The Dumbest Money Around

Is it just me or does it seem that the banking industry is becoming dumber. First we had JP Morgan Chase buying the startup Frank for $175 million without ever doing any due diligence or even asking how do we, JP Morgan Chase make money from this arrangement. Doesn’t matter now because they moved forward and now, they look like idiots.

Now we have Wells Fargo offering Built, which allows cardholders to earn points when paying rent. From what I understand Built runs the payment and Wells Fargo issues a check for the rent. And the best part is Wells Fargo agreed to cover the transaction fees. Turns out their cardholders are better Wall Street bankers than the bank itself because a lot of Built cardholders are NOT maintaining a balance on their cards. One of my all-time favorite movies is The Big Short and some of the best scenes are when Michael Burry is on Wall Street at Goldman Sachs convincing them to create a credit default swap instrument so he can short the housing bonds. One of the managers says to him, “Dr. Burry, this is Wall Street, if you are going to give us money we are going to take it.”

Well, it turns out some people paid attention and they weren’t even bailed out by the Fed.