Big Banks Losing Esteem
The Titans of Wall Street? More like the Titanics of Wall Street. It takes a few nautical miles to redirect an enormous passenger vessel traveling at full speed through treacherous seas. That’s unfortunate when an iceberg suddenly appears directly off your forward bow.
Historians speculate that the Titanic would have sustained less damage by ramming that iceberg head on rather than attempting to turn away from it, which resulted in a long fatal gash down one side of the big ship’s hull. Right now the US government is attempting to steer clear of a looming catastrophe which is still mostly hidden from view. We should allow the free market to run its course.
Bloated, hulking institutions don’t respond well to the needs of individuals. Investors will now think twice about handing their money over to distant corporations that reward leadership failures with multi-million dollar retirement packages.
Community Banks Invest Locally
Depositors used to change banks. Now banks exchange depositors. It’s exasperating. You open a checking account at American Savings & Loan. Then First Federal purchases American Savings & Loan. Then WAMU, formerly known as Washington Mutual, comes along and swallows up what’s left of both banks.
Now apparently JP Morgan Chase owns WAMU. So your money goes from a little hometown Savings & Loan, through Seattle, and on to a massive banking conglomerate in New York City. And which one of these players needs a bailout?
Expect more local TV advertisements that sound something like this: “When you open a savings account at State Bank of Springdale, it stays right here in the community.”
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