I been off the air, or “in the air” but lots going on. As an observer + participant, sometimes I can’t help but being caught between – wow is this ever a) funny b) dumb.

In the US, Mellon & Morgan Banks, each, have announced a new fee – effective the other week (which in today’s world is ions ago) they now charge account holders, basis points to “hold” their money. Yes, money in the bank now has a percentage cost, just to have the bank hold it for you.

This applies to Clients with over 50 Million on deposit – which is apparently common in this cash rich environment of the melt-down. So, most need not worry. But why such craziness? First – America was on the verge of insolvency – that means couldn’t pay their bills –maybe. And in business terms that usually leads to …..well it begins with bank and ends with a ‘y’. Yes the B word. So these cash rich companies no longer trust their ‘cash’ in the Investment Houses, aka Investment Banks. They want safe ground - a real Bank. Why? Because in the US, as in Canada, Banks have a Government Guarantee for depositors in the event of a bank failure.

And there are A+B – Funny plus Dumb. The panic is caused by a US Government maybe at the edge of insolvency. What do all the genius money wizards do? Made nervouse by the Government’s shakiness, and their Investment Banks - they move their cash into somewhere that now charges a fee “to hold” because they’re backed by a guarantee that in fact is the cause of the issue at hand – concern over ability to pay by who else – the Guarantor, which is the reason to need to safe harbour.

So the story is: “We took our cash away from our good friends in the event of collapse, for safe haven with a guarantee by the very entity that gave rise to the possibility in the first place, and we’re paying a fee for this hollow guarantee – smart eh?

Questions to ask
– Are the bank vaults really at point of bursting from holding too much cash?
– And, if today money is paperless – because of “e”, so vault size is irrelevant, is it instead maybe their computers that are too small to hold the shear volume of this “e” paperless cash?
– And if there’s so much ‘cash’ Think of PE Trudeau, he’d of invented a new and horridly expensive corporate tax to encourage (force) these companies to expand, innovate and maybe restart this out’a juice perpetual motion machine of invent, sell, buy; upgrade, sell’em again, buy even more….and keep it going….

And in fairness to these two Banks – why should they hold all this “cash” for free. In normal times – these new clients keep it at their “other” buddies, except that for now - the Guarantor has made a real mess of things. Oh Oly. Oh Stan.