Opinion

Felix Salmon

Counterparties

By Felix Salmon
April 14, 2011

Durbin’s letter to Dimon, on debit interchange — WSJ

Comment du jour: Summers “still contends that there are certain people who just can’t do math. Formerly they were known as women” — Reuters

Hugh Grant (yes, that one) turns investigative journalist & moves the Murdoch phone-tapping story forwards — New Statesman

White House can’t find anybody willing to replace Warren at CFPB, they might be forced to go with her — WSJ

Comments
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Speaking as a high school math teacher, there may be aspects of our approach to mathematics training that fit the personality of the stereotypical male high school student better?

At least at that age, the boys are more inclined to take risks, to proceed on a partial understanding, to make educated guesses… The girls want to understand the problem thoroughly before they hazard an answer. Given the same level of understanding, the boy might earn a “B” on a test where the girl gets stuck on a problem, freezes a bit, and earns a “C”.

Our approach to mathematics education is essentially a bootstrap process, based on PARTIAL understanding throughout. As you advance through the curriculum, your partial understanding of the earlier topics improves until you eventually understand it well. For example, adding fractions with unlike denominators is introduced in fifth grade (?), but it typically doesn’t mature until the students see the same fundamental concepts in action when they study rational functions in Algebra II (10th grade) and proving trig identities in Precalculus (11th grade).

There are other approaches to mathematics education that might serve girls better.

Posted by TFF | Report as abusive
 

Durbin’s letter is worth reading and especially worth reading in the context of the JPM earnings release yesterday.

JPM reported lower quarter-to-quarter revenue. Adjusting for the reduced (and in some businesses, reversed)loan provisions and the increased proprietary trading revenues in the Investment Bank, JPM also reported significantly lower recurring quarter-to-quarter profits. So JPM pushed hard to reach a 13% overall return on equity.

However, the Card Division increased both revenues and profits. And even more striking, JPM reported a whopping 42% return on equity in the Card Division. Revenues and profits in Cards have quadrupled since QII 2010.

And yes, while much of Card Revenues are Interest Income, the Other Income (and debit card contribution) is hopelessly obfuscated by inter-division transfers.

So the lack of debit card transparency just fuels the fire, and as Durbin notes more then once in his letter, there is a lot of money being clawed off the table “hand over fist.”

Posted by AABender1 | Report as abusive
 

Durbin’s letter is pure gold. A must read on the debit war and supprisingly accurate for a pol!

The law change will cause profits at my community bank to drop very slightly in the short term… but will push customers away from large banks and into our open arms overtime… on balance small banks win large banks lose.

Posted by y2kurtus | Report as abusive
 

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