Warren Buffett, a Secret Society, and Greedy Banks: All in Today's Must Reads
Enjoy these three reads to satisfy your Foolish curiosities in business, investing, and life!
The secret society on Wall Street that everyone knows about
Fortune.com reports on the annual meeting of Kappa Beta Phi, the tongue-in-cheek secret fraternity for Wall Street's elite. From JPMorgan Chase's famed deal maker Jimmy Lee to former New York City Mayor Michael Bloomberg, the who's who of Wall Street gathered this past Thursday for some drinks, some networking, and a little financial industry hazing.
Before the cocktail hour, the neophytes do one final rehearsal in a small room on the main floor of the St. Regis, informally called "the hazing room." This is the performance many connoisseurs most relish witnessing. The room is totally dark; at one end stand the current and former Swipes, Loafs, and other officers. Neophytes are marched in one at a time. They're welcomed with what one member describes as a "Dragnet-style spotlight" that blinds them. The neophytes are supposed to preview their numbers to this thankless audience.
The neophytes can't see their tormentors, nor tell who's talking. The audience trashes their careers with barbs like, "That was the worst deal ever!" Then they mock the performance itself in profane language. Most neophytes are booed out of the dark room within five minutes.
Seriously, does anyone trust banks anymore?
In this passionately written article for American Banker, author Katya Grishakova argues for a return to a bygone era of banking. Her populist sentiment resonates, particularly as banks like PNC Financial successfully end free checking a little more than two years after public enemy No. 1, Bank of America , memorably failed.
I don't like to be hustled. In short, a good bank has to be there when I need it to be, no more or no less.
I'm generally suspicious of any banking innovations. Any creative banking is an automatic blinking red light in my book. New products and services rarely are directed at making my life easier. Instead, they are meant to improve a bank's bottom line at my expense.
The two primary functions of banking should be to take deposits and to make loans. All other services should be supplementary to these two primary activities. I wish banks would refocus more on traditional services. This is particularly true when it comes to making loans, given all that money from the Federal Reserve sitting on the banks' balance sheets
Without intention, Grishakova is in many ways supporting exactly the strategy driving Bank of America in the Brian Moynihan era. Perhaps its a sign that at least some in the banking industry are listening to customers, to their benefit.
Warren Buffett finds yet another way to create money out of thin air
Warren Buffett's Berkshire Hathaway will insure a $1 billion prize offered for picking the perfect NCAA men's basketball tournament bracket this March. Berkshire will charge Quicken Loans, the sponsor of the contest, a handsome insurance premium for the coverage. Mathematically, the odds of a perfect bracket are 1 in 1 quintillion (that is, 1,000,000,000,000,000,000).
But, according to Business Insider, Buffett calculated the odds of a winner being better, but still not great.
At the time, Buffett estimated the odds were slimmer than one in 100 million that someone would win the grand prize. However, he says that because basketball victories are not random, there are no "true odds," and the likelihood of someone winning could be as high as one in 20 million.
Whether its 1 in a quintillion or 1 in 20 million, I'll be filling out a bracket with Quicken Loans this spring. Fool on!
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The article Warren Buffett, a Secret Society, and Greedy Banks: All in Today's Must Reads originally appeared on Fool.com.Fool contributor Jay Jenkins has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Berkshire Hathaway. The Motley Fool owns shares of Bank of America, Berkshire Hathaway, JPMorgan Chase, and PNC Financial Services. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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