Bulls & Bears

Days of free checking are numbered?

Banks cite government regulation for new fees




Gary B. Smith: I just go back to the basic facts and the question is, has the original stimulus worked? If I thought it worked and the facts bore that out, I'd say fine, let's do more stimulus. The fact is unemployment is still north of 8 percent. It's higher than when we first started the stimulus. The Obama administration said by now it would be 6 percent. If you factor in all of the people who came out of the workplace, who aren't looking for jobs, the real unemployment rate is close to 15 percent. Even if you think I'm being biased, charitably the economists are split on the issue. All this, even at best if it was a wash, causes an additional $5 trillion in running up the deficit. I don't see how you can argue for more stimulus.

Tobin Smith: Let's unleash the economy before we add another sugar high or stimulus that's providing a short term spurt. We have the opportunity to have the largest energy producing country in the world if we would unleash it. We have the ability in our technology businesses to unleash them. Why would be putting money into more "green" jobs, more "green" manufacturing, job training in areas where we don't have a mismatch. It's an idea that if they keep spending they'll get something right. We can't afford it. Why should we? We were doing fine with the business cycle coming back with the way it always does.

Jonas Max Ferris: America is on a positive trend. We're in a transitional period between needing stimulus and not needing stimulus. At this point, you can make the case that you're wasting money and running deficits for an artificial stimulus. I don't think that was the case two or three years ago. I'm not saying our stimulus was the most brilliant, I'm saying a concept in a recession. But, we're not in a recession. Things are improving. The trend is your friend. You have to acknowledge that a good portion of our stimulus is actually in the form of tax cuts. That's where a lot of the gaps are coming from. If you're not for stimulus, are you not for extending the payroll tax cuts? That's a part of stimulus that we're in right now. We probably don't need it much longer and it's just causing deficit spending.

Bob Froehlich: I think the reason why we're finally seeing some positive job growth is because we don't have the stimulus. So, the government needs to get out of the way and let corporations do what they do best, which is make money and create jobs. Plus, they don't have the money for another stimulus. In five years, our debt has gone from $5 trillion to $10 trillion. How can you be talking about a stimulus? Think about short term-so far this year, since the budget season started, we have spent $1.5 trillion and took in $869 billion. We're spending twice the amount that we're taking in. How can they even think about more stimulus? We don't need it. I think it would be a huge mistake. It would do nothing to help the job market.

Mike Norman: If you look at the stimulus since 2009, we've gained something like 4 million jobs. You keep saying the facts don't support the stimulus, but in fact, it's the exact opposite. When it comes to the deficit, excuse me while I yawn, can you find something else to get worried about? You've been complaining about this for three years and the economy has been steadily improving. The stock market is up 100 percent from its lows. The unemployment rate is at 8.3 percent. It was above 10 percent. Look at the trend. The trend is that it's coming down. We've still got to bring it down further. We're only growing at2 percent. It's not enough to really create a jobs boom. That's why we need more stimulus and if we had it we would see job growth really take off and be sustained for a long period of time.


Gary B. Smith: I'm all for everything Toby said as long as the government doesn't come in and try to manipulate it. At the start of the gasoline-powered automotive industry there was no government involvement. People went to the local gas stations, drug store or hardware store and picked it up. It was only when autos became popular that the oil companies said there's a market here to open up gas stations. I'm hoping that's the same way with natural gas. The market will work or it won't work and GM would have made a bad bet. I'm all for GM doing this. I think it's great-good for them. Let's just do it without the government getting involved and mucking this up.

Tobin Smith: If you would extrapolate this across the United States to personal cars it would be a big improvement and all that natural gas comes from the United States. If you're buying gasoline on the East Coast of the United States, that gasoline is coming from Nigeria and other places. If we could get our large 18-wheelers on this, we could reduce about five or six million barrels a day. It is absolutely the one policy that every American should be following.

Jonas Max Ferris: I don't think driving one hundred miles out of the way to get to a gas station has been factored in the miles per gallon calculation. The natural gas is at all time lows. It's going to take one hurricane before it costs five times as much. Natural gas is a great American resource. That doesn't mean it makes sense to have it in cars. It makes sense possibly in buses. It makes a lot of sense to pipe it somewhere to a generator. But to put it in your car, it doesn't compare well to gasoline. I will say why this won't work. Honda can't pull this off and they've been making a natural gas car for years. They pulled off hybrids and so has Toyota. American car companies are not going to be able to pull of something that the Japanese have not pulled off yet. It's not going to happen.

Bob Froehlich: We really don't need the government's involvement. Let the free markets bear. I do love the natural gas idea. I love it because I compare it between the electric car and the natural gas car. I would never say an idea is stupid, but the electric car may be the stupidest idea I've ever seen in my life. We have the worst electric infrastructure grid maybe in the whole world and we want to move one hundred million people to plug in their car every night, as if California and New York don't have enough problems with brown outs and black outs. When I look at this, I try to be objective and I say the electric car-a pretty stupid idea. A natural gas car is an awesome idea as long as the government stays out of the way.

Mike Norman: The government subsidizes the oil industry for crying out loud. The largest industry on earth is subsidized by the government. You're saying we shouldn't subsidize a new fuel that we have a huge abundance of, which could be a very positive thing for our economy, just because it's government.


Gary B. Smith: This is another case of the government coming in and mucking things up and the banks are responding. As a customer I hate it, but free checking is not a birth right. The effect here is the banks are going out and try to make more money. If I were a Wells Fargo customer I may try to look for another bank if it made me that mad, or maybe I would put my money under a mattress. But, this is capitalism at work. Good for them, maybe bad for the customers. Maybe it creates more competition.

Tobin Smith: Free checking was a code word for freedom of over-regulation. That is gone because of Dodd-Frank and you better get used to it. There may be some competition over the internet where there's a more efficient player and that would be good, old capitalism coming in. But we have basically six banks that have over 80 percent of all the deposits in the United States, so I don't know.

Jonas Max Ferris: You can't blame the airline fee on the government-that's ridiculous. This has nothing to do with prop trading and the hedge fund business. They cannot charge you a lot of money when you overdraft. Without being able to do that a $200 account does not make money for a bank. They have to charge you $7 a month or they lose money in the account because they cannot charge you high ATM fees, high overdraft fees. Who lost in this whole deal? The guy with the low balance who doesn't overdraft. Who won? The guy who over drafted and was paying $39 fees through some crazy formula.

Bob Froehlich: The banks gave free checking because they were able to make a lot of money in other places where they can't now. They're not allowed to use anything in proprietary trading, the government took that away from them. The government took away securitization of loans. They can't charge high fees if someone overdrafts a bank check. They can't charge much interest rate for credit cards. What's left is the banks not making a lot of money so they're going to charge for checking. This is a result of the regulation. When big banks were making money they gave checking away and it made everyone give checking away. The new reality is this is just like the airlines. You're going to pay for every little service you get from the bank. You can blame that on regulation.

Mike Norman: The fees are disgusting. We bailed all these banks out and now they're hitting us up with fees. They should all be out of business. They should have been closed down. This is ridiculous. The fees are disgusting and I do not like them. I do not like them.


Gary B. Smith: SPDR Dow Jones Industrial Average (DIA) up 15 percent by 2013

Tobin Smith: Yum! Brands (YUM) has 25 percent gain in one year

Jonas Max Ferris: Constellation Brands (STZ) has 20 percent profit in one year

Bob Froehlich: Carnival Cruise Lines (CCL) triples in 24 months

Mike Norman: Atlas Energy (ATLS) has 30 percent profit in six months