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Sunday, October 04, 2020

Mailvox: a warning sign

A reader writes about an observation he has made in his travels through various small towns:
I don't know what is going on but something is happening below the surface. Locally, the various banks have been shutting down branch offices all over. In the small towns, who owns the prime property at the intersection of Main and State Streets? Banks.

I was talking to someone whose husband ran a branch is a small town. The bank shut down that office. He got out of finance. In a small town of 5,000 in the borough and another 5,000 or so in the township, a big player shut down its branch. That property is now up for sale. That office had been in existence as long as I can remember.

This town used to have in the early 80s a Chevy-Oldsmobile, Ford, Dodge, Chrysler-Plymouth, and Pontiac-Buick dealerships. All are gone now. The Chrysler dealership built a new building in another small town in the county. The original location deals only in used cars now.

Something is up with the banks.
Banks don't make their money from deposits anymore. And increasingly, they don't make money from loans anymore. So there simply isn't any point in maintaining branches for service to non-revenue-producing customers who have no savings and can't take out any more loans.

It's interesting that they're trying to sell the real estate, though. That tends to indicate that they need cash. It won't be even remotely surprising if the next financial crisis starts later this month; I would be very surprised if it didn't start before the end of 2021.

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68 Comments:

Blogger JD Curtis October 04, 2020 12:33 PM  

Milo posted on Telegram earlier that Santander just deplatformed him.
They cut him a check for what he had in the bank and basically told him to take his business elsewhere :-/

Blogger "William Berke" October 04, 2020 12:41 PM  

I have a solution, they could redistribute what is considered wealth based on how much attention people pay to a electronically disseminated narrative of their choosing. Most of the American nation's espionage laws are no longer enforced, this should make things easier for foreign capital interests to reward people for rejecting American society and spending their time whistleblowing to alien spy networks instead.

Blogger Cy True October 04, 2020 12:45 PM  

Jackson killed the bank but the bank came back!

Blogger borsabil October 04, 2020 12:45 PM  

Central banks are already providing funds directly to consumers and businesses. It's limited at the moment but it's rapidly growing. Monetary easing policy serves no purpose in a ZIRP world, so in a few months, a year tops, your nation's central bank will be writing your mortgage and car loan.

The retail banks serve no useful purpose in the real economy. They're making their money in the stock and capital markets, essentially less ethical forms of gambling. The only sensible thing to do is to put them out of their misery and set up a proper sovereign bank.

Blogger buzzardist October 04, 2020 12:49 PM  

There are precious few local and small regional banks anymore. All of them were bought up by big players 20 or 30 years ago. In most areas, I suspect there is little or no competition outside of big banks. Much of personal banking has moved online. Big banks have little need to keep open branches that serve 5000 or 10000 people. Interest rates have been kept artificially low to prop up the financial markets, which benefits the big banks and prevents small banks from entering markets or remaining competitive. How is a small bank supposed to subsist on deposits and loans when interest rates are essentially zero? Big banks control most local markets. They needed local branches to gain that control, but they don't need to keep them now that they have the monopoly.

Meanwhile, those same banks have been pressured to pump money to businesses, and everyone is leveraged up the wahoo. Toxic debt is everywhere underneath the surface, and banks are again playing high-risk markets to keep themselves afloat.

Inflate the bubble. Lock in profits. Pop the bubble. Slash interest rates. Get taxpayer bailouts. Reinflate the bubble, and repeat, and repeat. This has been the U.S. (and thus global) financial markets since the 1990s. Each time gets a little more frenzied and desperate as the bankers and politicians have fewer tools and tricks to reinflate the bubble.

But, hey, at least we've all got smartphones and plasma TVs on credit, right?

Blogger Brick Hardslab October 04, 2020 12:56 PM  

How many crisis's are left in the system?

Blogger Out of Nod October 04, 2020 1:02 PM  

The reduction in real estate is something that is happening with big corporations as well. Many are adopting a remote work culture which allows them to reduce costs for office space. It's as if Corona-chan has provided these companies a raison d'etre for poor growth numbers and a need to reset.

Blogger Mauldication Bear October 04, 2020 1:14 PM  

I certainly pay heed to Vox's observations. With a new family and looking to buy a home, I may postpone doing so. We are fortunate to have a family farm as refuge if things become worse than expected.

Paying off the remaining balance in student loan debt is also a tough call with more talk of partial forgiveness in Congress, and the potential for an economic crisis forcing their hand.

Blogger rikjames.313 October 04, 2020 1:16 PM  

Not saying this is what is going on. Just an observation. A friend of mine was midlevel at UBS when they were doing their huge expansion 1998-2005 in the US. The corp ended up buying, either entire buildings or multiple floors in condoized buildings. All over the US, even tertiary markets.

I got to deal with a sale to them of two floors of a pretty nice building, they had a lot of requirements. They obviously intended to be there for a long time.

Except buying instead of renting gave the feds a huge hook to pry into their deposit records. They broke first and took the biggest hit with customer trust.

As for car dealers, the big three started cranking down hard on dealers two decades ago. GM was pissed over the dealers forcing GM BuyPower out when they first tried it, so GM was playing the long game to squeeze the smaller dealers out, and that got a big boost with the bankruptcy.

Same with the other big makers. They, and the banks, don't want to screw around with lots of inventory everywhere, floorplan loans, dealer cash...

I think the end game is to have one or two dealers for every 500k population, more of a showroom, and encourage people to special order anything other than the 5 of each kind of middle of the road stock they keep on hand. The dealer families hate that idea, many of them are third or fourth generation, and most of their wealth doesn't even come from the new car sales. They love financing and add ons, and tradeins/used car sales. Heck, a good special finance manager is their number one most valued employee.

Blogger Better Left Unsaid October 04, 2020 1:31 PM  

Conservative Tree House pointed out that one early critical action Trump did with the help of Mnuchin was to establish a new banking system that would support small businesses as there was practically none of it when he took office. Those same lenders were then used to distribute the Payroll Protection Loans offered as part of the Covid relief package earlier this year.

I'm not sure whether that was a good thing but goes to show how broken the banking system was/is even recently.

Big Banks seem to lurch from one big fad and bust to another. In the 70s it was the Savings & Loan Debacle, then international lending to Banana republics, then junk bonds and on and on. This makes it hard to justify their actual economic value to the country.

Blogger Attila is my bro October 04, 2020 1:37 PM  

>>There are precious few local and small regional banks anymore. All of them were bought up by big players 20 or 30 years ago. In most areas, I suspect there is little or no competition outside of big banks. Much of personal banking has moved online. Big banks have little need to keep open branches that serve 5000 or 10000 people. <<

I don't know if this is true everywhere, or if it's just a product of commie NY regulatory environment, but the Chase banks of the world disappeared from rural upstate at least 30 years ago. But people still need a teller for deposits, etc, and the void was filled by many small credit unions. Then in the past 10 years or so, they've all consolidated into bigger credit unions.

I suppose following this trend, they will start disappearing soon as well.

Blogger bramley bramley bramley October 04, 2020 1:38 PM  

In the UK banks have been pulling out of small towns and villages for at least the last decade, often leaving the place without any way to access cash, as most of the Post Offices left as well. This severely inhibits the abilty of elderly people to access their accounts/pension payments etc., and with regional bus routes also being cut down like mad, it's reaching a crisis point where people with no private transportation are basically left in a cashless desert.

Like you say, Vox, they are not able to make money from loans, so see it as unviable to stay there and function like tradtional banks should, with counter service for withdrawls and deposits.

The major banks have also recently undertaken a simultaneous facelift for their retail branches and now look like estate agents, with open plan shop floor and smiley door greeters, and no cashier's desk. It's weird and horrible, and i bet they are all kicking themselves now for having been previously 100% coronachan safe, but instead having to reinstall partitions and such.

Too big to fail means they must all go. It's criminal the way they operate.

Blogger Doktor Jeep October 04, 2020 1:53 PM  

I recall a short video about Chase bank shutting down branches in NYC, but also pointing out that they would have branches within a few blocks of each other.
Yet the bank that owns my mortgage I never been to, and thought there were no branches. A few months ago I saw an actual branch of this bank and I think it's the only one in the county.
One thing is certain, we don't need so many branches.
Consider also demographics. There was one bank office I used to visit regularly to use the ATM. I noticed that it seemed like there were always the same old people there. I asked a teller about this and was told that these people go all the way back to the depression or post depression era and so actually need to go to the bank with bank book in hand, and talk to a human. Of course being old and retired they had all the time in the world.
These people are checking out. Why staff a bank that's seldom visited?
Whatever happens to the banks, they likely lack the gurantee that they will be bailed out as if by a typical democrat or neocon administration. I actually don't think Trump would tell the banks to pound sand, but he would expect something in return. And that might cut into profits, and somebody might end up with 50 doses of adrenochrome instead of 52. Can't have that now, can we.

Blogger J Van Stry October 04, 2020 1:59 PM  

My spouse worked in banking for almost two decades. They worked for a 'small' bank. When they started to grow, things got difficult, but they managed.

Then Obama came along and pretty much did a great job of shutting them down. It didn't happen overnight, but the federal auditors got worse and worse and eventually, as they got to the point of becoming a 'medium' bank, they were threatened with destruction POINT BLANK by the inspectors and regulators.

And there's nothing you can do about it, but sell.
So they sold out to a bigger bank, who fired -everybody- and closed all the branches but the main one.

What's funny is they were a commercial bank, but they were bought out by a 'personal bank'. Which of course doesn't know a damn thing about business accounts.

I don't know if there are any small banks even left out there anymore. The government systematically went through and did all they could to get rid of them. But I'm sure this wasn't influenced by all those big banks.
Right?

Blogger rikjames.313 October 04, 2020 1:59 PM  

Attila is my bro wrote:But people still need a teller for deposits, etc, and the void was filled by many small credit unions. Then in the past 10 years or so, they've all consolidated into bigger credit unions.

I suppose following this trend, they will start disappearing soon as well.


About 5 years ago I had to go to the federal courthouse in Alexandia, VA for a week.

The National Credit Union Administration and and Patent and Trademark Office complexes for the feds are literally so close to the various lobbying offices, and to investment publications like Motely Fool, that they can wave and call 'Hi' as they go into work.

Blogger ThatWouldBeTelling October 04, 2020 2:04 PM  

I wonder how much this has to do with local economic health, especially the general cost of doing business.

I live in a part of the US that hasn't been severely damaged by COVID-19 and that's very good for low cost of living, and the local bank and mid-sized regional bank I do business with seem to be doing OK, although the latter is closing a branch in a retail location which due to COVID-19 restrictions has got to have seen its foot traffic crater.

My credit union is higher education and in a very high cost of living and doing business area, and has been take steps to reduce its costs, moving its HQ out into a suburb, and is contracting its points of presence somewhat, although with the partnership arrangement it has with other credit unions this probably won't be seriously decreasing people's access to it.

Blogger thechortling October 04, 2020 2:14 PM  

Not sure about the indicator of bank closings. In a relatives backwater town in the US south we had noticed on several visits after the 2008 financial crisis that there was an explosion of new, small no-namer banks. Every year we went, 2 more had popped up. Some of those have been shuttered now but most seem to be still open.

One of the larger banks in that state had already consolidated down to just 3 or 4 staffed locations by about 2018 ... even though our relatives indicated that bank's online banking was stone age to use.

YMMV?

Blogger tuberman October 04, 2020 2:22 PM  

Federal Banks all have 'Charters' consisting of what they are supposed to be doing, and they've all been ignoring those Charters for decades. Wondering what EOs will be created in the near future to hem them back to where they belong. Of course they will fail then.

Meanwhile Trump has been attempting to create a Main Street banking system consisting of small lending institutions and credit unions.

Blogger Newscaper312 October 04, 2020 2:33 PM  

Not sure if this has that much significance.
For most people there is almost no reason to personally go into a bank branch any more, with Direct Deposit since forever, plus phone apps that now let you deposit real checks with a photo and OCR.
Temporary branch COVID closures and reduced hours pushed more people to go online who's been slow.
The people w no bank accounts in the first place still have all the check cashing shops.
Online mortgagors like Rocket Mortgage etc all gaining traction too.

In the opposite direction, last 5-10years or so saw very much the reverse trend here in a mid sized city w new small banks popping up all over. So much so that I wondered if there was really that much new business to be had, or it was a game where investors capitalizing in irritation w the big banks short term, while positioning themselves to be bought out by the big guys again.

Blogger Hammerli 280 October 04, 2020 2:44 PM  

I'm not seeing this much in Deep Southern Maryland. But I do think there's a general trend toward online banking, which significantly reduces the need for having a bank on every corner.

@9: One thing I'm convinced of is that the auto business is their own worst enemy. They have a tendency to count noses...not dollars. Take the area around Naval Air Station Patuxent River, MD. This area has one of the highest average household incomes in the country - mostly because it's the HQ of the Naval Air Systems Command. 30,000 engineers and Naval Aviators, most of whom are pulling down $100K+/year.

The nearest BMW dealer is 50 miles up the north road.

Blogger urthshu October 04, 2020 2:57 PM  

>>>With a new family and looking to buy a home, I may postpone doing so

Depending on what and where it could even be a good time to do that while they're divesting themselves of property.

Blogger Henry H October 04, 2020 2:59 PM  

This may be a dumb question. But should I remove my money from my bank accounts. I know in the Great Depression, many couldn’t get their money.

Blogger Henry H October 04, 2020 3:01 PM  

Should I pull money out of my bank accounts.

Blogger Doom October 04, 2020 3:01 PM  

I could keep some in the bank. But I realized, a while back, when the courts ruled that deposits were loans, and were thus property of the bank really, that keeping my pennies in there was more of a risk than a benefit. I keep as stocked in beans, ammo, and such as I can. Things that currently aren't worth killing for... mostly.

Even so, I can't really keep people out of my house. It will only get worse. I could walk away, but the options available are definitely worse. Druggers to just plain thieves... the closer you get to bigger cities, they thicker they are. But don't think living in the country will save you... especially if they think you have something, almost anything.

Blogger Unknown October 04, 2020 3:25 PM  

6. Brick Hardslab October 04, 2020 12:56 P
How many crisis's are left in the system?



as with the market, the system can remain irrational longer than you can remain solvent
...
if you try to bet against it.

the Soviet Union lasted 70 years. a lot of Russians went from cradle to grave and never knew anything but Marxist Communism.



11. Attila is my bro October 04, 2020 1:37 PM
and the void was filled by many small credit unions. Then in the past 10 years or so, they've all consolidated into bigger credit unions.


while i don't doubt that there has been some consolidation amongst CUs, i think there are also way more CUs than there used to be.

given the laws governing CUs, i don't think the corporate entities are permitted to cross state lines.

which isn't really necessary, given that most of them share access to a common account system such that ( assuming your CU is a member of the shared transaction system ) makes your funds available to you at a walk in teller all across the country.

Blogger SonyAD October 04, 2020 3:47 PM  

JD Curtis wrote:Milo posted on Telegram earlier that Santander just deplatformed him.

They cut him a check for what he had in the bank and basically told him to take his business elsewhere :-/


This should be illegal. To be denied business or service by banks, or any other business or corporation, without having defrauded them or otherwise breached your contractual agreement with them, should be illegal. Especially if you were already in a contractual relationship with them.

And unilateral changes of contracts by companies and businesses, such as Internet Service Providers or other utilities, banks, insurance companies etc. should likewise be illegal. Why does the service provider get to unilaterally change the terms of the contract and the consumer, customer or subscriber only get to choose whether to accept the new terms or cease doing business with that service provider?

Corporations, businesses and other legal fictions get away with far too much and have far too many rights over physical, natural persons. Not to mention that they're not treated the same under the law. As generally, businesses pay tax on profits. Not on income. Whereas physical, natural persons (actual people) pay tax on income and can't just be taxed on what they haven't spent of their wage this month (which would be analogous to businesses' profits and the tax they pay on that rather than their whole income).

Blogger NewTunesForOldLogos October 04, 2020 3:56 PM  

There’s a lot of ruin in a nation. We’ve barely scratched the surface.

Blogger urthshu October 04, 2020 4:20 PM  

>>Should I pull money out of my bank accounts.

My 2 cents
Do what you believe is prudent but be very careful of financial advice from anonymous postings on the internet.

Blogger Crush Limbraw October 04, 2020 5:23 PM  

Financial sector 'uber-alles' - economy be damned!
Who says so? Michael Hudson - https://www.unz.com/mhudson/how-an-act-of-god-pandemic-is-destroying-the-west/

Blogger Uncompliant October 04, 2020 5:50 PM  

Another factor is that Comptroller of Currency has issued new regulations related to the Community Reinvestment Act (C.R.A.). The CRA was passed back in the 70s to get banks to make loans in low income areas. Banks get a C.R.A score every year and a bank's score matters politically, particularly among democratic party politicians.

Until recently, the score and lending obligations were based on a bank's "geografic assessment area" -- where the bank collects its deposits and makes its loans. Put a branch/keep a branch in a rural town that has a depressed business economy, make some loans there and that enhances the bank's C.R.A. score. That loan is probably less risky than the same loan made from a branch in an inner city neighborhood, but the bank gets the same credit for either loan.

The Comptroller has now added a new non-geography-based method of calculating a bank's score. This is intended to encourage online banking but it will also have the affect of decoupling the C.R.A. score from physical geography. As such, banks do not need under-performing branch locations in rural areas to help with their annual scores.

Blogger rikjames.313 October 04, 2020 5:52 PM  

I took two classes in law school from Jimmy White (there were two James J Whites on faculty, thus the fun name), and some seminars later on.

He was the reporter for UCC Article 2A (later UCC permanent board member), and in the 90s one of the real proponents for clickwrap vs shrinkwrap (strongly on clickwrap), but he also was the powerhouse behind 'the corporation can dictate one sided terms'.

And he was right. Now we have auto makers claiming they can control your car maintenance and upgrades after you have paid it off. Famously, the farm equipment manufacturers have such terrible terms of service it is widespread that farmers deal with Russian and Chinese hackers.

Stupid law student me thought all the time studying contract of adhesion (old concept that the powerful can't dictate unfair form terms, now most gone) meant things would be fair with the new tech. Cynical lawyer me knows congressmen and the federal judges will do anything the corporations and gods chosen investors want, no matter who it hurts.

Blogger Rhadamanthys October 04, 2020 5:55 PM  

Its not just banks. When I was a boy growing up in rural England, it used to be that every village, or at least every other village, each had a primary school, a doctor, the policeman's house for a retired constable (whose job in return was to ensure the pubs closed on time and tweak the ears of naughty children), a post office - which sometimes also acted as a small grocery shop for tinned goods and other sundries if a dedicated shop didn't exist. If you were lucky there might be a garage for petrol and mechanical repairs. Eggs, Milk and even bread was delivered to your doorstep, sourced from local producers.

Most families - unless the father was a middle-class professional of some type - lacked a car. Generally it was only men who drove (it was before the days of power assisted steering), but it didn't matter because everyone walked, cycled or took one a buss from the myriad of small buss companies to get anywhere. Lower class folks worked for nearby farms or cottage businesses. Mothers stayed at home to raise the family. Middle aged matrons would find part time employment as house cleaners or dinner ladies at the local school. Few people commuted beyond 10 miles for work.

In short, employment, entertainment and infrastructure was distributed more evenly. And whilst a lot of jobs were often make-do types of employment, everyone _was_ gainfully employed somewhere, somehow.

Then centralisation and economies of scale became the byword. Rural schools, doctors surgeries, police stations, post offices, grocery shops and yep, even bank branches, all began to wither and vanish from the countryside. Everything that was necessary for daily life was pulled into urban centres, supply chokepoints - forcing the rural populace to purchase cars just to survive. With family farms and small scale factories unable to compete in the new economy, rural jobs vanished too, forcing people to move to those towns and cities which had stolen their local services and shops.

All in the name of corporate efficiency and saving government revenue.

When I was born Britain had half the population it has now. It was able to support a distributed rural economy and the necessary services, foundations of a civil society. Maybe not everybody had a car, a colour TV or even owned their own house... but, but, hell, people were polite, charitable, friendly and our taxes covered it.

Today, despite sixty years of industrialisation, an electronics revolution and centralising everything, we have less doctors, teachers and policemen per capita. What happened to all the 'money' that was saved? Why can't we afford even basic services anymore? Why can't we renovate roads, bridges, power grids and the like without yet another tax or service fee hike occurring? Now even hospitals, fire stations and police stations in medium sized towns are being closed down in the name of 'austerity'.

As far as I'm concerned, that the banks are closing their high street branches is merely the final blast of Gjallarhorn.

Blogger Brett baker October 04, 2020 6:16 PM  

Any over the deposit insurance limit.

Blogger Teleport me off this rock October 04, 2020 6:19 PM  

It's pretty straightforward, really: banking in the modern world is organized crime, and if you not in one of the Five Families, you're getting squeezed pretty hard from all directions right now. JPM, Deutsche and the like can eat fines and losses all day because they control the system and can freely manipulate it and frontrun their customers with little worry.

The little people, who don't have the political or financial leverage to play those games and continue to operate the old fashioned way, are dying the old fashioned way: their income is drying up because their customers' income is drying up.

Blogger Zeroh Tollrants October 04, 2020 7:10 PM  

We not only had our small town banks close, but even the Wells Fargo and the Chase bank, and our area isn't a poor area. They're just GONE. There's 5 major chain grocery stores within 10 miles from my home, which seems to be able to be supported just fine, but not a single bank. In 2007, we had 4.


Blogger Canada78Bear October 04, 2020 7:18 PM  

The amusing thing is that indeed banks don't make profits through loans or savings but through Feds funds rates. Banks literally can make money without customers so why even bother to acquire them.
Finally closing out small town branches tells you that they are not planning to reverse course to the cliff.
Also means barter/trade may be in the future.

Blogger bramley bramley bramley October 04, 2020 8:48 PM  

@32

Pete, when do you think the decline started, in your experience? We been having industrialisation for more like 200 years, but the last 60 have been brutal in terms of a shift away from small owner agriculture, domestic manufacturing and self-sustaining communities to service industries, and centralised agglomerated governance & corporations.

Have you ever read Brother to the Ox by Fred Kitchen, or Orwell's Coming Up for Air? Both describe the rapid changes they see in their own lifetimes, and with a profound sense of loss at the disappearance of a whole way of life common across the entire country.

My mum grew up in rural England, near the Welsh borders. She has told me all sorts of interesting things about the life children had back then (post-war), how simple it was, yet so safe. She and her siblings would spend all day just walking about on their own, three kids under the age of 10, going to visit 'aunts and uncles' (no actual relations of ours) on other farms, and not a care in the world or a worry about being molested or harmed in any way. My granddad would drive to the pub and leave the kids in the car outside all evening, bringing them pop and crisps. I've been to the areas around where she grew up and they are eviscerated. Her home village has nothing left except houses, a church and a primary school. No P.O. or shops, and one pub across a busy road a fair walking distance outside the village. To live a normal life requires getting in a car and driving somewhere for everything. It's very wrong.

Blogger lynnjynh9315 October 04, 2020 8:48 PM  

God. I'm finally getting out into the tech field... but it seems too little too late. A 2021 recession doesn't help. I'll be no warlord, but maybe I can fix your broken AC.... This world's going south quick.

Blogger Nate October 04, 2020 9:35 PM  

Checking in from a small town. All our branches are open and fine and two new ones are opening.

Blogger Dole October 04, 2020 10:04 PM  

I don't gamble, but seeing the gamblers who listen to Vox's predictions being reckless while getting richer and richer makes me reconsider the position.

Blogger Sicilian Switchblade October 04, 2020 11:05 PM  

One hundred and fifty years ago if you were dumb or weak you were basically dead.

Technology and an abundance of wealth is what's keeping many people from fading from existence. That and the benevolence of the productive class. If, or rather when tech and wealth begin to diminish in a significant sense there won't be the option of allowing eugenics to occur.

Blogger Ominous Cowherd October 04, 2020 11:49 PM  

Not seeing any of this in Alaska, yet.

Blogger DourCdn October 05, 2020 12:08 AM  

The business of banks is to attract viable people who need loans, the job of the loan manager is to make sure the loans are profitable. Deposits is an aside business, once the loans are created you need a deposit account where the loan amount is deposited. In the past you needed people with local knowledge, but data mining and A.I. will dampen the requirement for employees with specialized knowledge of the local economy.

Blogger DourCdn October 05, 2020 12:11 AM  

Probably any amount above the deposit insurance cut-off

Blogger The Pitchfork Rebel October 05, 2020 12:19 AM  

A couple of things operating "in the background here".

Dodd-Frank has been killing small community banks since its passage, accelerating a trend that started decades ago. Wells Fargo, Chase, Citibank are pretty much symbiotes of the Fed, the OCC, and the rest of the swamp now.

The compliance effort and costs simply cant be efficiently handled by some small community bank. They can't afford to hire enough lawyers and outside counsel fees are outlandish. Fifteen years ago I was on an audit of small community bank, they sold to a larger regional bank because of compliance costs-and that was only in response to Sarbanes Oxley, not Dodd Frank. That bank went bust and was delivered to Santander.

The second thing is the drive to kill cash. Businesses hate money because of the risks associated with handling cash. They are using COVID-19 as a cover to encourage credit/debit card use. Widespread innumeracy and dishonesty creates risks, as does the threat you or you business encounters "mostly peaceful protestors". I work for an enterprise that has a large big city foot print, and we are now using armored car pick ups and smart safes. For a small business, they are happy to take a credit card to be free of cash. If it was 100% debit credit, the C-Suite would dance for joy, despite the fees. They'd have no miscount, theft or counterfeit risks and could do away with the staff dedicated to reconciling the cash and sales.

The war on cash and the de-platforming really makes me think we've entered the age of Revelation 13. How long before they tell us don't worry about lost or stolen cards, get a special tattoo.

Banks are similarly trying to minimize cash and even ATMS. That's why the apps that cash checks are being pushed so hard.

Blogger Johnny October 05, 2020 1:51 AM  

Something like 40 years ago there was a bank in Arizona (as best I can recall) that had about fifty branch banks. The way the thing operated was that the various branch banks made no decisions about anything. All the book keeping and the decisions were sent to the home office. What it amounted to was that the branch banks were customer service oriented sales outlets. Like anything else, it is retail sales. So long as these local banks are viable sales outlets, they will be around.I suppose with electronic banking that function is diminishing.

Because it lends itself to corruption, mainly misleading financial statements, banks are discouraged from the direct ownership of real estate or other non financial assets. Typically all they own are their office and a few foreclosed items in the process of being sold.

Blogger Boaty Bear October 05, 2020 2:20 AM  

Is Mark Stein a (((Gatekeeper)))?

Blogger Bezzle October 05, 2020 3:40 AM  

37. bramley says "Enoch was right" October 04, 2020 8:48 PM
My mum grew up in rural England, near the Welsh borders. She has told me all sorts of interesting things about the life children had back then (post-war), how simple it was, yet so safe. She and her siblings would spend all day just walking about on their own, three kids under the age of 10, going to visit 'aunts and uncles' (no actual relations of ours) on other farms, and not a care in the world or a worry about being molested or harmed in any way. My granddad would drive to the pub and leave the kids in the car outside all evening, bringing them pop and crisps....

It was the era of Ealing comedies; I was always partial to "The Titfield Thunderbolt".

Blogger Avalanche October 05, 2020 8:15 AM  

@16 "partnership arrangement it has with other credit union"

New business idea? The picture that flashed through my mind was the 'rental car' center at an airport. One big single-purpose area/building with kiosks or 'storefronts' for each rental car co.

So, one centralized / center-of-town banking center where banks and credit unions set up their "local branch" in a bank-mall storefront, right next to their competitors.

There'd need to be some hellacious security set up: it's kind-of a bait station for predators, yes? But, perhaps a keycard to drive into a fortified parking lot for the rare personal entry and a separate entrance for the barricaded drive-through lane entries.

Security office outside the grounds, where folks could come in and prove their ID to get or replace a lost a keycard; special facilities to join a bank -- you wouldn't even need a rep for each bank: set a day for Join Chase and Join Barclays and Join WhoverBank... Couple of reps get sent 'outside' to the Security Building to welcome newbies and get them set-up. E-transfers or cashiers checks to fill the new accounts.

Appts could be set for needed in-person meetings out in the Security Bldg. Or, if you already belonged to the bank, drive into the fortess and walk-in for an appt with the mortgage handler or help with whatever...

I s'pose there'd need to be a floor for the credit card co's... they would want in to a money-focused crowd of folks?

Really difficult for rural and outer-suburban folks, but we're headed that way ANYway. I do nearly all of my banking online, even with the military personnel associated credit union that I've belonged to since the 80s; only 12 branches in my state anyway. Currently, the local branch males it nice to be able to go pull cash or deposit a check without using an ATM. All my biz banking is done with that credit union, but once set-up it's all online. Having to drive to a 'banking hub' wouldn't change much.

And, eventually, there would be single-person 'outside offices' where you could do everything but draw cash -- that's what ATMs are for.

Blogger Avalanche October 05, 2020 8:26 AM  

@23 "Should I pull money out of my bank accounts."

I always keep several thousand dollars in my home safe! IF the grid goes down, if the internet is hacked, if there's an EMP, natural or otherwise: having cash on hand will be necessary. Silly side-note: I even keep an envelope called "lawn" in my safe -- so I always have the right cash on hand for my lawn guy. Refill it in spring, top it up late summer.

And it's not like, at 0.6% APR, there's any reason to keep it in a bank!! {eye roll}

But pull all of it? No, of course not. You need to keep a 'hand in the game' for whatever comes in the future... Think of it not as a place to earn interest, but rather a place to saf... ha, I was gonna type 'safely keep' your money, but THAT'S not likely true in the long run! Pray God, it's not in the short run!

Even for something as simple as banks and store credit card machines all down for whatever reason, say a big hurricane or tornado, not even necessarily locally, you NEED cash on hand!

Just as you must always keep your car gas tank at least half full and probably a gas can or two stored and used and refilled regularly to keep your emergency supply fresh.

Basic prepping Henry, do your research right away... time is ticking by!

Blogger Avalanche October 05, 2020 8:31 AM  

@26 "be analogous to businesses' profits and the tax they pay on that rather than their whole income"

I WISH! In Georgia, I not only pay taxes on profits -- I ALSO pay taxes on however much money I have in my bank accts at year-end!! AND they count as "profit" and charge tax on any 'assets' at year-end -- raw parts and finished saleable devices -- you know, the stuff I will be taxed on AGAIN, when I sell it the next year. Very frustrating!

Blogger Avalanche October 05, 2020 8:35 AM  

@31 " Cynical lawyer me knows congressmen and the federal judges will do anything the corporations and gods chosen investors want, no matter who it hurts."

Lawyer Robt Barnes, who appears with Viva Frei weekly on YT 'casts, describes soon-to-be new Justice Amy as "she never met a corporation or prosecutor she'd didn't prefer." Doesn't fill me with hope OR happiness...

Blogger Avalanche October 05, 2020 8:40 AM  

@40 "I don't gamble, ... makes me reconsider the position."

It's a club -- and YOU'RE NOT IN IT!

Banking and the stock market: casino. The House always wins? YOU ain't the House!

Blogger Avalanche October 05, 2020 8:55 AM  

@46 "For a small business, they are happy to take a credit card to be free of cash."

Not all of us. I fob off customers -- maybe even about 1/3 or more? S'pose I should count 'em up -- who want to pay by credit card to my distributors, who all take CCs. It's WORTH to me to give up the 20-30% skim the distributors get to not have to fuss with cards and fakery. The checks I can eDeposit from home.

Most of my customers are companies or individual engineers; and the likelihood of them stiffing me seems slight: thus far at least, which is some 45 years for this company, only one customer never sent the check. And I now take ACH and even Western Union. My overseas customers nearly all pay by ACH or TT as they call it in biz: "Telegraphic Transfer."

One Chinese distributor pays by Western Union: turns out the "fee" for him taking cash to the WU office is substantially LESS than the "intermediary bank" skim -- usually by Chase to get the money into the U.S.!

I also pay my local suppliers and subs by check, which they prefer even if they take cards -- no CC fee! Out-of-state suppliers nearly always CC, but they're bigger co's; my local vendors are small biz like me!

More business types in heaven and earth, Horatio...

Blogger OneWingedShark October 05, 2020 9:39 AM  

J Van Stry wrote:I don't know if there are any small banks even left out there anymore. The government systematically went through and did all they could to get rid of them. But I'm sure this wasn't influenced by all those big banks.
The corona-shutdowns were a good excuse to kill off small businesses, the "small business protection" bailout money went to the subsidiaries of big businesses; and stock-market prices went up. — I think they're trying to make mega-corporations a thing, and the little tyrants think all the better if they can blacklist someone and make sure they can't get a job for 70% of the market.

SonyAD wrote:Corporations, businesses and other legal fictions get away with far too much and have far too many rights over physical, natural persons. Not to mention that they're not treated the same under the law. As generally, businesses pay tax on profits. Not on income. Whereas physical, natural persons (actual people) pay tax on income and can't just be taxed on what they haven't spent of their wage this month (which would be analogous to businesses' profits and the tax they pay on that rather than their whole income).
You're absolutely right.
There is a way to solve this: treating the corporation as if it were a 'person', by which I mean it would be eligible to be prosecuted for Treason. If you did that, and upon conviction and 'death' of the corporation telling the investors "your money is gone". If they try to make a legal claim to the money/assets of the traitorous corporation, then charge them with the Treason (aid and comfort) themselves.

Pete Nash wrote:What happened to all the 'money' that was saved? Why can't we afford even basic services anymore? Why can't we renovate roads, bridges, power grids and the like without yet another tax or service fee hike occurring?
Because the money was stolen, by politicians, by corporate fraudsters, by lawyers, and by banks. — The honest ones got suckered by the "get rich quick" schemes, and the corrupt by the easy graft.



Blogger Maniac October 05, 2020 10:01 AM  

"Not seeing any of this in Alaska, yet."

Joe Vogler was right.

Blogger Ominous Cowherd October 05, 2020 10:16 AM  

Maniac wrote:"Not seeing any of this in Alaska, yet."

Joe Vogler was right.

About poplars being ``damned arboreal weeds?'' Or something else?

Blogger DeepThought October 05, 2020 10:54 AM  

In Central Illinois, I just don't see this BUT we are just starting to see the hallowing out of our industries as the largest private employer is moving everything out of our state fast. 20 years ago, they had 30,000 employees in Illinois with 20,000 of them in Central Illinois.

Currently they have less than 10,000 with about half that in Central Illinois. A crash in school test scores and empty store fronts is just the beginning of the hallowing out.

Blogger Chicken Tender October 05, 2020 11:40 AM  

in the Agricultural export world we are seeing the bank lending drying up. Importers in middle east nations are able to fund purchases but outside of there the other world markets are drying up due to lack of credit available in their central banks.
China is still pulling a lot of food but outside of that there are tumble weeds blowing around.

Blogger ThatWouldBeTelling October 05, 2020 1:17 PM  

@58 DeepThought" Moving, well, anything out of Illinois is only prudent; is that company offshoring, or moving to more sane parts of the US?

Blogger Gospace October 05, 2020 1:58 PM  

On credit unions and state lines- I have accounts at Navy Federal CU, and they have branches in many states.

The banking industry is complicated. I know there are (or were) state banks and national banks, and that at one time there was a significant difference between a bank, a savings and loan association, and a credit union. Credit unions are still member owned, though most members (depositors) are likely unaware they're owners....

Blogger Rhadamanthys October 05, 2020 4:01 PM  

@37

When do I think the decline started? That's a tough question, since societies and economies are constantly changing. If history tells us anything, its that morals, religions, laws and so on gradually change with every generation in a (usually) slow cyclical dance. Empires rise and fall; peoples migrate; religions form, schism and die; rulers are overthrown.

From my perspective I think rural Britain lasted until the end of the 70s. I remember it being a bad decade triggered by the financial woes that followed the breakup of Bretton Woods, the Oil Crisis, and the rocketing inflation and strikes that followed. Most of the social disorder that followed were limited to heavy industrial towns in Wales and northern England. The countryside was still reasonably insulated from rising discontent.

The eighties however saw skyrocketing unemployment, destructive riots and the first armoured riot police. It was also the time that supermarkets appeared, spreading like wildfire and challenging more specialist bakers, butchers, grocers and so on. Meanwhile, the genteel and oft bucolic nature of British TV began to be washed away by the glitz, glamour and shockingly casual violence of American shows. Whilst we all sat mesmerised by the splendid facade it portrayed, it unfortunately planted darker seeds into the British psyche.

Materialism encouraged self seeking greed. Egocentricity eroded social responsibility. Aggressive belligerence trumped good manners. Litigation became a new, sought-after avenue to resolve problems. Whilst I still love many of the Hollywood movies produced in the eighties, I am sad to say that US media thoroughly corrupted British culture. The British atheist backlash against Christianity (for both its hypocrisies and intolerance of more permissive social trends of the time) meant that there was no defence against this hollowing out of national character.

By the start of the nineties, despite a feeling of optimism with the fall of the USSR, the British economy was buggered. Unemployment was once again reaching the heights of the 80's and this time, it finally killed off rural self-sufficiency for once and for all. Almost all employment could only be found in towns and cities. Once that occurred the social cohesion of the local village died(*). Most of each adult's day was spent commuting and working away from the place you lived. Save for pub culture, you never socialised with anyone in your neighbourhood. Today, even that is dying.

In some parts of the country there are villages here and there that try to build a social network, so that folks remain friendly and helpful to one another. But the infrastructure is gone for good.

* This is when social trust withered too. In the old days it was easy to know who was who. Pedophiles, violent drunks, wife beaters, petty thieves and the like were unable to operate since they could not act without discovery. Thus such problem folks were either censured or dealt with by the community as a whole, making it much safer for kids, young women, elder pensioners and so on.

Blogger Maniac October 05, 2020 10:51 PM  

@57 - About telling Uncle Sam to shove it and having sovereignty over the land and its resources.

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Blogger bramley bramley bramley October 06, 2020 9:13 AM  

@62

Thanks for your reply, Pete. It's interesting you bring up the influence of the US media on British culture, as that's something which is hardly ever mentioned these days. It's just taken as a given that 'our' culture seems to be some order of hybrid of the two. I am a product of that culture, but take pains to try and disentangle what i can identify as the foreign influence from that which is native. It's a thankless task. The coarseness and obsession with sex and violence which it brought into our popular taste has been devastating, it's steamrollered all the nuance and subtlety that we used to enjoy in the arts and media, as you say. I was on a Betjeman binge recently, and found it such a welcome breather to sink into that leisurely pace, away from the frantic modern media barrage. At home we have recently been shouting in despair every time Radio 4 goes on and there's another American accent jabbering away at us from Broadcasting House. So much for the Home Service! It's little better than Twitter for information at this point. I'm horrified to say that i have even perceived an accent shift in our youth, with a very distinct trans-Atlantic twang creeping into the native tongue, not a good development at all. I want Britain to remain uniquely itself, and to enjoy the companionship of our brothers across the pond, sharing what we have alike, and enjoying the picquance of difference where it arises.

Blogger Bezzle October 07, 2020 5:30 AM  

The problem with land is that it is an illiquid, immobile asset.

In an "ordinary" SHTF, you eat your stores while the city folk wait for hours at the food bank for cheese you got a tax write-off donating to the government. All is well, and you might even be the hero of the story. But in an extreme SHTF, the new NKVD browses the property tax registries for fat kulaks to hit first. If you have sympathizers, they're being rounded up too.

Morale of the story: never assume that you have it made in harsh times, because history suggests you don't.

Blogger Daniel October 07, 2020 1:45 PM  

In Argebtina bamks make money from lending to the state mainly. So it is not an unique us thing

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