27 Sep 08
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Word on the street is that there is a silent run on the banks. The wealthy who have more than $100,000 are withdrawing it because the FDIC only insures up to $100,000 because they are getting increasingly nervous about Congress's inaction over the bail out proposal. They are then throwing their money into T-bills because they are insured by the government. In fact, the word is that many more banks will begin to go under next week. The longer the proposal is delayed the more banks will begin to go under. Soon the US may be reduced to only a hand full of banks.
27 Sep 08
Originally posted by whodeyGood fear mongering. You really are living up to your Republican roots.
Word on the street is that there is a silent run on the banks. The wealthy who have more than $100,000 are withdrawing it because the FDIC only insures up to $100,000 because they are getting increasingly nervous about Congress's inaction over the bail out proposal. They are then throwing their money into T-bills because they are insured by the government. ...[text shortened]... he more banks will begin to go under. Soon the US may be reduced to only a hand full of banks.
27 Sep 08
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Originally posted by CliffLandinActually this did not come from a Republican source, rather, it came from a source that has been very critical of the Fed for its handling of the crisis and predicted what is happening now over a year ago. In fact, Washington Mutual just went under and there be more to follow. It was the biggest bank to go under in US history.
Good fear mongering. You really are living up to your Republican roots.
27 Sep 08
Originally posted by whodeyIn a capitalist economy, non-competitive or poorly run firms fail all the time. Them's the breaks.
Actually this did not come from a Republican source, rather, it came from a source that has been very critical of the Fed for its handling of the crisis and predicted what is happening now over a year ago. In fact, Washington Mutual just went under and there be more to follow. It was the biggest bank to go under in US history.
28 Sep 08
Originally posted by whodeyAnd what source would that be?
Actually this did not come from a Republican source, rather, it came from a source that has been very critical of the Fed for its handling of the crisis and predicted what is happening now over a year ago. In fact, Washington Mutual just went under and there be more to follow. It was the biggest bank to go under in US history.
28 Sep 08
Originally posted by whodeyIt seems unlikely that the Fed would let wholesale bank failures occur when they could prevent them by simply providing additional cash. Also, I would think that most people who have huge sums of cash would tend to invest it rather than let it sit in a bank account. I could be wrong though...I've got no data to back this, just supposition.
Word on the street is that there is a silent run on the banks. The wealthy who have more than $100,000 are withdrawing it because the FDIC only insures up to $100,000 because they are getting increasingly nervous about Congress's inaction over the bail out proposal. They are then throwing their money into T-bills because they are insured by the government. ...[text shortened]... he more banks will begin to go under. Soon the US may be reduced to only a hand full of banks.
I was a little surprised actually that they didn't prop up Washington Mutual. I'm a bit suspicious that they intentionally let it fail, wanting to send a chill into Congress and get their bill ramrodded through without debate.
28 Sep 08
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Originally posted by EladarI think that might be a bit of a harsh tactic. Banks aren't really an entirely free-market business. They're backed by the federal government. And they couldn't stay in business without that backing. They make their money by earning interest on loans. And those loans are a big part of the US economy. Without the federal backing they wouldn't be able to make loans because then any run on the bank could wipe them out. Their competition could eliminate them by simply spreading a rumor about their upcoming insolvency. It's important that the Fed step in and provide short term funding in a situation like that, and it doesn't make much sense that they allowed Washington Mutual to fall.
I say let the banks fail. Let the market do its thing.
28 Sep 08
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Originally posted by leisurelyslothI don't know what you mean by claiming that private banks are "backed" by the Federal government. The FDIC insures deposits up to $100,000 but that is to benefit depositors, not the banks.
I think that might be a bit of a harsh tactic. Banks aren't really an entirely free-market business. They're backed by the federal government. And they couldn't stay in business without that backing. They make their money by earning interest on loans. And those loans are a big part of the US economy. Without the federal backing they wouldn't be ion like that, and it doesn't make much sense that they allowed Washington Mutual to fall.
BTW, Washington Mutual didn't "fail" it was brought by JP Morgan Chase. http://www.mercurynews.com/valley/ci_10570318
28 Sep 08
Originally posted by whodeyYup.
Word on the street is that there is a silent run on the banks. The wealthy who have more than $100,000 are withdrawing it because the FDIC only insures up to $100,000 because they are getting increasingly nervous about Congress's inaction over the bail out proposal. They are then throwing their money into T-bills because they are insured by the government. ...[text shortened]... he more banks will begin to go under. Soon the US may be reduced to only a hand full of banks.
Banks typically only hold between 5-10 percent in cash of the total amount of money that people have deposited with them.
Right now, banks in the US are hoarding cash and refusing to lend to each other because they need the cash to run the day to day business. If more people withdraw money, the banks won't have enough cash on hand to pay out everyone's money.
All it will take is some americans to panic and start withdrawing all their money and you'll see banks collapse faster than the levees in New orleans.
Banks Consolidation is coming folks....it's already started with WaMu.
28 Sep 08
Originally posted by EladarOkay fine. Who's going to pay back all the money that the FDIC guarantees? It's up to 100,000 bux PER ACCOUNT.
I say let the banks fail. Let the market do its thing.
The FDIC will run out of money faster a cat on Speed. Then, if you have an account at a bank that fails, and the FDIC is tapped out, what happens to your money?? You're outta luck? Who cares you say...it's not YOU right? pfft. Typical.
The only other alternative is for the Gov to step in and pay back the money that people lose...which means MORE TAXPAYER money!!!!!!
Let the market decide....works in theory, sux balls in practice when dozens of banks fail at the same time.
28 Sep 08
Originally posted by uzlessHysterical blather. It's always true that if everybody went down to the bank and wanted their money, the bank couldn't pay it. There's no possibility of such a thing happening in the US though.
Yup.
Banks typically only hold between 5-10 percent in cash of the total amount of money that people have deposited with them.
Right now, banks in the US are hoarding cash and refusing to lend to each other because they need the cash to run the day to day business. If more people withdraw money, the banks won't have enough cash on hand to pay out every ...[text shortened]... in New orleans.
Banks Consolidation is coming folks....it's already started with WaMu.
28 Sep 08
Originally posted by uzlessSome bigger bank will buy any bank with sufficient assets that would make a difference to the FDIC (which has $45 billion on hand). Let me know when "dozens of banks fail at the same time".
Okay fine. Who's going to pay back all the money that the FDIC guarantees? It's up to 100,000 bux PER ACCOUNT.
The FDIC will run out of money faster a cat on Speed. Then, if you have an account at a bank that fails, and the FDIC is tapped out, what happens to your money?? You're outta luck? Who cares you say...it's not YOU right? pfft. Typical.
...[text shortened]... decide....works in theory, sux balls in practice when dozens of banks fail at the same time.
28 Sep 08
Okay fine. Who's going to pay back all the money that the FDIC guarantees? It's up to 100,000 bux PER ACCOUNT.
The government does. Then the government charges banks in the future to make up for the money it has lost. If the government wants to get in the insurance buisness, then it needs to act like an insurance company. Lose money in the short run, but make it back in the future.