank's board.

 

All in all, there is a convincing portrait that in Braavos, the interests of the Bank are intimately tied into the power of the State.  When the leadership and ownership pool of the Iron Bank is analogous to the leadership of the sovereign entity of Braavos itself, then who is to distinguish between the interests of the two?  It was Iron Bankers who negotiated the terms of the Uncloaking with Valyria, so bankers are being used as emissaries of the State, as well as members of the State almost uniformly being members of the Bank.

How does any of this back up your assertion that the IB is involved with their non-Braavosi clients beyond lending and collections like business development, consulting, etc?

36 minutes ago, cpg2016 said:

I mean, in a real sense, that is what they're doing with Stannis, or any other rebellious claimant they support.

Baseline, no, we never hear about the Iron Bank loaning to someone or some institution in order to get a claim on it's stuff (except maybe in the sense that the confiscated wildling goods are being posted as partial collateral for the loan), but it's such a basic principle of banking that I think it's okay to assume it.

Buying Stannis so he can repay the IT's debt is not comparable to loan to own of property.

My experience with banks is that they hate foreclosing and that it's a last resort. Property ownership, property management, property development isn't what they do. They just handle the money, not the day to day details of operations.

And GRRM has been very careful to not include information which wouldn't be reasonable for the average fantasy reader from around the world to know, and that includes non-first world countries. If you think GRRM is assuming his average reader knows this, I say that this is inconsistent with how he handles topics in his books. GRRM doesn't do finance and economics much, and I don't think one's on firm ground in assuming the average fantasy reader around the world might know this.

[cpg2016]

23 minutes ago, Lollygag said:

This is a wash for me as I agree that allowing the Wildlings en mass to become wighted is unacceptable. I know the Jon hater types (not sure about your stance on Jon) will disagree, but I and many others don't see Jon having a choice here. Also, Jon was given the same education as Robb who was to be Lord of Winterfell which isn't in any financial trouble that we've been told. You need to back up your assertion that Jon has little understanding of finance beyond that it supports your own conclusion. Jon noticing that the loan came easier than it should have and that Jon spent a great deal of time negotiating says to me that Jon knows more than what you're ascribing to him.

I don't think it's relevant here, but Jon obviously makes the right choice.  But again, his choice is framed in realistic terms; while as readers we know it's the correct decision, it's also easy to imagine being a Sworn Brother and having your worldview upended on the word of teenager.

And my point isn't specifically about Robb or Jon.  It's about the nature of Westerosi society.  These are warrior nobles.  Across Westeros, we see that the nobility has an ingrained disdain of the merchant class, and there is no reason to think that doesn't apply equally in the North as it does in the Vale, the Riverlands, and in the West (where we have concrete examples of prejudice against families who are thought to gain their wealth through commerce).

So again, my point is this: Jon is a noble (a bastard, but raised as part of a noble household), with all the competencies and training that implies.  We hear of him training in the yard; we do not hear of him learning how to run a bank.  And it's not like Ned Stark is knowledgeable about this stuff either, so we have no reason to think he's prioritizing a financial education over a military one.  Tycho Nestoris is a banker, with all the competencies and training that implies.  We are we assuming that he would make a bad loan, on the word of a guy who has no knowledge of what a safe loan looks like?  Again, Jon like sees money in and money out, and that's his idea of finance.  Because that is what nobles have thought throughout history, both Westerosi and ours.  Tycho Nestoris has a more nuanced view, presumably (since we don't have a POV from him).  But again, the Iron Bank is not the largest one in the world because they make stupid loans.

34 minutes ago, Lollygag said:

Do you have a quote for the bolded? I don't recall this at all.

It's an exaggeration.  But the Waynwoods are in significant debt, hence why Petyr is able to buy it all up.  It's strongly implied that Lyonel Corbray is hurting for money, hence why he endures the social stigma of marrying a rich commoner.  That's two major bannermen right there.  All of the cadet branches of the Arryn's are noted to be penurious, except for the one family that married into Gulltown merchants.  You could even make a case that the Royce's aren't super-wealthy, as they send Waymar off to the Wall instead of providing for him out of their own purse.

41 minutes ago, Lollygag said:

They all know why the IT is in debt: Robert spends and spends. This was outlined when Ned couldn't stop Robert from having a Tourney for the Hand and was unable to convince him otherwise  Not sure what you're talking about here.

But this is exactly my point; Robert spends, a lot, but not nearly enough to justify the kind of debt the Iron Throne is in (which is Littlefinger's graft).  The various lords who look at the books see that Crown incomes are ten times higher than they've ever been, and assume that the spending must be keeping pace, because that's the only thing they can think of that would justify why the Crown can't cover it's debts.

48 minutes ago, Lollygag said:

Not sure what you're talking about here. Tyrion is unable to discipher LF's books. Are you referencing that? In which case that wouldn't be a matter of not understanding finance. That's a matter of not understanding LF's games which is not the same thing.

Um, of course it's the same thing.  Littlefinger's books are the Crown's audit files, ya know?  So... if Tyrion can't decipher them, then he doesn't understand finance.  But let me repeat the point above; I am aware that no one in Westeros is a forensic accountant, and therefore, no one should necessarily be able to uncover the massive shell game Littlefinger is running as he embezzles most of the treasury.  But no one has the knowledge to even begin to suss out what he's doing!  It doesn't even occur to them that Littlefinger is corrupt on an unusually vast scale, they just default to assuming it's a spending problem.  And if Littlefinger isn't embezzling, then Tyrion and everyone else downright doesn't have the knowledge to understand accounting, which again... coming from a highly intelligent member of the richest, most liquid family in Westeros (potentially the world) is a HUGE indictment of the general level of financial knowledge in Westeros.

52 minutes ago, Lollygag said:

How does any of this back up your assertion that the IB is involved with their non-Braavosi clients beyond lending and collections like business development, consulting, etc?

I never claimed they were?  And how is it relevant?  I was arguing that the Iron Bank as an entity can be viewed as a proxy for Braavos, in many ways, because the major decision makers and power players in the political sphere in Braavos and the economic sphere of the Iron Bank are the same.  So when a question arises like "why does the Iron Bank want a bunch of underpopulated wildnerness areas in Northern Westeros that the Night's Watch can't monetize," the answer is "because Braavos and the Iron Bank act with similar interests in mind, and Braavos has the men and the material needs to capitalize on unused lands in the Gift/New Gift if the Iron Bank were to take it as collateral for an unpaid loan."  In other words, lending against the Night's Watch revenues is foolish, because it is highly debatable that the Watch has the resources to repay their loan.  But the Watch has ownership of the resources to do so, which is why your "Potential =/= Actualization" argument is a straw man.  The Watch cannot actualize the value of their land, but their financing partner can, so it's still a safe/smart loan.

58 minutes ago, Lollygag said:

Buying Stannis so he can repay the IT's debt is not comparable to loan to own of property.

The Iron Bank is buying Stannis so that he'll assume a greater debt that is owed to them.  It's obviously not a perfect parallel, but they are essentially trying to buy defaulted debt at a reduced rate.

Most loans are entered into with both parties wanting exactly what is on the table and negotiating in good faith; the lender wants to utilize capital reserves in order to generate profits via interest.  Loan-to-own is a form of loan sharking and is illegal in a lot of places, I was merely drawing a parallel between predatory lending practices.

1 hour ago, Lollygag said:

My experience with banks is that they hate foreclosing and that it's a last resort. Property ownership, property management, property development isn't what they do. They just handle the money, not the day to day details of operations.

Right, but they also don't lend to your neighbor to come and kill you if you don't pay.  Some allowance has to be made that this is a fantasy world.  And the Iron Bank is clearly uninterested in restructuring the Crown's debts, or else... you know, they would have.

And this is also where the unusual synergy with the political entity of Braavos comes into play.  Your average bank doesn't need timber for a fleet, or farmland for surplus food, because they're private entities.  The Iron Bank clearly is much more engaged with the public sector than that; it is very much possible to imagine that if the Iron Bank forecloses on the Gift, that it's Braavosi colonists who come to exploit those resources, not necessarily "employees" of the Iron Bank.

1 hour ago, Lollygag said:

If you think GRRM is assuming his average reader knows this, I say that this is inconsistent with how he handles topics in his books.

I think the concept that you put up collateral for a loan is extremely common knowledge.  That isn't esoteric financial wizardry, it's the basis of the entire system of homeownership in the world.  I think if you asked 100 people on the street that question, the vast, vast majority would know what collateral is.

1 hour ago, Lollygag said:

As to this motivating the attack, Jon doesn't tell Marsh about the loan a few chapters before his attack so it would be a cheap move on the reader to have Marsh find out about the loan off-page.

Again, it isn't the only reason for the mutiny.  But it is one of them.  Jon's whole arc is that while what he's doing is right, he's upending too many entrenched value systems, and doing so in a high-handed way, and it's backfiring on him.  You asked why the fact that the Watch can't repay the loan is mentioned if it's unimportant, and I'm telling you that in-universe, it's just one more nail in the coffin in the sense that the mutineers genuinely believe Jon is mismanaging the Watch, and most of that resentment stems from the fact that he's advancing nontraditional interests at the expense of longstanding members of the Watch (e.g. mortgaging future revenues to save the wildlings, who are the enemy, or putting Satin in a position of favor over Brothers from "better" families).

By your logic, there would be no reason for the mutiny in the first place.  The conspiracy is in place long before the arrival of the Pink Letter, which is obvious, so all of the factors that contribute to the plot must be in place before Jon decides to ride south.  Which means all of those elements are seeded into his ADWD plot arc; you don't need to have a motivating action occur immediately prior to its inevitable reaction.

[Nevets]

6 minutes ago, cpg2016 said:

never claimed they were?  And how is it relevant?  I was arguing that the Iron Bank as an entity can be viewed as a proxy for Braavos, in many ways, because the major decision makers and power players in the political sphere in Braavos and the economic sphere of the Iron Bank are the same.  So when a question arises like "why does the Iron Bank want a bunch of underpopulated wildnerness areas in Northern Westeros that the Night's Watch can't monetize," the answer is "because Braavos and the Iron Bank act with similar interests in mind, and Braavos has the men and the material needs to capitalize on unused lands in the Gift/New Gift if the Iron Bank were to take it as collateral for an unpaid loan."  In other words, lending against the Night's Watch revenues is foolish, because it is highly debatable that the Watch has the resources to repay their loan.  But the Watch has ownership of the resources to do so, which is why your "Potential =/= Actualization" argument is a straw man.  The Watch cannot actualize the value of their land, but their financing partner can, so it's still a safe/smart loan.

The Iron Bank doesn't need to take possession of the NW lands to profit from them.  They could simply receive rights to harvest resources, such as timber or minerals, from them.  Given the high value of wood, especially, in Braavos, these concessions could be quite valuable.  The NW role would be primarily logistical help and possibly security, especially north of the Wall.

Another possibility is that the IB's loan to Stannis includes a provision that the Crown will act as a backstop to the NW loan; essentially that they will pay if the NW can't.  Whether this applies would obviously depend on the relative values of the loans, plus Stannis's willingness to assume it.   

I am confident that Tycho has figured out how to profit from the loan.

10 minutes ago, cpg2016 said:

And the Iron Bank is clearly uninterested in restructuring the Crown's debts, or else... you know, they would have.

I think the Iron Bank would be quite happy to restructure the loans to the Crown.  The problem is that Cersei and her minions have been unwilling to engage in any meaningful negotiations on the subject - until now, with Swyft's visit to Braavos.  

[Lollygag]

1 hour ago, cpg2016 said:

I don't think it's relevant here, but Jon obviously makes the right choice.  But again, his choice is framed in realistic terms; while as readers we know it's the correct decision, it's also easy to imagine being a Sworn Brother and having your worldview upended on the word of teenager.

And my point isn't specifically about Robb or Jon.  It's about the nature of Westerosi society.  These are warrior nobles.  Across Westeros, we see that the nobility has an ingrained disdain of the merchant class, and there is no reason to think that doesn't apply equally in the North as it does in the Vale, the Riverlands, and in the West (where we have concrete examples of prejudice against families who are thought to gain their wealth through commerce).

So again, my point is this: Jon is a noble (a bastard, but raised as part of a noble household), with all the competencies and training that implies.  We hear of him training in the yard; we do not hear of him learning how to run a bank.  And it's not like Ned Stark is knowledgeable about this stuff either, so we have no reason to think he's prioritizing a financial education over a military one.  Tycho Nestoris is a banker, with all the competencies and training that implies.  We are we assuming that he would make a bad loan, on the word of a guy who has no knowledge of what a safe loan looks like?  Again, Jon like sees money in and money out, and that's his idea of finance.  Because that is what nobles have thought throughout history, both Westerosi and ours.  Tycho Nestoris has a more nuanced view, presumably (since we don't have a POV from him).  But again, the Iron Bank is not the largest one in the world because they make stupid loans.

To the bolded and back to my original question. What is the point of Jon saying that the loan is fishy if nothing is to come of it and it had no impact on how Jon is perceived by the NW as no one knew about the loan (that we know of)?

I don't think Tycho made a stupid decision given the loan because I think he's up to something else.

Jon doubts his ability to pay back the loan. You still haven't supported your assertion as to the general Westerosi's and Jon's lack of understanding of finance and if what you are saying is true, Westeros' stability and the stability of its major houses doesn't follow.

I don't have to know how a bank works in detail to be able to manage my own finances adequately. Nor do I have to know about the ins and outs of banking to understand whether I can pay back a loan or not. Neither do the Westerosi in general apparently as while their economy is certainly not dynamic, it is also not unstable (yet).

1 hour ago, cpg2016 said:

It's an exaggeration.  But the Waynwoods are in significant debt, hence why Petyr is able to buy it all up.  It's strongly implied that Lyonel Corbray is hurting for money, hence why he endures the social stigma of marrying a rich commoner.  That's two major bannermen right there.  All of the cadet branches of the Arryn's are noted to be penurious, except for the one family that married into Gulltown merchants.  You could even make a case that the Royce's aren't super-wealthy, as they send Waymar off to the Wall instead of providing for him out of their own purse.

It's really difficult to discuss things when people aren't saying what they mean. The Waynwoods aren't the rule. I disagree with your assertion about Lyonel as I think it's part of LF's plot to raise the merchant class. LF has ddep roots in Gulltown where the Corbrays live. Sending a son to the Wall doesn't prove anything about a family's finances. The Starks sent Benjen and Jon. I can't think of any family sending sons to the Wall so they don't have to support them.

And given that everyone knows that the Vale is sitting on a food hoard while the rest of Westeros' food stores are low doesn't follow with the Vale lords being financially in poor health.

And even if I grant you the Vale (I don't), one kingdom doesn't prove your point about Westeros in general not understanding how to manage their own finances.

1 hour ago, cpg2016 said:

But this is exactly my point; Robert spends, a lot, but not nearly enough to justify the kind of debt the Iron Throne is in (which is Littlefinger's graft).  The various lords who look at the books see that Crown incomes are ten times higher than they've ever been, and assume that the spending must be keeping pace, because that's the only thing they can think of that would justify why the Crown can't cover it's debts.

This is LF's scheming, not failing to manage finances. The Targs did fine for hundreds of years. The major houses have done fine for thousands of years in some cases. You still haven't proven your point about Westeros (and Jon) not understanding basic finance.

1 hour ago, cpg2016 said:

Um, of course it's the same thing.  Littlefinger's books are the Crown's audit files, ya know?  So... if Tyrion can't decipher them, then he doesn't understand finance.  But let me repeat the point above; I am aware that no one in Westeros is a forensic accountant, and therefore, no one should necessarily be able to uncover the massive shell game Littlefinger is running as he embezzles most of the treasury.  But no one has the knowledge to even begin to suss out what he's doing!  It doesn't even occur to them that Littlefinger is corrupt on an unusually vast scale, they just default to assuming it's a spending problem.  And if Littlefinger isn't embezzling, then Tyrion and everyone else downright doesn't have the knowledge to understand accounting, which again... coming from a highly intelligent member of the richest, most liquid family in Westeros (potentially the world) is a HUGE indictment of the general level of financial knowledge in Westeros.

LF is deliberately keeping inaccruate books to cover up his scheming. Lies on paper, so no, LF would be an idiot if anyone could make sense of the books and that's the point. Why would he leave books which could be figured out?

1 hour ago, cpg2016 said:

I never claimed they were?  And how is it relevant?  I was arguing that the Iron Bank as an entity can be viewed as a proxy for Braavos, in many ways, because the major decision makers and power players in the political sphere in Braavos and the economic sphere of the Iron Bank are the same.  So when a question arises like "why does the Iron Bank want a bunch of underpopulated wildnerness areas in Northern Westeros that the Night's Watch can't monetize," the answer is "because Braavos and the Iron Bank act with similar interests in mind, and Braavos has the men and the material needs to capitalize on unused lands in the Gift/New Gift if the Iron Bank were to take it as collateral for an unpaid loan."  In other words, lending against the Night's Watch revenues is foolish, because it is highly debatable that the Watch has the resources to repay their loan.  But the Watch has ownership of the resources to do so, which is why your "Potential =/= Actualization" argument is a straw man.  The Watch cannot actualize the value of their land, but their financing partner can, so it's still a safe/smart loan.

I asked for proof that the IB is involved with their clients beyond strict lending and collecting (like consulting, advising, etc) and your response was background on how the IB functions in Braavos, not Westeros, or anywhere else. I'm not saying that the IB can't help the NW pay the loan, I'm saying there's nothing in the text which says they do so.

 

1 hour ago, cpg2016 said:

The Iron Bank is buying Stannis so that he'll assume a greater debt that is owed to them.  It's obviously not a perfect parallel, but they are essentially trying to buy defaulted debt at a reduced rate.

Most loans are entered into with both parties wanting exactly what is on the table and negotiating in good faith; the lender wants to utilize capital reserves in order to generate profits via interest.  Loan-to-own is a form of loan sharking and is illegal in a lot of places, I was merely drawing a parallel between predatory lending practices.

Do you have an example where the IB has engaged in this sort of behavior for the purpose of acquiring property for the sake of acquiring property?

1 hour ago, cpg2016 said:

Right, but they also don't lend to your neighbor to come and kill you if you don't pay.  Some allowance has to be made that this is a fantasy world.  And the Iron Bank is clearly uninterested in restructuring the Crown's debts, or else... you know, they would have.

And this is also where the unusual synergy with the political entity of Braavos comes into play.  Your average bank doesn't need timber for a fleet, or farmland for surplus food, because they're private entities.  The Iron Bank clearly is much more engaged with the public sector than that; it is very much possible to imagine that if the Iron Bank forecloses on the Gift, that it's Braavosi colonists who come to exploit those resources, not necessarily "employees" of the Iron Bank.

Where is this laid out in the text because this would be blind-siding the reader unless I'm missing something.

I don't disagree with this post, it's just that this is too much economics for the series and has no basis unless I've missed it. It really wouldn't make sense for this to be brought up in the series unless there's some impact on the already existing plot like the IB's magical history, opposition to Valyria and dragons or some such.

1 hour ago, cpg2016 said:

I think the concept that you put up collateral for a loan is extremely common knowledge.  That isn't esoteric financial wizardry, it's the basis of the entire system of homeownership in the world.  I think if you asked 100 people on the street that question, the vast, vast majority would know what collateral is.

There's nothing in the text about collateral. Jon is given a loan. He doubts his ability to pay. Instead of confiscating property, the IB has a history of deposing those who do not pay for those who do pay.

Collateral only exists on this forum to date.

1 hour ago, cpg2016 said:

Again, it isn't the only reason for the mutiny.  But it is one of them.  Jon's whole arc is that while what he's doing is right, he's upending too many entrenched value systems, and doing so in a high-handed way, and it's backfiring on him.  You asked why the fact that the Watch can't repay the loan is mentioned if it's unimportant, and I'm telling you that in-universe, it's just one more nail in the coffin in the sense that the mutineers genuinely believe Jon is mismanaging the Watch, and most of that resentment stems from the fact that he's advancing nontraditional interests at the expense of longstanding members of the Watch (e.g. mortgaging future revenues to save the wildlings, who are the enemy, or putting Satin in a position of favor over Brothers from "better" families).

By your logic, there would be no reason for the mutiny in the first place.  The conspiracy is in place long before the arrival of the Pink Letter, which is obvious, so all of the factors that contribute to the plot must be in place before Jon decides to ride south.  Which means all of those elements are seeded into his ADWD plot arc; you don't need to have a motivating action occur immediately prior to its inevitable reaction.

So how did Marsh know about the loan if Jon decided against telling him? Proof please. I really don't understand this argument given that I quoted actual text in my previous post about how Jon intentionally kept the loan from Marsh a few chapters before his attack. You just ignored it.

No reason for the mutiny? Jon let the Wildlings through the Wall and some couldn't handle the logic. Jon sent a NW expedition to Hardhome under the command of one of the most hated enemies of the NW in the form of Tormund. Jon as NW commander was leading a band of Wildlings on his home of Winterfell. It has nothing to do with the loan that we're told.

You're making assertions you've failed to back up despite my requests and moreover, a lot of these are based in ASOIAF going deep into economics and banking policy for its own sake which is unprecedented at this point (thank goodness). 

Forum kicked me off again but luckily my post is still here. I'm a slow thinker and this forum isn't nice to me. If you're going to keep on with the long-winded arguments which have little or no text as backup I can't continue further.

 

[Lollygag]

Just found this.

AFFC Cersei IV

"Whilst we await Lord Walder's death, there is another matter," said Aurane Waters. "The Golden Company has broken its contract with Myr. Around the docks I've heard men say that Lord Stannis has hired them and is bringing them across the sea."

"What would he pay them with?" asked Merryweather. "Snow? They are called the Golden Company. How much gold does Stannis have?"

"Little enough," Cersei assured him.

 

[cpg2016]

2 hours ago, Lollygag said:

What is the point of Jon saying that the loan is fishy if nothing is to come of it and it had no impact on how Jon is perceived by the NW as no one knew about the loan (that we know of)?

Or maybe, because it's utterly unimportant, it was mentioned offscreen?  Satin, at least, has some knowledge of what they're up to, as he's present during at least part, and probably all, of the negotiation, and Jon has no other reason to (a) be closeted with the banker, and (b) break bread with him after, as he himself notes. 

2 hours ago, Lollygag said:

Jon doubts his ability to pay back the loan. You still haven't supported your assertion as to the general Westerosi's and Jon's lack of understanding of finance and if what you are saying is true, Westeros' stability and the stability of its major houses doesn't follow.

I'm sorry, but I have, a couple times now.  We see some of the smartest and most financially literate men in the kingdom (the various Lannisters) as well as other highly educated men (Pycelle, Ned Stark, Jon Arryn) be completely beffudled by Littlefinger's accounting.  They don't even know enough to think of fraud; all they can see is income is high but debts are higher, so it must be because there is a ton more spending.  And since we know that Littlefinger is engaged in embezzlement on a massive scale, it means the spending isn't as high as they think.  In other words, they don't know how to follow even basic accounting.

2 hours ago, Lollygag said:

I don't have to know how a bank works in detail to be able to manage my own finances adequately. Nor do I have to know about the ins and outs of banking to understand whether I can pay back a loan or not. Neither do the Westerosi in general apparently as while their economy is certainly not dynamic, it is also not unstable (yet).

Their economy IS unstable, since the Iron Bank pulled their credit.  That being said, you (and all of us today) have a much more thorough understanding of finance than a feudal noble would.  Yes, I agree, Jon and everyone else knows that spending more than you earn means ruin in the end.  But to a society in which land is a source of military power and personal prestige, and which is not alienable under the terms of it's feudal contract, it isn't so crazy to think that Jon isn't even giving thought to the idea that the Iron Bank might demand his land as collateral for his loan.  Feudal nobles in our world (and therefore, to all evidence, in Westeros), could not sell land.  There was no market for it in a modern sense.  In a Renaissance era merchant republic, though, that might not be the case.  All I'm arguing is that in addition to some very obvious political motives the Iron Bank has (and having Arya is not one of them), there is an excellent financial reason to extend the loan to the Watch that Jon might not even be cognizant of, or culturally capable of grasping.

2 hours ago, Lollygag said:

I disagree with your assertion about Lyonel as I think it's part of LF's plot to raise the merchant class. LF has ddep roots in Gulltown where the Corbrays live.

Lyonel Corbray does not live anywhere near Gulltown, he's a landed lord.  We have literally no knowledge of any plot by Littlefinger to raise the merchant class; if anything, his actions as of TWOW are actively undercutting them, by putting the nobility in a more mercantile mindset.  And moreover, to the first point, marrying commoners results in massive social stigma, something the presumably prickly Lord Corbray (or I assume, given his overall pissiness at not getting Lady Forlorn along with everything else) would be acutely sensitive to.  There is NO reason for him to marry this girl except the money, which means he needs the money.

2 hours ago, Lollygag said:

Sending a son to the Wall doesn't prove anything about a family's finances. The Starks sent Benjen and Jon. I can't think of any family sending sons to the Wall so they don't have to support them.

Benjen and Jon chose to go, which is vastly different, and not least because the North is known to find honor in service with the Watch, which implicitly means this attitude is rare south of the Neck.  It doesn't have to be the case for Waymar Royce, of course.  But it's a possibility.

2 hours ago, Lollygag said:

And given that everyone knows that the Vale is sitting on a food hoard while the rest of Westeros' food stores are low doesn't follow with the Vale lords being financially in poor health.

Which we know they generally do not sell for high prices, because the nobility scorns merchants and their class and doesn't want to be caught acting like them!  Which is why Littlefinger has to browbeat even his greedy supporters like Lord Belmore into waiting for the market to go higher; nobles have a sense of noblesse oblige, which means they don't maximize profits.  Plus, genteel poverty arises over generations; one great harvest isn't going to arrest years or decades or even centuries (given the relative timelines) of relative decline.

2 hours ago, Lollygag said:

And even if I grant you the Vale (I don't), one kingdom doesn't prove your point about Westeros in general not understanding how to manage their own finances.

Except we see the Lannisters, who are the closest thing to a Westerosi banking family, having (a) the same dismissive attitudes towards merchants, and (b) having no idea how to sort out what Littlefinger was doing.  Look, it's easy.  I obviously am not arguing that every Westerosi noble is in debt or living in genteel poverty.  I'm just saying that we've met some of the most powerful nobles in the land, as well as some of the smartest, and none of them have been particularly financially literate.  So why should we expect Jon, who never expected to manage lands himself, to be any smarter about this than Tyrion or Tywin or Ned?  All of them have full access to what Littlefinger is doing, because he's leaving a paper trail, and yet none of them even have the competence to spot massive fraud when it's dancing under their nose.

2 hours ago, Lollygag said:

This is LF's scheming, not failing to manage finances. The Targs did fine for hundreds of years. The major houses have done fine for thousands of years in some cases. You still haven't proven your point about Westeros (and Jon) not understanding basic finance.

My point is implicit in the story.  Littlefinger is scheming.  We know this, and it's perfectly obvious in-universe that it's happening.  Tyrion recites a whole section where he talks about how confusing Littlefinger's reports are.  Which means he either cannot follow the accounting, or is so naive (not something we should say about Tyrion Lannister) that he cannot spot embezzlement on a truly epic scale.  Again, I'm not arguing that most Houses are failing to manage their finances, because successfully managing finances is easy; spend less than you make.  There are any number of reasons a House could fall into penury beyond that.  My point is that when confronted with someone who thinks like a fraudulent banker, no one has the knowledge to even pick up on the fraud!  Their default is still "well, King Robert must have spent more than he made."  This is what I mean by being financially illiterate, and it ties into the loan to the Watch; these people think in one gear, and one gear only; revenues must outpace expenses.  If we're in debt, it's because we spent too much.  Not, you know... because Littlefinger is borrowing money the Crown doesn't need so he can capitalize those earnings and steal them.  Jon takes out a loan from the Iron Bank and assumes that because his revenues don't match his debt service payments, he'll be stuck in debt forever.  Not, you know... that the Iron Bank might be interested in exploiting the natural resources that the Watch has in abundance, and that Braavos doesn't.

3 hours ago, Lollygag said:

LF is deliberately keeping inaccruate books to cover up his scheming. Lies on paper, so no, LF would be an idiot if anyone could make sense of the books and that's the point. Why would he leave books which could be figured out?

Sir/Ma'am, you are proving my point.  Littlefinger is leaving account books which make no sense.  Tyrion can't follow them, money appears and disappears and everything is a disaster.  And all he thinks is that Robert is profligate, not that Littlefinger is thieving on an industrial scale.  And MANY other characters have access to this information (since, presumably, its a matter of constant discussion for the Small Council), and NONE OF THEM PICK UP ON IT EITHER!  Being so naive that you cannot even spot the possibility of fraud means you are financially illiterate.

3 hours ago, Lollygag said:

Where is this laid out in the text because this would be blind-siding the reader unless I'm missing something.

Well, the part you bolded is exactly what the IB is doing with Cersei.  She won't pay, so they're essentially hiring Stannis to go depose (and kill) her.

3 hours ago, Lollygag said:

There's nothing in the text about collateral. Jon is given a loan. He doubts his ability to pay. Instead of confiscating property, the IB has a history of deposing those who do not pay for those who do pay.

Collateral only exists on this forum to date.

There isn't anything in the text about the rate on the loan, either.  It isn't relevant.  It's so basic and familiar to any reader that it doesn't bear repeating.  Jon has taken out a mortgage on the Watch.  We don't get the term of the loan (well, technically it's indefinite, I suppose), or the maximum line of credit, or what his interest payments are.  But we know they're there.

If you are the Iron Bank, and the Watch doesn't pay you back, what do you do?  Jon isn't contemplating NOT paying.  He's contemplating that he CAN'T pay.  Why would the Bank spend time and money to get the same result?  We know the Iron Bank and it's representatives aren't stupid (or I think we can agree they aren't).  So clearly they think the Watch is capable of paying back this loan in some manner.  Jon doesn't think they have the revenue for it.  Which means the Bank must think there is another way to monetize the Night's Watch to make good their loan... hence, collateral.  We also don't know that R+L=J, or that Aegon isn't a main-line Targaryen, or even that Ned Stark wasn't revived by the Lord of Light!  We go on what makes sense, and what is hinted at.  In this case, we have some pretty damn professional and hard core bankers who think this is a good loan, versus Jon, who has no particular knowledge of finance that we know beyond the ultimate basics, who frets he can't repay the loan.  I trust the Watsonian explanation that the bankers know what they are doing.  I can think of any number of Doylist reasons why Jon doesn't mention the loan.

3 hours ago, Lollygag said:

So how did Marsh know about the loan if Jon decided against telling him? Proof please. I really don't understand this argument given that I quoted actual text in my previous post about how Jon intentionally kept the loan from Marsh a few chapters before his attack. You just ignored it.

Because there is no reason this shouldn't be common knowledge?  And moreover, the whole argument is a straw man.  Why does it matter?  The loan can have nothing to do with the mutiny, or everything.  If your argument is simply that because it's lampshaded, it must have meaning, then I can give you a few right now, which have nothing to do with the economics behind the loan being poor (and thus an ulterior motive for the Iron Bank) and everything to do with Jon's long-term arc.  Maybe Tycho Nestoris comes back to the Wall, finds Jon dead, and pronounces his support for the Jon-loyalist faction, seeing as he thinks the Iron Bank has a better chance of repayment with the Lord Commander who made the deal in charge, or at least his partisans?  Or maybe Bowen Marsh, knowing as well as Jon that the Watch can't repay the loan, and obviously being far more shortsighted, repudiates the loan entirely, and hence Nestoris moves against him?  This is entirely in keeping with the IB's modus operandi, justifies Jon not telling Bowen Marsh about it, and still allows for the fact that the loan might be financially viable, notwithstanding Jon's misgivings.

3 hours ago, Lollygag said:

No reason for the mutiny? Jon let the Wildlings through the Wall and some couldn't handle the logic. Jon sent a NW expedition to Hardhome under the command of one of the most hated enemies of the NW in the form of Tormund. Jon as NW commander was leading a band of Wildlings on his home of Winterfell. It has nothing to do with the loan that we're told.

I misread your earlier comment to mean something else.

3 hours ago, Lollygag said:

You're making assertions you've failed to back up despite my requests and moreover, a lot of these are based in ASOIAF going deep into economics and banking policy for its own sake which is unprecedented at this point (thank goodness). 

I am sorry, but if you think that the concept of posting collateral for a loan is "deep into economics" then you are sadly divorced from the reality of our world.  This is a baseline assumption; anyone who has ever owned a home or taken out a personal loan understands the concept of collateral.

[Lollygag]

16 minutes ago, cpg2016 said:

 

No text to back yourself up.  If you like speculating, fine. I just don't see any point in treating things as anything more than speculation if you don't ground it in text. Like I said, I can't do these back and forth arguments when I keep getting kicked off. If you'd like to reformat your assertions with more back up beyond speculating and generalizing, then I'd be happy to read it.

22 minutes ago, cpg2016 said:

Lyonel Corbray does not live anywhere near Gulltown, he's a landed lord. 

I stand corrected on this. Was thinking of his wife apparently. As to your point about the stigma about the noble/commoner marriage, it's not mentioned in the text. I agree that there should be something there about that but it's not for some reason. Don't know why. But again, Waynwoods and Corbrays are not evidence for the general conclusion that Westeros in general is bad with money, nor does it have anything to do with what Jon does or does not know about money.

31 minutes ago, cpg2016 said:

I am sorry, but if you think that the concept of posting collateral for a loan is "deep into economics" then you are sadly divorced from the reality of our world.  This is a baseline assumption; anyone who has ever owned a home or taken out a personal loan understands the concept of collateral.

I didn't say this. I said there's no mention of collateral in the text.

 

[cpg2016]

Just now, Lollygag said:

I stand corrected on this. Was thinking of his wife apparently. As to your point about the stigma about the noble/commoner marriage, it's not mentioned in the text. I agree that there should be something there about that but it's not for some reason. Don't know why. But again, Waynwoods and Corbrays are not evidence for the general conclusion that Westeros in general is bad with money, nor does it have anything to do with what Jon does or does not know about money.

What?  Of course it's mentioned!

There are several branches of House Arryn scattered across the Vale, all as proud as they are penurious, save for the Gulltown Arryns, who had the rare good sense to marry merchants.  They're rich, but less than couth, so no one talks about them.

This could not be more explicit.  The Arryn's who went into poverty kept their pride, while the rich Gulltown Arryn's are social inferiors.  Why?  Because they decided to forego their pride and name and marry merchants.

"... Lady Sybell's grandfather was a trader in saffron and pepper, almost as lowborn as that smuggler Stannis keeps.  And the grandmother was some woman he'd brought back from the East... She's long dead, to be sure.  And Jeyne seemed a sweet child, I'll grant you, though I only saw her once.  But with such doubtful blood..."

That is Kevan, not even a lord in his own right, commenting that even his own second son is too proud to marry a nobleman's daughter, because of a merchant in the family tree.  Also, and I don't want to hunt it down, there is Tywin's dismissive comment about cheesemonger lords in Pentos.  I can find it, if you'd like.

Even for actual nobility, this stigma against trade holds true.  Dunk (a commoner!) thinks:

The Freys of the Crossing were no nobler than the Butterwells. They owned a bridge instead of cows, that was the only difference.

This is backed up by Hoster's unwillingness to wed any of his children to Frey's, and Tywin's opinion of that marriage (which, admittedly, has other reasons).  The point being, they're considered upjumped toll collectors.

And more to the point, please don't put words in my mouth.  I never said Westeros in general is bad with money.  In fact I disavowed that a couple times.  What I said is that the nobility of Westeros have a cultural disdain for the merchant classes (explicitly true) and that they aren't, as a rule, particularly financially literate (which I think is borne out by the text).  Hence why the only person capable of running a shell game like Littlefinger is.... Littlefinger, who is barely a noble at all.  And why none of these extremely smart, otherwise competent nobles can even figure out that he's committing fraud.

23 minutes ago, Lollygag said:

I didn't say this. I said there's no mention of collateral in the text.

What you said, in response to my argument that what Nestoris may be looking for is collateral and not just a revenue stream (literally the overarching point of my argument) is:

Quote

I don't disagree with this post, it's just that this is too much economics for the series and has no basis unless I've missed it. It really wouldn't make sense for this to be brought up in the series 

"too much economics for the series".  That is a justification you JUST used as to why my argument cannot be correct.  Additionally, you said:

Quote

u're making assertions you've failed to back up despite my requests and moreover, a lot of these are based in ASOIAF going deep into economics and banking policy

Again, the concept of collateral is NOT "deep economics" as you claim above.  And for what it's worth, I have plenty of textual evidence, you've just chosen to ignore it.  I'm having trouble copying out of the e-reader, but since you seem perfectly familiar with the text I'm referring to, in general (which is gratifying), I haven't bothered to retype it by hand until this post.

27 minutes ago, Lollygag said:

No text to back yourself up.  If you like speculating, fine. I just don't see any point in treating things as anything more than speculation if you don't ground it in text. Like I said, I can't do these back and forth arguments when I keep getting kicked off. If you'd like to reformat your assertions with more back up beyond speculating and generalizing, then I'd be happy to read it.

I've done so.  Let me summarize, since you seem to be having trouble putting the pieces together.

Point 1 - We know that the nobility of Westeros have a cultural disdain for merchants, bankers, or even anyone who gets rich through something other than holding lots of lands (e.g. the Freys).  This is a perfect parallel to the way feudal nobility in the real world viewed merchants.

Point 2 - We know that Littlefinger is embezzling on a massive scale, and that extremely smart characters to whom we have access are incapable of figuring this out.  They think that the Crown's indebtedness is because of Robert's profligacy, and don't even have the animus to actually ascertain whether that's true or not.  I have surmised that this is because the nobility of Westeros, in keeping with Point 1, have a cultural aversion to obtaining knowledge of finance or accounting beyond the basic landlord's principle of "income must exceed expenses, or debt and ruin ensues".  This is entirely borne out by the fact that Tyrion and (presumably) Tywin and Ned cannot even imagine that Littlefinger is stealing from the treasury, but that if there is debt, it must be because there is too much spending by the Crown.

Point 3 - We know Jon has been brought up in this same martial aristocracy, and we have no evidence to suggest he's more financially literate than any other noble child (on the contrary, his status as a bastard makes it less likely).

Point 4 - We know Tycho Nestoris is an experienced agent of the Iron Bank of Braavos, a financial institution which is legendarily wealthy and resilient, and moreover, which exists in a more advanced society (when comparing to our real world timelines), and who we therefore can assume has a greater degree of financial literacy than a random Westerosi noble... you know, since that's his literal job.

Point 5 - We know that the Iron Bank, as personified by the highly knowledgeable Tycho Nestoris, and the Night's Watch, personified by the intelligent but culturally blinkered Jon Snow, have mutually consented to enter into a loan agreement.  One party, that of the more naive Jon Snow, is literally doing so under threat of starvation.  The other, that of the experienced Tycho Nestoris, has absolutely no direct reason to make a bad loan to the Watch, except perhaps to support the more important claim embodied in Stannis (though, Jon has already provided that aid without monetary inducement from the Bank).

So here's my logic.  Points 1-3 all point extremely strongly to the idea that Jon Snow thinks of finances like a manorial vassal; income must exceed expense.  Many nobles in Westeros, as I've freely acknowledged, are perfectly capable of holding to this simple maxim; very few go beyond that.  But we have no examples of nobles leveraging income streams to promote economic activity, no land banks, no raising capital via mortgage (which is likely illegal anyway), no sophisticated financial machinery of ANY kind.  So why should we assume Jon thinks of the Gift as anything more than that?  On the contrary, I think Point 4 makes it clear that as with any banker, literally ANY banker EVER, Tycho Nestoris is most certainly thinking of ways to secure his principal beyond just the revenue streams of the Watch.  As I said, this is not "deep economics" or anything like that; this is a concept that is immediately self-evident to any reader, as it's something tens, if not hundreds, of millions of Americans deal with on a day to day basis.

And all of this feeds into Point 5, which is really just my conclusion.  We are only in Jon's head!  We only should get the super-simple thought process that, "holy shit! the Watch can't afford this loan!"  But it makes perfect logical sense, both in universe and in a meta-context as a reader, that the Iron Bank may be thinking about other methods of securing their loan that Jon can't even imagine, because he's from a military caste that scorns people who "rub coins together," like Littlefinger or Nestoris.  There are even good reasons from a narrative perspective for such a loan to exist, knowing what we do of the Iron Bank, and subsequent events to the signing of said loan.

So yes, you are right, there is no text that supports this conclusion directly, the same as any other theory.  I'm just making a point that there are many logical reasons to think that the Iron Bank's motivations are exactly what they seem, and that Jon's inner monologue about repaying the loan is not GRRM lamp-shading some secret or conspiracy, but rather the believable ignorance of a man who doesn't understand the deal he made as well as his partners.

[Lollygag]

45 minutes ago, cpg2016 said:

What?  Of course it's mentioned!

There are several branches of House Arryn scattered across the Vale, all as proud as they are penurious, save for the Gulltown Arryns, who had the rare good sense to marry merchants.  They're rich, but less than couth, so no one talks about them.

This could not be more explicit.  The Arryn's who went into poverty kept their pride, while the rich Gulltown Arryn's are social inferiors.  Why?  Because they decided to forego their pride and name and marry merchants.

"... Lady Sybell's grandfather was a trader in saffron and pepper, almost as lowborn as that smuggler Stannis keeps.  And the grandmother was some woman he'd brought back from the East... She's long dead, to be sure.  And Jeyne seemed a sweet child, I'll grant you, though I only saw her once.  But with such doubtful blood..."

That is Kevan, not even a lord in his own right, commenting that even his own second son is too proud to marry a nobleman's daughter, because of a merchant in the family tree.  Also, and I don't want to hunt it down, there is Tywin's dismissive comment about cheesemonger lords in Pentos.  I can find it, if you'd like.

Even for actual nobility, this stigma against trade holds true.  Dunk (a commoner!) thinks:

The Freys of the Crossing were no nobler than the Butterwells. They owned a bridge instead of cows, that was the only difference.

This is backed up by Hoster's unwillingness to wed any of his children to Frey's, and Tywin's opinion of that marriage (which, admittedly, has other reasons).  The point being, they're considered upjumped toll collectors.

And more to the point, please don't put words in my mouth.  I never said Westeros in general is bad with money.  In fact I disavowed that a couple times.  What I said is that the nobility of Westeros have a cultural disdain for the merchant classes (explicitly true) and that they aren't, as a rule, particularly financially literate (which I think is borne out by the text).  Hence why the only person capable of running a shell game like Littlefinger is.... Littlefinger, who is barely a noble at all.  And why none of these extremely smart, otherwise competent nobles can even figure out that he's committing fraud.

You mentioned Lionel specifically. That was my response. I wasn't discussing noble/commoner marriages in general. It has nothing to do with the topic of Jon and the loan.

And I did not put words into your mouth about Westeros being bad with money per the bolded. "Westeros in general is bad with money" is indistinguishable from "an idiot when it comes to finance and lending, the same as nearly every other character we encounter save Littlefinger and the actual bankers". This isn't the first time you've backtracked on yourself, either.

10 hours ago, cpg2016 said:

Jon is a product of his culture, which is a martial aristocracy.  He has doubts because he's an idiot when it comes to finance and lending, the same as nearly every other character we encounter save Littlefinger and the actual bankers.  Tyrion, objectively one of the most intelligent characters encountered, and one raised in the extremely rich and liquid House Lannister, is almost entirely at a loss to understand what Littlefinger was doing as master of coin.

 

[Lollygag]

44 minutes ago, cpg2016 said:

What you said, in response to my argument that what Nestoris may be looking for is collateral and not just a revenue stream (literally the overarching point of my argument) is:

 

44 minutes ago, cpg2016 said:

"too much economics for the series".  That is a justification you JUST used as to why my argument cannot be correct.  Additionally, you said:

 

44 minutes ago, cpg2016 said:

Again, the concept of collateral is NOT "deep economics" as you claim above.  And for what it's worth, I have plenty of textual evidence, you've just chosen to ignore it.  I'm having trouble copying out of the e-reader, but since you seem perfectly familiar with the text I'm referring to, in general (which is gratifying), I haven't bothered to retype it by hand until this post.

You're doing some serious switcheroo here. My theory of collateral is real Arya which is not deep economics or even economics at all. It's extortion and blackmail. I've also entertained the possibility that they want the Wall because of something related to the Others vs Dragons which also isn't economics at all. Since collateral is just speculation on the readers' part, you can't use anything about collateral as evidence of your position that there's nothing suspect about the loan.

And your evidence is speculation and generalization and has nothing to with Jon specifically which is why you're come around to discussing Lionel Corbray's marriage and other unrelated topics as round-about support for your theory about the loan being just a loan and Jon knowing nothing about money. How did this even come up?

44 minutes ago, cpg2016 said:

So yes, you are right, there is no text that supports this conclusion directly, the same as any other theory.  I'm just making a point that there are many logical reasons to think that the Iron Bank's motivations are exactly what they seem, and that Jon's inner monologue about repaying the loan is not GRRM lamp-shading some secret or conspiracy, but rather the believable ignorance of a man who doesn't understand the deal he made as well as his partners.

And I've yet to see a solid logical reason for believing this beyond Jon's statement being filler or bad writing. It makes no sense to bring up that Jon suspects the loan given that we know that Cersei isn't paying, they're now working with Stannis, and that it's confirmed in text that the IB engages in conspiracy and secret plots to ensure repayment.

To the bolded, sure. Because 5000+ pages and even more supplemental material can't be about secret plots within secret plots within secret plots. The first book is A Game of Thrones which was chosen as the name of the show due to its being appropriate to the entire series. I really don't get this hostility to the possibility to secret plots and conspiracies in a massive series specifically about secret plots and conspiracies. While being a fantasy, the series is actually written more in the format of a mystery which is actually appropriate to the subject of plots and conspiracies. Not sure if you've ever read mystery, but everything mentioned in a well-written mystery should be considered as relevant somehow.

I don't know that there's something going on with the loan. But it was raised in text by Jon to question it which makes sense given the subject matter of political intrigue that is this series.

[Wild Bill]

10 hours ago, Lollygag said:

You're repeating yourself and I'd be repeating myself in turn by replying. Time to get off the hamster wheel.

Well, this thread is hotting up! Lots of bits that are interesting and informative. My post started this renewal, or your post in response started it - whatever...

And the wheel turns and turns...

3 hours ago, cpg2016 said:

Well, the part you bolded is exactly what the IB is doing with Cersei.  She won't pay, so they're essentially hiring Stannis to go depose (and kill) her.

Exactly so.

 

I've found, from my brief experience in the fandom, that relying on book quotes is either a sign of great strength or of great weakness (in an argument) ...

Using book quotes to defend something - I'm not even sure what is the point - it is not working in this case. Meanwhile, the (hamster-wise) viewpoint that, per OP, that NW might have some problems repaying their debt to IB. And further IB might have some "concerns" about getting their money back from loans to the IT is cogent, and that IB might look at alternatives to get their due...

Whatever, cheers, etc...

[cpg2016]

On 11/28/2017 at 0:13 AM, Lollygag said:

And I did not put words into your mouth about Westeros being bad with money per the bolded. "Westeros in general is bad with money" is indistinguishable from "an idiot when it comes to finance and lending, the same as nearly every other character we encounter save Littlefinger and the actual bankers". This isn't the first time you've backtracked on yourself, either.

There are plenty of people in the real world who are idiots with money who understand the concept of "earn more than you spend".  Within the context of a feudal aristocracy, Jon is not an idiot with money, because his level of financial knowledge is probably roughly that of any other person raised in a landowning household. Objectively, he's still a complete neophyte when it comes to knowledge of finance.  I assumed I was dealing with someone who understood the concept of nuance in an argument.  I "backtracked" only because you seemed to be interpreting my argument as being that Jon is less competent in a relative sense to his contemporaries.

On 11/28/2017 at 0:13 AM, Lollygag said:

You mentioned Lionel specifically. That was my response. I wasn't discussing noble/commoner marriages in general. It has nothing to do with the topic of Jon and the loan.

But you can't separate the two.  Lyonel is marrying the Gulltown daughter for her dowry; it's even noted in the text that the dowry is particularly large specifically because of her commoner status.  

And it absolutely has something to do with Jon and the loan, you just refuse to accept circumstantial evidence as having any validity.  Again, we know that even intelligent Westerosi nobles don't get finance in anything more than the most basic level.  Again, the inability of "smart" men to figure out even what Littlefinger's up to, let alone follow how he did it, is evidence of that.  This is perfectly reflective of real world nobility.  If we make the reasonable assumption that Jon has no more financial acumen than a Tyrion Lannister or Ned Stark, then he also is, from a modern or even Braavosi perspective, financially illiterate.

All of which is to say, just because Jon thinks that he can't repay the loan, doesn't mean it's a bad loan.  We're only in his head; if GRRM gives us a POV from Tycho Nestoris and HE says it's a shit loan, that's obviously a different story.  But if forced to choose, I would assuming the banking professional has a better idea of what constitutes a credit-worthy borrower, even beyond the borrower himself.

On 11/28/2017 at 0:45 AM, Lollygag said:

You're doing some serious switcheroo here. My theory of collateral is real Arya which is not deep economics or even economics at all.

This doesn't make any sense.  Why is Arya collateral?  To the extent the Iron Bank is even aware of Arya, they have her, not Jon.  You may be mistaking what the definition of collateral is; it's an asset or security that the borrower puts up in case they can't repay their debt, not that the lender possesses.  So, for example... the land of the Gift/New Gift is collateral (my theory), because the Iron Bank can take it if the Night's Watch fails to repay their loan.  Arya is not collateral, because (a) she doesn't belong to the Watch, (b) the Iron Bank probably has no clue who she is, (c) she's in Braavos! and (d) even if none of the above were true, the Iron Bank doesn't trade in slaves as per Braavosi law, and therefore can't "take possession" of another human being.

On 11/28/2017 at 0:45 AM, Lollygag said:

And I've yet to see a solid logical reason for believing this beyond Jon's statement being filler or bad writing. It makes no sense to bring up that Jon suspects the loan given that we know that Cersei isn't paying, they're now working with Stannis, and that it's confirmed in text that the IB engages in conspiracy and secret plots to ensure repayment.

Then you aren't reading.

On 11/27/2017 at 10:27 PM, cpg2016 said:

Maybe Tycho Nestoris comes back to the Wall, finds Jon dead, and pronounces his support for the Jon-loyalist faction, seeing as he thinks the Iron Bank has a better chance of repayment with the Lord Commander who made the deal in charge, or at least his partisans?  Or maybe Bowen Marsh, knowing as well as Jon that the Watch can't repay the loan, and obviously being far more shortsighted, repudiates the loan entirely, and hence Nestoris moves against him?  This is entirely in keeping with the IB's modus operandi, justifies Jon not telling Bowen Marsh about it, and still allows for the fact that the loan might be financially viable, notwithstanding Jon's misgivings.

This is a perfectly reasonable scenario.  There are a plenitude of reasons the Iron Bank might want the land belonging to the Night's Watch, from an additional agricultural base for a metropolis that almost certainly needs to import food, to the need for timber for shipbuilding or even firewood.

On 11/28/2017 at 0:45 AM, Lollygag said:

And your evidence is speculation and generalization and has nothing to with Jon specifically which is why you're come around to discussing Lionel Corbray's marriage and other unrelated topics as round-about support for your theory about the loan being just a loan and Jon knowing nothing about money. How did this even come up?

It came up because you believe that if Jon thinks his debt is not repayable, then that means the Night's Watch cannot make good on it's promise, and therefore the Iron Bank must have some ulterior motive driving their lending. I countered by saying that Jon, who (like all characters) is an unreliable narrator, cannot necessarily be trusted to know whether the Iron Bank has made a good or bad deal, because a feudal aristocrat, both in-universe and in the real world, is a complete financial illiterate compared to a Renaissance banker.  All the nonsense about Littlefinger's fraud, and the attitudes of the nobility towards commoners, is support for that theory.  

On 11/28/2017 at 0:45 AM, Lollygag said:

To the bolded, sure. Because 5000+ pages and even more supplemental material can't be about secret plots within secret plots within secret plots. The first book is A Game of Thrones which was chosen as the name of the show due to its being appropriate to the entire series. I really don't get this hostility to the possibility to secret plots and conspiracies in a massive series specifically about secret plots and conspiracies.

Because most of the secret plots and conspiracies serve a narrative purpose.  GRRM doesn't have any "gotcha!" plots, no surprises for the sake thereof, which is why it's unlikely that Septa Lemore is Ashara Dayne, or that Jaqen H'gar is really Syrio Forel - they don't serve a purpose within the story, or advance any plots or themes.  Almost every "surprise" or conspiracy can be traced to the author deconstructing a specific trope, or advancing a specific character's arc.  Simply put, I think that if you want to allege the existence of a twist in the story, you have to justify how it satisfies those conditions.  I am not arguing that it is impossible that there is no secret motive to the Iron Bank's loan to the Watch.  I'm just saying that if your only justification for it is that Jon doesn't think he can repay the debt, doesn't mean that the Iron Bank isn't looking at it from a totally different viewpoint.

[Lost Melnibonean]

On 11/9/2017 at 3:59 PM, Lollygag said:

Speculation here mostly, but concurrent to the whole Iron Bank thing, Jon demonstrated Arya's value to him with the fArya plot. Not sure how much the IB knew of the Winterfell plot or if it impacted their decision or not.

I'm not sure how much, but the FM and the Iron Bank are affiliated to some degree. And the FM have real Arya. I'm inclined to think that if real Arya decided to leave the FM, they might have a problem with that.

As I stated elsewhere, I think this idea has some promise. 

As for why the loan was extended in the first place, one of the author's criticisms of most fantasy writing, specifically Tolkien's, is that it ignores the finer bbn points of ruling. In Dance, I think The George addressed this with Daenerys in Meereen to some extent, but even more so with Jon as Lord Commander of the Night's Watch. 

[Lord Lannister]

Repossess the Wall?

[Corvo the Crow]

Extend a loan to Weeper and replace Jon?

Gift has good farmland and orchards and lakes and even access to two seas. It is conveniently no more under wildling threat and is repopulated by them.

Haunted forest has wood which Braavos lacks and desperately needs to maintain their large fleet. A forest owned by no one is a very cheap source for wood.

There's no way NW not being able to pay the debt in the long run. Worst case scenario Braavos handles the logging and farming with the permission of the watch.

[Lord Varys]

If the Watch cannot pay then the Braavosi would like take possession of the Gift and eventually of the Wall itself, making the NW their servants working their lands for them.

Or they would throw them out of their new lands and have some Braavosi settle the Gifts.

The only collateral Jon could offer Nestoris at the time of their deal was the lands of the NW. He didn't have any cash, nor any other movable riches. And it is likely that the Iron Bank would eventually take that land if the Watch received the loan and never paid it back.

Jon's plan apparently was - after he came up with his deal to allow the wildlings into the Realm - to take the wealth of the wildlings and use it as (part of the) collateral for the Iron Bank deal. Whether that's enough is unclear at this point, as is whether the Iron Bank are interested in wildling trinkets (they would be interested in the gold and the other precious metals the stuff they have is made, but I doubt they care very much about trinkets made of bone, etc.).

But I daresay the loans Jon would need to feed the Watch and the wildlings in winter would greatly extend the net value of the stuff he got from Tormund's gang. Still, it could have helped him sweeten the deal and convince himself that he did not just sell the NW to a foreign power that might, in the long run, not really care about their sacred duty or their tradition to elect their leaders, etc.