Sweeps Week at the Morgue; Banking Hits New Carnival Highs[Lows?]

As RW at EPJ central recently wrote:

The U.S. government has so many regulations that it should come as no surprise that some work at cross purposes.

The government continues to increase the rules and regulations under which it can gain access to information about your financial transactions. The surveillance state is obviously growing. Yet, at the same time, other new regulations will drive customers away from using bank services, making those ex-customers much more difficult to track. These former customers are being called the "unbanked".

According to Jamie Dimon, federal limits on debit card processing fees will force banks to charge customers more for services, making accounts too expensive for as many.

Indeed, banks are getting more creative now that the government is setting transaction fees below market rates (though offset, if you're a primary dealer, by the Fed continuing to pay above market rates). Ever wonder why recently, every bank teller experience involves a sales pitch for a savings account (assuming you don't have one with that particular bank already)?

There are no required reserves on savings account deposits. They immediately can be lent out at 100 cents to the dollar. So it's no surprise that banks incentive their customers to put as much of their money as possible into savings accounts. And, with savings accounts yielding a whopping 1% annually, it's only natural that JP Morgan Chase would craft a pitch worthy of Billy Mays or Ed McMahon:

That's right kids: double your money, betting on future bailouts and other assorted moral hazard while we blow your money on leveraged silver shorts and non-creditworthy borrowers (don't worry, we'll sell the 95% LTV loan to Fannie). The free lunch promise parade marches on to the drum beat of fractional reserve banking fraud. Ironic that savings--the bane of Keynesians everywhere--is now one of the large banks' few remaining cash cows.