Bank Liabilities | Where the Money Is - 2/20/14 | The Motley Fool

TL;DR

Federal Reserve targets, Amex business model, unusual insurance policies, Facebook's potential bank acquisition.

Transcript

oh no inflation is too low the Federal Reserve is going to need a new target you're in the right place folks because this is where the money is welcome to the show on that copenhefer this is david hanson i was gonna say what day it is but I'm not sure I even know it's thursday thursday thursday indeed look David I was looking at the headlines today... Read More

Key Insights

• 👶 Federal Reserve's consideration of new targets reflects uncertainty in economic forecasting.
• 😘 American Express's business model prioritizes customer loyalty and premium services over lower merchant fees.
• ✳️ Unusual insurance policies reflect niche markets and unique risks within the insurance industry.
• 🏦 Facebook's potential acquisition of a bank is a risky proposition due to regulatory complexities.

Questions & Answers

Q: How is the Federal Reserve considering changing its targets based on inflation and unemployment rates?

The Federal Reserve is contemplating adjusting its targets, possibly focusing on inflation as unemployment nears the 6.5 percent threshold.

Q: Why does American Express charge higher merchant fees compared to Visa and MasterCard?

Amex's business model emphasizes customer loyalty, premium services, and higher merchant fees to attract and retain customers willing to pay for the additional benefits.

Q: What are some of the unusual items insured by Markel and Lloyd's of London?

Markel and Lloyd's of London provide insurance for equine infertility, chest hair (Tom Jones), taste buds, and other unique risks.

Q: Why is it unlikely for Facebook to acquire a bank despite its financial success?

Facebook's entry into the highly regulated banking industry poses significant challenges, making it an improbable business move despite its potential for attractive returns.

Summary & Key Takeaways

• Federal Reserve targeting inflation as unemployment decreases, potentially changing targets in the future.

• American Express's unique business model focuses on customer loyalty and higher merchant fees.

• Unusual insurance policies covering equine infertility, chest hair, and taste buds.

• Facebook's potential acquisition of a bank seen as unlikely due to regulatory challenges.