Friday, 4 November 2011

Bank boss incensed about getting 2 cents from public

When Loren Snyder's debit card was damaged recently, Bank of America wanted $5 to issue a new one.

That struck Snyder, a bank customer for many years, as penny-wise and pound-foolish.

"I know the CEO has to have his summer cottage and his yacht," the 63-year-old Medford man said. "But would it hurt them to give me a new card?"

Brian T. Moynihan doesn't like that kind of talk.

Moynihan, Bank of America's chief executive officer, said the other day he is "incensed" by people criticizing the banking giant.

He used the strong word — it's from the Latin for fire and means "very angry" — speaking to bank employees at the bank's Charlotte, N.C., headquarters, saying he gets "a little incensed when you think about how much good all of you do, whether it's volunteer hours, charitable giving we do, serving clients and customers well."

He went on to say to the bank's critics, "You ought to think a little about that before you start yelling at us."

If you think a little about that, you'll quickly see it's completely irrelevant. All those charitable, volunteering employees have nothing to do with what people are yelling about. If banking had an Academy Award for disingenuousness, Moynihan would be the industry's Meryl Streep.

Yes, Bank of America branches have employees who are really nice people. But the analysts, regulators, investors, customers and others who are "yelling" at the bank aren't yelling at its employees, they're yelling about the bank's behavior.

Does Moynihan think people didn't notice that the second-largest American non-oil company (after only Walmart) took $45 billion in Troubled Asset Relief Program bailout money and then announced they would charge people $5 a month to use their debit cards to access their own money? Netflix is now facing a customer revolt for the same kind of thinking.

The bank repaid the TARP money. It's still planning on taking the $5 a month from customers who don't have mortgages with it or maintain a $5,000 minimum balance.

Moynihan said the "place to win the battle" over the banks battered image is at the state and local level, referring to the bank's practice of supporting some worthwhile causes and putting its name on them, a common form of cheap advertising. But even out here, far from Wall Street, we hicks aren't so easily distracted.

Asked how he felt about the prospect of paying B of A $5 a month to use his own money after paying another $5 for the card to do it with, Snyder, who owns a local dental supply business, said, "Can I use profanity?"

Does Moynihan think people at the local level don't remember the bank's $50 billion "deal from hell" to buy bankruptcy-bound Merrill Lynch, and the $3.6 billion it handed out in bonuses to Merrill Lynch executives even as Merrill was reporting a loss of $27 billion for the year, and B of A was seeking more TARP money?

Maybe if people didn't look past the local level they wouldn't have noticed that when two of B of A's top executives, both reporting to Moynihan, were shown the door last month, their severance pay was more than $11 million.

To put this in a local perspective, it would take Snyder 2.2 million months to pay off those two. That $14 billion legal fund (which some analysts say is insufficient) B of A has set aside for lawsuits stemming from its role in the mortgage mess? Snyder can cover that in 2.8 billion months.

Moynihan has an attitude that gets you described as "beleaguered." That's understandable. In a J.D. Power and Associates customer satisfaction survey this month, B of A came in 24th out of 24 banks (see Jason Linkins on the Huffington Post).

Meanwhile, named the bank the nation's second-worst American company of any kind. B of A missed the gold only because of the presence of Darth Vader-ish BP on the list. But since the "it's-not-our-fault" oil spillers are a British company, B of A could probably claim the all-American double: last in customer satisfaction and first as worst American company.

Maybe some of the people yelling want to know why, if Moynihan gets so incensed on behalf of the bank's charitable employees, he is planning to cut 30,000 of them from the payroll, as the bank announced last month.

Maybe they notice that B of A is facing skepticism from the market, anger from investors, lawsuits from its role in the mortgage debacle and a government investigation into its foreclosure practices, which have included such quirks as trying to foreclose on the wrong home. For a funny (although probably not if it's your home) take on this, see John Oliver "foreclosing" on B of A on for Aug. 8.

Or that the bank has been selling off assets. Or that its common stock has been dipping under $7 in recent days, about half its 52-week high. Or that it's being sued by the Feds for allegedly misrepresenting the quality of mortgages it sold to Fannie Mae and Freddie Mac.

Some have even noticed that the bank claims a book value (assets minus liabilities) of more than $200 billion, although the market doesn't agree, and its actual market cap is only about $72 billion. Some people think that spells trouble, nationally and locally.

Wednesday, 27 April 2011

House gives its OK to cutting gas tax by 5 cents

The House Wednesday approved a two-month reduction in the state’s gas tax, but the proposal faces an uncertain fate in the Senate.
The House voted 201-108 to approve the 5-cent gas tax reduction from 18 cents a gallon proposed by House Speaker Bill O’Brien, who has said the decrease will provide some relief for consumers and will bring more people across the border to buy gas, lottery tickets, food and other goods and services.
But opponents argued consumers will never see the benefit, while repairs to the state’s roads and bridges will be delayed.
Gov. John Lynch called the reduction a “political gimmick” that will not result in a price reduction at the pumps. “It will never happen.” he said after the Executive Council meeting.
Asked if he would veto the bill, he said that would be speculative because “I don’t believe it is going to get to me. I think the Senate is going to look at it and recognize it for the gimmick that it is.”
The reduction was included in Senate Bill 78 (click to view text), which eliminates the $30 surcharge on auto registrations. The bill passed on a 208-98 vote.
During the House debate, Rep. David Campbell, D-Nashua, said the gas tax reduction will have a negative impact on the state’s roads and bridges and will not have the desired results because consumers will never see it.
“Look at the conditions of our roads and bridges,” Campbell said. “The timing couldn’t be worse.“
The 5-cent decrease will cost the highway fund $7 million, which includes $840,000 earmarked to help cities and towns repair their roads and bridges, he added.
“That nickel will be gobbled up by the big gas companies and the big oil companies . . . Who are seeing record profits,” Campbell said.
The price of gas in surrounding states with higher gas taxes are often lower than they are in New Hampshire, he noted.
But supporters argued out-of-state motorists are buying their fuel in New Hampshire today, and a drop in the tax will bring even more people over the border.
Rep. Ken Weyler, R-Kingston, said half the cars at a gas station in his community are from Massachusetts and that station is two miles over the border.
The tax cut “will bring more people from out-of-state and other sources of revenue,” Weyler said. “This talk about damage to road and bridges I don’t see.”
Off the $7 million, he said, $2 million would go to the Department of Safety, while another $2 million would go to the betterment program. That leaves only $2 million for roads and bridges, he said.
Weyler said the arguments against the gas tax reduction are “more tales of gloom and doom that never come true.“
House Majority Leader B.J Bettencourt, R-Salem, said while some call the gas tax reduction a gimmick, politicians in Massachusetts don’t think so and neither do senior citizens living on a fixed incomes.
“It is easy to call this a gimmick and oppose this, but it is much more difficult to put out a plan of your own,” Bettencourt said.
The Senate will have to vote on the gas tax proposal.
O’Brien said he hopes the Senate will take up the plan next Wednesday when it meets.
However the Senate does not have to do that and could take several weeks or more to take up the proposal.

Friday, 1 April 2011

Gas prices jump 14 cents in 2 days

WHAT HAPPENED? Gasoline prices took another jump Thursday, rising to $3.69 a gallon at most area stations. That jump, combined with one Wednesday, means gas prices are 14 cents a gallon higher than when the week began. They are also at their highest level since October 2008.
WHAT ABOUT DIESEL? Diesel is also high. A gallon of diesel fuel now fetches $4.10, nearly a dollar more than a year ago. The highest recorded average price of diesel in Erie was $4.98, on May 31, 2008.
WHAT'S DRIVING THIS? The price of oil rose to a 30-month high Thursday as fighters loyal to Moammar Gadhafi pushed back rebels from key areas in eastern Libya. Benchmark West Texas Intermediate crude rose $2.45, more than 2 percent, to settle at $106.72 a barrel on the New York Mercantile Exchange. At one point it hit $106.83, the highest it's been since September 2008. In London, Brent crude rose $2.10 to $117.05 per barrel.

Monday, 14 March 2011

Maine gasoline prices rise average 2 cents in week

A website that monitors gasoline prices says average pump prices in Maine have risen 2 cents per gallon in the past week to $3.58 per gallon. says Sunday's prices were 77.4 cents per gallon higher than they were the same day one year ago, and 37.6 cents per gallon higher than a month ago.
The website says prices nationally have increased 3.8 cents per gallon during the last week to $3.53 per gallon. The national average has risen 40.5 cents per gallon during the last month and is 74.5 cents per gallon higher than this day one year ago.