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Take Your Camera To The Bank

Bank vault 470Let’s have some fun with privacy.  But first of all, let’s be reasonable. We don’t expect privacy when we take a walk down town or drive into the city. That’s important, because a “reasonable expectation of privacy” is often the basis for judicial decisions on privacy.

But do reasonable people expect to be followed continuously by a policeman?  That’s what happens whether you’re a pedestrian on the sidewalk or a driver in a car. Police departments have access to municipal cameras posted all over town and they can follow a person or a vehicle quite nicely. And don’t think you’ll escape surveillance because they’ll fall asleep from boredom. They have excellent software that takes the drudgery out of finding and trailing you.  Furthermore, they can make arrangements to be connected to commercially owned cameras positioned in stores or outside or in parking lots.They have you covered.

But the invasion of privacy is all in one direction. Have you noticed? Your government and the commercial enterprises that surround you, such as your bank,  are permitted take your photograph and invade your privacy, but you’re not supposed to  invade theirs in return.

The next time you go to the bank, take a camera with you and photograph the employees and the interior of the bank. After all, the bank is run by reasonable people who don’t expect their customers to be blind and not able to see their surrounding. So take a camera along and start taking photographs. If you take photos with your smartphone, you’ll be able to upload them! Work fast.

JPMorganChase, Jamie Dimon, & Chicken Little

Chicken Little

Chicken Little

We’ve called on our financial adviser, Chicken Little, for views on JPMorgan Chase’s loss of $2 billion in a trading mistake:

First we have to put the $2 billion in perspective. Jamie Dimon, the CEO, and all the others at JPMorgan Chase will be happy to tell you that $2 billion isn’t much of a loss when you consider that the bank had revenues around $90 billion over the past year. And, yes, we know JPMorgan Chase stock (JPM) has gone down, losing the company almost $20 billion in value, but it’s already on the way back up. So why are so many people upset about $2 billion?

Maybe it’s because the median household income in the US is $46,326. Let’s call that $50,000 just to make the math easier. Now, if you divide $2,000,000,000 billion by the median household income of $50,000 you get 40,000. In other words, that trading mistake equals the sum total of the year-long income of forty thousand households. (That’s a lot of households. Maybe you should check the math. We did. We kept coming out with 40,000 households.)

When Obama said that JPMorgan Chase was “one of the best managed banks”

Jamie Dimon

Jamie Dimon

and Dimon “one of the smartest bankers we’ve got,” the President was reflecting what most people in the banking and financial industry have been saying for years. After all, JPMorganChase was one of the largest banks that did NOT need a bailout,and Jamie Dimon has steered the bank through very troubled financial waters with great success.

It may be that Jamie Dimon had come to that point in his career where he believed he was as wise at investing and at managing risk as other people said he was. No matter the profession, when your work earns you continuous year-in and year-out praise as “the best,” and when you’re paid millions upon millions, you can believe that you simply do no wrong. Your colleagues grow deferential and no longer challenge you, nor do the directors on your board. That’s when you make a mistake, make the wrong assessment of risk, make the wrong bet, and then make another to cover the first. And another to cover the second.

Our prudent financial adviser believes that even pieces of the sky can fall.

It’s Happening Again

Money bagUnless you’re a banker, you probably haven’t noticed that some banks are getting another helping hand from tax payers. A couple of years ago we citizens gave loans to bankrupt banks so that they could look solvent. That was called the Troubled Asset Relief Program. (Troubled Asset sounds so much nicer than flat-broke or busted.)

Nowadays those same banks, having been to the brink of insolvency, won’t lend unless they’re very, very, very sure they’ll get it all back with interest. As a result, small business are justifiably complaining that banks aren’t lending money, even when it’s a safe bet they’ll get repaid. Small businesses create the bulk of our employment, so when they’re not getting the money they need, our economy moves at a crawl.

To fix this, Republican Sam Graves (he chairs the House Small Business Committee) came up with a plan to help banks make loans to small businesses. The Graves plan is simple: give money to banks at almost no cost to the banks.  But wait! That means  banks can take these new low-cost loans and use the money to pay off their Troubled Asset Relief Program debt!

Banker by Orozco

Banker by Orozco

The Boston Globe reported that a Boston bank “has applied for more than $4 million in funding from the new program to replace the $3.5 million it received through TARP. The bank said it expects the funds to cost just 1 percent a year under the new small business lending program, compared to the 5 percent it pays now (and 9 percent in 2014) under TARP.”  Now that’s banking! And that Boston bank is not alone in knowing a good thing when they see it. The Treasury Department said has received 847 applications, including 315 from banks still holding TARP money. Oh, mercy!

More Notes

Tim Carmody, in his excellent piece, "How Haiti Became Poor", notes that President Trump's racist policies and vulgar language have sullied the word "shithole" which used to be one of the all-time great swear words. He's right. It's another terrible power this careless President wields.