The market determined interest rates have gone up, but you as a saver is not benefitting, don't worry banks in the US are also not passing on the interest rate increase to their existing deposit holders.
It seems like more and more service companies take their existing customers for granted.Morgan Housel a distinguished business, economics and financial journalist believes the smartest people only know a fraction of what's out there.
His latest research highlights his thoughts about the investment industry and behavioural finance.The Amazon CEOs latest missive explores the subtle nuances of high standards.
He writes customers are divinely discontent.
Their expectations are never static they go up.
Its human nature.
People have a voracious appetite for a better way, and yesterdays wow quickly becomes todays ordinary.I reiterate that this is only a sampling of some of the best content I read through the week, with a dash of my own thoughts.
Until next weekBank deposit growth in India slowest in 54 years(Source: Outstanding deposits stood at Rs 114.75 lakh crore as on March 30)(Source: Why arent big banks paying higher interest rates on deposits)Outstanding deposits stood at Rs 114.75 lakh crore as on March 30 compared with Rs 107.58 lakh crore a year earlier, translating into a year-on-year growth of 6.7 per cent, according to provisional figures from the Reserve Bank of India.This marks the slowest pace of growth in aggregate deposits of scheduled commercial banks in a fiscal year.
Low interest rates offered by bank deposits have resulted in people shifting away from FDs to mutual funds which witnessed significant inflows in FY18.Meanwhile, the big US banks are not paying higher deposit rates to existing customers.
Interest rates from the very short-term through two-year maturities have surged since the Fed got serious about raising rates.
Recently, the three-month yield in the treasury market was about 1.76 per cent and the two-year yield was at 2.37 per cent.
The interest rates that banks offer on deposits should in theory be about in line with Treasury yields in a competitive market.To keep the funding costs low, the big US banks are paying insultingly low rates on existing deposits.
Credit unions and smaller banks might offer higher rates if they feel they need to compete with the big boys for clients and deposits.
Banks are interested in attracting new deposits and are offering competitive rates in competitive market places, but theyre not offering those rates to their existing clients.
Those competitive market places are the brokers.
Some brokers are offering CDs (certificate of deposit) from all kinds of banks.
These brokered CDs can be sold in the secondary market through the broker as you would sell a bond.
For people hunting down higher deposit rates, now is the time to start looking for competitive market places.
Unlike the US markets, retail investors in India are not able to take advantage of investing directly in short term debt instruments like CDs where banks are currently offering higher rates compared to FDs.
although the same investors, ifsave through Mutual funds are getting higher rates than bank deposits because MF invests in the CD of these banks.Some Things Im Pretty Sure About(Source: I increasingly dont believe in gurus, in any field)This article is written by Morgan Housel a well-known business, economics and financial journalist.
His latest research highlights about the investment industry and behavioral finance.
Innovation and economics can be miles apart.
Twitter directly influences geopolitics between nuclear states and is worth half as much as Progressive Auto Insurance.
Investing is one of the simplest fields run by people who believe in their souls that theyll do better if they make it more complicated.
Few superpowers are as super as the ability to change your mind.
It is so much easier to fool yourself into believing a falsehood than admit a mistake.
Successful investing is having everyone agree with you later.
That means you cant ignore the noise forever.
Your success relies on getting the noise, the idiots, and the gamblers to eventually see eye to eye with your thesis.
Some of the richest people are the worst money managers Ive seen.
When money loses the power of scarcity you stop caring about leaks that are meaningful when youre poorer.
And when your life gets complicated youre more likely to outsource decisions to middlemen who may not have your best interest at heart.
Enough money to care but not enough to not care is the sweet spot for management.
The largest business line items are employee compensation and an attachment to sunk costs.
Things that cause permanent blindness: Luck attributed to skill; Losses that cause a lifestyle downgrade or fewer career options; Unshakeable political beliefs that influence investment decisions; Building a reputation on a single belief that you cant distance yourself from.
The biggest social problems are opioids, student debt, media distrust, and affordable housing.
These are generation-defining issues whose economic incentive to solve is dwarfed by the harm they cause.Tell people what they want to hear and you can be wrong indefinitely without penalty.
Confirmation is in much higher demand than information.
Some things that look unsustainable are new breakthroughs that dont apply to past trends.
Every new industry fits this description.
Many market trends do, too.
But its safer to call something a bubble than predict a new trend because bubbles threaten careers while cheering new ideas makes you look like an aloof salesman.
The same traits needed for outlier success are the same traits that increase the odds of failure.
The line between bold and reckless is thin.
So be careful blindly praising successes or criticizing failures, as they often made similar decisions with slightly different levels of luck.
Many people are pessimistic with their words but optimistic with their actions.
If you say the world is going to hell but still invest in stocks, the latter is probably a more genuine feeling.Key takeaway from Jeff Bezoss annual letter.
Read moreAmazon CEO Jeff Bezos recently released his latest annual shareholder letter which provides rich detail around the CEO's management principle and long-term thinking.
His latest missive explores the subtle nuances of high standards and what it takes to rise up to the challenge of divinely discontent customers.
This year's letter focuses on the idea of setting high standards and highlights some elements:High standards are teachable and contagious-People dont intrinsically have high standards but can learn them through exposure.
Bring a new person onto a high standards team, and theyll quickly adapt.
The opposite is also true.
If low standards prevail, those too will quickly spread.One can accelerate that rate of learning by articulating a few core principles of high standards.High standards are confined to specific domains, not universal-Just because someone has high standards in one area doesnt mean the same person will have high standards in another.Achieving high standards requires recognizing what those standards look like in a specific domain, and understanding how long it will take to achieve them- Unrealistic beliefs on scope often hidden and undiscussed kill high standards.
To achieve high standards yourself or as part of a team, you need to form and proactively communicate realistic beliefs about how hard something is going to be.
By setting high standards, companies are able to live up to ever-rising customer expectations.
Building a culture of high standards is well worth the effort, and there are many benefits.
The Amazon CEO also highlights how the rise of empowered customers is impacting not just retail but most other industries and it isnt going to slow down any time soon.
Customers are divinely discontent.
Their expectations are never static they go up.
Its human nature.
People have a voracious appetite for a better way, and yesterdays wow quickly becomes todays ordinary.
The cycle of improvement is happening at a faster rate than ever before.
It may be because customers have such easy access to more information than ever before in only a few seconds and with a couple taps on their phones, customers can read reviews, compare prices from multiple retailers, see whether somethings in stock, find out how fast it will ship or be available for pick-up, and more.
You cannot rest on your laurels in this world.
Customers wont have it.
The full letter is worth a read as a new insight into the formula behind one of the worlds most valuable companies.