Stunning Number: Big Banks set to lose 70,000 accounts today

Originally posted by Gridrebel
reply to post by Numb2itall

 

I cant remember the exact figures, 45% increase in new money or new members. Either way, the credit union that has new money or new members shouldn't have to charge additional fees to handle it's new accounts. The new money from the new accounts earn it way more income than it had before.

Thanks for the info!
Was switching to a CU anyway but it was a thought that rolled around inside that was keeping me from making the switch.
I just figured what was the point if they would end up doing the same thing.

Any changes yet? I don't see any big banks taking a hit. It seems to be like the so called 99%ers where they are really the .1%ers yelling about the other .1%ers of the rich...the rest of the 99.8%ers would just assume not to side with either...I see this bank thing the same way.

Originally posted by NorEaster

Originally posted by AtticusRye

starred

The people at OWS are chronic homeless, drug pushers, prostitutes and the mentally infirm (for the most part, not entirely), not - as a general rule - the mainstream of society.

My posts get junked by the mods whenever I neglect to employ the genteel filter phrasing when describing the kind of impression you're making with posts like this, so I'll simply let you in on the truth that you're really crippling your team's efforts to derail the OWS movement.

The OWS people are seen in a positive light by a majority of the mainstream of society. Not the same case with the people being targeted by the OWS movement. People like you.

All that belligerent (and clearly ignorant) tough-guy talk is building resentment, and as a result, you're doing important online heavy lighting work for the OWS crowd. At first blush, it offends me, but then I realize how tough it is to effectively vilify your crowd - especially since it's not allowed on big sites like this. But if I sit back and think that most people don't like bullies and negative cranks, I end up being grateful for your efforts. No one can make you and your Wall St. heroes look worse than you make yourselves look.

It's pretty amazing to see how unattractive some people make themselves appear to others, and how ignorant they are that this is what they're working so hard to accomplish. Keep it up. You guys are failing wonderfully.

ps - I was talking (before a poll worker training class I was conducting) with a tough-guy who was crabbing about "all that politically correct crap". When he got to the rant about schools cracking down on bullies, I had to toss something in for him to think about.

"Well, y'know why that happened?"

He didn't even think before replying "Some little nerd's mom went crying to the school board."

"No," I said. "They started really shutting that stuff down after Columbine. Bullying changed in the minds of school management once the victims started coming to school with automatic weapns and bombs."

He shut right up and I could see the wheels turning for the first time since meeting him.

This OWS thing is the reaction to something, and it's not the need of prostitutes to have something to do they're not getting effed by paying Johns. It's also not the sort of thing that drug dealers, who need to turn their inventory into hard cash, would see as a profitable way to spend their time. Hell, dope dealers and hedgefund managers have exactly the same way of seeing life - a series of money making ventures, with laws being hurdles to overcome. As far as homeless vagrants, they're in that park already, and have been for years. They'll just shove over and let these protesters have their space. Especially if they can get a meal here and there in the process.

It's amazing that you can make this sort of statement and remember your log-in password while using the same brain/mind configuration for both efforts.

edit on 11/6/2011 by NorEaster because: (no reason given)

650,000 stars for you sir, or madam as the case may be.

Originally posted by schuyler
One of the funniest threads I've seen in a long time. Moving your money will have very little impact on the big banks, if any. Look who is moving their money? People with no appreciable net worth anyway, people who are not exactly profit centers for the banks. If I were a bank, I would welcome getting rid of these folks. These guys are not Jed Clampett and no one cares where they deposit their $2,371.42.

Besides, the monetary system in this country is like a large round building with teller windows around the outside. One window says "Bank of America." Another says "Wells Fargo," and another says, "Podunk Credit Union.' All those windows lead to exactly the same place. So y'all, being in a protesting mode and against "Big Banks," withdraw all your money out of the Bank of America window and rush as fast as you can over to Podunk Credit Union to deposit your money there. It goes back into PCU's window and into the big round building where it was a few minutes before. Net effect: Zero. You guys are like the Keystone Cops, running everywhere, using up a lot of your own energy, and accomplishing nothing at all,

except for the entertainment value, of course.

And you are aware of who is doing what with their money? You dismiss the power of the individual, at least you seem to dismiss your own. Don't. It it is not so much as being "in a protest mode", I rarely am and when I am, prefer to protest by actions like moving my money to a place that treats me with a degree of decency. I have not gotten as away from large banks, in so complete a manner before. No inclination, until now, hence I do what is effective, quietly. And when I through my business contacts get others to transfer their money to what is a local institution, as the credit union is, I assure it very much noticed. Sure, they don't have the world advantages of a large multi-national bank in many cases. But I seldom need that. And while by many standards I'm not super-rich, I am very good using what I do have. Making lots of noise, passing gas whatever is not my style.

Think those of us who do what we can because we're disgusted and tired of the bull **** are "Keystone Cops"? Well, if my or others doing this is amusing, why I don't have any problem with making you laugh, spreading a little joy after all, if it makes you feel good? Well then feel free to amuse yourself by putting others down. Success is after all, it's own nice reward...

Of course they create money out of thin air - that's how the banking system works.

If banks could create money out of thin air, there would never be such a thing as a bank failure.

If you could provide a link to an academic resource that backs up your claim, I might believe you. Links to conspiracy web sites and other goofy hacks does little to prove your point.

To put it very simply, if a bank has outstanding loans of $1M then they must have a capital reserve of at least $100K in hard currency or equivalents. When they don't because of too many bad loans or because of the dreaded "run on the bank" - i.e. - many people taking out their money (think Bank transfer day - i.e. this thread), they become insolvent. The gov't/FDIC then usually comes in, cleans things up as best it can and tries to find a buyer (i.e. another bank) for some or all parts of that bank's book of business.

First, when a bank rights a loan, it only needs to keep loan loss reserves in place in the event of losses. In the example above, you are assuming a 10% loss rate on a $1 Million loan portfolio. Check your industry research - Losses on loan portfolios are rarely that high historically. Maybe 3% in a normal economy.

Secondly, going back to the point above, why would any bank ever become insolvent if they can magically create money out of thin air, as you suggest? Your ramblings defy logic.

Listen, banking has historically been one of the most profitable industries in the world, right up there with the oil business. But it is a business. It operates in the hard, concrete world of numbers and accounting, not fictional make-believe.

If a bank could create money out of thin air, why would they ever turn down a loan application? Why wouldn't they just give away loans to just anyone at all? After all, by your logic, they could just magically create money out of thin air to cover any losses, right?

Again, the theory you propose is pure gibberish. And, please, spare yourself the drama. Don't post any web links to "prove" your theory correct. Cite an academic journal if you must, but please, no more conspiracy web sites or Wikipedia.

reply to post by CookieMonster09

Secondly, going back to the point above, why would any bank ever become insolvent if they can magically create money out of thin air, as you suggest? Your ramblings defy logic.

Listen, banking has historically been one of the most profitable industries in the world, right up there with the oil business. But it is a business. It operates in the hard, concrete world of numbers and accounting, not fictional make-believe.

If a bank could create money out of thin air, why would they ever turn down a loan application? Why wouldn't they just give away loans to just anyone at all? After all, by your logic, they could just magically create money out of thin air to cover any losses, right? Again, the theory you propose is pure gibberish.

And, please, spare yourself the drama. Don't post any web links to "prove" your theory correct. Cite an academic journal if you must, but please, no more conspiracy web sites or Wikipedia

You are obviously not familiar with the first rule of holes: When you find yourself in one, stop digging.


Everything I said about how banking works is a FACT.

Fractional reserve lending (where Banks create money out of thin air) is a FACT.

I've explained how fractional reserve lending works and why the bank still needs real money to start with at about a 10:1 ratio but you don't seem to grasp it.

I'll try one last time.

Bank has one billion in real assets (customers money). They can therefore lend or invest up to 10 billion using fractional reserve lending rules. Let's say they do that. Customers then pull out 100 million because the bank sucks. Uh-oh...bank now needs to come up with 100 million in real cash to cover their capital reserve requirements for the 1 billion in loans/investments it was "covering" or they will be declared insolvent.

Grossly simplified - but that is HOW IT WORKS.

It might defy your logic, but that doesn't change the facts. Your belief is not required.

And finally, I'm not responsible for your ignorance on this - you are. Do some research on your own. Google can be your friend here. There's actually a lot of info right here on ATS on this topic - use the search function. Talk to a real banker. Take an economics course. Whatever - there are many paths to enlightenment.

This post kind of has died out...any big hits as I asked a few posts ago?

reply to post by Riffrafter


There is no real need to worry about the big banks.

I just read wher the BoA was arranging to "DUMP" over 70 Trillion in derivitives into the U S taxpayers accounts.

I am quite sure we will all thank them for this extreamly generous jesture because of all the benefits it will bring us.

This is all thanks to the Federal Researve Banks. THANK YOU VERY MUCH !!

reply to post by CookieMonster09

although your belief is not necessary ... in an effort to increase your understanding, i offer these ...
what is a Federal Reserve Note

1914: $1 Federal Reserve Bank Note
At the time this was issued, a "note" was well understood to be a promise of payment. Accordingly, this is prominently labelled as a "Federal Reserve Bank Note".

can you say IOU ???
that is hardly an asset or anything resembling value.

another source

However, under President Nixon, the gold standard was officially abandoned creating a fiat currency. In other words, Federal Reserve Notes were no longer backed by hard assets. Rather, Federal Reserve Notes were now backed solely by the government's declaration that such paper money was legal tender in the United States

repeat ... it's an IOU ... nothing more.

Federal Reserve / good enough authority?

Federal Reserve Notes are not money because they don't have any intrinsic value. They cost two cents to make regardless of denomination. That's an obvious shocker to a lot of people - the fact that someone actually makes a 98 cent profit on every dollar bill; a $99.98 profit on every $100 bill.
--- snip ---
When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money.

all emphasis mine.

i admit that i do not know exactly what you consider an academic source however, these above should help you better understand that which you clearly do not. good luck.

Everything I said about how banking works is a FACT.

Again, if banks can "create money out of thin air", as you suggest, then why would there ever be a bank failure?

In fact, if you read the failed bank "autopsy" reports from the FDIC, private banks typically fail due to loan losses, not due to a run on the bank by depositors --- in most instances. In this recent recession, many banks have failed due to sour loans for real estate speculation.

Which, again, begs the question - which you refuse to answer: If private banks can magically create money out of thin air, then why don't they do so when loans go bad or when depositors withdraw funds (as in the case of a bank run)?

I'll answer the question, since you cannot.

Banks cannot magically create money out of thin air. They have assets, and they have liabilities, like any other business. Just look at any Annual Report of any bank. They cannot magically conjure up money out of thin air to cover up loan losses, or to make up for a run on the bank. Not possible. To suggest otherwise is comical, at best.

And let me be clear -- I am referring here to common, everyday banks such as the 4 mega-banks, such as Chase and Wells Fargo, as well as smaller regional banks such as BB&T and Regions Bank, and even community banks.

I assure you that these banks do not create money out of thin air. There's no magician in the back room with his magic wand magically creating dollar bills and coins out of thin air.

If private banks were to start printing their own money, they would be shut down by the Fed in short order.

Customers then pull out 100 million because the bank sucks. Uh-oh...bank now needs to come up with 100 million in real cash to cover their capital reserve requirements for the 1 billion in loans/investments it was "covering" or they will be declared insolvent.

Banks don't operate in a wind tunnel, as your suggestion indicates. You are being far too simplistic. First, in a normal market environment, banks are earning money on loans when those loans are repaid in full. The profits from these loans are in the form of interest earned.

Secondly, you forgot to mention that banks have assets of their own, completely unrelated to the deposits held from consumers. They have assets such as cash (Yes, banks have their own cash), stock investments, real estate, buildings, equipment, loan receivables, etc.

Just look at the Balance Sheet of any major bank, and you will see quite clearly that they have significant Assets - oftentimes in the billions or even trillions of dollars. If deposits are withheld, the bank still has Assets. They still have buildings, cash, stock investments, loan receivables, etc.

i admit that i do not know exactly what you consider an academic source however, these above should help you better understand that which you clearly do not. good luck.

Again, when you can provide me with a reputable academic source, I might listen. Web links to conspiracy web sites and pseudo-business writers are not academic sources. Sorry.

We can agree to disagree. You will never convince me that banks like Wells Fargo and Chase have hocus-pocus magicians that magically conjure money out of thin air. No, these banks are businesses. They are run by private bankers and hard-nosed business elites for a profit.

reply to post by CookieMonster09

Which, again, begs the question - which you refuse to answer: If private banks can magically create money out of thin air, then why don't they do so when loans go bad or when depositors withdraw funds (as in the case of a bank run)?

this question is a complete fail because private banks, commercial or community, do NOT print Federal Reserve Notes ... the Fed does and only the FR.
shame on you for trying to muddy the waters.

I'll answer the question, since you cannot.

Banks cannot magically create money out of thin air.

Constitutionally, the Fed doesn't have that authority either but here we are and they are still creating the perpetual illusion of value via an IOU.

They have assets, and they have liabilities, like any other business.

not really and certainly not like other businesses. Their "fraction" of an illusion is still an illusion.

Just look at any Annual Report of any bank. They cannot magically conjure up money out of thin air to cover up loan losses, or to make up for a run on the bank. Not possible. To suggest otherwise is comical, at best.

what is comical is to suggest "money / Fed Reserve Note" has ANY value whatsoever.

I assure you that these banks do not create money out of thin air. There's no magician in the back room with his magic wand magically creating dollar bills and coins out of thin air.

and this statement could be true, but you negate to mention the discount window at the Fed which provides, encourages and supports aforementioned illusion ... which amounts to one big MAGIC show and nothing more.

They create the illusion, you buy and sell it, it's really just that simple.
Same old snake oil being sold at roadside parlors ... nothing has changed much at all.

edit to add: ya know, i was just checking to make sure i didn't miss that fabulous collection of resource links you've shared ... your posts in thread ... and surprisingly, only one appears ... a blog ??
and you expect anyone to take you seriously, really ???

We’re a community-specific news and information platform dedicated to providing comprehensive and trusted local coverage for individual towns and communities.

We want to make your life better by giving you quick access to the information that’s most relevant to you. Patch makes it easy to:

Keep up with news and events
Look at photos and videos from around town
Learn about local businesses
Participate in discussions
Submit your own announcements, photos, and reviews

yep, that sure is a valuable resource regarding this topic

reply to post by CookieMonster09

First, in a normal market environment, banks are earning money on loans when those loans are repaid in full. The profits from these loans are in the form of interest earned.

yes, profit via interest ... which is collected in the earliest repayments, NOT when the loan is paid in full.

so, even if the loan defaults, the bank has already made it's profit and is subsequently reimbursed for the "paper" loss. (see FDIC for examples)
[some consider this "double-dipping" in this particular industry]

Secondly, you forgot to mention that banks have assets of their own, completely unrelated to the deposits held from consumers. They have assets such as cash (Yes, banks have their own cash), stock investments, real estate, buildings, equipment, loan receivables, etc.

all of which were either provided by the Federal Reserve's initial investment in the institution or purchased by the institution with the profits provided by their customers ... yeppers, they did that all themselves, rather invest in their community, their customer service or their client's advantage.
________________________________________

since you choose to address two different posters in the same response and fiercely defend the system of colossal thievery ... i bid you adieu.

enjoy your delusion and try not to steal from too many as you grow your financial profile, wouldn't want your eventual fall upon that imaginary cushion to hurt or anything.
_________________________________________

since this was directed at my commentary specifically, i'll address it separately ...

Again, when you can provide me with a reputable academic source, I might listen. Web links to conspiracy web sites and pseudo-business writers are not academic sources. Sorry.

We can agree to disagree. You will never convince me that banks like Wells Fargo and Chase have hocus-pocus magicians that magically conjure money out of thin air. No, these banks are businesses. They are run by private bankers and hard-nosed business elites for a profit.

so, the Federal Reserve education.org is a pseudo whatever to you ??
well ok then, how 'bout YOU provide ANY academic source that defines a Federal Reserve Note.
... how's that?
you claim it, well ok then, prove it ... don't worry, i won't hold my breath.

matter of fact, where are your references in this thread ???
any of them.

like i mentioned earlier, your belief is not necessary ... well, to sustain your delusion, maybe it is.

yes, profit via interest ... which is collected in the earliest repayments, NOT when the loan is paid in full. so, even if the loan defaults, the bank has already made it's profit and is subsequently reimbursed for the "paper" loss.

Yes, profit via interest. Banks also earn profits on investments, the sale of assets, and via other traditional methods such as fees earned, etc.

Regardless, a bank does not typically recoup its losses when a loan defaults, even though - as you do correctly state - the bulk of the interest is collected in the first 10 years. Just run the numbers. Even in the first 10 years of the typical mortgage loan, the bank has yet to recoup the dollar amount funded at closing. (I have given several examples of running these numbers in prior threads, but do the math yourself.)

all of which were either provided by the Federal Reserve's initial investment in the institution or purchased by the institution with the profits provided by their customers ... yeppers, they did that all themselves, rather invest in their community, their customer service or their client's advantage.

Fed's initial investment? No, small banks get started by private investments from individual investors, not from the Fed. Again, you are clearly mistaken.

Profits earned by banks from legal contracts are no different from profits from any other business that earns income from services rendered. And, yes, banks do invest in communities, by providing capital to entrepreneurs to purchase real estate, buy equipment for expansion, and by providing a whole host of credit facilities to help the entrepreneur continue to expand and grow.

Banks also do invest in their communities. In fact, some of the biggest mega-banks spend tens of millions of dollars in charitable donations to the United Way. This is a little known fact, but a fact nonetheless.

well ok then, how 'bout YOU provide ANY academic source that defines a Federal Reserve Note.

Take a basic accounting course at your local community college and learn what an Asset and a Liability is. Then perhaps we can talk with some level of intelligence. Until then, my friend, there is no use in discussing the matter further. You can't argue with someone that cannot understand basic accounting, or who cannot comprehend what an Asset and a Liability is. There's just no point.