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A letter sent to a ZH reader yesterday by JPMorgan Chase, specifically its Business Banking division, reveals something disturbing. For whatever reason, JPM has decided that after November 17, 2013, it will halt the use of international wire transfers (saying it would “cancel any international wire transfers, including recurring ones”), but more importantly, limits the cash activity in associated business accounts to only $50,000 per statement cycle. “Cash activity is the combined total of cash deposits made at branches, night drops and ATMs and cash withdrawals made at branches and ATMs.”
Why? “These changes will help us more effectively manage the risks involved with these types of transactions.” So… JPM is now engaged in the risk-management of ATM withdrawals?
Reading between the lines, this sounds perilously close to capital controls to us.
While we have no way of knowing just how pervasive this novel proactive at Chase bank is and what extent of customers is affected, what is also left unsaid is what the Business Customer is supposed to do with the excess cash: we assume investing it all in stocks, and JPM especially, is permitted? But more importantly, how long before the $50,000 limit becomes $20,000, then $10,000, then $5,000 and so on, until Business Customers are advised that the bank will conduct an excess cash flow sweep every month and invest the proceeds in a mutual fund of the customer’s choosing?
Full redacted letter below:
- Toward Free Exchange Rather Than Capital Controls (economicsone.com)
- Easing troubles in the long run (thehindu.com)
- Capital controls to be lifted by January: Anastasiades (cyprus-mail.com)
- Capital controls to be lifted in the first months of 2014, Cyprus FinMin says (famagusta-gazette.com)
- Capital controls to be lifted except cross-border transfers (UPDATED) (cyprus-mail.com)
- Cyprus Capital Controls Could ‘End in Months’ (blogs.wsj.com)
- 5 Years Later: Winners & Losers of the Financial Crisis (fool.com)
- RBI chief says policy not to resort to capital controls – Reuters India (in.reuters.com)
Four decades ago no one had cell phones, the Internet, or personal computers; households had landlines, only offices or research centers had any kind of computer, and wireless anything wasn’t even close on the horizon. These days, of course, there is more than 1 cell phone per person in the US, laptops are standard fare, and using dial-up or wired Ethernet is like living in the Stone Age. But each of these technological advances comes with a cost; and, more specifically, a cost a family in the 1970s didn’t have to cover. The price of a cell phone plan and wireless internet is well over $1,000 per year; more if you add in the price of a $1,500 laptop or a $200 smartphone, which most of us tend to replace after a few years of wear and tear.
With average post-tax income of $63,000, according to the latest Consumer Expenditure Survey, these bills might not seem like a lot to shell out – only about 4% of post-tax wages – but they’re costs that the families of 1973 avoided completely. How have the households of the 21st century managed to incorporate these added expenses?
Surprisingly, though, the average household in 2012 spent a bit less of its post-tax income than its counterpart from 1973: 81.2% versus 85%. Part of this is simply a matter of size: there were 2.5 people per household in 2012 and 2.9 in 1973. But regardless of family size, the way we spend on just about everything has changed – and not just because we pay for multiple smartphone plans and satellite TV. As prices (read: inflation) and necessities have evolved, so has the mode of income allocation among American families.
Read on for our list of “10 Thing You Didn’t Know About US Household Income Allocation”, derived from the self-reported CES data from the BLS:
- How Much Should We Spend? (moneylook.wordpress.com)
- 10 Reasons I’m Ditching The Cell Phone! (masterkeyabletsang.wordpress.com)
- The Myth that Growing Consumption Inequality is a Myth (economistsview.typepad.com)
- Flaherty sees no ‘doom and gloom’ in housing market (bnn.ca)
- Canada’s Flaherty: No ‘doom and gloom’ in Canada housing market (xe.com)
- Housing Market Optimism (southvalleyhomes.wordpress.com)
- Return of the Housing Bubble? (cepr.net)
- Canadian Finance Chief on Those Betting Against Housing Market: ‘I Wish Them Bad Luck’ (blogs.wsj.com)
- Home Flipping Indicates Recovery Of Housing Market (losangeles.cbslocal.com)
- Calgary listed as one of Canada’s more affordable housing markets (calgaryherald.com)
- The Hottest Housing Markets of 2013 (247wallst.com)
- Keiser Report: Narcissists’ Rally (E448) (sgtreport.com)
- Net Asset Value Premiums of Certain Precious Metal Trusts and Funds – Rehypothecation Ponzi (jessescrossroadscafe.blogspot.com)
- EU could accelerate banking collapse with newly proposed collateral policy (examiner.com)
- The (sizable) Role of Rehypothecation in the Shadow Banking System (ritholtz.com)
- EU Weighs Curbs on Banks’ Use of Client Assets as Collateral – Bloomberg (bloomberg.com)
- Recession Over for Wealthiest Americans (drudge.com)
- Pew: Wealthy Getting Wealthier While Bottom 93 Percent Lose Net Worth (washington.cbslocal.com)
- Report: Wealthy Thrive and Poorest Dive as Surge in US Inequality Continues (commondreams.org)
- An economic recovery for wealthy people only? (pubcit.typepad.com)