Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
I hope, given you hold it, it does well and I think it could do okay in the short-term (hopefully better than the reaction to WF and JPM the other day.) I think in the long (5 years) term, the world of personal finance (basic banking, not mortgages, etc) looks very different than it does today - I think you're going to see far less in the way of bank branches than you do today, for one thing. Partly due to technology and partly because it would appear Visa, Amex and MC want into the basic banking business in a considerable way.
"Eckert said that while Wal-Mart doesn’t know exactly how many of its customers are unbanked and underbanked, the percentages that fall into those categories are slightly higher than the FDIC figures.
“We actually believe that Bluebird is designed for not just that segment,” Eckert said. “In fact, our specific aims with American Express were to bring Bluebird to the millions of Americans whom we would describe as ‘unhappily banked’ or ‘ambivalently banked.’ They’re just not getting the value that they once expected and felt they deserved with everyday checking services and the like.”
That’s largely due to the “increasingly high fees and maze of fees that have been attached to these products,” he said."
This article notes the ING Direct Cafes, which I think are an interesting example of what branches may look like. They certainly seem popular, although I don't know how successful the model is in terms of creating new financial customers (are people just going in for good and cheap coffee and free wifi in an environment that looks like a sleek Starbucks?) I guess if they've continued to open them, they can't be doing badly.
"Bank branch closings have outpaced openings by an average of 48% in every quarter since the first quarter of 2011, including the quarter to date. Banks have closed 3,839 branches in that time while opening 2,595 for a net loss of 1,244 branches. At an average range of 2,000 to 4,000 square feet of space per bank branch, that represents a loss of 2.5 million to 5 million square feet of retail absorption. "
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This doesn't even get into mobile payments and other technologies that will likely rise up further in the years ahead (well, that are already commonplace in other countries,but haven't gotten going in this one.) In terms of financial services technology, I think Fiserv is an interesting name (well, kind of "the" name, as I believe it's the largest company in the financial services tech industry) - I don't own it. http://www.fiserv.com/ Intuit would be another one (which I also don't own)
Again, I don't think the TBTF banks are going anywhere, but I think the financial industry will see a lot of change due to technology and increasing competition for basic services over the next 5-10 years.
As for the "great recession", I think there are some considerable structural problems that need to be addressed before there's any sort of a sustainable recovery, but the banks will likely continue to be bailed out and catered to - and like I've said in the past, addressing some of the structural problems means difficult decisions and we have a government that doesn't want to make difficult decisions and can't even agree on naming a street, much less addressing education, infrastructure and an enormous array of other problems.
NEW YORK (MarketWatch) — Citigroup Inc. shares extended earlier gains Monday, up nearly 5% as the company reported better-than-expected financial results for the third quarter, sparking gains in financial stocks and a modest advance for the broader market.
The results, and the market move higher, came as welcome relief as investors look to recover from the worst week of trading since June.
Citigroup’s third-quarter net profit fell 88% to $468 million as the company (C +4.45%) took charges tied to the value of its debt and the sale of a stake in its brokerage joint-venture, but core revenue in its main businesses continued to improve.
Nomura Securities analyst Glenn Schorr told clients that there were signs of “mostly progress” for Citigroup in its quarterly results.
scott, gotta tell ya, very much appreciate your perspectives on future banking (I agree), the way you articulate importance of education (for the masses) in investing, independent perspectives on funds, the desire to make tough decisions, and having open and healthy debate.
Trust you will announce on MFO when you decide to seek political office. Seriously.
In The Little Book of Economics, by Greg Ip, 2010, he describes that a nation's productivity is dependent on three things: people, capital, and ideas.
I see a healthy BAC, C, WFC, MS, and GS as providers of capital. But I think you are warning that their ultimate health is dependent on structural changes in the macro economic framework of our nation.
Thank you so much for your comments. As for me ever thinking about running for office - I suppose my views lean a little towards the Marc Faber-ish as to whether or not what I feel is a broken political system can be fixed before it eventually winds up leading to a crisis of some sort. I don't believe we can go another four years of having a political system this dysfunctional without leading to major problems.
"But I think you are warning that their ultimate health is dependent on structural changes in the macro economic framework of our nation." Yeah, I suppose my view is that a sustainable recovery is not going to be Wall Street finding new ways to "financialize" something (in the manner mortgages turned into derivatives), but a sustainable recovery comes out of improvements in education, infrastructure, regulation, healthcare and a host of other sizable issues. We also need a change in philosophy at some point about what this economy is about beyond consumer spending, and I think a plan from both parties as to goals and real change over the next 5-10 years would not be a terrible idea (an unlikely one, but not a terrible one) as this country needs more of a defined path and sense of real direction and ideas for how to evolve - because we need to evolve as a country.
It's 2012 and almost 2013 - four years after 2008, the amount of money that continues to be funneled into a still-troubled in ways financial system is remarkable (and really, who continues to pay for it while everyone who caused the problems and who were totally wrong never got in trouble?), and makes one wonder when the focus will shift to the majority/rest of the country and the issues they are facing. As for stocks doing well, I think they could continue to do well - heck, we could see DOW 20,000. However, the bottom 50% of the country owns something like 0.5% of the stocks and bonds.
Nothing that will be solved overnight, but things that needed to be started years ago, and in many cases will only be more costly the longer they take to get going. I think the print our way out of any and all problems philosophy is tremendously short-term in its thinking and it just doesn't lead to a sustainable recovery, nor does it begin to fix any of the issues that the majority of the country faces.
If some of the problems are not addressed, I think you could see some degree of social instability and other such problems. At the core, my problem is that you have a congress that tells Bernanke, "Mr Bernanke, get to work." We need a lot more than easy monetary policy, and if congress doesn't want to agree on anything or make difficult decisions, that leads to - I think - even bigger problems down the road. I don't have confidence in the current administration, nor do I think Romney is the solution, either (and as Faber said the other week, as much noise as Romney has made about Bernanke, Romney isn't going to change anything if he got into office.)
As concerning as I think some big picture aspects are, I'm actually very bullish on some things, such as agriculture, infrastructure (hard/productive assets) and some aspects of technology and nutrition.
Comments
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I think stuff like this is only the beginning, although it won't happen larger-scale overnight:
http://www.dallasnews.com/business/columnists/pamela-yip/20121014-will-new-wal-martamex-prepaid-card-help-unbanked-and-underbanked-consumers.ece
"Eckert said that while Wal-Mart doesn’t know exactly how many of its customers are unbanked and underbanked, the percentages that fall into those categories are slightly higher than the FDIC figures.
“We actually believe that Bluebird is designed for not just that segment,” Eckert said. “In fact, our specific aims with American Express were to bring Bluebird to the millions of Americans whom we would describe as ‘unhappily banked’ or ‘ambivalently banked.’ They’re just not getting the value that they once expected and felt they deserved with everyday checking services and the like.”
That’s largely due to the “increasingly high fees and maze of fees that have been attached to these products,” he said."
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"Bank Branches: Withering Away"
http://www.economist.com/node/21554746
This article notes the ING Direct Cafes, which I think are an interesting example of what branches may look like. They certainly seem popular, although I don't know how successful the model is in terms of creating new financial customers (are people just going in for good and cheap coffee and free wifi in an environment that looks like a sleek Starbucks?) I guess if they've continued to open them, they can't be doing badly.
http://www.costar.com/News/Article/Bucking-Historical-Trends-Bank-Branches-Disappearing-Rapidly/141624
"Bank branch closings have outpaced openings by an average of 48% in every quarter since the first quarter of 2011, including the quarter to date. Banks have closed 3,839 branches in that time while opening 2,595 for a net loss of 1,244 branches. At an average range of 2,000 to 4,000 square feet of space per bank branch, that represents a loss of 2.5 million to 5 million square feet of retail absorption. "
_________________________________________________
This doesn't even get into mobile payments and other technologies that will likely rise up further in the years ahead (well, that are already commonplace in other countries,but haven't gotten going in this one.) In terms of financial services technology, I think Fiserv is an interesting name (well, kind of "the" name, as I believe it's the largest company in the financial services tech industry) - I don't own it. http://www.fiserv.com/ Intuit would be another one (which I also don't own)
Again, I don't think the TBTF banks are going anywhere, but I think the financial industry will see a lot of change due to technology and increasing competition for basic services over the next 5-10 years.
As for the "great recession", I think there are some considerable structural problems that need to be addressed before there's any sort of a sustainable recovery, but the banks will likely continue to be bailed out and catered to - and like I've said in the past, addressing some of the structural problems means difficult decisions and we have a government that doesn't want to make difficult decisions and can't even agree on naming a street, much less addressing education, infrastructure and an enormous array of other problems.
http://www.marketwatch.com/story/citigroups-results-buoy-financial-sector-2012-10-15
Citigroup’s results buoy financial sector
NEW YORK (MarketWatch) — Citigroup Inc. shares extended earlier gains Monday, up nearly 5% as the company reported better-than-expected financial results for the third quarter, sparking gains in financial stocks and a modest advance for the broader market.
The results, and the market move higher, came as welcome relief as investors look to recover from the worst week of trading since June.
Citigroup’s third-quarter net profit fell 88% to $468 million as the company (C +4.45%) took charges tied to the value of its debt and the sale of a stake in its brokerage joint-venture, but core revenue in its main businesses continued to improve.
Nomura Securities analyst Glenn Schorr told clients that there were signs of “mostly progress” for Citigroup in its quarterly results.
scott, gotta tell ya, very much appreciate your perspectives on future banking (I agree), the way you articulate importance of education (for the masses) in investing, independent perspectives on funds, the desire to make tough decisions, and having open and healthy debate.
Trust you will announce on MFO when you decide to seek political office. Seriously.
In The Little Book of Economics, by Greg Ip, 2010, he describes that a nation's productivity is dependent on three things: people, capital, and ideas.
I see a healthy BAC, C, WFC, MS, and GS as providers of capital. But I think you are warning that their ultimate health is dependent on structural changes in the macro economic framework of our nation.
Thank you so much for your comments. As for me ever thinking about running for office - I suppose my views lean a little towards the Marc Faber-ish as to whether or not what I feel is a broken political system can be fixed before it eventually winds up leading to a crisis of some sort. I don't believe we can go another four years of having a political system this dysfunctional without leading to major problems.
"But I think you are warning that their ultimate health is dependent on structural changes in the macro economic framework of our nation." Yeah, I suppose my view is that a sustainable recovery is not going to be Wall Street finding new ways to "financialize" something (in the manner mortgages turned into derivatives), but a sustainable recovery comes out of improvements in education, infrastructure, regulation, healthcare and a host of other sizable issues. We also need a change in philosophy at some point about what this economy is about beyond consumer spending, and I think a plan from both parties as to goals and real change over the next 5-10 years would not be a terrible idea (an unlikely one, but not a terrible one) as this country needs more of a defined path and sense of real direction and ideas for how to evolve - because we need to evolve as a country.
It's 2012 and almost 2013 - four years after 2008, the amount of money that continues to be funneled into a still-troubled in ways financial system is remarkable (and really, who continues to pay for it while everyone who caused the problems and who were totally wrong never got in trouble?), and makes one wonder when the focus will shift to the majority/rest of the country and the issues they are facing. As for stocks doing well, I think they could continue to do well - heck, we could see DOW 20,000. However, the bottom 50% of the country owns something like 0.5% of the stocks and bonds.
Nothing that will be solved overnight, but things that needed to be started years ago, and in many cases will only be more costly the longer they take to get going. I think the print our way out of any and all problems philosophy is tremendously short-term in its thinking and it just doesn't lead to a sustainable recovery, nor does it begin to fix any of the issues that the majority of the country faces.
If some of the problems are not addressed, I think you could see some degree of social instability and other such problems. At the core, my problem is that you have a congress that tells Bernanke, "Mr Bernanke, get to work." We need a lot more than easy monetary policy, and if congress doesn't want to agree on anything or make difficult decisions, that leads to - I think - even bigger problems down the road. I don't have confidence in the current administration, nor do I think Romney is the solution, either (and as Faber said the other week, as much noise as Romney has made about Bernanke, Romney isn't going to change anything if he got into office.)
As concerning as I think some big picture aspects are, I'm actually very bullish on some things, such as agriculture, infrastructure (hard/productive assets) and some aspects of technology and nutrition.
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As for Pandit:
http://dealbreaker.com/2012/10/zen-gardens-that-never-were-vikram-pandit-walks-away/
http://www.bloomberg.com/news/2012-10-16/pandit-steps-down-as-citigroup-s-chief-as-corbat-takes-over-1-.html
Actually, I do not think Wall Street likes surprises.
So, steady as she goes.
Let's climb our way out of this hole.
One quarterly report after another.
Onward, upward.