In India they have a saying “Weenasha kaalay wiprit buddhi” (विनाश काले विपरीत बुद्धि) meaning when ones time to self annihilate nears the mind starts playing the wrong way. When I think of Bank of America (BAC) I cannot help but be reminded of this old wise saying.
The bank epitomizes the American economy. Of the 300 million Americans nearly 58 million bank with BAC. Such is the might and standing of the bank in American economy that Washington is sweating at the mere thoughts of BAC failure. The American economy survived the Bear and Sterns and FNM and FMC failures through stimulus, but the Federal Reserve cannot see any amount of stimulus that would bail out BAC. Basically the bank has to stand on its feet and recover on its own – which it does not seem very keen on doing.
Today Bank of America announced a $5 fee per month for customers using Debit card. What other genius tactics can you devise to drive away your account holders when Banks like Citi, JPM and credit unions all over the country are offering free debit card services? Last week, Bill Maher referred the bank as “Skank of America” and that’s exactly what all their loyal customers are thinking right now. At a time when the bank needs capital; driving away the customers is going to lay the stone of the great American bank.
Mahesh, you are correct, BAC will fail. The silent run is already underway. Once the public learn the wealthy is removing their funds from BAC, they will follow. The government has already made it known they will not rescue the bank. The $5.00 fee at this time will show desperation to BAC customers. Another wrong move for BAC at the wrong time. Most Americans see all banks as crooks with BAC being one of the largest crooks. Ironically speaking the first major bank to fail during the great depression was the United States Bank.
ReplyDeleteAbsolutely,
ReplyDeleteWhen Jay Leno starts bashing the bank every night you know they are going to get it. Bank of America will be right up there with Goldman Sachs as the most hated corporation in the United States.