(via oxyidiot)

STRETCH (via shawnblog)

pegobry:

johncarney:

Over at Clusterstock, we give a lot of thought to the future of banking. So many banks have gone bust this year that there seems to be an opportunity for starting a bank that would run very differently.

One obvious strategy would be to radically change the online banking experience. Most bank websites are clunky and unfriendly. The user experience could be vastly improved. Having, for instance, something like a Microsoft Money application would be nice. Between credit cards and ATMs, my bank knows where almost all my money goes. So why isn’t it tracking this for me, displaying it graphcially, and allowing me to consider what would happen if I shifted money from one activity to another?

Over at Continuations, Albert has been trying to conceive of a disruptive bank. There are some good ideas being discussed, particularly about how to make customers happier with the fees. But the main idea seems to be to separate the functions of a deposit bank and a lending bank. What he seems to have in mind is a 100% reserve bank that wouldn’t lend out the money of its customers. This would mostly mean eliminating interest, which is a substantial cost for customers. It’s not clear at all to me why this would benefit customers, especially since deposits are covered by FDIC insurance.

Albert suggests allowing customers who want to earn interest be allowed to select various lending schemes with part of their money. This would make participating in fractional reserve banking more transparent. But, again, its a lot more work for bank customers without much upside. I could see a certain type of libertarian being philosophically attracted to this kind of bank but its clearly not for the general customer.

Still, it’s good to see smart people trying to rethink banking.

(via navsmusings)

Three words: Zappos of banking. Put everything into customer service.

mudwerks:

Skimmers: Here’s What A Card Skimmer Looks Like On An ATM | Consumerist

“A lot of you have been asking to see what a skimmer looks like before it’s yanked off an ATM. Are they easy to spot or virtually unnoticeable? Our reader Timeus works for a bank and deals with this sort of thing every day, and he sent in the following photos. Enjoy…”

[lots of pictures and explanations…scary stuff…](m)

adamiss:

heyitsnoah:

How polite.

Attn: Bank Robbers [PIC]

neoncrayon:

theonlyamaris:

poortaste: While Americans lined up this weekend to shell out over $70 million dollars for Fast and Furious Part 4, this happened.

sangwonyoon:

georgiegirlnyc:

Spotted among the anti-banking and God-knows-what-else protests in London.

(via 2oceansvibe)

bowlingalleylawyer:

billda:

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He’s been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with “adverse” consequences if its chairman persists. That’s politics talking, not economics.

scary goings-on that too many people are ignoring/sweeping under the rug…

dominilucy:

Thank you for jerking me over fuck faces.

azspot:

To be sure, most of A.I.G. operated the way it always had, like a normal, regulated insurance company. (Its insurance divisions remain profitable today.) But one division, its “financial practices” unit in London, was filled with go-go financial wizards who devised new and clever ways of taking advantage of Wall Street’s insatiable appetite for mortgage-backed securities. Unlike many of the Wall Street investment banks, A.I.G. didn’t specialize in pooling subprime mortgages into securities. Instead, it sold credit-default swaps.

These exotic instruments acted as a form of insurance for the securities. In effect, A.I.G. was saying if, by some remote chance (ha!) those mortgage-backed securities suffered losses, the company would be on the hook for the losses. And because A.I.G. had that AAA rating, when it sprinkled its holy water over those mortgage-backed securities, suddenly they had AAA ratings too. That was the ratings arbitrage. “It was a way to exploit the triple A rating,” said Robert J. Arvanitis, a former A.I.G. executive who has since become a leading A.I.G. critic.

Why would Wall Street and the banks go for this? Because it shifted the risk of default from themselves to A.I.G., and the AAA rating made the securities much easier to market. What was in it for A.I.G.? Lucrative fees, naturally. But it also saw the fees as risk-free money; surely it would never have to actually pay up. Like everyone else on Wall Street, A.I.G. operated on the belief that the underlying assets — housing — could only go up in price.

That foolhardy belief, in turn, led A.I.G. to commit several other stupid mistakes. When a company insures against, say, floods or earthquakes, it has to put money in reserve in case a flood happens. That’s why, as a rule, insurance companies are usually overcapitalized, with low debt ratios. But because credit-default swaps were not regulated, and were not even categorized as a traditional insurance product, A.I.G. didn’t have to put anything aside for losses. And it didn’t. Its leverage was more akin to an investment bank than an insurance company. So when housing prices started falling, and losses started piling up, it had no way to pay them off. Not understanding the real risk, the company grievously mispriced it.

In short, AIG had a quarter of a trillion or more in insurance payouts and triggers it owes — and had absolutely NO MONEY put aside to cover it. And because this money was owed to banks, pension funds, and other critical financial institutions — who themselves used it, since it was absolutely safe and insured — to leverage their OWN house of cards — someone has to pay it. Because if you thought the US banking system was shaky before, AIG defaulting would be the explosion that destroyed the modern world.