Chasing away customers
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Dear Mr. Berko:
I used to bank at Washington Mutual until the takeover by JPMorgan Chase, and I have so many problems with this bank that I want to cry. Chase has messed up my checking account like you wouldn’t believe, and their monthly fees are so high. I had to change my address months ago, and they still send statements to my old address. I have a good credit score (780), but they won’t lend me money for a home air conditioner. Last week was the last straw. I deposited a $16,300 bank check, and they made me wait 14 days before it cleared. I couldn’t even write another check on that account. I never had these problems before. Would it help if I wrote Mr. Dimon, who is the CEO? My second question concerns inflation. My wife and I are 52, and our Individual Retirement Accounts (IRAs) are valued at $402,000. We both own Treasury Inflation-Protected Securities (TIPS) and some gold. But we want to invest in another security that should appreciate with inflation. We each have about $14,000 to invest and would appreciate your recommendation.
G.H., Fort Lauderdale, Fla.
Dear G.H.:
Change banks immediately. I think you would sooner have success trying to melt an iceberg with a hair dryer than repairing your problems at Chase Bank. And writing JPMorgan Chase’s CEO, James Dimon, is futile. JPMorgan Chase & Co.(JPM-$42.13) is a $64 billion revenue company, and asking Mr. Dimon to help you is like asking God to temporarily suspend the natural order of the universe to answer the prayers of a single petitioner.
You and JPM’s other depositors in Fort Lauderdale are the great unwashed, the riffraff and peasantry. Lord James doesn’t look down his nose at depositors like you; he looks down his chin. Mega-banks like Chase treat small accounts like yours with a cavalier attitude because those accounts are not important to them. Think about it: Why would Lord James, who probably makes more money in a single month than you make in an entire lifetime, stoop to help you?
However, Lord James will acknowledge that JPM extorts big bucks from folks like you — not from monthly checking account fees, certificates of deposit or savings accounts, but from exorbitant bounced-check charges, huge late-payment penalties and excessive service charges. The bank gets away with it because mooks like you are easy marks and lack the skill sets to take appropriate action.
It’s time to change banks and kiss Chase goodbye. There are many small banks in Fort Lauderdale that value your business and will meet, greet and treat you like family instead of black sheep.
I like TIPS, because I think they’re an excellent inflation hedge. I like gold, but I seldom recommend the stuff because gold is a speculative commodity, not an investment. Another inflation hedging investment that might do well is Elements Rogers International Commodity Agricultural Total Return Index (RJA-$7.62). This is an exchange-traded fund (ETF) that replicates (net of expenses) the Rogers International Commodity Index of 20 agricultural commodity futures contracts. In the past two years, RJA has ranged from a high of $12.15 in June 2008 to a low of $6.68 in February 2009.
Certainly, an increase in the prices of wheat, corn, soybeans, etc., would cause RJA to rise in value. As you know, Washington often omits the cost of food from its published Consumer Price Index (CPI) numbers because this volatile sector too easily pushes them up, and that makes the administration look bad. Merrill Lynch, JPMorgan, Northern Trust, Wells Fargo and Morgan Stanley are large investors in this ETF.
You also might consider the more inclusive Rogers International Commodity Index (RJI-$7.57), which replicates the values of 35 commodity futures contracts. In addition to agricultural contracts, RJI’s portfolio also contains 16 non-agricultural commodities such as gold, palladium, gasoline, zinc, lumber, heating oil, tin, rubber, nickel, lead, crude oil, etc. RJI had a high of $13.84 in June 2008 and a low of $6.02 in March 2009. Obviously, RJI is a more volatile investment.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, Fla. 33775 or e-mail him at mjberko@yahoo.com. © 2010 Creators.Com
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