First, let's kill all the bankers, at least the lying idiots

With apologies to Shakespeare, who'd understand ...

Financial researcher Richard X. Bove, taglined in his NYT op-ed as the senior vice president of equities research at a brokerage firm, curiously doesn't want his firm to be identified.

Or not so curiously.

Since he can't figure out the difference between causal correlation and statistical correlation. And, can't or won't do simple analysis.

Bove notes that, in the past two years, the total loan volume of American banks has dropped by 8 percent, while business loans have fallen by 25 percent and mortgages by 15 percent.

That said, almost ALL of the total amount of falloff in all loans combined is from mortgages and business loans. Well, until his poor banker friends start renegotiating more mortgages and eating more mortgages they were stupid enough to write in the first place, the mortgages bottom line ain't changing. Business loans? Well, banks are generally less likely to write small-biz loans in a recession, no matter the change in banking laws. And, he NOTES that!

The size of the credit market is smaller today because banks will no longer make risky loans to marginal borrowers.

But, doesn't factor it into his calculations.

But wait, he gets even stupider, or more deceitful.

Next, we get to the empirical self-contradiction, of statement 1:

At the end of 2008, Federal Deposit Insurance Corporation data showed that the American banks it insured — around 8,000 of them — had $13.84 trillion in assets. At the end of the second quarter of this year, they held a total of $13.22 trillion — a decline of $620 billion.

And statement 2:

However, the main reason bank lending has declined may be that the banks’ capital requirements have increased, and this encourages them not to lend.

My emphasis added

There are so many problems here.

First, banks' capital requirements haven't magically increased that much overnight. Second, bank mergers have theoretically reduced overhead. Third, that $300 billion drop in mortgages probably reflects at least $300 billion of bad mortgages that are nonperforming.

But, we're told none of this by X. Bove from Company X.

And, fourth, note that weasel phrase "may be." You won't see it in the rest of the column, because X. Bove from Company X has an ax to grind with Dodd-Frank and other legislation and regulatory change that obviously has caused these problems.

X. Bove from Company X can't leave room for "may be."

Even if he's right on all the numbers AND better sorted them out, though ... back to problem No. 1.

He still hasn't done anything beyond showing a statistical correlation; he hasn't proven a causal one.

He finally says that the "animus against banks" is therefore stifling recovery.

Sounds like X. Bove from Company X is a fat-cat type who doesn't want to support more responsible lending even as big banks give out bonuses.

As for community banks? Some of them spit the bit on underwriting crapola mortgages more than any nonbank loan originator like Countrywide.

C'mon, Mr. X. Bove from Company X, some truth here, you lying bastich.

First, we kill all the bankers, at least the lying idiots.

Update: Here's the non-onerous, phased-in regulatory agreement, Basel III, that has X. Bove bitching. And, from somebody more fiscally renowned than X. Bove, Felix Salmon, here's why it's a good thing.