Don't Quit Your Day Job…

Well, probably not the death of free checking accounts, but a little hyperbole never killed anyone, right?

DQYDJ already gave you a “view from 35,000 feet” analysis of new debit card transaction caps in our last article, but we wanted to follow it up with something deeper, for those interested in how the sausage is made. We’ve dug into two of the more recent Bank of America investor releases and are ready to share our thoughts on why Bank of America’s move is rational – and you can expect other banks to follow. Yes, likely even online banks and credit unions. However, first up is Citibank, who is eliminating free checking… unless your account is over $6,000.

There’s been a lot of talk about the Troubled Asset Relief Program (TARP for short) as of late. The TARP, as you may know, authorizes the Department of the Treasury to purchase (or repurchase!) up to $700 billion of so-called “Troubled Assets” in order to shore up bank and bank-like company (somehow including the auto industry) finances. The Treasury has kept the TARP in the news by deciding it is time to sell its stake in Citibank.

Rortybomb, a blogger and financial engineer from San Francisco posted an interesting spreadsheet based on the stress test results. Hunting through the stress test results, he found a chart on page 6 with ‘Baseline’ and ‘More Advanced’ numbers. Since that’s enough to do a linear extrapolation (of course, with two data points that probably isn’t the most accurate way to do it… see his background post) allowing you to set your own estimate for worst case unemployment numbers. Read on…