Notes from underground

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Archive for the tag “finance”

650,000 Americans Joined Credit Unions Last Month — More Than In All Of 2010 Combined | ThinkProgress

650,000 Americans Joined Credit Unions Last Month — More Than In All Of 2010 Combined | ThinkProgress: “One of the tactics the 99 Percenters are using to take back the country from the 1 percent is to move their money from big banks to credit unions, community banks, and other smaller financial unions that aren’t gambling with our nation’s future.

Now, the Credit Union National Association (CUNA) reports that a whopping 650,000 Americans have joined credit unions since Sept. 29 — the date that Bank of America announced it would start charging a $5 monthly debit fee, a move it backed down on this week.”

Now there’s an interesting thought.

The South African equivalent of a credit union was a building society, but the building societies all went commercial, turning themselves into banks in about 1987.

Building societies specialised in one thing — lending money for building and buying houses; in other words, mortgages. It was something they were actually quite good at, and something commercial banks are very bad at — much of the economic crisis of the last four years or so was caused by American banks playing fast and loose with mortgage finance.

So the news that Americans are moving their money to credit unions might herald the beginning of a return to sanity.

As I understand it, a credit union is like a general putpose building society, lending money not only for building and buying houses, but for other things as well. I believe that, like the building societies, they are cooperative rather than commercial.

Can South Africans do the same thing?

Are there any building societies left? Perhaps this is their opportunity to make a come-back. If anyone reading this knows of any South African bulding societies, please post a link in a comment. And revived building societies could even help to solve the housing shortage.

There are, of course, stokvels, but they usually have to keep their money in commercial banks, with the ever-increasing bank charges. I saw that my bank now charges R25.00 for a cash withdrawal.

That’s a good and sufficient reason to move my money to a building society… if there was one.

Personal Banking – simpler, better faster?

The Standard Bank of South Africa used to have an advertising slogan “simpler, better, faster”, until they were inspired and motivated to make banking more involved.

Now along comes Capitec bank, which, if their blurb is to be believed, is out to really make banking simpler, better, faster.

If their publicity documents are to be believed, this will provide the first opportunity for ordinary people to save money since the demise of the building societies in 1987.

Personal Banking | Global One Facility | Capitec Bank:

We believe that simplicity is the ultimate sophistication. That’s why we offer the Global One facility – a single solution to daily money management that lets you transact at the lowest fees, earn highly competitive interest on your savings, and get the easiest access to the best-priced credit through a Daily Savings Account.

The way building societies worked was simple. Lots and lots of ordinary people would put their spare cash in a savings account, which paid fairly low interest. And they would lend this money to people at a somewhat higher rate of interest, so they could build houses.

Then the building societies converted into commercial banks, and imposed fees on savings accounts. Thus any money you tried to save would disappear, as the banks would take it in fees.

Now Capitec Bank does not work quite like a building society. It still charges fees, but if the fees are R4.50 a month, and they give you 6% interest on your savings, then if you have R100 in your account, your savings will still grow by 1,5% a month.

Perhaps if more “fincancial services providers” had thought like this, there wouldn’t have been the sub-prime lending crisis that led to the current recession.

One thing I have against Capitec Bank, though. Like other financial services providers, it likes to think of itself as a financial products provider, and likes to call its services “products”. I’m not sure what it produces, but such evidence of woolly thinking makes me uneasy. The question of which word to use might not be the only thing they are confused about.

I’m not yet a customer of Capitec Bank, but I’m thinking about it.

The financial journalist and the monk

Some years ago the author Arthur Koestler wrote a book called The Yogi and the Commissar, about two very different worldviews. This article could be called “The financial journalist and the monk”.

What makes a rather worldly financial journalist visit a monastery, not as a break form the rat race, but to find out the story of what’s going on in the world where he earns his bread an butter. And it seems that Vatopedi Monastery has had quite a big influence in worldly affairs.

Read the story to find out.

Beware of Greeks Bearing Bonds | Business | Vanity Fair:

After an hour on a plane, two in a taxi, three on a decrepit ferry, and then four more on buses driven madly along the tops of sheer cliffs by Greeks on cell phones, I rolled up to the front door of the vast and remote monastery. The spit of land poking into the Aegean Sea felt like the end of the earth, and just as silent. It was late afternoon, and the monks were either praying or napping, but one remained on duty at the guard booth, to greet visitors. He guided me along with seven Greek pilgrims to an ancient dormitory, beautifully restored, where two more solicitous monks offered ouzo, pastries, and keys to cells. I sensed something missing, and then realized: no one had asked for a credit card. The monastery was not merely efficient but free. One of the monks then said the next event would be the church service: Vespers. The next event, it will emerge, will almost always be a church service.

Read the rest of the story here. It’s long, but quite illuminating.

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