Originally posted by no1marauderSon, what is your major malfunction. Do you not read? Do you just make this crap up? Banks ARE IN TROUBLE. Consolidation is coming. More banks will fail Runs will occur. NOW READ! and stop wasting our time.
Hysterical 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.
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"One must now worry about old-fashioned bank runs, which is something that was supposed to have disappeared after the Great Depression," said Jaret Seiberg, a financial services analyst at the Stanford Group in Washington
http://money.cnn.com/2008/09/26/news/companies/banks_look_ahead/?postversion=2008092617
Here's some more articles for you to ignore despite reality.
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But other banks and savings and loans, including Wachovia, Newport Beach's Downey Financial Corp. and FirstFed Financial Corp. of Los Angeles, were hammered. Wachovia fell $3.70 to $10 and was trading still lower after hours; FirstFed sank $8.21 to $10.04, and Downey fell $1.87 to $2.03.
http://www.latimes.com/business/investing/la-fi-banks27-2008sep27,0,5656940.story?page=2
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how bout a UK perspective?
http://www.guardian.co.uk/commentisfree/2008/sep/28/globaleconomy.creditcrunch
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Originally posted by uzlessI suggest you actually read the entire articles you site rather than a few sound bites. The only "run" cited was a withdrawal of 10% of deposits from WashMU a few days before it was sold. That's a trifle. The articles clearly agree with my basic premise; any bank with decent sized assets that "fail" will be brought by a stronger bank. Nothing to get so Chicken Littleish about.
Son, what is your major malfunction. Do you not read? Do you just make this crap up? Banks ARE IN TROUBLE. Consolidation is coming. More banks will fail Runs will occur. NOW READ! and stop wasting our time.
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"One must now worry about old-fashioned bank runs, which is something that was supposed to ha rspective?
http://www.guardian.co.uk/commentisfree/2008/sep/28/globaleconomy.creditcrunch
For example, from your second article: The Wall Street Journal and New York Times, citing unnamed sources, reported that Wachovia was in preliminary takeover talks with three banks: Wells Fargo & Co., Citigroup Inc. and Spain's Banco Santander.
Gee, I can see what you're panicking about.
Originally posted by no1marauderI think you just answered your own question. The FDIC insures deposits. As such, it's in the FDIC's interests to keep banks from failing. If there was a run on the banks (as happened with WaMu) they'd be far better off giving the banks a short term loan, than having the banks topple like dominos and having to pay out this insurance.
I 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.
BTW, Washington Mutual didn't "fail" it was brought by JP Morgan Chase. http://www.mercurynews.com/valley/ci_10570318
This is the reason why it didn't make a lot of sense for them to allow WaMu to fail. According to reports, WaMu had about $300 Billion in assets and about $30 Billion in questionable mortgages. While they'd done a crappy job with their loans, it doesn't sound as though their business was in ruins. A run on the bank depleted WaMu's onhand cash, but a short term loan would have kept them afloat.
And yes, WaMu did "fail" in the sense that they were seized by the FDIC and essentially given away to JPMorgan--"sold" for less than $2 Billion dollars (not even 1 cent on the dollar for their assets).
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Originally posted by leisurelyslothWrong. You float money to WashMU and every other incompetently run bank will have their tin cup out. The way it was done didn't cost the Fed or the depositors a dime and the bank's branches will be open Monday. Problem solved while it only would have festered if they tossed god knows how many billion in a "short term loan" to an institution that was likely to "fail" anyway. WashMU's shareholders will take a hit but that's what they get for investing in a poorly run firm (that's why it's called gambling).
I think you just answered your own question. The FDIC insures deposits. As such, it's in the FDIC's interests to keep banks from failing. If there was a run on the banks (as happened with WaMu) they'd be far better off giving the banks a short term loan, than having the banks topple like dominos and having to pay out this insurance.
This is the d" for less than $2 Billion dollars (not even 1 cent on the dollar for their assets).
Originally posted by uzlessIt's not per account. It depends on how the accounts are titled.
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.
Originally posted by no1marauderThey've all GOT their tin cups out! Haven't you been paying attention? The taxpayer is about to get soaked to the tune of $700 Billion dollars to bail them out. And that's the INITIAL estimate--God only knows where the numbers will end up after Congress gets done monkeying around with this thing for the next decade or three. It'd be a heck of a lot smarter to give them short term loans as needed to deal with liquidity problems and get paid back with interest, than to give them ALL a massive bailout.
Wrong. You float money to WashMU and every other incompetently run bank will have their tin cup out. The way it was done didn't cost the Fed or the depositors a dime and the bank's branches will be open Monday. Problem solved while it only would have festered if they tossed god knows how many billion in a "short term loan" to an institution that was likely to "fail" anyway.
How on earth was WaMu likely to fail anyway, when they had 10 times as many assets as questionable loans? And "questionable loans" doesn't mean worthless. It most likely means houses that are underwater, or borrowers who don't have enough income to make their house payments. But those houses still have most of their intrinsic value. Maybe the bank loses 1/3 of their $30 Billion in questionable loans, But that still leaves WaMu with $290 Billion in assets. They were brought down by a $16 Billion run on the bank. The dollars just don't add up.
Originally posted by leisurelyslothThey wouldn't get a nickel if it was up to me.
They've all GOT their tin cups out! Haven't you been paying attention? The taxpayer is about to get soaked to the tune of $700 Billion dollars to bail them out. And that's the INITIAL estimate--God only knows where the numbers will end up after Congress gets done monkeying around with this thing for the next decade or three. It'd be a heck of a lo ...[text shortened]... hey were brought down by a $16 Billion run on the bank. The dollars just don't add up.
You're putting the cart before the horse. There was a "run" because it was clear that WashMU was about to fail; it's stock price had plummeted by 95% and it showed $3 billion in losses in the second quarter.
http://www.huffingtonpost.com/2008/09/26/wamu-becomes-biggest-bank_n_129503.html
Originally posted by no1marauderIt's not going to be up to you #1. The banks are ALL going to get a $700 Billion bailout (at least the ones that survive until the bailout is approved), and the taxpayer is going to get stuck with the bill and likely some massive new tax-dollar-sucking bureaucracy. It'd be a heck of a lot cheaper to prop up the FEW banks that face a run, than to give a huge bailout to ALL of them. Furthermore, it'd force the banks to deal with their own bad loans and learn their lessons--since they wouldn't be getting a free pass, they'd only be getting a loan that they have to pay back.
They wouldn't get a nickel if it was up to me.
You're putting the cart before the horse. There was a "run" because it was clear that WashMU was about to fail; it's stock price had plummeted by 95% and it showed $3 billion in losses in the second quarter.
http://www.huffingtonpost.com/2008/09/26/wamu-becomes-biggest-bank_n_129503.html
The only reason that WaMu was about to fail was short-term liquidity. $3 billion in losses was peanuts compared to their assets.
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Originally posted by leisurelyslothIt's utter foolishness to loan a business that's going down the tubes because of its own incompetence MORE money it can blow; it's like giving a drug addict more heroin thinking he'll make better decisions in the future. If other businesses are smart enough not to throw away their money by giving it to losers like WashMU, why should our government? The solution they came up with didn't cost the Fed or the depositors a dime; what are you complaining about?
It's not going to be up to you #1. The banks are ALL going to get a $700 Billion bailout (at least the ones that survive until the bailout is approved), and the taxpayer is going to get stuck with the bill and likely some massive new tax-dollar-sucking bureaucracy. It'd be a heck of a lot cheaper to prop up the FEW banks that face a run, than to giv fail was short-term liquidity. $3 billion in losses was peanuts compared to their assets.
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Originally posted by no1marauderThey weren't going down the tubes, #1. In any other business climate there'd have been all sorts of people throwing money at them. But the capital has dried up because everyone is concerned about their own questionable loans and runs on their own bank. That's why they're talking about bailing out the whole system--they're all in trouble and it's dried up the flow of capital.
It's utter foolishness to loan a business that's going down the tubes because of its own incompetence MORE money it can blow; it's like giving a drug addict more heroin thinking he'll make better decisions in the future. If other businesses are smart enough not to throw away their money by giving it to losers like WashMU, why should our government? The s ...[text shortened]... came up with didn't cost the Fed or the depositors a dime; what are you complaining about?
I'm annoyed because they're going to bail out some of the banks but allow others to go under. And it's a pretty damned good bet that it'll be the shady ones who've been lining the pockets of crooks in Congress and the administration who will benefit from this plan. You've already seen this with the cherry-picking of bailing out some investment banks while allowing others to fail. Before this is all over, we'll have Congressional hearings galore, investigating (and covering up) all the shady stuff that's going on here.
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Originally posted by no1marauderWell said, no1. This bailout, picking the lesser of two evils which Bush et.al are pushing, is absurd. I hope the whole plan bogs down in such a muck of gridlock that all of those companies fail, just as I would if I had a company that went bankrupt.
They wouldn't get a nickel if it was up to me.
You're putting the cart before the horse. There was a "run" because it was clear that WashMU was about to fail; it's stock price had plummeted by 95% and it showed $3 billion in losses in the second quarter.
http://www.huffingtonpost.com/2008/09/26/wamu-becomes-biggest-bank_n_129503.html
I think Bill O'Reilly said something like "the welfare of the folks trumps ideology." Bill O'Reilly is, of course, no expert in economics.
Originally posted by no1marauderAbsolutely right. Why throw good money after bad?
It's utter foolishness to loan a business that's going down the tubes because of its own incompetence MORE money it can blow; it's like giving a drug addict more heroin thinking he'll make better decisions in the future. If other businesses are smart enough not to throw away their money by giving it to losers like WashMU, why should our government? The s ...[text shortened]... came up with didn't cost the Fed or the depositors a dime; what are you complaining about?
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Originally posted by CliffLandinIf I told ya I would have to kill ya. 😛
And what source would that be?
Lets just say it is a friend of mine. The only reason I give him credence, is because he said a year ago that the Fed had to act quickly in order to avert the crisis we are in now and they did not. At the time, I felt like many of you who say that he was simply "fear mongering".
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Originally posted by uzlessMy "friend" says that to avert the crisis the government must insure above the $100,000 mark via the FDIC or pass the emergency legislation via the bail out. However, the way the government runs perhaps this is asking a bit too much. Then again, maybe the powers that be want to nationalize the baking system or they are motivated to give the share of the wealth to an elite few banks left standing. If so, this is a great way to go about it.
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 in New orleans.
Banks Consolidation is coming folks....it's already started with WaMu.