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EYE-BALL Guru on – BANKS … Desperado’s inflicting more pain for their own mistakes …

October 1, 2011
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Title:
BANKS … desperado’s inflicting more pain for their own mistakes …
World's best treasurer: Wayne SwanBanks – Global Banks are the new robber-barrons of the World.

Make no mistake – they are all fighting for survival in the wake of the GFC – even though they are largely responsible for taking the Worlds Financial Markets to the brink of an armageddon that still might destroy 150 years of commercial advancement.

For far too long BANKS have plundered their depositors – the fee income structures within the Banks are nothing more than silent theft – stealing by another name.

The Banker was always a trusted business in any community – but that evil doer called ‘greed’ became their devilish instinct.  Not only were Banks in need of depositors funds to do business – they found a way to charge customers for the privilege to deposit for safekeeping – and to have access to those funds should they have a need to spend their paid income.

FEE income for Banks is something they now rely upon to balance their spend – just as State Governments have come to rely on the gambling habits of their taxpayers to balance their budgets.  The ‘FEE’ menace should never have been allowed to get to the point it has.

A true BANK profits from lending the monies it holds on deposit.  If the gap in that transaction does not cover the Banks operating costs – then the Bank is either paying too much for its deposits – charging too low a cost to borrow – or is a Bank that makes bad loans and pays its staff too much.

To resort to ‘FEE’ based revenues is not justification to cover the costs for the ‘greedy’ big bonus’ – flashy cars, offices, shareholder content and all the other trimmings Bank Executives believe is their just entitlements.

The overnight story on the BBC wire about Bank of America introducing a cap fee on Debit Card purchases – is another ‘FEE’ introduced to bolster a failing ‘bottom line’ – [see story below].

BBC

Bank of America shares fall amid debit card fee anger
30 September 2011 Last updated at 20:05 GMT-

Shares in Bank of America have fallen 2%, a day after it announced plans to charge debit card users $5 (£3.20) per month to pay for their purchases.

Bank of America, the largest US bank by deposits, said it would introduce the fee early in 2012.

The move comes ahead of a new rule that will limit how much lenders can bill retailers for customer debit card transactions.

The bank’s debit card holders will still get free cash withdrawals.

The monthly charge will apply to users of Bank of America’s basic bank accounts, and will be in addition to any service fees they already have to pay.

A number of smaller US banks, such as SunTrust, a regional lender based in Atlanta, have already introduced charges for debit card purchases.

Bank of America said the new fee will be rolled out on a state-by-state basis.

This represents another betrayal by Bank of America and all those who wish to follow – more indications of just how bankrupt the Banks are – both as a moral standard and as acceptors in the responsibility of the cause of the GFC.

Bank of America – were one of the Banks bailed out big time at the height of the GFC – the Saudis and Chinese came to their rescue early in the piece paying more than $15 a share and up to US$20 a share to inject much-needed capital.

Bank America shares are quoted today at US$6.12 – well down from the US$50+ levels pre GFC – [see Bank of America 5 year share price chart] –

Not only does the Bank profit from the Merchant fees it charges the seller of the goods – be it that its Merchant arrangement might be with a different Bank – Bank of America is again that close to collapse it sees a need to lift fees charged to deposit customers to survive.

Banking Regulators have failed miserably if they allow this proposed ‘fee’ levy to happen.

For far too many years these same Regulators have stood by and let Banks become dependent on FEE driven income – it was wrong 30 years ago when it first started as a way for Banks to recoup some of the R&D into computer systems – and it is still wrong today.

Banks are in the business of lending money – that is and should be the only way they make their money off of deposit and borrowing customers.  Merchant fees to facilitate grocery shopping and the other spending habits of Bank customers should be catered for by the merchants eager to hep their customer pay for goods.

If Banks can’t make themselves profitable in this way – they suck at the Banking business and should be hounded out of the Business.

If the deposit rates were lower and the lending rates higher and all the fees in between were rescinded – than customers would know if they could afford a loan or if they should take their funds elsewhere.

But this monthly fee structure and the constant transaction fee levy is a burden the customer only really finds out when they look at their Bank statement – which you also have to pay a fee for today – is criminal in its intent – and a wicked impost on customers who are forced to have a Bank account in which their pay is credited to.

If it were me – give me my pay in cash – and let the employer pay the cash delivery fee and Bank charges to meet the payroll obligations.

This ‘creep’ has gone on long enough and customers should withdraw their funds and go to a Financial Institution where such fees are not charged.

Shame on the Regulators – shame on the Bank Executives who think these levy’s warranted – and shame on all who prosper from this ‘greedy’ and ‘grubby’ excuse for a quick money grab.

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The EYE-BALL Guru …

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  1. Firecracker
    October 1, 2011 at 8:58 am

    Hi Guru –

    This story should get some feedback – everybody hates a Banker and Banks in general … great post …

    Firecracker …

    PS – Confucious says – Banker who wants to visit ‘knock shop’ and tries to use Merchant arrangement to not pay – is a Banker we all call a ‘WANKER’ wanting a freebie …

  2. oztruth
    October 1, 2011 at 12:55 pm

    I agree, great article. Interesting to note Warren Buffett is bailing them out aswell – 5 billion a couple of weeks ago. This tells me his mates at Goldman Sachs are going to print themselves and their banking buddies some more money – big bonuses and yachts allround. I can’t see Buffett giving 5 billion to a bank that is going bust, without insurance from the Fed owners.

  3. October 1, 2011 at 1:16 pm

    Thanks Ozthrth –

    Banks operate without a moral compass – they have only one aim – growth to feed shareholder returns – that in turn feed their Executive bonus clauses …

    This is the heart of what is wrong …

    Will keep pounding the door …

    EYE-BALL Guru

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