Two newsish articles today form a contrast that proves a point: Banks are one of the few remaining old-fashioned businesses.
(1) The Ankler is discussing how movies get capital. Private equity is one of the sources as expected, and PE wants to take huge risks and make huge losses for tax evasion. Regular banks are still the primary source for mid-size productions. Banks (as I didn’t quite expect!) are still banks. Despite all the crap of mortgage-backed securities and such, banks still want collateral, and banks want to make safe loans for a small and definite return. They don’t want half the profits, they just want to get back 7% more than they put in.
(2) Saagar looks at a stupid mistake by Wells Fargo, which was trying for too long to be something besides a bank. Wells made a long-term contract with a weird credit card company that has some incomprehensible weird shit about making “points” when you pay rent. Saagar is Indian, like the CEO of the credit card company, so he enjoys math games and betting games. He loves the weird card because it gives him something or other.
I don’t grasp the whole realm of discounts and loyalty points and refunds. I’m half Kraut and half Scot, not Indian or Chinese. My concept of commerce is primitive:
You have thing.
I pay you money for thing.
Now I have thing.
Wells was betting that most users of the card would run up a balance on other purchases and pay 30% interest, and only a few would take advantage of the incomprehensible landlord weirdness. They bet wrong, and now they’re stuck in a 10 year contract with a huge loss every month.
Polistra's Mill 