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America will soon see a wave of bank mergers?

economist.com

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

#331

Post by 015a »

cyclecount wrote: post #2

All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…

All numbers approximate:

- Number of banks in the US: 4,844 (69,500 people / bank)

- Number of banks in the UK: 365 (184,000 people / bank)

- Number of banks in Australia: 95 (272,000 people / bank)

- Number of banks in Japan: 199 (628,000 people / bank)

Let's cool it with the doomsday talk. Every major economy (except maybe China, but they're weird so not counting them) has 2.5x+ the number of people per bank than the US. The US is the weird one.

If you want to look at this from a "return to fundamentals" perspective: the US is only a few hundred years old, and was built on some of the most virgin, rich, plentiful, resourceful land on the entire planet. That fueled 300 years of economic development the likes of which the world has never seen; and the nice thing about growth is that it really helps cover-up bets that were far too risky for any reasonable risk-taker.

We're not going to see big banks take on increasingly higher risk over the next decade. In fact, we'll see the opposite. Fewer banks, more regulation, and less risk taking, as the US begins to regress more to the worldwide economic growth rate.

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

#332

Post by imtringued »

HissingMachine wrote: post #157
omgomgomgomg wrote: post #152

Why exactly should banks be private companies at all? Theyre just skimming middle man between the government and end consumer. Sure, the government would know your bank balance and spendings, but that could be worked around If youre in trouble with the irs or the law, the government will have all the insight they request. Sounds crazy? We the people had to bail them out and never get anything of their profits. Too bi…

Governments are even worse than banks with money, if they were private companies every government would be bankrupt ages ago.

The house hold sector wants to save net. The corporate sector wants to save net. The government wants to save net. Tell me, where is the money supposed to come from? Will you drop it with a helicopter?

At some point some people have to spend off their money.

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

#333

Post by HWR_14 »

no_wizard wrote: post #323
HWR_14 wrote: post #307

Earlier quoted context omitted.

Rent and utilities rarely report to credit scores.

There's been normalization around using rent as additional inputs into a credit score: https://www.cnbc.com/select/your-rent-payments-can-raise-you... I'm not sure they're all that available or popular (they're highly dependent on your landlord having the correct paperwork and such) but the place I rented an apartment last year had this available and it did get reported

Yes, that's been a push for a while. I'm glad to see it's becoming more popular. But it doesn't work if unless the landlord opted into their payment system.

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

#335

Post by reb »

Rebuff5007 wrote: post #324
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…

> you immediately see the need for breaking these banks up. Why exactly is this the conclusion, as opposed to suggesting the big banks need better evaluation of borrowers (whether thats with better metrics or humans in the loop)? All the problems being brought up seem like they could happen to banks of any sizes...

Something something "free market" something something "competition" something something "creative destruction"...

It's nice to believe throwing more greedy people at a problem will fix it, and hey, sometimes it works.

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

#336

Post by SeriousGamesKit »

HWR_14 wrote: post #305
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…

> 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 had to close one or more credit cards in order to get their mortgage approved.

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

#337

Post by imtringued »

ptero wrote: post #161
oarsinsync wrote: post #113

Earlier quoted context omitted.

> People want zero risk, demand deposits that pay interest. There’s no business model that can provide that. > It would be perfectly possible for a business to provide zero risk demand deposits—-but the business would have to charge customers for its custodial operations rather than making money by writing loans That was true when we lived with 0% interest rates. Now, there’s no reason why a narrow bank couldn’t take…

> there’s no reason why a narrow bank couldn’t take deposits, stick them in with the fed providing 4% interest, and keep 25% of that for itself to cover its costs, passing 3% onto the customer. The problem with this business model is that this 4% interest either (A) requires a certain hold period or (B) allows on-demand withdrawal. (A) is exactly the model used today. It did not stop the collapse SVB and FRC. Assets…

The 100% reserve bank people will at some point discover why Silvio Gesell imagined the concept of demurrage currencies.

Because at some point the market interest rate is 0% and the cash rate is 0%. There is no reason to lend money via longer term deposits. The amount of deposits available to banks dries up. The circulation of money stagnates and ultimately causes a recession with high unemployment.

The demurrage fee doesn't change the market interest rate, it just moves the guaranteed interest rate into the negative range so that the market interest rate can be negative, if it has to be, instead of being stuck at 0%.

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

#338

Post by s1artibartfast »

mauvehaus wrote: post #313
nitwit005 wrote: post #245

Earlier quoted context omitted.

The human will type your information into the same system.

The human can likely also pick up the phone and talk to another human if the system is spitting back something obviously stupid. You don't need the human for the typical case; you need the human for the atypical case.

They also usually have a monetary incentive to make the deal work, which you cant get from a app.

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

#339

Post by inconceivable »

nitwit005 wrote: post #245
inconceivable wrote: post #117

Earlier quoted context omitted.

never buy a mortgage through an app. use a human broker or if you're rich enough, a bank salesman. and for those of you who refuse to talk to people when spending multiple hundreds of thousands or even millions of dollars, well... this is what you get to deal with.

The human will type your information into the same system.

okay, sure and probably half a dozen other systems you don't have access to. this is wholesale debt brokering, it's not available on a public website that you found on google with creative out-of-the-box keywords like "best mortgage rate "

the first step to not being a mark is understanding what you don't know, and working with people who do. you may still get marked to a certain degree, but at least you'll end up with a 2.x% interest rate like i did and no messages from the computer saying "you're too poor to buy this product, so run along now little man" when it clearly isn't true.

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

#340

Post by smolder »

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…

When there is concerted effort to undermine a populist movement, that's how it will end up looking: disorganized, chaotic, unproductive, and eventually dead. It very well could have failed due to deliberate interference where it might have had a substantial impact otherwise. How much would you bet that there weren't covert agents working to put it down?
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