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Small business rescue earned banks $10B in fees

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Re: Small business rescue earned banks $10B in fees

#331

Post by celticninja »

dtwest wrote: post #308
celticninja wrote: post #201

Earlier 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.

it does seem like you choose to pick arguments when people generalise, opting to show how there are examples that go against their point. Even though they may be unique examples that are the opposite to what someone claims but are unrepresentative of reality. This doesn't add to the discussion, in fact it detracts because it devolves into an unnecessary flamewar. HN is not reddit so please dont try and make it like that. I hope you can see how you were being disingenous, regardless it makes me not want to continue the discussion anymore as I dont feel you are engaging honestly and are just trying to score points.

Re: Small business rescue earned banks $10B in fees

#332

Post by MR4D »

MiroF wrote: post #185
MR4D wrote: post #132

Earlier quoted context omitted.

I missed that interpretation, but upon rereading the post, it sounds like you are correct. That being said, the central bank (at least in the US) is structured much more like a think tank and policy center than anything close to a customer-facing organization. Personally, I'm not a fan of that idea, but I completely agree that banking policies/regulations need to be overhauled.

> structured much more like a think tank and policy center Uh, I agree that the central bank isn't consumer facing - but this is a bit of a stretch. Think tanks don't loan trillions of dollars.

Not much of a stretch, though. From [0]:

The Federal Reserve

1 conducts the nation's monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy;

2 promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad;

3 promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole;

4 fosters payment and settlement system safety and efficiency through services to the banking industry and the U.S. government that facilitate U.S.-dollar transactions and payments; and

5 promotes consumer protection and community development through consumer-focused supervision and examination, research and analysis of emerging consumer issues and trends, community economic development activities, and the administration of consumer laws and regulations.

Other than #4 (which as you say is clearly is nothing like a think tank), all the rest have significant policy or regulatory actions.

[0] - https://www.federalreserve.gov/aboutthefed/structure-federal...

Re: Small business rescue earned banks $10B in fees

#333

Post by viklove »

volak wrote: post #307
viklove wrote: post #300

Earlier quoted context omitted.

> Businesses operate on revenue and margin and companies like airlines can't justify using even 1% of its revenue to "save" for rainy days. Huh. Where did they get the money for the stock buybacks they initiated last year?

Repurchasing shares is what companies do with profits they cannot effectively leverage into new investments. I suggest you read https://en.wikipedia.org/wiki/Share_repurchase But to sum up: if you are a company with $1 million on hand at the end of the year you have to disperse it somehow. - If you put it in a bank account you'll earn 0.2% interest on your "investment" - If you pay out dividends your shareholders wil…

> Businesses operate on revenue and margin and companies like airlines can't justify using even 1% of its revenue to "save" for rainy days.

So you're admitting that this statement you made is just patently false, thanks.

Re: Small business rescue earned banks $10B in fees

#334

Post by 411111111111111 »

LatteLazy wrote: post #325
411111111111111 wrote: post #324

Earlier quoted context omitted.

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…

I think you're misunderstanding the original point then

It definitely is a wealth extraction industry. This however doesn't mean that it shouldn't exist.

even in the best case scenario of the bank financing someone who starts producing products which he sells.. the banks job will only be to extract as much money they can get from this person.

As such, they're not producers.. they live off of them.

Nonetheless, there'd be less producers without the banks (at least short term), so they're also enablers. This makes them valuable. But still, they earn their money by extracting the value of someone else's product.

Which is fine if everybody is a willing participant...

Re: Small business rescue earned banks $10B in fees

#335

Post by chris_va »

JSavageOne wrote: post #315
chris_va wrote: post #199

Maybe this is an unpopular opinion amidst the pitchforks, but do we not have better things to worry about at the moment? The system is inefficient and unfair, great lets put it on the list of things to fix, but a ~3% fee is not world ending (unlike some other things) and seems like a low priority.

How is a 3% fee not outrageous when there is no work being done? If 3% of the $1,200 stimulus checks owed to individual citizens went to private banks, would you say it's not a big deal? (if so I hope you're not running for Congress)

Apparently not, though given our current congressional representatives, are you sure that is a good metric to judge rational decision making?

3% is 3%. It's nonzero, so that's unfortunate. It's not a large fraction, so it's just not a time sensitive problem.

Is it worth tying up media, political and financial resources in blaming+lawsuits over the optics of a 3% fee, instead of just waiting to deal with it next year?

Your question implies that 3% of loan applicants get nothing because of this fee (which is inaccurate, since congress will just authorize more loans as long as it's politically convenient). As I said, it's unfortunate, but it's not world ending.

Re: Small business rescue earned banks $10B in fees

#336

Post by rapind »

_curious_ wrote: post #299
MiroF wrote: post #270

Earlier quoted context omitted.

Sure, you can examine moral and political philosophy. Nozick has some writing about it, Rawls does, Mill, etc. - it's a whole branch of thought. The benefit of shaping society in a way that you think is good is that you end up with a better society. I don't really think you're discussing in good faith, so I'll end it here - but I think this is a very interesting line of discussion.

I'm open to learning about moral and political philosophy. I will check out Nozick, Rawls and Mill - thanks for the pointers. Meanwhile I am failing to grasp how feeling (worse yet acting) entitled to something (in this case money) from someone else or society at large is beneficial. Anyone I've ever met or interacted with IRL with this disposition is perpetually unfulfilled and extremely ungrateful for very gift of…

If we can acknowledge that societie's rewards aren't directly proportional to work ethic (Bezos works hard sure, but 5,000 times harder?), and yet everyone participates in a society that enables these rewards. Think of every civil service, roads, consumers buying your stuff, the fact that brigands aren't simply looting your factories and stores etc. Fortunes are built on the shoulders of everyone who does and has contributed to society.

So if you accept the above statement we can discuss what people are entitled to coming from the same place. If you don't accept the above (many don't, not judging) then we we'll be stuck on that and won't get any further discussing entitlement.

It's not about doling out money to lazy people. That's become a bit of a trope. The American dream is dead. If you are born into poverty then the odds of you getting out of poverty, regardless of how hard you work, is vanishingly low. Sure there are lazy people but I would argue that it's impractical to try and figure out a system that weeds them out at scale, and then you're stuck with half assed policy that does nothing or benefits a bunch of smart greedy pricks instead.

Re: Small business rescue earned banks $10B in fees

#337

Post by RivieraKid »

xerox13ster wrote: post #241
RivieraKid wrote: post #195

Earlier quoted context omitted.

I don't have a proof, it's a belief based on anecdotal evidence and just thinking about it.

Then use a qualifying statement such as "It seems to me ___" or "I believe ___" Don't make an opinionated statement saying "is" as though it's statement of fact without being able to prove it.

That is implicit, there's almost nothing I'm completely sure of. I would add that qualification if I had low confidence about the claim.

Re: Small business rescue earned banks $10B in fees

#338

Post by RivieraKid »

jatone wrote: post #285
RivieraKid wrote: post #195

Earlier quoted context omitted.

I don't have a proof, it's a belief based on anecdotal evidence and just thinking about it.

and based on medicare and the post office as reference points you'd be very wrong.

Maybe it doesn't apply to healthcare. I said "usually".

Re: Small business rescue earned banks $10B in fees

#339

Post by spopejoy »

LatteLazy wrote: post #289
JSavageOne wrote: post #220

Earlier 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…

> Finance is a very important industry that adds a lot of value.

perhaps, but

> The great recession after 2008 and the great depression both show what happens when finance stops working.

shows the problem with your comment. The "recession after 2008" is not the problem, the previous 30 years of finance capitalism and deregulation (starting with the mortgage interest deduction and securitization in the late 70s) is.

Justifying our horrendously corrupt system this way -- by pointing to the basic utility in banking, lending and financial instruments -- is like saying McDonalds is great because food is good.

Re: Small business rescue earned banks $10B in fees

#340

Post by nnvvhh »

mywittyname wrote: post #239
zarkov99 wrote: post #138

Earlier quoted context omitted.

Not only they are not taking risk, they get to pick who gets the funding so they further optimize their bottom line, by say favoring bigger loans or loans to their most indebted customers. I hope there is a reckoning but I am pretty sure there will be bonuses to the CEO's instead.

Maybe someone can get a class action lawsuit together on this.

The article mentions that a law firm is currently pursuing this.
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