Debit Card Blues

Debit card users the latest victims of the commercial banking industry's attempts to raise capital in a struggling economy.  Bank of America announced it will charge millions of customers with a $5 monthly fee to use BofA debit cards, and other large banks are expected to do the same.  The $5 monthly fee will cost a customer $60 per year--roughly two tanks of gas depending on your vehicle's efficiency.  The banks claim the desperate push for revenue is due to new government regulations regarding how much vendors can be charged for debit-card transactions.  The new restrictions on debit-card "swipe fees" are expected to cost US banks $6.6 billion in lost revenue per year.   The new rules cap the fee merchants pay to banks each time a customer pays for something with a debit card at 24 cents.  In other words, through the newly enforced regulation, the banks are being forced to shift the fees from the merchant to the customer.  The so-called Durbin amendment was an attachment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Wells Fargo, SunTrust, and Chase have already eliminated debit card reward programs.  Citibank is one of the few banks that took a definitive stance against the debit card charge because it realizes doing so will cause customers to be irritated and upset.

The bank's stock prices suffered after the announcements.  Bank of America opened at $6.80 on Tuesday and dropped to $6.12 per share during trading on Friday.  City National Corp. reached $41.24 on Tuesday before closing at $37.77 on Friday.

The regulation is the latest effort by the government to demonize Wall Street.  In reality, these regulations create burdens on business and use taxpayer dollars to enforce.    

Buffalo Springfield

Every once in a while, a song you first listened to years ago will resurface in your mind, and "For What It's Worth" by Buffalo Springfield is one such example.  Written by Stephen Stills, the song tells the story about how the police department arrived as city officials became paranoid about a peaceful, anti-loitering gathering outside a bar in LA called Pandora's Box.  For what it's worth, this Buffalo Springfield hit is not an anti-Vietnam war protest song.


For What It's Worth
By Buffalo Springfield

There's something happening here
What it is ain't exactly clear
There's a man with a gun over there
Telling me I got to beware
I think it's time we stop, children, what's that sound
Everybody look what's going down
There's battle lines being drawn
Nobody's right if everybody's wrong
Young people speaking their minds
Getting so much resistance from behind
I think it's time we stop, hey, what's that sound
Everybody look what's going down
What a field-day for the heat
A thousand people in the street
Singing songs and carrying signs
Mostly say, hooray for our side
It's time we stop, hey, what's that sound
Everybody look what's going down
Paranoia strikes deep
Into your life it will creep
It starts when you're always afraid
You step out of line, the man come and take you away
We better stop, hey, what's that sound
Everybody look what's going down
Stop, hey, what's that sound
Everybody look what's going down
Stop, now, what's that sound
Everybody look what's going down
Stop, children, what's that sound
Everybody look what's going down

Bank of America Cuts Costs and Jobs

As a part of a cost reduction strategy, Bank of America CEO Brian Moynihan announced a $5 billion cost-cutting plan that includes 30,000 jobs.  As of June 30, Bank of America had 288,000 employees, so the cuts equal a 10.4% decrease in workers.  The Bank of America stock price stayed consistent despite the news of job cuts, but it has dropped 47% since the beginning of 2011.

Although, the primary cost cuts will come from commercial banking and global technology, Bank of America officials will try to reduce expenses within wealth management, corporate finance, and investment banking.   

The expense cuts are deep, but the key issue is whether they are deep enough to offset Bank of America's exposure to multi-million dollar lawsuits related to foreclosures and mortgages.  In 2008, the bank acquired Countrywide Financial, one of the many subprime mortgage lenders that gave loans to individuals who would not make consistent payments.  The legal costs stemming from this acquisition turned what would have been a profit into a record $8.8 billion loss during the second quarter of this year as the bank racked up expenses to settle claims.  In August, insurance company AIG sued BofA over losses $28 billion of mortgage securities, seeking $10 billion.  Earlier this month, the Federal Housing Finance Agency sued the bank on behalf of mortgage companies Fannie Mae and Freddie Mac.

This news comes after Bank of American sold $5 billion of preferred stock to Warren Buffet's Berkshire Hathaway and agreed to sell half its remaining stake in a major Chinese lender.  This current event also follows a shake up in top management at BofA in which two high-ranking officials were fired. 

New York and Christians

The legislative battle in New York over gay marriage has dominated the headlines over the past few weeks.  A measure that would make same-sex marriage legal is currently hanging in the balance as I write this post.  Republicans in Albany are delaying the vote while Democrats and gay rights advocates are becoming increasingly frustrated with the GOP’s dilatory tactics.  

As of Friday morning, the number of state senators who had voiced support for the marriage measure- 31 of 62- are just one vote short of a majority.  New York’s Catholic archbishop Timothy Dolan reiterated the Church’s opposition to gay marriage on Sunday, vowing to oppose “any radical bill to redefine the very essence of marriage.”

I’m unsure of how the fight in New York will end up.  However, I am certain that even if gay rights activists lose this battle, they will win the war eventually.  Liberalism is an ongoing force that might experience a few setbacks, but it will win out before long, especially if Christians continue to make themselves a target for marginalization.  Leftist policies are more effective when they have a bulls-eye to prey upon.  Within 20 years, I predict that gay marriage will be legal in 15 or more states.  

The Catholic Church is the most visible opponent of gay marriage, and ultimately, the strongest voice against the relentless tides of liberal social activism.  The Catholic Church has taken a resolute stance against abortion, contraceptives, gay marriage, and stem cell research, but many of these controversial battles are being won by the leftists.  Because the Church has taken such a determined stance against these social questions, the perception young people have of the Church and Christians in general is largely negative and critical.  The Barna Group, an evangelical Christian polling firm, conducted a number of surveys and focus group with adults and young people to determine which terms people tended to apply to Christians.  Among Americans aged 16-29, 91% felt the term “antihomosexual” aptly described Christianity.  “Consistently shows love to other people” polled at 11% among the same demographic.  When you introduce yourself as a Christian to a neighbor, there’s a strong chance you will be labeled as antihomosexual and homophobic rather than accepting of all people.  

If Christians sincerely want to win the battle against same sex marriage, they need to stop conveying rhetoric that paints gays and lesbians as disordered and sinful.  Christians must stop condemning homosexuals and should make an effort to understand the complexity of their lives.  Furthermore, if Christians want the perception of themselves to change, it should be as enthusiastic and determined to reform no-fault divorce laws.  The threat on the essence of marriage comes from the behavior of heterosexuals as well.  Fornication, cohabitation, contraception, and remarriage after divorce are all contrary to Christian sexual ethics yet these actions aren’t as reprehensible as homosexuality in the eyes of many Christian churches.  Christians must ensure that young people know that its teachings are consistent.  While a more consistent implementation of Christian teachings would not win the minds and hearts of many young people, it would at least curb the accusations that Christians are hypocritical and homophobic.  If this is done, young people probably will not adhere to Christian teachings on sexuality, but at least they will respect them.  


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Taco Bell Sues...Then Is Sued?

About three months ago, I read an article in the Wall St. Journal that reported upon what exactly is in Taco Bell’s beef.  Shortly after in January, Alabama-based law firm Beasley Allen filed a lawsuit against Taco Bell.  As you might know, Taco Bell is a subsidiary owned by Yum Brands.

The complaint filed by Beasley Allen claimed that Taco Bell’s products supposedly containing “seasoned ground beef” actually contain “taco meet filling”  The complaint then went on to say, “Taco meet filling is not beef.  In fact, it does not meet the minimum standards set by the United States Department of Agriculture to be labeled or advertised as ‘beef‘, seasoned or otherwise.”

As you might expect, the media and news outlets exploded, and customers decided to avoid Taco Bell products.  It got so bad that Taco Bell ended up taking out full-page ads denying the allegations in Beasley Allen’s complaint and it protested that its beef food items contained 88% beef and 12% spices.  

On April 18, Beasley Allen dismissed the suit.  Three days ago, Yum! Brands filed a 10-Q that indicated the three months of customer suspicion has negatively impacted the company more than analysts projected.  One account argued that the matter would be contained and cause only a “negative, short-term impact”.  Yum! ended up spending $3.5 million to defend itself against the lawsuit.  A new SEC filing indicates that Yum might be in for more serious losses:

“Taco Bell’s operating profits were significantly impacted in the quarter by the publicity associated with a lawsuit filed in late January 2011 alleging a violation of consumer protection statutes and deceptive business practices by Taco Bell through its advertising that the beef served in its products is ‘seasoned beef’.  Such claims were false and the lawsuit was voluntarily withdrawn on April 18, 2011.  Nonetheless, Taco Bell experienced a significant reversal in sales trends immediately following the filing of the lawsuit.”

Taco Bell has stated it may sue Beasley Allen over the incident.  After Taco Bell quantifies its losses, this case should get interesting.  Taco Bell must decide whether it’s going to try to recover the losses and the cost of its emergency advertising campaign.

Amusing Courtroom Quotes

So far, Joe's Musings has been a rather serious project with most of my posts covering topics such as college advice, life hacks, and current events.  Today, I want to take an amusing break and focus on the humorous aspects of our legal system.  These quotes illustrate the various uses and interpretations of language.  Everyone of these are genuine, real extracts from courtrooms.  It's a good thing recorders and transcripts are required in the courtroom, or else none of these funny blunders would have been preserved.

Lawyer. What is your date of birth?
Witness. July fifteenth.
Lawyer. What year?
Witness. Every year.

Lawyer. This myasthenia gravis, does it affect your memory at all?
Witness. Yes.
Lawyer. And in what ways does it affect your memory?
Witness. I forget.
Lawyer. You forget.  Can you give us an example of something you have forgotten?

Lawyer. Now doctor, isn't is true that when a person dies in his sleep, he doesn't know about it until the next morning?

Lawyer. The youngest son, the twenty-year old, how old is he?

Lawyer. She had three children, correct?
Witness. Yes.
Lawyer. How many were boys?
Witness. None
Lawyer. Were there any girls?

Lawyer. All of your responses must be oral, okay?  What school did you go to?
Witness. Oral.

Lawyer. Was that the same nose your broke as a child?
Witness. I only have one, you know.

Accused, Defending His Own Case: "Did you get a good look at my face when I took your purse?"

Lawyer. Did you blow your horn?
Witness. After the accident?
Lawyer. Before the accident.
Witness. Sure, I played for ten years.  I even went to school for it.

Lawyer.  How far apart were the vehicles at the time of the collision?

Lawyer. What happened then?
Witness. He told me, "I have to kill you because you can identify me."
Lawyer. Did he kill you?
Witness. No

Lawyer. Now sir, I'm sure you are an intelligent and honest man--
Witness.  Thank you.  If I weren't under oath, I'd return the compliment.

Lawyer.  Were you alone or by yourself?

Lawyer. You say the stairs went down to the basement?
Witness. Yes
Lawyer. And these stairs, did they go up also?

Lawyer. Any suggestions as to what prevented this from being a murder trail instead of an attempted murder trial?
Witness. The victim lived.