Lunchtime Links 8-10

August 10, 2009

Spitzer vs. Blodget: The interview (Tech Ticker)  There are six videos.  See the bottom of this post for links to the other five.

Krugman’s “mission accomplished” moment (NYT)  I’ve take some liberties titling this link.  In the column, PK takes a bit of a victory lap, claiming we averted a Second Great Depression thanks to fiscal and monetary stimulus.  Once again, no discussion about the long-run negative consequences of not dealing with debt.  Thanks to these policies, we’ve put ourselves squarely on the Japanese path: a couple decades of stagnation, financed with stimulus and money printing, that may very well end more violently than if we’d just dealt with the problem late last year.

Deficit grew $181 billion in July (The Hill)  Krugman’s entire argument is based on the assumption of receptive bond markets.  Great, they’re still receptive.  And they may be for some time.  But is that a good thing?  Aren’t we just turning ourselves into California?

Banks make $38 billion from overdraft fees (FT)  On the one hand, banks need to recapitalize themselves and a big way to do that is by earning cash and keeping it on the balance sheet.  Arguing that banks should cap these fees because they’ve received bailout money seems a dangerous way of getting the government involved in banking.  We want the government OUT of banking.  We want banks to live or die on their own.  On the other hand, there’s a good argument to be made that overdraft fees are usurious.  They hammer the poor in a way similar to payday lending.   Is this just another case where the financially illiterate are being robbed blind?  A Consumer Financial Products Agency might have something to say on the matter…   (By the way, others including Felix have been on this story for a while.)

Cuomo orders dealers to stop deceptive cash for clunkers ads (oag.state.ny)

Freddie: TBW losses could be “significant” (CR)  “TBW accounted for approximately 5.2% and 2.7% of our single-family mortgage purchase volume activity for full-year 2008 and the six months ended June 30, 2009, respectively.” That’s a lot of mortgages folks.

Knob Creek embraces failure (failuremag)

Great resume (todayilaughed)  The details suggest this guy would be a good hire…

Cash strapped Cuba says toilet paper running short (Reuters)



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If Krugman is saying that Big Government averted another second depression, how does he explain that fact that he was bashing the administration for not spending enough money to fix the problem?

Posted by Steve Roberts | Report as abusive

So… I’m sorry banks aren’t not-for-profit enterprises? Want not-for-profit? Join a credit union, where you’ll still get hammered with NSF/OD fees.

Is there an estimate of how much in NSF/OD fees are waived each year by banks?

Is there an estimate of how much in NSF/OD fees go uncollected?

This annoys me because this article makes it sound like retail banking is a gold mine, when in reality it is a very thin margin business. The fees charged to customers are really just offsets for the backoffice expenses incurred to provide the services that most people take for granted. Branches are expensive, yet most banks don’t charge you to use a teller or have an account. They used to… even I remember that and I’m not that old. AND they charged NSF/OD fees as well. Banks don’t directly pass along interchange fees, the cost of processing checks or electronic transfers, or even FDIC insurance expense. The benefit to the bank is of course cheap funding and the opportunity to lend you money. You lower OD fees too much and people will start using it as a revolving credit facility. They’re meant to hit you in the face and encourage behavioral changes.

I mean, $38B? We’re pitching a fit over $38B in revenue for the banking industry? We’re in here talkin’ ’bout practice? Not a game… not a game. Practice. (Allen Iverson rant, for those not getting the reference). That’s less than 1Q of revenue for BAC.

I can get behind making it easier to opt out of “overdraft protection”, but I’m not sympathetic. Manage your money better. Learn a lesson. Use cash or just do *something* different. Don’t tell me about the big bad doctor’s bill you get every time you accidentally drink a little bleach.

Sorry… story’s been under my skin since this morning.

Posted by Andrew | Report as abusive

“Mission accomplished moment” sums it up pretty well . . . except that this mission is going to be a hell of a lot more expensive . . .

Posted by Apt604 | Report as abusive