Posts Tagged 'banking'

MOFT: Episode 6 (Chase’s New ATMs)

It doesn’t take much for a bank to make me happy. Give me online access, a good interest rate, a bunch of branches, and I’m all good. Heck, lately I’m just thrilled when my chosen banking institutions don’t implode and go boom.

But just because I’m easily satisfied doesn’t mean a bank often gets my juices flowing. Yet that’s exactly what happened this week as my main bank, JP Morgan Chase, installed sweet new ATMs that take the latest MOFT (My One Favorite Thing) title. I don’t know if Chase used TARP money to finance these new contraptions, but if so, consider it money well spent!

What’s so great about these new ATMs? It’s all about the deposits, baby. It used to be that whenever I wanted to deposit a check, I’d have to stand in line at the counter with all the deposit slips and envelopes and wait until one of the few chained pens that actually still had ink in them became free. I’d then fill out a bunch of uncomfortably personal information – account numbers, address, etc. – with strangers looking over my shoulder (waiting for their own shot with that elusive working pen), before getting back in line to wait for an ATM. Sure, the process only took several minutes, but my time is valuable, ya hear.

So imagine my delight when I stop by my nearest Chase branch and see these fancy new ATMs, which will take your loose checks, sans envelopes or deposit slips. Shove a bunch of them all together in the slot and watch the machine somehow magically decode the amount of each check (sometimes it fails to read handwriting and asks you to manually type in the amount – I was tempted to put in one meeeeelioon dollars, but somehow didn’t think my girlfriend had that much in her account). The ATM will even print your receipt with images of the deposited checks.

Ok, maybe it’s not very impressive. But all you hear about lately is how stupid bankers have been and how they’re responsible for much of the economic mess this country is in. And I just want to give props where props are due.

Though Chase yesterday reported its fourth-quarter profit fell 76 percent from the year-ago period, the bank remains in an enviably solid position, having acted the least stupidly during the mortgage and credit bubble. And now they are exploiting their relative largesse by placing themselves squarely at the forefront of cutting-edge ATM technology. Bravo, Chase … This check’s for you!

One $700B bailout coming up…

OK, the market’s up big. The bailout plan is about to be unveiled. What does it all mean? Here are my immediate thoughts.

  • Of course, the bailout plan is coming. Talk earlier this week that Democrats or hard-core free-market Republicans would torpedo the agreement was totally asinine. Very few politicians in their right minds would say no to this deal and risk being seen as the ones who put the final nail in the economy’s coffin, creating nightmarish scenes of bank runs and bread lines. What is smart and totally predictable is for politicians to raise a lot of hay and ask a lot of questions, so they can a) try to get things added or subtracted from the bill which they find disagreeable and b) blame others if the deal doesn’t work. This week was truly the American political system working as it always does, with plenty of good, bad, and ugly (or at least messy).
  • One of the last sticking points to getting to a compromise on the bill appears to be related to the Democrats wanting the ability for bankruptcy judges to amend mortgages for primary residences. I’ve said in earlier posts that I don’t think a lot of people understood what they were signing (or were deliberately misled) when they entered into these adjustable-rate mortgages and bought houses they couldn’t afford. So I do feel like it’s OK if we help people stay in their homes even if they were the ones who made bad decisions, as long as we are talking about primary residences – and not second homes or investment properties. However, I also feel this country has for too long encouraged an unhealthy focus on home ownership as being a key element of that mythical American Dream, a subject I will soon expound upon in a future post.
  • There is now talk that Nancy Pelosi and the Democrats want to bring another stimulus package up for debate in the House as early as tomorrow. Please don’t. The first stimulus package didn’t work, and this one won’t either. Again, I understand their political appeal, esp. when Congress is authorizing hundreds of billions to help bailout the banking system, but these stimulus packages offer about the same benefit as energy drinks provide for someone who’s woefully short on sleep. The rush ends way too quickly and the problems end up being worse than before. If we’re going to further burden our already troubled balance sheet, it’d be so much better if we take any money for a stimulus package and use it to help displaced workers acquire new skills or go back to school, or if we used it to invest in our country’s deteriorating infrastructure, or for public transportation projects, or alternative energy development. (anything that will increase American employee productivity or lead to real, lasting tangible benefits, neither of which stimulus plans accomplish).
  • The announcement of the bailout package will hardly signal the end of the story. The details haven’t yet been revealed, but I can assure you if the process goes down anything like the S&L crisis of 20 years ago, there will be plenty of bumps along the way. I’m assuming whatever deal gets signed into law will leave a lot of leeway for the Treasury Dept. and the Federal Reserve in figuring out how to handle the situation, but Congress will be watching closely and they ultimately control the purse strings. Whichever candidate takes over the White House will probably be preoccupied with this issue for at least the first year or two of their term. Plus, financial institutions aren’t the only ones that will be needing financial assistance from the government, esp. if the credit markets don’t unfreeze very soon. I expect the next industry expecting a handout will be the automotive industry, which is struggling badly and loaded with debt. And because Michigan is such a key battleground for the November elections, it would be in their interest to come a-callin’ to the government kitty as soon as possible. (Actually, speak of the devil, the House just passed a $25 billion loan package for the auto industry. Ugh.)
  • Again, I wish I could say with certainty that this bailout package will solve our problems over time and that we’ve seen the worst of this crisis. The problem is, we are dealing with unprecendented events. The world is a lot more complicated than it was in the 1920s and 30s. The world’s economies are more intertwined, and the financial instruments at the heart of this mess are much more complex. I expect a prolonged global slowdown, with the only good news being that we may be further along the road than a lot of other markets, including the high-flying emerging economies that will likely see sharp downturns.
  • The market is up big today on the news of the impending announcement, but we’re nowhere near where we were even last week when the bailout plan was first bandied about. As investors start to realize what a long, hard slog this is going to be, I believe the enthusiasm will wane very quickly (let’s not forget we’re still working under the ill-advised SEC short selling ban, which is surely keeping the market at artificial levels). Even if we’ve seen the market lows this year (something I am not totally convinced of), we won’t revisit our old highs for a few years.

September 2014
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