Boomtown Banks: What To Do With All That Money!

Note the source of this article!

Link here to Stanford University.

Gary Peterson, along with his family, owns the Lakeside Bank in New Town. I first interviewed him about a year ago, and didn’t notice the hint of gray showing along his temples. He’s smiling as he tells me, “The amount of liquidity in the system is amazing. We’re growing at 20% a year in deposit growth, which for rural North Dakota is unheard of. Before this happened, I think a lot of bankers would have told you that one their concerns is how we going to sustain the deposit side of our balance sheet. As the elderly would leave or die, those deposits would go to their kids who are usually elsewhere. Totally different story these days, we’re wondering what to do with it, frankly.”

David Hansen is the President of American State Bank and Trust in Williston, the epicenter of today’s boom. He remembers what happened during the oil embargo of the 1970’s. Williston funded an infrastructure expansion with bonds. “Then the oil embargo was over, the price of oil plummeted, and all exploration pretty much stopped in a very short time frame. People exited the area very quickly. [Williston] was strapped with about $27 million of special bonds based on property tax, and they weren’t worth anything. They went to a sales tax to pay off those bonds, and it took about 25-30 years to pay them off. That’s still fresh on people’s minds.” Hansen adds that it wasn’t only the city that was hurt; many banks had many bad loans on their hands as well.

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Note to the Granddaughters

Earlier today I bicycled down to the Boylston Apple store in Boston (which reminds me: there's a Microsoft store across the street inside the mall; I've never visited it; I saw it "going up" some months ago). I wanted to see the new iPad mini, but it won't be available (in stores) until Friday. Apple stores generally open at 10:00 a.m. (I think) but there are rumors that the stores will open at 8:00 a.m. on Friday for the iPad mini launch.

There has been some complaints that the iPad mini is priced at $329 instead of $299. Of course, if it had been priced at $299, folks would have complained that it was not $249. But back to the $329 vs $299 price point. Somehow, when most Apple aficionados own several Apple products (iPhone, iPod, desktop, and/or laptop) it's hard to take those complaints ($329 vs $299) seriously. Seriously? $30 is a deal breaker?

I had forgotten (actually never paid any attention) how phenomenal the iPod Nano is, the one with the FM radio. 4,000 songs. One ounce.

But this was the takeaway: there is something for everyone for holiday gifts at the Apple store, from less than $20 to more than .... well, whatever you want to pay.