Sunday, August 07, 2011

New Fees: Bookstore Admission, Big Bank Deposits

1. NY Times -- "Bookstores, including some of the most prominent around the country, have begun selling tickets or requiring a book purchase of customers who attend author readings and signings, a practice once considered unthinkable. Bookstore owners say they are doing so because too many people regularly come to events having already bought a book online or planning to do so later. Consumers now see the bookstore merely as another library — a place to browse, do informal research and pick up staff recommendations. 

“They type titles into their iPhones and go home,” said Nancy Salmon, the floor manager at Kepler’s. “We know what they’re doing, and it has tested my patience.” 

2. NPR -- Bank of New York Mellon said Thursday that it will charge its customers a fee to hold cash deposits over $50 million. The bank said it has seen such a large increase in deposits over the last month that it will charge a 0.13 percent fee to clients with "extraordinary high deposit levels." Normally, banks pay interest to customers for deposits. But with short-term interest rates near zero, and increased FDIC insurance premiums on deposits, it hurts banks when they hold large amounts of cash on their balance sheets.

"This is a historic precedent in the U.S. banking system," said Dan Geller, Executive Vice President at Market Rates Insight, a firm that analyses bank pricing.


At 8/07/2011 7:47 PM, Blogger Benjamin Cole said...

hmm. Like I have been saying, the globe has a glut of capital. High savings rates in Europe, Japan, China are surfeiting capital markets.

At 8/07/2011 7:50 PM, Anonymous Anonymous said...

Bookstores charging makes perfect sense, I think that will be a big trend going forward for almost all retail space. The only reason to go to a grocery or furniture or electronics store will be to actually try out different items, whether it's kiosks handing out samples of the Chicken Cordon Bleu, testing out how it feels to actually sit on the furniture, or see what the keyboard in that new tablet feels like when you use it. The notion that the same locations must keep a large inventory of those items that you can take home with you right away will seem quaint, as you'll just buy it online and get it delivered later. As for bookstores, there will be no paper books within a decade or two, just as I don't see anyone watching VHS tapes or reading scrolls anymore. ;)

At 8/07/2011 7:52 PM, Blogger Methinks said...

Oh, Morganovich, the negative interest rate is here.

BTW, did you notice the short term rates dipping into negative territory again last week? This week should be fun.

At 8/07/2011 9:38 PM, Anonymous Anonymous said...

I was intrigued after reading that quote from the NYT article, so I went ahead and read it, even though I don't normally click through on NYT links. This one is worth reading just for how many laughers the reporters can fit into one short article, ie all the quotes from the anti-economic, anti-"money" dimwits who frequent these independent bookstores. How fitting that after agitating against chain bookstores for decades, they all jumped ship to massive online stores like Amazon when the price difference presumably became irresistible. One whopper was from an author who says, "I’m not sure that charging readers would be a) useful or b) friendly. While I understand the need for bookstores to make money, I don’t think they should discourage readers.”

If she's so interested in "encouraging" reading, perhaps she should give her books away for free, just like she expects the bookstores to do the same with the space they rent. Somebody needs to explain to these morons that "money" is merely a medium of exchange, a way to trade two hours of your time waiting tables for a half-hour the author spent writing something you want to read or for the bookstore to staff and rent the location. By saying you won't pay for it, you're basically saying you want that person to work for you as your slave for free and won't trade them any of your work in return, which of course means they stop doing it, ie they stop writing for you and the bookstores close. The fact that so many people don't even grasp this basic concept highlights how broken the education system is and why it needs to be destroyed by online learning.

At 8/08/2011 6:31 AM, Blogger juandos said...

"Bookstores charging makes perfect sense, I think that will be a big trend going forward for almost all retail space"...

Hmmm, I can't help but think/guess that this type of trend will hurt the 'bricks & mortar' business places and enhance online sales of competing products...

I mean I go into the bookstore (staying with the book store example) and don't find what I want even after paying the ticket price then the odds of me returning are almost nil...

Yet I also understand the dilemma 'bricks & mortar' retailers are in...

What to do! What to do!

At 8/08/2011 8:07 AM, Blogger morganovich said...


don't worry.

greenspan says we can always print money.

that ought to calm markets down and protect our credit rating.

oh, wait...

am i the only one who finds it to be some sort of lewis carrol moment when china is lecturing the US on economics/finance and seems to have the right of it?

when the US first started running chronic deficits, people were aghast. we understood then that such a thing is not sustainable. decades later, we have been doing it so long that everyone looks at it like it's normal. hey, storing lots of compressed gas in the basement hasn't blown up the house yet, let's up the pressure. it'll be fine...

we have now finished the terrible bubble concatenation of the greenspan era.

we went from an easy to remedy bubble in 2000 (equity funded productive assets) to a very difficult one to remedy (debt funded unproductive assets like housing) and on to the final stage - a federal debt bubble which can be socially ruinous.

our fed is a one trick pony that thinks liquidity fixes everyhting and does not seem to understand that they are the ones digging the hole.

see you on st kitts.

At 8/08/2011 8:15 AM, Blogger morganovich said...

"Like I have been saying, the globe has a glut of capital. High savings rates in Europe, Japan, China are surfeiting capital markets."

bunny, as ever, you have this all wrong. BONY deposits are not being driven by foreigners.

it's US firms and funds who are so terrified of the economic and fiscal mismanagement in the US that they do not want equity or US debt exposure.

they could easily be buying US debt and levering it earning at least positive nominal rates. they fact that they are willing to pay to have someone to hold their money instead tells you just how little confidence they have in the federal debt.

frankly, i'm amazed anybody wants to hold their cash in dollars.

i sure as hell have not been doing it. just this year so far, i've made 22% return before interest by holding swiss francs.

this is one of the gaping holes in your "inflate to grow" notions.

far from forcing me to spend, it just causes capital flight.

i know whole multi billion dollar hedge funds that have moved entirely to a gold backing instead of dollars (including such luminaries as greenlight).

those with large amounts of liquid wealth have lots of options to avoid/profit from the debasement of US currency, but none of the cause growth here.

you have mistaken the brake for the gas because you cannot think in more than one term at a time.

At 8/08/2011 11:15 AM, Blogger Methinks said...


see you on st kitts.

If you run into a very small, bossy woman accompanied by a very tall and patient husband, you will know it's me. Please introduce yourself.

At 8/08/2011 12:53 PM, Blogger morganovich said...

"If you run into a very small, bossy woman accompanied by a very tall and patient husband, you will know it's me. Please introduce yourself."


first planter's punch is on me.

At 8/08/2011 3:22 PM, Anonymous Anonymous said...

Juandos, of course charging will hurt B&M businesses with some customers, the question is whether they should care about those customers, considering they likely made little to no money off of them anyway. And you're thinking of going to the store the wrong way, it isn't to "find what I want" anymore. You find what you want online through a quick search, then you'll go to the showroom to try out the few options you narrowed it down to. So if I wanted to buy a tablet, I'd narrow it down online to a handful, go to the showroom and try those out after paying a small fee (which gets rid of pushy salesman trying to make their money back), then order the one I liked online. That's what will remain of B&M businesses for most physical products, while books won't exist because the physical product will be replaced completely by the online version.

Morganovich, I was about to tell you that govt debt is a big problem but not catastrophic, but after looking at the data, you may be right. Total govt debt is expected to hit WWII levels in comparison to GDP this year. I was going to say that the bigger problem is that govt debt is collective, so it will kick off a battle royale to see who's going to actually foot the bill. It's certainly doable given $72 trillion in household assets, but the biggest problem of all is that much of that money was just shit away down the drain. Was it a better use of that money for a young Sun Microsystems or Google to have had it to grow faster or for the govt to build more Amtrak rails that were never used? Obviously the former, yet that's the issue that almost never comes up, the complete waste inherent to almost all govt spending and how the govt just slows down how fast the future gets here.


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