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(Bloomberg)   Fed to study how banks manage deposits. Their timing is impeccable   (bloomberg.com) divider line 52
    More: Obvious, Federal Reserve, JPMorgan Chase & Co., national banks, Ben S. Bernanke, New York Fed, Comptroller of the Currency, OCC, trading loss  
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4217 clicks; posted to Main » on 17 May 2012 at 5:09 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-05-17 03:11:36 PM
And by impeccable I mean... COMPLETELY PECCABLE!!!

t1.gstatic.com
 
2012-05-17 04:11:48 PM
I always just assumed that they just mailed it directly to their lobbyists.
 
2012-05-17 04:19:07 PM
It always made me REALLY REALLY HAPPY when the bank took out the $300 in withdrawals from my $260 balance before putting IN the $1,000 deposit. Especially when they debited the larger amounts first, thereby increasing the number of individual $25 overdraft fees they could charge on each $3 coffee, or $5 lunch.

Banks are assholes. Period. I managed to buck enough stress just by being at a Credit Union that doesn't actively conspire to f*ck me that I was able to get off of the hydrochlorothiazide.
 
2012-05-17 04:42:23 PM
Conan O'Brien, crossdresser

i.dailymail.co.uk
 
2012-05-17 05:10:38 PM

Gig103: And by impeccable I mean... COMPLETELY PECCABLE!!!

[t1.gstatic.com image 275x183]


came for this, leaving statisfied.
 
2012-05-17 05:14:27 PM
Screw a bank. They suck. There's nothing a bank can do that a credit union can't do better. Refinancing, home and business loans...look at how Deutschland does it. Lots of smaller institutions, still very connected to the LOCAL economy...no wonder they want the mark back!
 
2012-05-17 05:15:43 PM
Nothing like getting around to closing the barn door after the cows died six years ago.
 
2012-05-17 05:15:51 PM
If I had access to shiatloads of other people's money I'd leverage it up 40-1 and bet it all on Europe.
If it all comes crashing down.. we are all farked together, but if it recovers, I'd be rich as hell and they'd be none the wiser.
 
2012-05-17 05:16:08 PM
Ah, a study.

To be followed up with nothing that does anything to take power away the Masters of the Universe on Wall Street.

Would it be bad form to suggest that instead of a "study" we would see greater benefits by setting them on fire?
 
2012-05-17 05:19:59 PM
But who will study the studier?
 
2012-05-17 05:20:42 PM
MaxxLarge: "It always made me REALLY REALLY HAPPY when the bank took out the $300 in withdrawals from my $260 balance before putting IN the $1,000 deposit."

Not only do/did they have a police of processing withdrawals before deposits, they have a policy of processing withdrawals by largest amount first to maximize the number of items that overdraft.
So if you have a $260 balance, deposit $1000 at 8am, buy a $3 coffee at 9am and then a $300 xbox at noon, they go ahead and process it
260 - 300 (overdraft) - 3 (overdraft) + 1000.

They put serious time and effort into fee maximization. None of it was incidental or accidental.
 
2012-05-17 05:22:59 PM
Sticky Hands: "If it all comes crashing down.. we are all farked together,"

Actually, if you were a US bank you'd already have a golden parachute. And then you'd likely get bailed out. Failing that, at least pressured into a 'profitable' sale to a larger institution. From which deal you can probably pull down a second parachute. There was *every* incentive to gamble and *zero* downside for the people doing the gambling.
 
2012-05-17 05:24:15 PM
Banks are the only businesses granted special permission from the government to be perpetually bankrupt, and still stay open.

If any other business couldn't pay its liabilities, then any one of its creditors could force it into bankruptcy, shut it down, sell off all its assets, and divide up the proceeds.

But banks operate this way for a living, like they have for centuries.

Rather than apply ordinary rules about contracts and solvency to banks, the government doubled down on stupid and granted the banks their own monopoly over the issuance of money and a sanctioned cartel. Welcome to slavery.

If you want to know who the US government works for, just ask who can snap their fingers and have $700 billion of your money delivered to them.
 
2012-05-17 05:27:10 PM
img407.imageshack.us
 
2012-05-17 05:27:52 PM

MaxxLarge: It always made me REALLY REALLY HAPPY when the bank took out the $300 in withdrawals from my $260 balance before putting IN the $1,000 deposit. Especially when they debited the larger amounts first, thereby increasing the number of individual $25 overdraft fees they could charge on each $3 coffee, or $5 lunch.

Banks are assholes. Period. I managed to buck enough stress just by being at a Credit Union that doesn't actively conspire to f*ck me that I was able to get off of the hydrochlorothiazide.


A couple states required (may still require) banks to process larger checks/debits first. If I remember right, their reasoning was that bigger things might be more important ie., mortgage, car payment, etc. Not saying that's right, just that was their reason.

As for doing debits before credit, that's plain unadulterated scumbaggery. AFAIK, it varies from bank to bank within a state, so it's most likely not any kind of law.
Walk away from any bank that does this; there are too many to choose from and it's reasonably simple to migrate over, so there's no excuse for putting up with that kind of crap.

The issue of debits AFTER credits and all processing happening at close of business is one reason I switched from a a credit union to a bank. My credit unions always processed things as they came in-rent comes in at 8am, payroll check doesn't come until 9a, check bounces with the credit unions.
Same thing happens at a bank, no problem as long as the deposit happens before close of business (6-8pm); again assuming this bank runs all credits first, then the debits.
 
2012-05-17 05:27:55 PM
static2.dmcdn.net

I remembered what I did with the $8,000!
 
2012-05-17 05:27:58 PM
So one corrupt for-profit private bank is studying another corrupt for-private bank? I think we need a study of this study, commissioned by a body actually affiliated with the federal government. Mb federal express can do it.
 
2012-05-17 05:28:40 PM
Someone doesn't understand how regulatory timing works
 
2012-05-17 05:29:40 PM
Banking has always been a scary house of cards. If one in every ten people went to their bank and withdrew their account in cash the entire system would immediately collapse.
 
2012-05-17 05:29:44 PM
Gig, came to say the EXACT SAME THING! lol, wonderful. I feel so not old for once!
 
2012-05-17 05:30:34 PM
Well I'll be damned, the NY Fed does have Conflict of Interest rules.
 
2012-05-17 05:31:00 PM
Darling Fascist Bully Boy-

Give me some more money you bastard.

May the seed of your loins be fruitful in the belly of your woman.

-Neil
 
2012-05-17 05:32:11 PM
FTFA: "New York-based JPMorgan's trading loss, announced last week, occurred in its chief investment office, which oversees about $360 billion, the difference between deposits and what the bank lends."

Is this sentence incredibly hard to read or am I retarded?
 
2012-05-17 05:34:45 PM

pedrop357: A couple states required (may still require) banks to process larger checks/debits first. If I remember right, their reasoning was that bigger things might be more important ie., mortgage, car payment, etc. Not saying that's right, just that was their reason.


Yeah, I could see that.

I have $1,204 in my account. My mortgage (hypothetically) is $1,200. I also buy a $20 lunch that day.

Process my lunch first, and it'll be fine. But my mortgage is screwed.

Yeah, its my fault... but it could be a simple mistake.

I keep all of my money in savings and try to just keep bill-paying/ATM money in checking.

Debits before credits absolutely should be illegal. Its completely illogical other than to screw people.
 
ows
2012-05-17 05:43:48 PM
and.......we're done in 2
 
2012-05-17 05:53:04 PM
So, where did JP's $3 billion wind up?

static6.businessinsider.com

/Laughed all the way to the bank...
 
2012-05-17 05:53:10 PM
Fox, Henhouse. Henhouse, Fox.
 
2012-05-17 06:08:11 PM
Manage?
 
ows
2012-05-17 06:08:34 PM
big foreheads =easy targets
 
2012-05-17 06:18:25 PM
manage?

Using that term a bit loosely for banks aren't we?
 
2012-05-17 06:19:54 PM
also, did you guys know Wells Fargo has a "lost deposits" desk?

I'm sure they all do... but I was told by a teller once she had to check the 'lost deposits' desk when they once lost a deposit.

o-0
 
2012-05-17 06:22:19 PM
"There's not enough loan volume to drive earnings-per- share and to successfully reinvest all the liquidity," said David Hendler, senior analyst at research firm CreditSights Inc. in New York. "So, in a way, it forced them to do this, and the trade got away from them," he said, referring to JPMorgan.

Bzzzzt! Nope. It's not that there isn't enough loan volume. It's because banks have realized that it's a lot more profitable for them to invest this money in securities. What would you rather do? Invest your money by lending it to a homebuyer at 3.75% APR or invest it in a securities scheme that might return 10-20%?

In fact, if you believe that the officers of a publicly-traded company have a fiduciary duty to maximize shareholder value, then you could probably make a convincing argument that these big banks are required to make these sorts of hedges as opposed to making low-interest loans.
 
2012-05-17 06:53:37 PM

arcas: "In fact, if you believe that the officers of a publicly-traded company have a fiduciary duty to legally maximize shareholder value, then you could probably make a convincing argument that these big banks are required to make these sorts of hedges as opposed to making low-interest loans.


I also prefer to have my toast referred to as "ostriches", my eggs called "shoes", and my orange juice named "milkweed liquid".

What you are describing is not the primary purpose of a bank. But thanks to the Glass-Steagall repeal, I guess it doesn't really matter. Fark it. They should be able to take my money to Vegas, blow it all, then ask for a bailout because the word "bank" is in the name of their business.
 
2012-05-17 07:00:29 PM

MaxxLarge: It always made me REALLY REALLY HAPPY when the bank took out the $300 in withdrawals from my $260 balance before putting IN the $1,000 deposit. Especially when they debited the larger amounts first, thereby increasing the number of individual $25 overdraft fees they could charge on each $3 coffee, or $5 lunch.


You admit in your complaint to over-drafting your account by $40. It is not their job to pat you on the back and say "Aw, it's OK. Better luck next time with your maths." They are literally in the money business and will look for any and every opportunity to dupe you out of it, and they found a big fat reason right there.
 
2012-05-17 07:15:24 PM

xxmedium: They should be able to take my money to Vegas, blow it all, then ask for a bailout because the word "bank" is in the name of their business


You can avoid them doing anything with your money by simply not putting it with them. I don't remember the legal principle that says that bailouts are a given either.
 
2012-05-17 07:25:18 PM

pedrop357: MaxxLarge: It always made me REALLY REALLY HAPPY when the bank took out the $300 in withdrawals from my $260 balance before putting IN the $1,000 deposit. Especially when they debited the larger amounts first, thereby increasing the number of individual $25 overdraft fees they could charge on each $3 coffee, or $5 lunch.

Banks are assholes. Period. I managed to buck enough stress just by being at a Credit Union that doesn't actively conspire to f*ck me that I was able to get off of the hydrochlorothiazide.

A couple states required (may still require) banks to process larger checks/debits first. If I remember right, their reasoning was that bigger things might be more important ie., mortgage, car payment, etc. Not saying that's right, just that was their reason.

As for doing debits before credit, that's plain unadulterated scumbaggery. AFAIK, it varies from bank to bank within a state, so it's most likely not any kind of law.
Walk away from any bank that does this; there are too many to choose from and it's reasonably simple to migrate over, so there's no excuse for putting up with that kind of crap.

The issue of debits AFTER credits and all processing happening at close of business is one reason I switched from a a credit union to a bank. My credit unions always processed things as they came in-rent comes in at 8am, payroll check doesn't come until 9a, check bounces with the credit unions.
Same thing happens at a bank, no problem as long as the deposit happens before close of business (6-8pm); again assuming this bank runs all credits first, then the debits.


Really? My CU processes incoming at open, and outgoing at close of business day. Even if you hand deposit a check, it'll still apply*.

*a check from the CU or large local business / bank
 
2012-05-17 07:32:44 PM

Allen. The end.: Screw a bank. They suck. There's nothing a bank can do that a credit union can't do better. Refinancing, home and business loans...look at how Deutschland does it. Lots of smaller institutions, still very connected to the LOCAL economy...no wonder they want the mark back!


Actually, I have a credit card (eg. one that gives me cash back & rewards) with one of the Big Banks. My credit union's card can't really compare to it, IMHO.

/ my CU offers a really good checking account, however...
 
2012-05-17 07:36:51 PM

inglixthemad: Really? My CU processes incoming at open, and outgoing at close of business day. Even if you hand deposit a check, it'll still apply*.

*a check from the CU or large local business / bank


That's pretty nice actually. I'll look around at the CUs to see if they do that. The three I was referring to were Nevada FCU (NV obviously), Keesler FCU (Mississippi), and Clark County (also NV) CU. It's been probably 10 years since I did anything with the two in NV; but the MS one was doing it as of 6 months ago.
 
2012-05-17 07:51:06 PM

DuudeStanky: FTFA: "New York-based JPMorgan's trading loss, announced last week, occurred in its chief investment office, which oversees about $360 billion, the difference between deposits and what the bank lends."

Is this sentence incredibly hard to read or am I retarded?


Lack of editing.

Either by the editor (whose job it is, by the way) or the writer (who's getting paid plenty to write this farking stuff also, let us not forget).

Very common. I am sending off futile protests to the BBC all the time for sloppy writing / editing.

BUT IT'S THE BEEB!

Nobody seems to care any more. Editing costs time and money. So why bother. That seems to be their credo.

Try that with any food or pharma product and see what happens.
 
2012-05-17 08:06:18 PM
www.acfe.com
 
2012-05-17 08:34:52 PM

MaxxLarge: It always made me REALLY REALLY HAPPY when the bank took out the $300 in withdrawals from my $260 balance before putting IN the $1,000 deposit. Especially when they debited the larger amounts first, thereby increasing the number of individual $25 overdraft fees they could charge on each $3 coffee, or $5 lunch.

Banks are assholes. Period. I managed to buck enough stress just by being at a Credit Union that doesn't actively conspire to f*ck me that I was able to get off of the hydrochlorothiazide.


I once had to write some algorithms for a bank I am not allowed to name, to do exactly that. Yes, they intentionally try to maximize their fees by their "scheduling engine". I hated it, and that was the last contract I ever did for that particular contract agency.

On the flip side, Ive also had it happen to me, and after walking into -my- bank (a different one) and telling them that I knew what they did, because I had helped implement the same strategy elsewhere, demanded my fees removed, and, suprisingly, they removed them.

/still on the hydrochlorothiazide though :(
 
2012-05-17 08:39:26 PM
BTW, the bank that removed the fees (my bank at the time) I -can- name... WaMu.
 
2012-05-17 09:17:38 PM
my solution is to immediately spend my paycheck, thus avoiding these problems

/have fun taking care of me in old age y'all
//these things called dollars with be worth very little soon anyway
///I recommend buying goods from the Franklin Mint etc.
 
2012-05-17 09:24:09 PM

arcas:

In fact, if you believe that the officers of a publicly-traded company have a fiduciary duty to maximize shareholder value, then you could probably make a convincing argument that these big banks are required to make these sorts of hedges as opposed to making low-interest loans.


Is there any law that makes this true? It seems like the purpose of most businesses should be to make enough profits such that reinvestment can be done to maintain R&D and long-term profitability. Some money is also need to weather the bad times. Commercial banks should have an easier time than most. All they need to do is provide a safe place for people to store their money and then make prudent lending choices.

This whole idea of maximizing shareholder value seems to lead to decisions that may be good in the short term but are detrimental in the long-term. This is even more of a problem when those in charge have incentives such as stock options that allow them to profit from the increase in share price.

I would also like to think that companies have a social responsibility to act ethically, especially since they are now considered "people", but that seems to be asking too much.
 
2012-05-17 09:24:57 PM

eventhelosers: my solution is to immediately spend my paycheck, thus avoiding these problems

/have fun taking care of me in old age y'all
//these things called dollars with be worth very little soon anyway
///I recommend buying goods from the Franklin Mint etc.


Personally I recommend some short term investments with your local liquor store.
 
2012-05-17 10:18:17 PM
Banks really are simple to operate if you trim the staff and bonuses.

Borrow at one.
Lend at two.
Home by three.

Banks are supposed to be boring things that hold money and lend it out to qualified people and companies.
 
2012-05-17 10:20:56 PM

kidsizedcoffin: Personally I recommend some short term investments with your local liquor store.


Back in the dot.com days it was pointed out that if you had invested $X in Nortel vs. spending the same amount on beer, you would have had a better ROI by recycling your empties than by selling the stock after the crash.
 
2012-05-17 11:00:43 PM

DHMOlogist: arcas:

In fact, if you believe that the officers of a publicly-traded company have a fiduciary duty to maximize shareholder value, then you could probably make a convincing argument that these big banks are required to make these sorts of hedges as opposed to making low-interest loans.

Is there any law that makes this true? It seems like the purpose of most businesses should be to make enough profits such that reinvestment can be done to maintain R&D and long-term profitability. Some money is also need to weather the bad times. Commercial banks should have an easier time than most. All they need to do is provide a safe place for people to store their money and then make prudent lending choices.

This whole idea of maximizing shareholder value seems to lead to decisions that may be good in the short term but are detrimental in the long-term. This is even more of a problem when those in charge have incentives such as stock options that allow them to profit from the increase in share price.

I would also like to think that companies have a social responsibility to act ethically, especially since they are now considered "people", but that seems to be asking too much.


Banks are supposed to be bookies, not gamblers. You make the bets, they set the line and make money off the vig. Now, they are making bets with their own money knowing they can use your money to pay up when they lose.
 
2012-05-18 06:24:31 AM
I love how these comments are all "WHARGARBLE I CANT FIGURE OUT QUICKEN" and don't actually comment on the content of the article at all.

Hint: the article has nothing to do with how banks process your deposits/debits.
 
2012-05-18 08:13:17 AM
They wait until after your auto-payments all hit and you get hit with $750 in overdraft fees, of course.

Duh.
 
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