Wednesday, November 30, 2011

The New Novelist

It is the end of November, and I have just written the end of my first full-length novel. I wrote it this month as part of National Novel Writing Month (NaNoWriMo). I like this kind of gimmick that gets people to focus on a particular area of action, and I took on the NaNoWriMo goal of writing 50,000 words of new fiction during the 30 days of November. Having completed that goal, in the form of a novel, I feel like I am now an official novelist.

Writing a novel has prompted me to see people in a new light. Characters are key in a novel, more so than in any other form of fiction. In a novel it is important to have characters who are colorful and conspicuously different from each other. That is important in real life in a similar way. After guiding my characters through a long, involved story, I have a heightened appreciation for everything that makes people different from each other. Even people’s bad qualities are good in this sense. In economic terms we know that we will get more done if we all take on different points of view. Real life and the story lines of novels are very similar in this sense.

A Business Phasing Out Email

It’s no secret that email is messy. You can never say with certainty that a message, once sent, will be delivered, and when you receive a message, you cannot really tell where or when it originated or who wrote it. The vast majority of email messages, more than 99 percent, are junk messages, mechanically generated by organized crime groups. Most are filtered out at servers along the way, and legitimate messages are filtered out along with them. Both junk and legitimate email can carry destructive computer programs such as viruses, and can hide links to malicious web programs. It is no surprise that people are looking for ways to move away from email.

And in France, Atos has decided that time has come. Susanna Kim writes about this company’s efforts at ABC News: “Tech Firm Implements Employee ‘Zero Email’ Policy.” In a study, Atos found that its 74,000 employees receive an average of 200 email messages per day. It is a pattern that is too unproductive to carry on, they say, so they are cutting back on email with an eye toward phasing it out.

With 200 email messages per day, the workplace becomes the written equivalent of a shouting match. It is hard for the important information to rise above the noise. There are no easy answers for a worker who receives this many messages. If they were to spend one minute reading each message and five minutes responding to one message out of ten, there would be no time in the workday for anything else. Yet not every message can be read in one minute. Aside from the time spent on receiving messages, email is also an awkward format for searching and archiving, both of which are essential for business messages.

I personally receive an average of 1,000 email messages per day. For the most part, I keep up with this flow, but how do I do it? Let’s just say it is a skill I couldn’t teach and it does not feel like the right answer.

Executives at Atos have already stopped sending email, and employees in total have cut back by 20 percent. The company says it can cut back email back to “zero” within two years. It may not happen that quickly, but the flow of messages can easily be reduced by 95 percent in that time. That much can be accomplished by finding more appropriate forums for broadcast messages, notifications, reminders, collaborative discussions, and similar forms of messages that fit only awkwardly in the email format.

Downward Spiral in Iran?

It is never a good sign when a country starts attacking embassies, and political observers in Iran say the attack by “student demonstrators” who looted the British embassy in Tehran has all the signs of a state-sponsored attack.

That embassy is now, of course, closed, and the organized crime groups currently running Iran are further isolating themselves from the world.

There are some echoes of events in Syria, so is Iran starting to follow that regime’s downward spiral? There are a few reasons to think that is possible. Notably, first, Iran and Syria previously had a long history of collaboration in support of crime groups in Lebanon and Gaza. To the extent that regimes in Iran and Syria have supported each other, a decline in one place would imply a decline in the other. Second, it seems possible that the corruption in all four countries is driven by oil money, and that is a formula that has proved less potent in other places around the world over the last five years.

Iran’s government has been very publicly feuding with itself since before the last bungled election, and the process of overturning that election cemented the country’s status as a failed state. Now the establishment figures who had agreed to pose as opposition candidates in that election have been locked up. That is a potent symbol of a regime that is giving in to paranoia and running out of friends. That was the dysfunctional psychological state that brought down the regime in Libya and if it progresses in Iran, could ultimately bring down that regime too.

Monday, November 28, 2011

Decline of Content in Pharmaceuticals

Fortune has a story pointing to the same problem in big pharma that has already stung the major record labels and the newspaper business: the decline of content. Dan Primack writes “No new drugs? Blame Wall Street.” The big companies are cutting research and abandoning more products before release because the bean counters believe they can make a quicker profit by investing in things like marketing and lawsuits. The inevitable result is that big pharma will fade away the same way as the record and newspaper businesses. With few real musicians and writers, the giants of these industries are shadows of what they used to be. With fewer new drugs invented and tested, big pharma will become, in essence, a giant sales force selling empty pills — and that, obviously, won’t fly.

The decline of a few large companies would not be such a big deal if new companies were coming along to pick up the trajectory of the pharmaceutical industry, developing the next generation of drugs, but that is a problem too, with the big money pulling back. Primack writes:

Early-stage startups are having a much tougher go of it, with 17% fewer raising venture capital during the first three quarters of 2011 than during the same period in 2010. Moreover, a number of veteran VC firms are formally ending their pursuit of pharma startups.

The decline of big pharma will be blamed on other things five years from now, such as consumers’ growing skepticism of commercial medicine, but you are seeing the real cause here. It is the reluctance of executives and investors to pay the expenses that are required to keep the industry going. Big pharma will continue to put out new drugs, just as the major record labels continue to put out new records, but most of them will be products of limited consequence, ones that you may never hear about.

Sunday, November 27, 2011

Successes and Failures on Black Friday

The three big success stories at retail this weekend are Best Buy, Walmart, and Apple. The busiest parking lots I saw were at Walmart, which had the appeal of low prices and a wide range of products. Apple’s advantage is not just having products people want, but also a relatively frictionless buying experience. If you wanted to, you could go into the Apple Store and drop $5,000 in less than ten minutes, while being absolutely confident that you had gotten the right things. Products people want and a relatively frictionless buying experience could also be said this year of Best Buy, which did not have the problem of maddeningly thin inventories that had plagued it the last two Christmas seasons. The thin inventories may return at Best Buy before Christmas rolls around, I am told, but for Black Friday, it was properly stocked, and at prices that competed with the likes of Walmart and Sears. The midnight opening on Black Friday also seems to have been a big success at Best Buy, more so than at other retail chains.

These three success stories should not overshadow the many stores that found only modest success on Black Friday weekend. This was not just individual stores, but whole shopping centers where the throngs of shoppers never arrived and the parking lot was never more than one third full. Suburban retail parking lots in the United States are built for Black Friday, so if they are not at least half full at some point during that day, something has gone wrong.

Saturday, November 26, 2011

Black Friday and “Momentum”

By most accounts it was a strong Black Friday at U.S. retail. After a late start in holiday shopping, consumers had more things to buy when they went out on Black Friday. But retailers looking for “momentum” in the Christmas season are up against consumers who increasingly see Christmas shopping as a one-and-done occasion.

It was hard to imagine retail momentum when I saw local commercial areas this morning. After yesterday’s rush, today started off slower than a normal fall Saturday. Traffic picked up in the early afternoon but appeared to have peaked before 2 p.m.

Friday, November 25, 2011

Black Friday Overnight Adventure

The most interesting note in the early Black Friday retail reports is the suggestion that the overnight store openings seem to have had some appeal to under-30 shoppers. The after-midnight shopping expedition provided a sense of adventure, an excuse to escape the holiday evening at a reasonable hour, and a chance to buy an television or small appliance that was actually needed. Most younger shoppers avoid Black Friday entirely because of the crowds and inconvenience, but the overnight store openings allowed them to get in on the action and still avoid the crowds.

Thursday, November 24, 2011

A Mindfulness Attention Exercise for a Holiday Weekend

Part of the Thanksgiving tradition in the United States is the idea of spending a few moments consciously controlling what you pay attention. Instead of automatically griping about the details of life and the state of the world, you are asked by newspaper columnists and others to “count your blessings” — to focus one by one on things that are favorable or are going well. It is possible to turn that momentary exercise into a practice of mindful attention.

What occupies your attention all day long? It has barely occurred to most people to notice what they pay attention to, a necessary first step before you can start to consciously decide what to pay attention to.

I won’t repeat all the research that has been done on this question, which can easily be found elsewhere. It is enough to say that most people’s patterns of attention are highly repetitive. Repetitive thoughts are a sign of emotional insecurity, and so you may conclude that almost everyone is highly insecure about something in their lives, and whatever that topic is in your life, it is likely to occupy a disproportionate share of your attention.

It is hard to overstate the potential benefits of taking more control over what you give your attention to.

  1. You can substantially change your personality just by changing what you pay attention to.
  2. Rendering a strategy successfully depends mostly on paying attention to the right details. And yes, this includes that strategy for making a million dollars. If you don’t pay attention to the right things, you won’t get the million dollars.
  3. You will automatically become more popular if you are more consistent in paying attention to the people immediately around you.

And that is just the tip of the iceberg.

How do you get started? Here is one approach especially suited to a family holiday. Start by quietly making a list of things you have thought about more than once in the past hour. Try to include the things that are so obvious that you hesitate to write them down. The things that are so plainly evident to you may go unnoticed by others.

Then, separately, ask the people around to point out things they think you might have overlooked. You might just ask, “What’s interesting here that you think I might not have noticed?” Some of the things people point out will be things that you hadn’t noticed until they were pointed out to you. This works especially well with people who know your tendencies and blind spots, but it can work to an extent with random strangers also.

By comparing the two results, you can see that you notice some things and overlook others. The things you focus on obsessively are not necessarily more important than the things you fail to notice at all. This observation is a starting point for intentionally changing the things you focus in.

Wednesday, November 23, 2011

Germany’s Knife-Edge Euro Strategy

The failure of a German bond auction today highlights the risks of Germany’s euro strategy. Germany’s efforts to separate itself from the weakness found in the “peripheral” euro countries runs directly into the challenges posed by a common currency. A country cannot entirely separate itself from the economies of other countries that use the same currency. For example, if Italy falls into an inflationary spiral because of its problems, the inflation will occur in Germany too.

German, along with France and a couple of other countries, would do well to remember that the main reason the euro exists is to save them the costs of currency conversion in trading and travel among the countries of Europe. These benefits occur roughly in proportion to the wealth of individuals and states. Of all countries, then, Germany gets the greatest benefit from the euro zone and will pay the greatest price if the euro fails.

Germany’s approach of trying to gain advantage by short-changing the euro zone cannot end well. If it works so well that the euro falls into the inflationary spiral I mentioned, the cost to Germany will be far greater than any advantage it may have gained over its neighbors.

Tuesday, November 22, 2011

Christmas Shoppers Come Out

It has been a startlingly slow Christmas shopping season so far from what I am seeing locally in southeastern Pennsylvania. With half-hearted retail displays and retailers also holding back on discounts, no one could fault shoppers for holding out. It was not until the lunch hour at Thursday, November 17, one week before Thanksgiving, that I saw the first inkling of holiday shopping traffic. All Sunday afternoon, there was conspicuous retail traffic, though this may have been boosted by the fact that the local NFL team was playing a night game. But the heavy traffic on the streets did not arrive until this afternoon.

I am not sure this means a mob of shoppers will come out on Black Friday, either. I have seen a noticeably lower level of conversation surrounding the leaked and officially released Black Friday offerings. Instead, the main Black Friday headline thus far is about the petition to shorten Black Friday. Workers and shoppers are asking stores not to open until around 5 a.m. to give people a chance to enjoy Thanksgiving. If there is an especially busy day on Black Friday, the traditional peak of the shopping season, it still would not make up for the sales lost over the last three weeks. The slow start does not have retailers scaling back expectations by much yet, though they worry about low prices and thin profit margins.

Shoppers may have bought presents already without creating extra traffic. Many gifts were purchased during the summer, particularly at the Borders liquidation. Many Christmas-season items are picked up during other store visits to save time. Some of this year’s top wish list items, notably the iPad, don’t require a store visit. So it may be that shoppers are shopping, but trying to do it without the extra driving that generates the heavy traffic of Christmas season.

Monday, November 21, 2011

The Political Price of Inaction in Spain and the United States

Voters in Spain gave the Popular Party a ruling majority in yesterday’s elections. The Popular Party might be a deeply corrupt pro-business conservative party whose policies did much to create the economic problems Spain now faces, but voters are in no mood to accept failure, and the Socialist Party, in seven years, has not been able to do much to revive the country’s tepid economy.

It is just the latest in a series of anti-incumbency votes that have been sweeping across Europe, replacing some governments more than once in the last three years. It is not really much of a victory for the Popular Party in Spain, whose pro-business theories and tendency toward corruption are not likely to do much to reduce unemployment or make voters feel better about the state of the economy. The way things are going in Europe, they could be out again as soon as next year if the problems in Spain get worse. A sharp slide in stock markets today suggests that the ownership class that supposedly would benefit from the Popular Party’s programs does not have high hopes.

All this bodes poorly for Republicans and Democrats in the United States, whose two-party special budget committee, facing a Wednesday deadline, is expected to announce failure today. The committee was designed to deadlock, as any recommendation it made would next face a vote from a House that is adamantly opposed to any cuts in the largest categories of spending. But that doesn’t mean voters, or investors for that matter, will understand the lack of action.

Sunday, November 20, 2011

Big Money vs. Infrastructure

On Thursday I saw CNBC flipping back and forth between reporting on an Occupy Wall Street march and snippets of their new feature series on the decay of infrastructure, focusing especially on bridges. Yet CNBC’s reporters were somehow unable to draw the connection between those two stories. When you consider CNBC’s financial interests, this can probably be considered an intentional omission. But in case the connection between Occupy Wall Street and crumbling bridges is not obvious to all, I will connect the dots here.

Infrastructure is a fancy word for public products that enable workers to get work done. A bridge, for example, allows a road to connect one point to another. On that road, products can be delivered and people can go to work. (There are other uses for bridges and roads, of course, but when we look into it, we find that when people are out on the roads, it is mostly for the purposes of work or commerce.) The political opposition to bridges and other initiatives to support work is summed in the phrase “big government.”

You can see that “big government” really means infrastructure when you look at the views of the political opponents of “big government.” Some of them oppose military interventions in foreign countries; others call for the United States to be more aggressive in intervening in matters halfway around the world. Some want to create a new national police force to interfere in one way or another in people’s sex lives; others believe the government should not take a position on people’s sex lives. Some of the “anti-big government” crowd want to spend billions in public money to fund institutions that are essentially religious in nature, or to add religious indoctrination to public schools; others want to keep government and religion separate. Some of them, holding office, are busy about diverting public funds for personal profit; others are busy investigating the corrupt practices of the officials I just mentioned. The one point they all agree on is about not spending money on anything that would help workers get anything done. That is precisely the “big government” that gets them so mad. If they can eliminate funding for transportation, the Internet, the electric supply, or health-related initiatives (workers who are healthy do more work), they consider that an accomplishment.

Meanwhile, Occupy Wall Street is out on the street calling for a government that works for the people. They use the phrase “the 99%” to make it clear that by the people, they mean the workers, rather than the “1%,” the billionaire-investors and other very wealthy people who make up the ownership class. If the government supports “the 99%” rather than “the 1%,” it will be helping people who want to do things rather than those who merely want to control everything.

You see the same dichotomy in the current tax conversations. Most of the presidential candidates who are talking about taxes at all want to raise taxes on workers while lower taxes on owners. The more extreme proposals would abolish the capital gains and estate taxes. The two taxes that the ownership class cannot entirely avoid under the current system would be abolished. The ownership class would, for all intents and purposes, no longer pay taxes at all. Personal income taxes, payroll taxes, and sometimes consumption taxes — the taxes that particularly hit workers — would be increased to make up the difference. Occupy Wall Street seem to be the only ones out there saying that workers should not have to pay more than their share of taxes.

Bridges are crumbling because the big-money interests don’t want them. These are the same big-money interests, the “1%,” that Occupy Wall Street is warning us about. And it is not just bridges that are crumbling. The whole economy is crumbling because the big-money interests oppose anything that supports workers and work, and as a result, less and less actual productive work is getting done. It is also crumbling because of a tax system that encourages people to get away from working, the one area of the economy that is most heavily taxed, as quickly as possible.

In the fantasy world of Wall Street as shown on CNBC, there is no connection between crumbling bridges and the Occupy protests. But when you look at what is actually going on in the world outside, it is hard to avoid making the connection.

Saturday, November 19, 2011

Consistent Neutrinos and More Bad Science Reporting

A refined version of the neutrino experiment produced the same results and eliminated hypotheses involving mistaken identity of the neutrinos. Neutrinos again traveled faster than would be expected under the conventional scientific view of space, time, particles, rocks, geometry, and geography.

The new neutrino observations are an important development because neutrinos can’t be reliably identified. There are several types of neutrinos, but a group of neutrinos can’t carry an identifying signal because neutrinos change their identity frequently through a mechanism that is not well understood. Experimenters compensated by generating much smaller bursts of neutrinos so that there was less room for statistical doubt about which neutrinos were which.

As before, there were embarrassing headlines about “faster than light” travel. This is the logical error known as “assuming the conclusion,” which involves using an intended conclusion as the starting point for an argument. Light, of course, was not included in the neutrino experiment, and scientifically it cannot be said that light and neutrinos travel at different speeds until there is an experiment that generates and measures light and neutrinos together. No one is even proposing such an experiment. The fallacy of assuming the conclusion could be seen in various other forms in the reporting on the neutrino experiment. It goes to show how mind-bending this particular experimental result is.

If reputable physicists are saying that it is better not to speculate about the results, it is not that they are stonewalling. There have not been many measurements of the speed of neutrinos going long distances through solid materials, and a better picture of what is happening will be possible after such measurements are made in more places and under a greater variety of circumstances.

Friday, November 18, 2011

This Week in Bank Failures

With the success of Move Your Money and Bank Transfer Day, will the large banks start closing branches? In fact, bank branches close every week, and most of the large banks have quietly closed branches a few at a time over the last three years. It’s a trend that most industry observers expected to pick up in 2012 even before retail customers started to flee.

In my local area, Citizens Bank announced 7 branch closings today. There were earlier reports of 15 branch closings, but the smaller announcement probably just means the other 8 closings will be announced at a later date. Citizens was already 12 branches less than at its pre-crisis peak. It will have 173 after the new round of closings, and that is probably still more than it can afford.

One reason banks hesitate to close branches is that they lose customers every time they do so. Many bank customers almost automatically close their accounts when the branch they use closes. Large banks will become more eager to close branches as the number of active customers declines.

Tonight, state regulators closed Central Progressive Bank, which had 17 locations in lower Louisiana generally along Interstate 12 north of Lake Pontchartrain. It had $350 million in deposits. First NBC Bank, based across the lake in New Orleans, is taking over the deposits and purchasing 90 percent of the failed bank’s assets. First NBC Bank effectively doubles its footprint with the deal.

The failed bank’s holding company had tried everything to sell the bank, even filing for bankruptcy a month ago in the hope that that might help close the deal. The bank suffered from improper activities of its former management, along with the effects of the real estate slump and, given its location, more than its share of hurricane disruptions. Some observers said it was the only New Orleans area bank in serious financial trouble.

State regulators in Iowa closed Polk County Bank. The FDIC has transferred the $82 million in deposits and the assets to Grinnell State Bank. State regulators blamed the failure on real estate loans.

With tonight’s two bank closings, there have been 90 so far this year. That is a pace that would result in about 96 bank failures for the year, or roughly half the pace of the previous two years.

Thursday, November 17, 2011

Occupy Wall Street vs. the Roman Empire

If you look at some of the century-old architecture that surrounds the Occupy Wall Street movement in New York, with the heavy weight of concrete and stone, tall columns, and broad staircases, you can get the impression of a protest against the Roman Empire. There is some truth in this. The greed, corruption, and abuse of power targeted by the protestors are patterns of conduct that are direct descendants of the centers of power in ancient Rome.

It is surprising in a way that this particular protest movement is so needed in the United States. This is a country, after all, that was founded substantially by Protestants, who two centuries before had shrugged off the Roman Empire’s outsized lingering influence on people’s lives. Protestants objected to such details as religious fees that had no rational justification and forcing people to speak in Latin, the archaic language of Rome, when they had no familiarity with the language. The United States was founded with an emphasis on individual freedom that would have been unthinkable under the Roman Empire. But the Protestant Reformation was focused on personal lives and religious institutions, and the Roman influence and corruption carried forward in government, commerce, and education, and most especially when it came to money, law, and anything else that formed the common ground for commerce. The many things the Protestants could not accomplish fall to the protestors of today.

It is no trouble at all to pick out Roman influences on money, law, and commerce in the United States. The United States has always stamped Latin affirmations on coins and currency to try to lend legitimacy to its money. United States law, like law in most places, is loaded with Latin phrases and Roman legal principles.

The root problem with this side of the legacy of Rome is that the Roman Empire was out to cheat the whole world with its control of the common currency and a habit of exploitation of legal ambiguity. The successors to this tradition are found on Wall Street. The U.S. dollar is the currency of reference for international transactions almost everywhere in the world. Meanwhile, Wall Street banks have become more than notorious for a pattern of surprising their customers and trading partners with unexpected interpretations of contract language. Every day, lawyers of Wall Street banks are in court explaining to a judge how a contract allows them to assess a fee that the contract never mentions or why they are exempt from living up to their side of a deal because the words in the contract do not mean what they seem to mean. It is as if the Roman Empire never left us.

The corporate news media has whined for two months about the supposed lack of specificity in Occupy Wall Street’s positions. There can be no doubt, however, that the protestors are railing against greed. I believe they are speaking specifically against the kind of greed that leads powerful institutions to cheat people left and right, and a system that allows this kind of greed to operate unchecked. They are protesting, in short, against the modus operandi of the Roman Empire.

This particular influence of the Roman Empire has been with us for 30 lifetimes. It is hard to imagine a world without it. Yet other vestiges of the Roman Empire have fallen away over the past centuries, and looking back, we find it hard to believe people used to act in such an antiquated way. This one will fall away too.

Wednesday, November 16, 2011

Plastic Going to Waste in Ireland

The Edie story “Ireland poor on plastics recycling despite manufacturing demand” highlights a vexing and ironic problem. Ireland needs recyclable plastic as a raw material and imports it by the shipload from other countries. At the same time, it discards three fourths of its own waste plastic, with most of it going into landfills.

This is a multi-billion-dollar problem in Ireland alone, and on the face of it, it is a mostly solvable problem. Plastic is everywhere you turn and costs $1 per kilogram or more, but getting the waste plastic to the right factories just an old-fashioned logistics challenge. The persistence of big problems like this goes to show that the economy is far from optimized. There is still plenty of room for improvement at a basic level, before you have to resort to anything fancy or risky.

Tuesday, November 15, 2011

Google Is Tracking My Location in Real Time

A week ago today, when I attempted to sign in to Blogger to write my post in this blog, Google asked for permission to do something no one else had ever suggested to do. Google wanted to track my location in real time and pass that information along to unspecified third parties (i.e., anyone in the world). I would have assumed those third parties would be advertisers — like the local retail locations that want to advertise to people specifically when they are already in the neighborhood — but that wasn’t the language Google was presenting me with. They were essentially asking if it was okay with me if they could tell the whole world where I was from moment to moment. I don’t have a way to recover the exact text of Google’s request, which is a problem in itself, but that is the gist of it.

Until I agreed, I could not sign in. I could not access any Google services at all: not YouTube, not Google Plus, not Google Checkout. I faced a difficult choice: I could let Google, in effect, stalk me, or I could say goodbye to all of these services permanently.

Obviously, since you are reading this, I clicked the button to give Google the permission it was seeking. But since then, I have been having misgivings about it. It does not seem like an entirely fair trade. It is not that I don’t value Google’s services. But personal security is valuable too. It is perhaps more valuable than all information services combined, and there is no such thing as personal security if potentially the whole world can know where you are and where you are going at random times. And if this is a minor concern for me, something that is still bugging me a week later, there are others for whom it is a very big deal: corporate executives, minor celebrities, and Occupy Wall Street protesters, to name a few.

I haven’t seen any indication that Google is abusing its personal location tracking abilities, but on the other hand, that is not the kind of information a big, powerful corporation would tend to broadcast. And even if Google itself doesn’t use personal data indiscriminately, what of the marketing partners that it is sharing people’s location data with? We can hardly form an opinion about them, not knowing the first thing about who they are, or who they might be in the future.

I dug into Google’s privacy policies in the hope that they might shed some light on the subject. Although they run to hundreds of pages, they are strangely silent about Google’s uses of personal location tracking. However, they do contain this cautionary note:

Certain of our products and services allow you to interact and share your information with others. Please consider carefully before disclosing any personal information or data that might be accessible to others.

In that spirit, I am considering what I might do to share less of my location data with Google. I am not suggesting that I could stop using Google entirely. But it seems only prudent to look at alternatives and find the easiest ways to cut back. If I am connected to Google services only intermittently, and never all day long, then Google or its partners can’t produce a coherent narrative of my comings and goings.

When I started to look for alternatives on Saturday, I found that Google’s users have more choices than ever. Years ago when I signed up for Google Mail, it was the only email service of its kind. Now there are hundreds. Similarly, Blogger has gone from being one of the more powerful blog engines to merely being one of the more convenient. Google itself has an engineering initiative, Data Liberation, to help users extract their data from Google products so that it can be taken elsewhere.

As an easy first step, I deleted everything from Google Docs and Google Mail. That took 10 minutes. I removed Google Mail from my mobile phone, replacing it with another email account. Ten more minutes. I am trying to develop the habit of accessing all my Google stuff, including web searches, at once, especially at night or early in the morning. That alone may reduce my Google footprint by nearly a third. If the Google tracking problem continues to bug me, I may do more.

Monday, November 14, 2011

Jefferson County: Another Greece

At first glance, the bankruptcy of Jefferson County, Alabama, the county that includes Birmingham, looks like a repeat of Harrisburg, Pennsylvania. In Harrisburg, it was the failure of an incinerator overhaul that left the city insolvent. It was an isolated case, since so few municipalities have incinerator overhauls that run into problems. In a seeming parallel, it was a sewer project that caused the financial problems in Jefferson County.

But look closer, and it is not the same at all. Jefferson County’s problems were not so much with the sewer system itself, which is working essentially as planned, but with a badly mismanaged bond issue.

The bungled bond deal was one that Wall Street had its hands in. And Wall Street has its hands in a lot of things. Essentially, Jefferson County is not another Harrisburg, but another Greece. An order of magnitude smaller, but the same essential dynamic.

Jefferson County is obviously not the only place where financiers and officeholders had private profit on their minds. The outcome there lends credence to the thought that there may be a flood of local government bankruptcies in the next three years as the U.S. economy goes through a new series of stresses.

Sunday, November 13, 2011

Fall Arctic Ice Falling Too

The NSIDC Arctic sea ice extent graph has been tracking with the 2007 graph all year. Occasionally it has popped lower to set a new record low. That appears to be happening again now, with ice growth flattening since Thursday to track slightly below the record from 2006. Fall had been the one season in which Arctic ice extent was only modestly lower than the historical record, but now fall too is opening up a conspicuous gap from its pre-2000 record.

Saturday, November 12, 2011

More Steps to Reduce Corporate Control

Bank Transfer Day saw people moving their bank accounts to their own towns. It was meant as a blow to the big corporations the seek to manage people’s lives from far away.

A week later, people may be wonder what else they can do. At AlterNet, Anna Lekas Miller suggests “3 More Ways to Move Your Money Away from Corporations”:

  1. Buy local.
  2. Buy union made.
  3. Buy green.

Bank Transfer Day is just one of the first big successes of what will become a sweeping movement: a movement of individual actions to reduce the centralized control of the global economy. It is a reaction to a growing problem: as more economic decisions are made by fewer people paying less attention to the circumstances of people’s economic lives, errors and dysfunction are growing and breaking points are occurring more frequently.

This dynamic explains why a group of bankers could imagine it made sense to charge customers who can’t necessarily afford it, $5 a month for a non-service in order to fund bonuses for bank executives — the specific outrage that fueled Bank Transfer Day. It didn’t occur to the executives that $5 a month was enough money to matter to anyone. That kind of error is inevitable when decisions are entrusted to a committee of millionaires, sitting around a table with no view of the street, or any group equally removed from the real world. Equally clueless business decisions are made every day by corporate executives and committees that are so out of touch with the way the world works that they don’t understand the harm they are doing.

We can’t individually stop the dynamic of central control of the economy, but we can reduce our personal involvement. It is hard to know what specifically to do because almost everything a corporation does happens behind closed doors. Just to find out what products a corporation makes is a challenge. But we can start with what we do know, and add more as we go along.

For now, I will add three more suggestions of my own, suggestions that aren’t specifically about money:

  1. Cook your own food.
  2. Stay healthy.
  3. Spend less time watching commercial television.

None of these are meant as rules to follow all the time. But each time you can solve a problem outside of the corporate scheme, it reduces corporations’ grip on the world and their influence on your personal life.

Friday, November 11, 2011

This Week in Bank Failures

European leaders have begun talking quietly about breaking up the euro. The big winner in that scenario would be the larger banks — those that survived the initial turmoil, that is. Banks would gain about $2 billion per day in fees for currency exchanges that don’t have to be done in the euro zone. Wall Street would stand to gain an additional $1 billion per day in currency trading by manipulating exchange rates.

Those keeping score on Bank Transfer Day, a week ago tomorrow, say it was a big event, with a quarter of a million U.S. customers setting up checking accounts at new banks and credit unions. The amount of money moved on Saturday was only a few billion dollars, but partly that is because many participants were more focused on opening the new accounts than on closing their old accounts. Consumers wanting to minimize the frictional costs of moving their banking will continue to write checks on the old checking account until its balance dwindles, while doing all other banking at the new bank.

One small bank failed in Georgia. Community Bank of Rockmart‘s single location will carry on as a branch of Century Bank of Georgia, which is assuming the deposits and purchasing two thirds of the assets. The failed bank’s emphasis on commercial real estate was its undoing, according to regulators. It also suffered from inauspicious timing. It launched in May 2005 and opened its permanent location in March 2006, just at the time when the Georgia economy and real estate market were coming apart.

The bank closing occurred last night, not on the usual Friday night, because of the holiday today.

Thursday, November 10, 2011

Keystone XL Pipeline: Unofficially Canceled

Officially, the announcements about the Keystone XL Pipeline project are noncommittal. The State Department’s Inspector General is looking into the serious irregularities in the overview of the project, which include public hearings run by lobbying firms instead of government officials. According to reports, the White House has decided to look into an alternate route for the pipeline that would have a reduced threat of environment damage, and that is expected to be announced to the public this afternoon.

Changing the pipeline route won’t change much, though. There are problems with the route, but the fundamental problems with the pipeline are economic. The oil fields in and near Alberta will deliver only a modest amount of oil, and at a higher cost of extraction than the world’s currently active oil fields. With those limitations, the Alberta-to-Texas route doesn’t much any sense, unless you’re the owner of a refinery in Texas. The project stands a better chance of financial success if the oil doesn’t have to be carried the length of the continent for refining. The oil could easily be refined and used entirely in western Canada and the adjacent border states of the United States.

The premise of the project, of a massive public effort on behalf of an ill-conceived project that will only benefit a few people in Texas, helped to inspire a large-scale protest action last weekend, in which protesters circled the White House while carrying a large balloon in the size and shape of the proposed pipeline. The Texas oil refineries’ hope of getting the project quietly approved have obviously failed. Realistically, the announcement of a delay can be understood as a way to quietly cancel the whole project after the 2012 U.S. elections.

Wednesday, November 9, 2011

Confidence and Ability Are Overrated

Two current stories show that two of the most important personal attributes according to folk wisdom and management theories — a record of achievement and an air of confidence — don’t guarantee meaningful results. In Italy, the billionaire-investor running the country is prepared to throw up his hands in defeat and step down from his post. At Adobe, 750 layoffs are on the way as the company abandons plans to be the go-to source for cross-platform user interface development. Adobe had huge successes with software in the past but, despite a massive effort, couldn’t deliver a competent development environment. Berlusconi’s history proves he knows how to handle money, but he couldn’t find a solution to his country’s financial woes.

Tuesday, November 8, 2011

Credit Card Strategies for an Imagined Expansion

Consumers this month have been cutting up their credit cards for Bank Transfer Day. At the same time, several of the largest credit card banks are in the middle of the biggest marketing push to sign up new customers for credit cards. When you hear this, it almost sounds as if credit cards are a good deal for banks and a bad deal for consumers.

But wait a minute. Just last year the banking industry was screaming about how much money they would be losing on credit cards after the new rules went into effect.

These banks involved in this reversal of strategy either were wrong last year when they imagined that credit cards would become a money-losing business, or are wrong now to spend around a billion dollars to sign up 2 or 3 million new cardholders.

The worrisome thing about the new credit card rush is that the economic forecasts it is based on might be mistaken. The banks are particularly eager to sign up new cardholders now because they imagine the economy and job market will have to improve soon. The most eager adopters of this fall’s credit cards will be using them on the same theory. It is the same error, of course, that created the home mortgage mess six years ago. Maybe the economy will be booming again next year. But if it is not, the consumers and banks who make a move into credit cards now may just be creating the next credit mess.

Monday, November 7, 2011

Why Large-Screen TV Prices Are Falling

The 3-D fad is over. In the television business, the main focus has returned to large-screen televisions this Christmas season. But most American households that had a use for a large-screen had already purchased one by 2010.

When manufacturers are trying to keep selling into an already saturated market, that is reason enough to expect big price cuts. And there is another, more fundamental reason for lower prices of televisions this year. Engineering and design improvements have improved the manufacturability of the video displays. Flat-screen televisions now cost less to make than they ever did.

But even prices as much as 40 percent less than two years ago may not spur enough demand to sell all the televisions that manufacturers can make. Consumers who purchased a television within the last three years will subconsciously avoid the television promotions in stores, not eager to discover that the unit they paid $4,000 for is now worth less than $2,000. With banks in the news again, many households will think twice about making a frivolous purchase on a scale that resembles a monthly mortgage payment, perhaps opting to delay until the mortgage is paid off.

This, then, could be the last year in which large-screen televisions dominate Christmas-season store layouts. Everyone who was holding out will have a chance to buy a large-screen television in the after-Christmas, pre-Super Bowl sales of January. After that, manufacturers will have to cut back on production, and retailers on floor space, to a scale that fits a replacement-cycle product.

Sunday, November 6, 2011

Starting a New Chapter, Today

This month I am participating in National Novel Writing Month, better known as NaNoWriMo. I will attempt to write a 50,000 word first draft of a novel during the month of November. Every year, tens of thousands of novels are written this way. I have never written a full-length novel before, but I have written plenty of nonfiction books and short fiction, not to mention this daily blog, so there is little doubt that I will now be able to write a full-length novel. The only suspense is the question of how well I can do it in one calendar month.

One of the advantages of writing a novel this quickly is that the story can’t get boring. Thus far, I have written five chapters in five days, and to finish the novel during the month, I will have to continue writing nearly one chapter per day.

In the traditional novel form, and in the novel I am writing, each chapter is a new threshold. That is, the lives of the characters change just enough during the course of a chapter that the events of that chapter could not occur in the same way in the previous chapter or the next chapter instead. This convention gives rise to a familiar life metaphor.

There are actually two familiar metaphors or cliches that come from the experience of a novel. You “turn over a new leaf” or “turn the page” when you change a single habit or let go of something from the past. This level of change in life is like going from the right-hand page in a book to the left-hand page that follows on the other side of the same sheet of paper (called a “leaf” when it is bound into a book).

A bigger change, when you change your way of living so much that the previous pattern of daily action is no longer possible, is “starting a new chapter in life.” You might move to a new town, get divorced, start college, quit smoking, or change careers. People think of these big changes occurring only every couple of years. We all know people who have gone twenty years or longer without this level of change in their lives. On the other hand, there are also times when change is forced upon us, and we start a new chapter in life whether we are ready or not.

This especially tends to happen to characters in novels. In the novel I am writing, the main character has gone through five chapters in less than a month. As the writer, I have had to experience these new chapters on a daily basis in my imagination in order to write the narrative that forms the novel. It is not necessarily easy. I spent Friday getting comfortable with the idea of working on a road maintenance crew on a remote highway, only to wake up Saturday and have to follow a rumor that spreads through a town overnight. The pace of NaNoWriMo does not allow me to stand still long enough to get completely comfortable with the circumstances of any one chapter. I must move on as surely as the sun rises if am to reach my destination by the end of the month.

But I can do that. It is not so easy, but it is not so hard either. And if I can do it in my imagination, as a would-be novel writer, I must also be capable of doing it in my actual life. The imaginary mind is the same mind as the real-life mind. If I can imagine something in enough detail that I can write it out coherently in 2,000 words, then I can imagine something else in enough detail that I can live it all day long.

Furthermore, if this is a possibility for me, then it must also be a possibility for people in general. We are all capable of advancing from one stage in life to the next without the need for a long pause of years or decades in between. We can experience a threshold change between one day and the next.

If we have this capability, why do we employ it so infrequently? Well, why did I wait until November and NaNoWriMo to write my first full-length novel? Often, we are just waiting for life to tell us it’s time.

But more than that, it is a matter of doing the work. It is one thing to say, “Yes, I really want my life to change. Yes, I really, really want to change.” It is another thing to apply a disciplined imagination to your objectives, to spend hours working out the details of the next step forward in your life, giving it enough attention that it forms a picture consistent in itself and consistent with where you are arriving from.

Who has the time to do all that? I am only doing it today, for my novel, because the NaNoWriMo schedule says I have to finish during the month of November. But if you decided that you could take the time, it seems to me, you could start a new chapter in your life today.

And then, if you could spare the time again, you could start another new chapter tomorrow.

Saturday, November 5, 2011

Bank Transfer Day

Bank Transfer Day, today, was apparently not the anticlimax that most observers had expected. Probably 2 or 3 million consumers and a significant number of small businesses had already moved their accounts, including about $30 billion in deposits, from Wall Street banks to local community banks and credit unions before Friday, so how many could be left to make the move on the actual day?

There nevertheless was a lot happening today. At least three of the top 19 banks shut down large parts of their online banking systems for the weekend. The banks were pleading “scheduled maintenance,” and I am sure they did take advantage of the shutdown to do maintenance, but when a routine four-hour maintenance window gets expanded to more than 40 hours, you can be sure that more than maintenance is going on.

Banks are restricting their online access to try to force leaving customers to go to branch offices, where they hope to talk them out of closing their accounts. There is little the large banks can say to their departing customers, though. For the average banking customer, any bank will do — the most expensive banks don’t really offer any advantages over the least expensive ones. Consumer advocates promoting bank transfer day anticipated this kind of friction from the banks, and had this simple advice: wait a few days if that makes it easier. The objective of the day is not to suffer or be inconvenienced, but just to move your money.

The media seemed to focus mostly on the Occupy protesters, particularly major marches in Los Angeles and Portland, Oregon. There were coordinated “marches” to bank branches in dozens of cities, leading to at least five arrests. Police in Dallas use force and pepper spray to clear protesters and others from a sidewalk in front of a bank branch, but that was apparently the only mass violence.

There was some spillover into the United Kingdom and Canada. Wall Street banks obviously don’t own half the bank branches in those countries, but still, some banks are more local than others, and some people were moving their accounts or out on the street protesting.

Protests might make the news, but the most important actions were done by the smallest groups of two or three people going to the bank together for moral and logistical support. Early estimates suggested that between 50,000 and 100,000 people would move their checking accounts today, but reports on social media suggest a number larger than that, along with a surprising number of credit card cancellations, perhaps as many as a million. The credit cards are mostly symbolic — Americans hold far more credit cards than they actually use — but even symbolic actions can help people form new habits of action.

The giant banks may not financially miss the deposits they are losing today, but they are showing that they are worried about losing customers. They take for granted the chance to advertise potentially expensive services to their customers, and that is a window of opportunity that is shrinking today.

Friday, November 4, 2011

This Week in Bank Failures

Among the other developments this week in the financial situation in Greece, we learned that Greece is now a de facto European colony. Politicians in Germany and a newspaper in London called for the cancellation of a referendum in Greece and the removal of the prime minister, and tonight, indications are that Greece will be complying.

But it is not as if Europe has won a victory over Greece. If EU leaders took a hard line from the beginning in their dealings with Greece to try to strengthen their central control of Europe, the strategy has backfired. A series of increasingly clumsy interventions has turned an awkward situation into a disaster, and the European Union and IMF are to blame for most of the damage: a depression gripping Greece while half of Europe’s giant banks face insolvency. That’s a fate that this week claimed MF Global, a Wall Street hedge fund (confusingly, and perhaps improperly, organized as a brokerage) after it took losses on European bonds that declined in value as a result of European mishandling of the situation in Greece. Some of the banks in Europe could be in equally dire condition for the same reason. Now having a history as agents of disaster, the EU is left with a very small platform from which to manage the European economy. For the next 20 years at least, the EU will be hearing from member states and bank executives, “We can’t go along with that — look what happened to Greece.”

There was talk this week of expelling Greece from the euro zone. That is something that, legally speaking, can’t be done, but if Greece is now a colony with only shreds of democracy and sovereignty remaining, the law will not be an obstacle. Extricating Greece from the euro, if that has to be done, will precipitate the biggest banking crisis in the history of the euro, if not the history of Europe.

AIG slipped farther from profitability in the latest quarter with big losses in its insurance businesses on top of its usual losses from unwinding and restructuring. AIG opted to retain a 33 percent share of AIA, the east Asian life insurance unit it spun off a year ago, and that’s a decision it may be regretting now. The AIA shares have declined 20 percent from their summer peak, and AIG must now raise $7 billion to repay a note it used to retain the AIA shares. In its airplane leasing business, AIG is forced to recognize losses as it retires more of its airplanes, which have a book value that is far higher than their commercial value. All this noise obscured dismal results in AIG’s core U.S. insurance operations. There, losses were not awful, but revenue growth is unlikely and the prospects for profitability are not particularly strong. AIG remains mostly owned by the U.S. Treasury, which stands to record a huge loss as the company fades.

Bank Transfer Day is tomorrow, but most supporters have already moved accounts from Wall Street banks to credit unions and local community banks. The campaign is a big deal for credit unions. The Credit Union National Association (CUNA) is telling us that credit unions gained 650,000 new customers in October — a year’s worth of new customers in one month. Similar numbers are possible again this month. Bank Transfer Day is a social-media movement specifically promoting credit unions over Wall Street banks, but a larger number of consumers are moving their banking to local community banks. All this consumer action is motivated mainly by the fear of new fees from the larger banks, and it is being supported by both industry groups and political groups.

Almost half the accounts Wall Street has lost so far were at Bank of America. Its CEO on September 29 announced a crackdown on its debit card customers, who he characterized as freeloaders mooching off of the banking network without paying their share of the costs. A follow-up “p.r. offensive” in October failed to convince anyone that consumers are being unfair to Bank of America. In surveys, only a small fraction of the bank’s customers said they would pay the new fees. About two thirds said they would move their accounts or turn in their debit cards. Bank of America was emphatic this week when it announced it had had a change of heart about debit cards, but not all of its customers are convinced, and the outflow of deposits from Bank of America shows every sign of continuing.

Reclaim the Dream is also asking supporters to take the additional step of closing credit card accounts at Wall Street banks. Credit cards haven’t had nearly the level of public discussion this year that they had last year, but indications are that hundreds of thousands of supporters are closing credit card accounts this week at Wall Street banks, mostly at Bank of America and JPMorgan Chase.

Tonight at closing time state banking regulators closed two small banks, each with less than $200 million in deposits.

The more interesting and complicated case is SunFirst Bank, with three branches in Utah. Cache Valley Bank is acquiring 91 percent of the deposits and 88 percent of the assets. The FDIC is retaining 9 percent of the deposits, in accounts that are frozen by litigation. The bank was either mixed up in or a victim of two criminal cases that federal authorities are pursuing. One group was operating online gambling sites. Gambling sites are illegal in the United States anyway, and to make matters worse, some sites may also have been stealing money from their customers. A vice chairman at the bank had already been indicted for his alleged involvement in disguising illegal credit card transactions for gambling sites. The indicted vice chairman is also said to be associated with the defendant in the other case, involving a fraudulent payment-processing operation that the Federal Trade Commission says fabricated credit card transactions in order to steal money from cardholders and their banks. The frozen accounts are probably related to these two cases.

The problems at SunFirst prompted the FDIC in January to issue a warning about the risks to banks that process money-laundering transactions, something that can occur whenever banks fail to determine the identities of their customers. Around the same time, the FDIC issued an order barring SunFirst from processing most kinds of third-party payments. The FDIC’s warning to other banks carries more weight tonight now that SunFirst has failed.

The smaller bank closing tonight is Mid City Bank, with five branches in Nebraska. Purdum State Bank is acquiring the deposits and assets. There is a twist here too. Tomorrow when the acquired branches reopen, Purdum State Bank is changing its name to Premier Bank.

Thursday, November 3, 2011

The Drug Candidates

Maybe it was a publicity stunt. After all, 100,000 people have viewed a speech presidential candidate Rick Perry gave last week. They are watching to try to determine whether he was stoned or not, but they are watching. Another 2 million have watched highlights of the speech, which give essentially the same impression as the full speech. Search YouTube for “Rick Perry drunk” and you can find all this easily. The debate over whether Perry was under the influence of alcohol and/or a controlled substance rages on, a week later, and it’s probably one of those questions that will never be definitively answered.

What you can say for sure when watching Perry’s speech, though, is that he was having trouble keeping a straight face. That he wasn’t feeling the kind of respect for the audience that normally goes with political speeches. That his speech was slurred, with words running together, key consonants missing, and misplaced emphasis in almost every sentence. That the audience, consisting largely of his own supporters, was embarrassed and uncomfortable for most of the 25 minutes. Perry may or may not have been on drugs during the speech, but he was presenting himself as a man who was.

Drug use of another kind turned up in what is officially considered a campaign advertisement for Herman Cain, but what is in practice a tobacco advertisement. It consists of little more than a campaign staffer puffing on a cigarette. Search YouTube for “Herman Cain smoking” to see this one. Tobacco companies are not allowed to present television commercials that show people smoking, but they are permitted to funnel unlimited sums of money to candidates who do so. It is the kind of loophole that a man who is not serious about running for president might employ.

A public opinion survey found that the Cain advertisement made most voters uncomfortable, including voters of his own party. Viewers saw the commercial as an endorsement of cigarette smoking and didn’t feel that promoting tobacco use was a proper part of political discussion.

In both cases, candidates are associating themselves with the idea of drug use, and voters are uncomfortable and resisting that message. People don’t believe drugs are the answer. But there are political candidates who are willing to give drugs a try, at least as a political strategy.

Wednesday, November 2, 2011

Return of the Credit Card?

Major banks are trying to use the recent controversies surrounding debit cards to their advantage, with a major push to sign up new credit card customers. The theory, apparently, is that consumers who get frustrated with debit cards may use credit cards instead, and it not an entirely unreasonable thought. From what I have heard, highly qualified prospects have received a year‘s worth of credit card offers in the past seven weeks, and other prospects have also received an unusual volume of card offers in the mail.

There is little evidence, however, of a big move by consumers to credit cards. To the contrary, many people are making a point of canceling credit card accounts issued by the major credit card banks in connection with the Bank Transfer Day, Move Your Money, Reclaim the Dream, and Occupy campaigns. Separately, I have seen some indication of people who now see paying in cash as a political statement. “Pay in cash and stick it to the man,” is the way one friend explained this concept to me. Ironically, paying in cash is being used to make the same statement that others are trying to make by boycotting government-issued cash and paying in alternate currencies, usually involving silver coins. Either way, part of the idea is that this keeps more of the money in the local economy, and on the surface, this seems likely enough.

Tuesday, November 1, 2011

Banking Giants Show Lack of Pricing Power

It seemed like the largest banks had a sure-fire way to raise a few hundred billion dollars. Monthly fees on debit cards would be their new cash cow. Consumers, after all, need their debit cards, and they couldn’t easily leave a bank to avoid the new fees if the other banks were charging something similar. It would be the same kind of windfall as the 3 percent transaction fee the giant banks added to foreign-country credit card transactions nine years ago.

Yet this new transition didn’t go smoothly at all. While other banks were “experimenting” with the new fees, Bank of America went charging ahead with the announcement of a $5 monthly fee. Most of its customers made plans to switch banks. Some switched from cards to cash. Push came to shove last week, when Bank of America went on a self-styled public relations offensive to justify its high fees while several other banks quietly withdrew their debit card fees. Today Bank of America realized it was out in front all alone, walking itself to the slaughter. It announced a change of heart.

It may be too late to repair Bank of America’s image or its stock price, which fell when the new fee was announced and fell again when it was canceled. Bank of America may already have lost more than a million customers, and there will be more when customers get around to it. CNN has already run its program to show viewers how easy it is to change banks. Consumer activists are going ahead with this week’s Bank Transfer Day which encourages consumers and small businesses to move accounts to local credit unions. Credit unions have gotten a fortune in free publicity from the controversy, and there, the main point that has finally sunk in with consumers is that credit unions are simpler than banks.

Banking customers who are worried about new fees will just go ahead and switch regardless of the fate of this one fee. The fact is that the largest banks have the largest expenses and have no other choice but to raise fees somehow. Customers who stay with these banks will be facing a new fee every year. They can either stay put and deal with the next fee when it comes along or switch now to a bank that isn’t so expensive to operate or so difficult to do business with. Consumers have learned that they do have choices when it comes to banking. Knowledge like that can’t be undone.

For the banking industry, this episode is a rude awakening, or at least it should be. The noisy consumer resistance proves that banks have lost the pricing power that they enjoyed up until last year. The banking giants can no longer simply budget how much consumers will pay, nor can they sit in the back rooms and divide the consumer market up among themselves. They now have to compete. They can charge only what the market will bear. If their costs are too high, they have the option of shutting down. The U.S. banking industry as a whole hit its 2007 peak overextended by about 30 percent. If cutbacks have been slow to come, it is because customers have been content to stay put. But now, that appears to be changing.