Bank plans to charge for debit cards abandoned. U.S. banks continue to abandon plans to charge fees to holders of debit cards. SunTrust (NYSE: STI) and Regions (NYSE: RF) today announced they will kill charges on debt cards. That means Bank of American (NYSE: BAC), which had planned on the tolls for new revenue, will have to drop its charges as well. It cannot afford to be isolated and lose customers who believe the fee is unfair. Bank of American chief executive Brian Thomas Moynihan said it was fair to set the charge to make profits for shareholders. Instead, it just caused more bad publicity for the troubled company.
China’s PMI trouble. China’s PMI showed manufacturing activity in the country fell to a low not recorded since early 2009. Economists were left to question whether this means the People’s Republic is in danger of moving toward recession, or if the news signals a tempering of China’s overheated economy. The recession argument is the more compelling of the two. China’s official PMI fell to 50.4 in October from 51.2 in September, the National Bureau of Statistics reported. The consensus among analysts was that the number would remain steady with September’s. Chinese officials said the weak economy in the EU caused the dip; the EU economy is the world’s largest by GDP — about 20% larger than the U.S. Europe is in recession, so China’s manufacturing problem has just begun.
MG Global New Woes. MF Global (NYSE: MF) filed for Chapter 11 after its gambles on the financial fate of Europe turned out to be wrong. The filing may only be the start of the company’s trouble. “Early this morning, MF Global informed the regulators that the transaction had not been agreed to and reported possible deficiencies in customer futures segregated accounts held at the firm,” the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission said in a joint statement. Somehow MF Global “mishandled” client accounts. Worse, it may have used client money to support trades that turned out to be untenable. That would almost certainly cause a number of civil and criminal charges to be brought against MF Global, and perhaps its CEO, former Goldman Sachs chief, Jon Corzine
The Fed will remain quiet. The Federal Reserve will announce its intentions after a two-day policy meeting. The market expects no change in the central bank’s major policies. This may be due to a battle among the Fed’s members. A minority believe that any Fed attempt to aid the economy will fuel inflation soon. Most members believe the central bank must keep rates as low as possible and perhaps begin a QE3 program. “I have never seen the Fed more deeply divided than it is at this moment,” said David Jones, head of DMJ Advisors and the author of books on the Fed, according to the AP. The muddle will cause more uncertainty about the future of the economy and markets. A house divided against itself cannot stand.
Douglas A. McIntyre