Scenario: You've been saving for five years with the intention of buying your dream home, and since you're conservative with money, you're sitting on an old school LARGE down payment of $60,000 cash. All parties are ready, the moving plans are made, and your old house is already sold. You wake up on transaction day and head to the bank to procure your cash. When you arrive you're stunned to see the doors locked, with a note stating that they have ceased operations effective immediately. You are given a contact number for the FDIC.
In a panic move, you try the ATM machine for some walking around money... it's turned off.
This has just ruined your entire week, potentially your month. Since you now have to proceed through bureaucratic hoops in order to secure your own cash (the cash that belongs to you, after all), the entire home process is off, pending a resolution. You call the moving company to cancel, then the purchasers of your current home with the hope that you can stall for a while.We all have a reasonable expectation that we can access our own money whenever we need it. Most of us take this for granted on a daily basis. We swipe the card and it works. Every time.
Since we all should know by now that this cavalier approach is misguided, I will float a new question:
Should the access to our money on a daily, even hourly, basis be as regulated as the power that flows into our house? Should we be stripping as much uncertainty out of the process as possible, even if it means over-regulating?
A prominent writer (and pioneer of derivatives) believes we now have no choice.
On Wednesday's Charlie Rose, Nassim Taleb, author of the acclaimed The Black Swan, proposed the idea that we are entering the era of "Capitalism2." After the failure of the highly speculative and over-leveraged "Original Capitalism," we are being forced by the current economic collapse to adapt a new way of looking at banking in America.
In Taleb's words:
It will be very different. Number one, banks will be utility companies, because we no longer will tolerate privatizing the gains and socializing the losses anymore. If you and I are going to bear the losses of bankers, we don't want to pay them bonuses for five or six or seven years, and then bail them out. Banks are going to converge with utility companies, because if you go to Detroit or LA you want to be able to get cash from a cash machine. It's a utility.
Article comments
— go to most recent comments1 - Dave Nalle
Interesting article, Dave. Not sure how boring natural gas companies are, though. Once you get away from major cities it's the wild west for those of us using propane. Multiple suppliers, lots of market competition - hell you can even get it at Home Depot or the local grocery store in a pinch.
But that's all really beside the point. The argument that banks become part of the public trust when they start accepting services and support from the government - even if only FDIC insurance - seems awfully valid, even if we don't like it much. The particularly irritating downside of this is that it means more government interference in the banks, and there's already way too much.
What really ticked me off earlier this month was that I deposited a sizeable check from a client and because it was over a certain dollar amount they decided to hold it for the incredible span of 7 business days for part of the total and 10 for the remainder. And this is something they're required to do by the feds because of concern over fraud and drug and terrorist money. This despite the fact that they could verify the funds in a matter of seconds electronically. If I'd deposited a check for $2000 they'd have given me access to all of it immediately, but because it was over (I think the cut-off is currently $3000), they gave me only $100 and held the rest for almost two weeks. Ridiculous.
More government involvement means more government intervention and more bullshit interference with our finances.
Dave
2 - bliffle
One might well ask why the feds have the brass to interfere in the flow of your money. It's one thing to spy on that money, it's another to hold it up like that.
When I was a lad we used to say that could only happen in (shudder) Communist Russia.
Now we have it right here. Brought to you by Good Republican Americans.
Control Freaks: They're everywhere.
3 - Baronius
The argument behind regulation of utilities is that they are natural monopolies. They will always be able to produce the next unit of, say, energy cheaper than a competitor. That's not the case with banks, so they shouldn't be treated as utilities. Anyway, who says that this credit hiccup constitutes the failure of "capitalism1"?
4 - Clavos
Dave #1,
I ran into the exact same problem last month.
I sold a fairly substantial boat which closed on November 25th. My bank did the same as yours, except that they said all deposits (not necessarily just individual checks) in excess of $5,000 will be held. They released it to me in three stages: $100 immediately, then $4,900 after five business days, with the balance after ten days from day of deposit.
I only got full access to my funds a few days ago.
5 - Dave Johnston
Good comments...
@Dave Nalle - my bank recently began doing a very similar float routine as yours on almost all significant deposits, and the first time you notice it when you're depending on using the funds can be quite frustrating. In some ways this type of policy actually encourages customers to use their open lines of credit for liquidity while waiting for their actual money to clear...think about that one. Not really a pro-consumer approach in the long haul.
I think Taleb's view that we're moving to a society that welcomes government regulation to "prevent risk," because the ATM is a utility, is quite frightening.
6 - pablo
Re 1, 4, and 5
Velcome to the New World Order fellas. Oh and a special link just for the cynical jabber Clavy, how the New World Order is now being taught openly in public schools. New World Order being taught in public schools
Gary CFR Hart, one of their chief minions, and one of the creators of the first USA Patriot Act along with former US Senator Warren CFR Rudman, openly proclaimed within a week of 9/11 that this would be a perfect time to bring in what former President George W Bush called the "New World Order".
When recently asked about it a Border's book signing he denied ever saying it! Talk about being in denial and being a liar Hart takes the cake, one only has to videogoogle Hart and new world order to see his famous original quote.
So you boys, Nalle and Clavy keep on denying the obvious, I could give a rat's ass, but just like to rub your face in it as it gives me pleasure (I know I am a sucker for cheap thrills), as these globalist fascists get ready to roll right on over ya boys. Have fun! I sure am, hehehe.
7 - Clavos
I'm a globalist too, pablo...
[Clavos, please be a good boy and don't mess with commenter names.]
8 - Cindy D
Dave,
And this is something they're required to do by the feds because of concern over fraud and drug and terrorist money.
The bank is lying to you if that is what they told you.
My funds turn over within days regardless of size (even check amounts of about $8500). Not all accounts at my bank turn over in days. And our account at another bank turns over like yours, not withing days but with x amount then more at x days, then 10 days, blah, blah...I don't even pay attention because it's too long. That is why that bank only gets our payroll account.
Preferred customers can negotiate and get speedy turnarounds. We have this arrangement with one bank. No laws at all interfere with it. It's the bank's decision, whether they find it lucrative to give you preference or use your money without you being able too.
It's a Capitalism thang. Ask around (go through a manager) you can do better.
9 - Cindy D
Pablo,
I am diligently working on an article. I guess globalism will be the focus. Because there are so many ugly facets of Capitlaism, but none has caused more harm and destruction of rights than globalism.
Stay tuned. I'm still a ways away having not only gotten the flu, but I am also somewhat overwhelmed by what to include and what to let go. Besides that I end up reading for days and days before I write anything at all.
Besides, my computer and my router have both decided to play tricks on me. Damn technology.
10 - Cindy D
...but none has caused more harm and destruction of rights than globalism.
Well, they have, but nowhere is it easier for even the feebleminded to see clearly.
11 - Dave Johnston
If by "globalism" we are talking about more people trading more goods and services across the entire globe, in the manner they so choose and at low tariff/taxes...then I am a fan.
If we mean supermegamassive legislative bodies and regulation, then not so much.
12 - bliffle
in re: #11 " Dave Johnston:
How can globalism and wider trade NOT lead to more massive international controls?
The very traders and customers will demand it.
Like control of armies from distant capitals to 'protect' traders as they encroach on less favored traders. To suppress rebellion as mere citizens complain of traders raiding their natural resources, polluting their streams and filling the atmosphere with soot.
Armies from distant lands who look different, don't speak your language, and don't share your values. They may enjoy raping your women and killing your children. Or maiming them by cutting off arms.
Once globalized, you will own nothing. You will have sovereignty over nothing. You will be enslaved.
Good luck, sucker.
13 - Clavos
Armies from distant lands who look different, don't speak your language, and don't share your values. They may enjoy raping your women and killing your children. Or maiming them by cutting off arms.
Once globalized, you will own nothing. You will have sovereignty over nothing. You will be enslaved.
Take your meds, bliffle, you're going off the cliff of hyperbole again.
And just out of curiosity, over what do you "have sovereignty" now, besides your own home (and even your home is subject to taxation and can be taken away from you for failure to pay the taxes)?
14 - bliffle
At best, you have a very weak sovereignty over your home (as any victim of the recently devised mortgage crisis will attest), but you have some small say, even if you must fight for it constantly.
On the other hand, under the New World Globalization Order terms will be dictated to you from, say, Brussels. Or perhaps Peiking. If you seek recourse you will have to journey there and sit on their doorstep with a petition for 10 or 20 years hoping for an audience with the New Pope of Global Commerce and Financial Purity. No doubt your petition will be rejected because of your various crimes against the new Global State and your generally low character.
I, on the other hand, have a better plan: being dead by that time. By careful selection of parentage I have assured that I will live long enough to have tried almost everything I ever wanted to try, and not so long as to become a gibbering idiot dependent on my children.
Ta ta.
And once again:
Good luck, sucker.
15 - pablo
#7 Clavy
Of course I am not surprised you are a globalist clavy, as well as a peasant elitist. It is more people such as you that are the problem in this world globalist fascism that is sweeping the globe, as you are indeed one of their minions, not to mention your murderous activities in Vietnam decades ago, when you actively participated in killing human beings and burning them alive with napalm, you should be ashamed of yourself, however you have lost your own humanity, and are lost. I pity you, more than dislike you.
16 - Clavos
On the other hand, under the New World Globalization Order terms will be dictated to you from, say, Brussels. Or perhaps Peiking.
I see no difference between any far flung city and Washington. It's more likely to be Peking than Brussels. In another 20 or 30 years, the Chinese will own the world, if they are able to sustain their present rate of growth.
17 - Clavos
Aawww, pablito, you're such a silver-tongued devil.
you should be ashamed of yourself
I know, I know. But, like most murderers, I'm not.
18 - pablo
I know Clavito, cuz you lost your conscience long ago buddy,
19 - Clavos
I don't think I ever had one, pablito, they tend to be inconvenient and get in the way.
20 - pablo
Well at least your honest about it Clavy, I will give you that much.
21 - Mark Eden
Perhaps one of the comments censors will take the time to explain how Pablo's #15 above is not a personal attack and why it has been left up for as long as it has.
22 - Dave Nalle
Gary CFR Hart, one of their chief minions, and one of the creators of the first USA Patriot Act along with former US Senator Warren CFR Rudman,
Quite an accompishment when he left the Senate 15 years before it passed.
openly proclaimed within a week of 9/11 that this would be a perfect time to bring in what former President George W Bush called the "New World Order".
What Pablo will likely never grasp despite its obviousness is that what Gary Hart and George Bush and the CFR mean when they say 'new world order' and what Pablo's controllers at the JBS have trained him to think they mean by it are two very different things.
Dave
23 - pablo
Mark 21
If you would care to look over the past 6 months at some of the comments that Clavos has directed at me, perhaps you would be a little more restrained in your haste to have me edited.
24 - pablo
Nalle post 22
Hart and Rudman originators of the USA Patriot Act
Sigh, I know I have to do all your political research for you Davey. You are quite right however in that Hart was no longer a sitting US Senator when he first tried to create this monstrous fascist piece of legislation, but Hart and Rudman were the creators of it.
In regards to Bush, Hitler, Hart, Rockefeller and others of their ilk using the term "The New World Order", you draw your own conclusions about it as I do, and I maintain that this terminology means one and the same thing, and brought to us by the Rothschilds family, in conjunction with Jacob Shiff, Koehn and Loeb, and JP Morgan.
As I also pointed out The New World Order is now openly being taught in textbooks in our public school system. Nothing like the blind who refuse to see, oh that's right your not capable of it, cause your blind! smirk for davey
You might have saved yourself a bit of embarrassment had you just googled Hart and USA Patriot act buddy, however Nalle doesn't get embarrassed does he?
My political acumen buddy leaves yours in the dust, any day o the week pal.
25 - pablo
I would also like to point out the George W Bush when he originally used the phrase The New World Order was on September 11 1991, exactly ten years to the day before 9/11.
Coincidental? Yes as coincidental as the Bin Laden family doing business for over 20 years with the Bush family, as well as being part owners of The Carlyle Group. I tell ya Davey, some people (YOU) will believe anything in your denial of the obvious.