I blame the shareholders as much as I blame the banks themselves. They drive the behavior. Surely shareholder value can consist of something other than pure profit.

Need to raise cash quickly? Do layoffs. Regardless of whether it weakens the company in the long term.

The banks have had the benefit of technological innovations that reduce their operational costs. So why is the customer being charged for a service that costs less to perform? They should be using the operational savings to innovate and create some true value in the business.

I don't understand why people don't just move their money to a local bank or credit union. People say that they are old-fashioned and don't have as many services, but my credit union has pretty great online banking and other services.

Diogenes: I blame the shareholders as much as I blame the banks themselves. They drive the behavior. Surely shareholder value can consist of something other than pure profit.

No, it doesn't. People think that this whole mess is capitalism gone wrong. It's actually unfettered capitalism. Seeking profit on the part of the capitalist class is the bottom line in a capitalist system.

coco ebert: I don't understand why people don't just move their money to a local bank or credit union.

I heart my CU.

coco ebert: I don't understand why people don't just move their money to a local bank or credit union.

Here is a story about my local credit union.

One day, I filled out an online application to open an account at Local CreditUnion. Everything goes fine. A few days later, I receive my application in the mail, for me to sign and send back. I start reviewing it for accuracy, and at the bottom of the page, I see something like ShowUser.aspx&userID=245. Hrm, curious, I think, let me type that URL into my address bar. Hows about that, there's my information. I wonder what happens if I change the userID to 246. Hello, there is someone else's information including social security, mother's maiden name, the works. shiat. OK, call them up and tell them that they have to fix that tout suite. Can't get anyone on the phone. Call everyone and their mother, now I just want my information off of there.

Fast forward a few days, the police are at my door, accusing me of hacking the credit union. Of course nothing happened, but still, I am very unlikely to bank with them, and that's kind of made it so that my real bank would have to do something pretty bad to motivate me to try again.

coco ebert: I don't understand why people don't just move their money to a local bank or credit union. People say that they are old-fashioned and don't have as many services, but my credit union has pretty great online banking and other services.

Diogenes: I blame the shareholders as much as I blame the banks themselves. They drive the behavior. Surely shareholder value can consist of something other than pure profit.

No, it doesn't. People think that this whole mess is capitalism gone wrong. It's actually unfettered capitalism. Seeking profit on the part of the capitalist class is the bottom line in a capitalist system.

Well, kind of. But the other half is other capitalists coming into the market and grabbing a share of that profit. But things like banks have unusually high barriers to entry, which allow for higher profits. Plus the artificial barriers large banks can impose, including monopoly pressures and government intervention, keep pretty much all competition out. And more profit buys you more of both.

The nature of a competitive capitalist market is to drive profit to a healthy equilibrium between market entry cost and 0. The problem is we don't have competitive markets, we have companies fighting tooth and claw to extract rents on the order of 10% growth year-over-year to meet their investor's targets. That's just not sustainable without extracting rents, and you can't grow your market forever, but don't tell Wall Street that.

EatHam: coco ebert: I don't understand why people don't just move their money to a local bank or credit union.

Here is a someone else's story about my local credit union Citibank.

Diogenes: I blame the shareholders as much as I blame the banks themselves. They drive the behavior. Surely shareholder value can consist of something other than pure profit.

Need to raise cash quickly? Do layoffs. Regardless of whether it weakens the company in the long term.

The banks have had the benefit of technological innovations that reduce their operational costs. So why is the customer being charged for a service that costs less to perform? They should be using the operational savings to innovate and create some true value in the business.

As one of the poeple that keep those technological innovations coming for a large bank in the south east I have to say we are already as lean as we can get. I am part of the %99 and I work really freaking hard at my job. So why do you want to punish me with a layoff when I am already overworked?

The truth of the matter is your free checking was never free. You have been paying for that at the checkout counter all along. You are still going to pay for it. I haven't seen any retailer say they were going to lower prices because their banking fees have been lowered to the tune of billions a year(think walmart).

That fancy online banking, mobile apps, ATM's everywhere do cost banks money. I know the money they spend on it pays my bills. The bank trying to recoup those fees through a nominal fee is no crime in my eyes. There are many things to hold the banks accountable for. A $5/mo debit cards fee is not one of them. They provide a lot of service and convienience and there is no reason they can not expect to make a little money for those services. If you think $5/mo is gouging the customer you really need to rethink things.

palladiate: EatHam: coco ebert: I don't understand why people don't just move their money to a local bank or credit union.

Here is a someone else's story about my local credit union Citibank.

if my bank had the same problem, that would probably be enough to motivate me to go to a larger credit union like USAA or something.

sammyk: As one of the poeple that keep those technological innovations coming for a large bank in the south east I have to say we are already as lean as we can get. I am part of the %99 and I work really freaking hard at my job. So why do you want to punish me with a layoff when I am already overworked?

I wasn't advocating layoffs. I was using them as an example of how companies can raise case quickly, regardless of the long term consequences.

I provide the technology you use to innovate. I'd like to keep my job, too ;-)

Diogenes: Surely shareholder value can consist of something other than pure profit.


Moynihan, 51, became president and CEO in January 2010. Bank of America posted a $2.2 billion net loss last year and the bank's shares dropped 11 percent. Bank of America's top executives got the "vast majority" of their 2010 compensation in share units to be paid in the future if performance targets are met, causing an apparent drop in pay for some leaders.

Moynihan earned $10 million for 2010.
His salary was cut to $1.94 Million, to comply with SEC regulations. (new window)

He who cuts the pie -serves himself the biggest piece.

I don't think shareholders are overly concerned with CEO pay. The top private shareholder is Moynihan himself. The institutionalized shareholders are all rubbing elbows in other major Wallstreet banks.

No seriously take a look:

http://finance.yahoo.com/q/mh?s=BAC+Major+Holders (new window)

sammyk: f you think $5/mo is gouging the customer you really need to rethink things.

Therion: sammyk: f you think $5/mo is gouging the customer you really need to rethink things.

[img100.imageshack.us image 500x389]

You must have missed the part about all of us paying for the use of the debit card as a hidden fee at checkout.

Why am I responding to someone that replies with a cartoon? Do you have any of your own thoughts?

cefm: It's like they've totally forgotten what business they're even in. In order to make any money, a bank has to lend it out. In order to have money to lend, it needs to have deposits. In order to have deposits, it has to have customers who are willing to deposit money in said bank.

They're acting as if depositing money in a bank checking account is a privilege that you should be charged for instead of a necessary part of their own operating model. They should be the ones providing us incentives to deposit with them instead of accross the street.

Your forgetting the part where they can get train loads of cash from the fed interest free. They don't need our money to fund any lending they want to do.

sammyk: cefm: It's like they've totally forgotten what business they're even in. In order to make any money, a bank has to lend it out. In order to have money to lend, it needs to have deposits. In order to have deposits, it has to have customers who are willing to deposit money in said bank.

They're acting as if depositing money in a bank checking account is a privilege that you should be charged for instead of a necessary part of their own operating model. They should be the ones providing us incentives to deposit with them instead of accross the street.

Your forgetting the part where they can get train loads of cash from the fed interest free. They don't need our money to fund any lending they want to do.

Yes, because the discount rate has ALWAYS been zero. And there's no such thing as a fractional reserve or reserve requirement.

Diogenes: Need to raise cash quickly? Do layoffs. Regardless of whether it weakens the company in the long term.

If a company dumps property, that gets reported in financial reports as selling an asset. I wonder what would happen if an investor considered employees as assets, especially those who know the business. If a business lays off 1000 skilled workers, figure annual salaries of $40,000 * 3 years (ie an approximate replacement cost), and suddenly that company could be viewed as having 'sold' $120,000,000 worth of 'assets' for $0. Kinda offsets a temporary increase in the bottom line. I wonder if any major investing firms include employees in their analysis this way.

itsdan

Major layoffs are often taken as a charge against earnings for other reasons. Accountants mark all future costs of the ex-employees as present expenses. I don't know whether this serves any purpose other than reducing taxes.