Earlier quoted context omitted.
What kind of burglar or gunman writes you a check for $300,000, maybe more?
The one that holds many guns to many heads, and has obtained the monopoly on writing pieces of paper.
Umm, what?
Small business rescue earned banks $10B in fees
321–330 of 342 posts
Re: Small business rescue earned banks $10B in fees
#322Re: Small business rescue earned banks $10B in fees
#323Earlier quoted context omitted.
Finance is a very important industry that adds a lot of value. If you get a student loan, you can go to university tomorrow and earn more in a few years, that's much more valuable than spending 20yrs at McDonald's earning nothing and saving very slowly to pay for your degree upfront as you would have to otherwise. Ditto mortgages. Ditto getting a car or starting a business or basically anything finance permits. The g…
> Finance is a very important industry that adds a lot of value. If you get a student loan, you can go to university tomorrow The vast majority of student loans are guaranteed by the federal government. The banks take zero risk on these loans and still charge higher rates than home mortgages. Something seems broken there.
That doesn't change the fact the loans are useful. In fact it re-enforces it. Finance is so important the federal government underwrites it at huge cost. But it's also not useful or productive apparently!?
Re: Small business rescue earned banks $10B in fees
#324Earlier quoted context omitted.
> Finance is a very important industry that adds a lot of value. If you get a student loan, you can go to university tomorrow The vast majority of student loans are guaranteed by the federal government. The banks take zero risk on these loans and still charge higher rates than home mortgages. Something seems broken there.
That doesn't change the fact the loans are useful. In fact it re-enforces it. Finance is so important the federal government underwrites it at huge cost. But it's also not useful or productive apparently!?
Nobody you've responded to said that though.
They explicitly said that if you wanted to get a loan, private Banks should be there to enable you.
The only thing that they wanted was a public bank, so you're not forced to support them if all you need is an online account for transfers.
Re: Small business rescue earned banks $10B in fees
#325Earlier quoted context omitted.
That doesn't change the fact the loans are useful. In fact it re-enforces it. Finance is so important the federal government underwrites it at huge cost. But it's also not useful or productive apparently!?
Nobody you've responded to said that though. They explicitly said that if you wanted to get a loan, private Banks should be there to enable you. The only thing that they wanted was a public bank, so you're not forced to support them if all you need is an online account for transfers.
Sorry, I'm not sure what you mean?
My point here is that finance is useful.
The view that institutions make too big of a profit off too little risk isn't really relevant to that. Cars are useful no matter what profit Ford makes by making them.
Maybe we need to examine the market to make sure its working? Maybe they're duping the government? Maybe they have some hidden reason to justify those rates. I don't know. But the underlying product is useful wither way. I don't object to any of that. But none of it changes the need for credit.
The original comment I replied to is very clear: finance is not useful, it's a wealth extraction process Etc.
Am I missing your point?
Re: Small business rescue earned banks $10B in fees
#326Earlier quoted context omitted.
You outline the problem very well. The banking sector has an ENORMOUS amount of power over the economy/society in a way that no other industry does because it literally has the ability to create money out of thin air (by loaning it into existence). The banking industry is the arbiter and credit in our society and decides where money get allocated. This would be fine if it were their own money, but it's not - it's our…
Finance is a very important industry that adds a lot of value. If you get a student loan, you can go to university tomorrow and earn more in a few years, that's much more valuable than spending 20yrs at McDonald's earning nothing and saving very slowly to pay for your degree upfront as you would have to otherwise. Ditto mortgages. Ditto getting a car or starting a business or basically anything finance permits. The g…
Counter point: access to cheap finance pushes up people's purchasing power, driving up the prices of things which can be financed (homes and education being the big ones). I think even before the crash we hit limits on house prices because the bank simply can't increase the loan term beyond 40 years.
Re: Small business rescue earned banks $10B in fees
#327Gotta ask whether the banking system makes sense in its current form. - Part of it is actually a utility. Payments, sending money from one place to another, making sure there's an account at the other end of that number. Everyone needs this, yet being a huge international network there isn't a whole lot that one bank offers that another cannot. - Part of it is deciding who to lend money to. Makes sense for the bank t…
Right now as things are Banks are just leeches offering minimal value to the world yet receiving a lot of income.
I'm pretty sure banks are offering lots of value. What would you do without an electronic bank account? Send cash via mail? The problem is that they are abusing their monopoly position and lack accountability which results in a moral hazard. You didn't mention any of that.
Re: Small business rescue earned banks $10B in fees
#328Earlier quoted context omitted.
It's not a single point of failure, it's giving people the option to not bank through a private bank. Private banks already get a bank account with the government (the Central Bank), why shouldn't individuals have that same option?
I'm not even sure if central banking will last much longer before collapsing under the seemingly unlimited requests for funding. I notice that people want to pretend like laws of supply and demand don't exist and that everything can be fixed with the money printer. I think this does not bode well for our future in general. The reason to reject having a central bank having direct tentacles into your life is the same r…
There is no money printer. Each unit of currency that the central banks flood the market with is backed by an asset of equal value on the balance sheet of the central bank.
Re: Small business rescue earned banks $10B in fees
#329That's about a 2% fee which doesn't seem out of line with other transaction processing fees that are out there. That fee probably has built in insurance for fraud and other failures. And also the cost of the transaction. I bet that fee is the same fee as a year ago?
This is the wrong way to think about it. Rates are nearly negative, so 2% is practically 10, 100X the rates banks can earn otherwise. It's basically free money shoveled into banks, a massive boon.
Bank fees are added on top of the market rate. If the rate is -1% and the bank demands a 2% fee then you will have a 1% interest rate.
Re: Small business rescue earned banks $10B in fees
#330Earlier quoted context omitted.
Stock price does not tell you how the fundamentals of a business are operating. Especially not in this environment, everyone's stock price is down. Also these are the banks that got a huge bailout from the government a decade ago for failures of their own making. If a big bank goes under due to coronavirus then I will of course apologize for being wrong, but I doubt that will happen. Too big to fail remember. So we b…
Everyone's stock price is not down. Another false statement. The majority are down though, as they should be. I am not defending bailouts, I'm saying you should get your facts straight.
OK, not everyones individually, but look at all the major stock exchanges and their value is down. This is a good indicator that the vast majority, and therefore it means that most investors are affected similarly. Are pension funds down? Yes. Are most retail investors down? Yes. Anyone who is up is not up enough to make a difference to the market in general. So dont be disingenous, you know what i meant by 'everyone' in this instance.