Shocking Way That Big Banks Are Profiting Off of Your Accounts. Interest Rates at the Core.

Quick Rundown Of Today’s Article:

1. Big Banks Are Profiting Off Customers Through Interest Rates.

2. The official end of the COVID pandemic.

3. Commodity Prices Looking Bullish.

4. Case-Shiller Index Down For Housing. Big banks are stealing through interest rates
   

Let’s Get Started!

Newsletter: BIG

Title: The $109 Billion Bank Hustle.
Link: https://mattstoller.substack.com/p/the-109-billion-bank-hustle

Here are the top takeaways:

• Consumer Financial Protection Bureau Director Rohit Chopra wants to end the practice of banks making it hard to switch bank accounts and credit cards. This ‘lock-in’ method of business is costly to businesses and consumers who use our banking system.

• Net Interest Income is when banks use deposits to finance loans, and keep the difference between the interest rate they receive on loans and the amount they pay to depositors, minus any loans that don’t get paid back.

• It is a major earner for banks, JP Morgan alone earned $70 billion from Net Interest Income in 2022.

• Since the start of 2013, American consumers have increased spending on these financial services by about 57%. Consumer spending has not grown this rapidly in decades.

• This is mainly due to the concentration of 6 banks controlling deposit accounts. Normally, there would be competition for deposit accounts. If Bank A was offering .5% and Bank B was offering 1.5% on a deposit account, customers would go to bank B. This happens to some extent, but lock-in costs keep customers from switching.

• Lock-in costs are frictions that arise when changing banks. Re-routing direct deposits, setting up scheduled ACH/credit card payments, while also making sure there is enough principal amount in the account to make payments is a major hassle.

• Banks take advantage of this situation by not adjusting interest rates they pay to their customers. In 2013 banks made $239 billion from Net Interest Income. In 2022 they made $421 billon. An increase of $109 billion without providing any additionally value to their customers.

• This is why it is important to increase the interoperability of banking, so that customers are not paying hidden fees in the form of lagging interest rates. Banks are cherry-picking rates to offer that best suits their bottom lines.
  

Website: Epoch Times

Title: Biden To End COVID-19 Emergency Declarations On May 11, Also Ends Title 42 Policy At Border
Link: https://www.theepochtimes.com/biden-admin-plans-to-end-covid-19-emergency-declarations-on-may-11_5021586.html

Here are the top takeaways:

• The Biden administration has announced that it plans to end national COVID-19 emergency declarations. This move would shift the U.S. government's response for managing COVID-19 back to the normal authorities.

• The COVID-19 pandemic was declared a national emergency at the start of the outbreak by President Donald Trump.

• President Joe Biden has repeatedly extended the emergency declarations since. The White House noted on Monday that the COVID-19 national emergency and the public health emergency (PHE) are currently set to expire on March 1 and April 11th, respectively.

• The administration's plan is to extend the emergency declarations to May 11, and then end both emergencies on that date. This wind-down would align with the administration's previous commitments to give at least 60 days notice prior to termination of the PHE.

• Continuation of these emergency declarations until May 11 do not impose mask mandates or vaccine mandates. They do not restrict school or business operations. They do not require the use of any medicines or tests in response to cases of COVID-19.

• Under the PHE declaration, the federal government has been funding COVID-19 vaccines, as well as some tests and treatments. When this ends, the costs will be transferred to private insurance and government health plans. Costs of COVID-19 vaccines are expected to surge once the federal government stops buying them. Pfizer has said it will charge between $110 to $130 per dose.

Newsletter: Commodity Report

Title: The Commodity Report #87.
Link: https://commodityreport.substack.com/p/the-commodity-report-87

Here are the top takeaways:

• Goldman Sachs is overly bullish on commodities, predicting that prices will rise due to strong demand from China and insufficient investment in supply.

• International Energy Agency says that world oil supplies will exceed consumption by roughly 1 million barrels a day. However, they also predict that global oil markets will tighten as China consumption accelerates.

• Protests in Peru could restrict access to $4 billion worth of copper. Peru’s third largest copper mine hasn’t exported copper concentrate since Jan 3. This location accounts for 2% of the worlds copper output.

Website: Wolf Street

Title: The Most Splendid Housing Bubbles in America, January Update: Now Phoenix, Las Vegas, San Francisco, Seattle, San Diego Plunge Fastest
Link: https://wolfstreet.com/2023/01/31/the-most-splendid-housing-bubbles-in-america-january-update-now-phoenix-las-vegas-san-francisco-seattle-san-diego-plunge-fastest/

Here are the top takeaways:

• The Case-Shiller Index as a housing price indicator that compares the sales in the current month to when the same houses sold previously. The Case-Shiller index a more reliable indicator for housing prices, but it lags months behind.

• The Case-Shiller Index for home prices in the US has dropped again, with all 20 metros covered by the index seeing prices fall from the prior month.

• The biggest peak price drops were seen in the San Francisco, Seattle, San Diego, Phoenix, Denver, Los Angeles, Las Vegas and Dallas. The price drops ranged from 7 to 14%. from peak prices.

• The biggest month-to-month drops were seen in Phoenix, Las Vegas, San Francisco, Seattle, San Diego, Dallas, and Tampa. The month over month drops range from 1 to 2%.

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