Tag: banks

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Do You Feel Rooked?

If not today, you may soon. The sudden shakeup toppling several banks was long foreshadowed. Classic run ruined Silicon Valley Bank less than two weeks ago. Dominos fell. First Republic required $30 billion bailout to avoid similar fate. Regulators took over Signature Bank, which was besieged by cryptocurrency losses. Over the weekend, 166-year-old Credit Suisse agreed to be acquired by UBS, in a $3.2 stock swap that is a mere pittance.

Long before the SARS-CoV-2 (severe acute respiratory syndrome Coronavirus 2)/COVID-19 pandemic, I told my wife that too many companies, banks among them, had assumed too much debt during the long period of low interest rates. Wall Street Journal story “First Republic, SVB, Credit Suisse Show How Higher Interest Rates Caught Up With Banks“, dateline today, affirms my hypothesis and gives analysis you want to give some attention.

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The Lost Dog and the Ukrainians

Rarely is the frequency with which I go to one of the local banks. But need pulled me across the bridge over Washington Street into San Diego neighborhood Hillcrest, where I and others looked on gasping at the most terrifying spectacle: A little dog frantically running up Vermont from Robinson and then zigzagging into moving traffic along University Avenue.

Cars braked, pulled to the side, and honked. I was sure the lost pup would get hit, but somehow he (or she) sprinted into the Hub plaza unharmed. I followed along, hoping to corral the animal to safety. The dog ran around the side of Ralph’s Supermarket and disappeared. As I pursued, a woman pulled her car alongside and asked about the animal. Was I following? She was late for an appointment but said she cried seeing the poor thing. I explained my intentions.

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You Don’t Need Overdraft Protection

I knew it! Today’s Wall Street Journal story “Wells Fargo Managers Pushed Overdraft Services” exactly recounts my experience as the bank’s customer. Few years back, during a routine phone call, a banker offered to add overdraft protection to my account. She pitched it as an important benefit. I paused and replied that the account never overdraws. But she pressed, encouraging me to take the service—and did so four more times.

See, we had an exchange, where I pushed back hard. “If I overdraw the account, you don’t pay, right?”—being well aware of the 2010 Federal Reserve regulation regarding overdrafts. If customers don’t opt in, the bank doesn’t pay the bill and there is no fee. “You can charge only for overdrafts if I sign up, right?” She sidestepped, at first, avoiding the answer and touting the benefits to me.