America will soon see a wave of bank mergers? • Hacker News Board

Re: America will soon see a wave of bank mergers?

#341

Post by supportengineer » Tue, May 02, 2023, 10:06 PM UTC

chickenpotpie wrote: post #316

nicholasjarnold wrote: post #295

Earlier quoted context omitted.

Reasons other than "it helps me build a credit history": * you think you can make more money by investing your 30k and letting it grow and compound * you are very prudent with your cash on hand and would rather have immediate access to liquid cash than save a little bit on interest which you pay down over the course of Some of the dynamics here are a bit different when market returns are not looking great/steady and…

> you think you can make more money by investing your 30k and letting it grow and compound Mortgages especially. Mortgage interest is tax deductible and makes it easier for high tax bracket individuals to outperform their loan by investing.

> Mortgage interest is tax deductible

Since 2017, not really, due to tax law changes. Cap of $10k but that includes state taxes paid also.

Re: America will soon see a wave of bank mergers?

#342

Post by smolder » Tue, May 02, 2023, 10:08 PM UTC

kiawe_fire wrote: post #159

prasadjoglekar wrote: post #39

Earlier quoted context omitted.

That was what Occupy Wall St and Tea Party movements were. Remember that? Before each of them got infested with social-issue parasites of each pole, both were populist reactions to financial injustices.

At some point, it starts to feel intentional that every time an issue that could bring us together begins to gain traction, it’s diverted into some media concocted idea about how (left wing or right wing group) is out to destroy (social thing).

It's only starting to feel intentional, eh? While it may not be a result of coordinated and direct pressure, like a secret ban on promoting non-partisan popular causes or something... I don't believe for a minute that our cultish, deadlocked political landscape is just an emergent phenomenon resulting from good faith participation in our system. It's the result of powerful people and institutions throwing around their weight, buying allies and generating propaganda, in order to dominate and shape said system.

Re: America will soon see a wave of bank mergers?

#343

Post by stephen_g » Tue, May 02, 2023, 10:10 PM UTC

SeriousGamesKit wrote: post #336

HWR_14 wrote: post #305

Earlier quoted context omitted.

> despite near perfect credit Your credit wasn't near-perfect. You hadn't defaulted, but that's far from proving that you can manage your credit/money and make payments on time. A hobo who lived in the woods would also have never missed a payment.

Interestingly, this expectation isn't universal in the Western world outside of the US. In Australia, the banks don't expect to see previous credit card management, and in fact the presence of an open credit card will significantly reduce your calculated borrowing power for a mortgage. The myth of US-style 'credit score' requiring a history of card use does persist here though, and I've known several people who have…

Weird thing is that when I got my mortgage, I had two credit cards (for airline points) and the broker was like “oh if you’re happy to close them you’ll be able to borrow more”, so we did the application based on that, but then the bank just didn’t ask me to… I still have them, years later…

Re: America will soon see a wave of bank mergers?

#344

Post by lowkey » Tue, May 02, 2023, 10:10 PM UTC

siliconc0w wrote: post #107

The big banks are terrible if you fall outside their algorithmic expectation. My partner and I were trying to get a mortgage and despite near perfect credit, large incomes, etc our apps were auto-denied because I never opened multiple open loan lines. Never needed them, just used CCs I immediately paid off for points as I always had a job/savings and bought cheap used cars for cash. We eventually got one but it took…

I feel it is important to call out the one’s credit score is not a measure of creditworthiness. It is a measure of an individual’s potential profitability to a creditor.

These two are not the same thing.

Re: America will soon see a wave of bank mergers?

#345

Post by toast0 » Tue, May 02, 2023, 10:17 PM UTC

supportengineer wrote: post #341

chickenpotpie wrote: post #316

Earlier quoted context omitted.

> you think you can make more money by investing your 30k and letting it grow and compound Mortgages especially. Mortgage interest is tax deductible and makes it easier for high tax bracket individuals to outperform their loan by investing.

> Mortgage interest is tax deductible Since 2017, not really, due to tax law changes. Cap of $10k but that includes state taxes paid also.

I was under the impression that the $10k cap is for SALT and mortgage interest is separate? The mortgage interest deduction was reduced, interest on new loans is only deductable for the first $750k of debt, instead of $1M, and mortgage rates were really low in 2017; capped SALT + a relatively low interest rate on $750k might not combine to more than the standard deduction if you're married filing jointly. Certainly on my ~ $350k mortgage @ 3.15%, I stopped itemizing after the tax changes.

Re: America will soon see a wave of bank mergers?

#346

Post by Spivak » Tue, May 02, 2023, 10:20 PM UTC

HWR_14 wrote: post #330

llsf wrote: post #326

Earlier quoted context omitted.

But he said that he used credit cards and never missed a payment. That should count, right ? I can relate, as I came in US from Europe. I arrived, opened a bank account in a big bank, I could only get a debit card, because I had not credit history. After few months I could get a credit card, but with a $500.00 limit! I needed a car, so I bought one cash. When came the time to buy a home, I was asked to open more cred…

You never proved you could handle more than $500 in debt. You then asked for maybe three-orders of magnitude more debt. Surely you can appreciate that difference.

There's no difference at all for someone who works a dayjob. The only thing that matters is that you have you demonstrated that you can make a fixed monthly payment reliably. Paying your bills, paying your rent, paying your CC all demonstrate that. If you rent a $1500/mo apartment you actually have managed $18k of debt.

Doing the same thing but this time with interest proves nothing the others don't. Borrowing history makes sense for businesses or people who with complicated cash-flows. But if you're stably gainfully employed the only things that matter is how you manage your external financial risks (which banks don't check for) and your ability to not over spend (which banks also don't check for).

Combine this with the your typical mortgage is overcollateralized means the magnitude of the loan is essentially meaningless outside of "is the monthly payment something you can afford."

Re: America will soon see a wave of bank mergers?

#347

Post by TexanFeller » Tue, May 02, 2023, 10:23 PM UTC

siliconc0w wrote: post #107

The big banks are terrible if you fall outside their algorithmic expectation. My partner and I were trying to get a mortgage and despite near perfect credit, large incomes, etc our apps were auto-denied because I never opened multiple open loan lines. Never needed them, just used CCs I immediately paid off for points as I always had a job/savings and bought cheap used cars for cash. We eventually got one but it took…

Credit scores make more sense if you think of them not as scores of your ability to pay back debt, but as scores of likely profitability for the creditor. Someone who never carries a balance and never will pay the occasional late fee is less profitable and thus has a lower score.

Re: America will soon see a wave of bank mergers?

#348

Post by toast0 » Tue, May 02, 2023, 10:25 PM UTC

BitwiseFool wrote: post #213

JamesLeonis wrote: post #144

Earlier quoted context omitted.

Occupy was suppressed by the entire police state, coordinated at the federal level under the FBI and DHS [0]. [0]: https://www.theguardian.com/commentisfree/2012/dec/29/fbi-co...

I feel like the most significant cause of Occupy's burnout was the fact that it was so poorly organized and had no concrete goal. I don't recall any specific legislation or reform that they were calling to enact and there was a cacophony of voices each calling for some kind of societal revolution. Eventually the local Occupy demonstration turned into a homeless encampment with some signs propped alongside the roadway…

I don't know if it was from infiltration, or what, but one of the biggest talking points of Occupy was that they were a leaderless organization, and they would establish rules of order that required near unanimous consensus to make decisions. That's a great way to avoid making any decisions.

Re: America will soon see a wave of bank mergers?

#349

Post by evancox100 » Tue, May 02, 2023, 10:26 PM UTC

ChadNauseam wrote: post #277

JumpCrisscross wrote: post #242

Earlier quoted context omitted.

> "too big to fail" should be recast as "too big to exist" Was SVB too big to fail? Signature? Apparently! TBTF is now a popular concept more than a legal one. We need explicit universal deposit insurance along with the rules that make that guarantee tenable. I also think experiments in narrow banking, e.g. permitting each state to charter a narrow bank open to its residents and guaranteed against losses ( e.g. due t…

SVB did fail, with basically no repercussions to the economy as a whole. Under what interpretation was it too big to fail?

Ya but the uninsured depositors were still bailed out, so I think it's a little more complicated than that.

The FDIC insurance fund is predicated on any one bank (and their customers) being small enough that if you wipe out the uninsured deposits, the system as a whole will be ok. That was arguably not the case, or at least regulators didn't want to take that risk for SVB or Signature.

Re: America will soon see a wave of bank mergers?

#350

Post by JumpCrisscross » Tue, May 02, 2023, 10:27 PM UTC

bradleyjg wrote: post #280

JumpCrisscross wrote: post #243

Earlier quoted context omitted.

> stick them in with the fed providing 4% interest The Fed pays interest on those reserves to keep them from being lent. A narrow bank wouldn’t be able to lend its reserves. As such, it makes no sense for the Fed to pay interest on them.

Increasingly banks are only lending to a different parts of the federal government anyway-—deploying their cash on treasuries and agency debt. They are being driven to this by the risk weighted capital adequacy requirements. The whole thing resembles an ever more intricate Rube Goldberg machine.

> increasingly banks are only lending to a different parts of the federal government anyway-—deploying their cash on treasuries and agency debt

This is incorrect. In 2022, the largest increases were in credit cards (+17.4%), commercial and industrial loans (+14.5%), consumer loans (+11.6%), commercial real estate loans (+11.3%) and real estate loans (+10.1%) [1]. Treasury and agency security holdings across American banks were majorly added between 2019 and 2021, and then spent down as balance sheets swapped. (They remain, of course, a commanding fraction of bank assets for obvious reasons.)

[1] https://www.federalreserve.gov/releases/h8/current/