Amplitude and Banks

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bankclosing-new-york-timesWe shouldn’t be surprised to see local banks closing.  In a world where microlending is booming (see www.kiva.org), it would make sense that local lending, of the old-fashioned variety, would go through a restructuring process.  The cost of the systems which provide loans is dwindling to zero; how else could rich Americans lend to poor third-worlders?  Therefore, the local lender that has not improved their systems is going to be high cost relative to the Wells Fargo’s of the world.  The giant banks have their own issues, but those are very different from the scale economies that give giant banks and internet banks a huge leg up on plain old-fashioned local banks.  These kind of changes I am calling AMPLITUDE, which I define as accelerated creation and destruction caused by an accelerating rate of change.  I would argue that we are seeing more AMPLITUDE today than in the past.  Gibson Journal – A Small Town Loses a Pillar – Its Only Bank – NYTimes.com

amplitude

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