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Bank Runs
Submitted by Brian A. on Mon, 2008/07/14 - 5:11pm.
Thanks to the "mental recession," I suspect scenes like this will be repeated across the country in the coming months.
A number of regional banks are in trouble. Shares of First Horizon National Corp., parent of First Tennessee Bank, fell 24% today.
If you have an amount deposited in a bank account (any bank) in excess of the FDIC-insured $100,000, I recommend you withdraw it and place it elsewhere. Immediately.
What difference do you think it would make if they did ask them? Do you think they would say, oh, the bank is in a lot of trouble? They're going to give a positive spin no matter what, until the very end. That's their job.
Wasn't there something on the news where depositors at IndyMac said they were told all would be okay, then those with savings over $100,000 got 50 cents for the dollar?
Submitted by Carole Borges on Tue, 2008/07/15 - 6:57am.
The way I understand it, once the bank was seized or taken over by the Feds, the doors were locked and the ATMs shut down and no one could get access to their money. To those with less than $100,000 in the bank, especially people on tight budgets with low balance checking accounts this could be disastorous. Many of my bills are auto-paid by my bank. Would these transactions go through on time? How long did it take for the bank to re-open and be fully operational again? I keep most of my money in the bank and use my ATM to pay for things. Now I feel like I should have a sock under my bed with an emergency fund in case of bank failure. The pictures of people jamming the bank to get their money made me think of the "It's a Wonderful Life" movie. Kind of unreal.
Submitted by RayCapps on Tue, 2008/07/15 - 8:55am.
The FDIC was enacted by congress at FDR's behest in 1933 in order to stave off the "runs" on banks that prompted this whole thread. It has served that purpose extremely well down through the years. The point to quibble here is that the "capitalists" were already grousing about increased federal controls and regulations on private enterprise at this time and many were quite literally calling FDR a "communist." The capitalists of 1933 didn't want to "privatize profit, socialize risk," they wanted Laissez-Faire to rule the day. FDR wanted to do that for the overal economic stability of the nation.
Capitalists of today, having grown up in an environment where governments at all levels subsidize, regulate, incentivize, penalize, guarantee, insure, and otherwise become intimately involved business decisions, would be a different breed altogether from their predecessors. For both good and ill, governments and businesses are today coupled together far, far more intimately than was the case prior to FDR's first 100 days. That coupling came by acts of congress over the very loud objections of those Depression Era capitalists.
Submitted by RayCapps on Tue, 2008/07/15 - 9:39am.
Funny how capitalists become communists just as soon as trouble starts.
Only the capitalists didn't become communists when the trouble started. The capitalists were entirely prepared to ride things out under laissez-faire conditions. The FDIC (and Gonzone's point quoted above can only be referencing the FDIC within the context of this thread) was created by government over the objections of the capitalists. He was either historically mistaken or being disingenuous in order to get in a shot.
Submitted by RayCapps on Wed, 2008/07/16 - 8:00am.
A = Capitalist
B = Right Wing Ideologue
and
A = B,
Then I agree there is hypocrisy at play here, not that this constitutes an unusual state of being for any politician, political party, or ideology (even my own).
And I'm sure George Soros will be bitterly disappointed to learn he's a right wing ideologue. :->
The Indymac ATMS worked all weekend, and all bills were paid on time as soon as the Fed took over Friday night. The bank opened on Monday so anyone who wanted to close out their accounts or withdraw could access it. This post is more fear mongering than anything. If you have more than 100K socked away in the bank (why you would have that much in a savings or CD account earning jack shit for interest I havent a clue but I digress...) take it out and deposit it at another bank up to the FDIC insured limit and so on.
The Indymac ATMS worked all weekend, and all bills were paid on time as soon as the Fed took over Friday night. The bank opened on Monday
Thanks for letting people know. Generally when a bank closes it is a blip to the consumer.
(why you would have that much in a savings or CD account earning jack shit for interest I havent a clue but I digress...)
On this I disagree to some extent. There are probably many retirees with their money strictly in savings and CDs. For them the stock market is not a good investment at this time. If fact, there is not much of anything but CDs that are a good investment for retirees at this time. They don't generally plan for a 7-14 year return.
Submitted by RayCapps on Tue, 2008/07/15 - 8:41am.
On this I disagree to some extent. There are probably many retirees with their money strictly in savings and CDs.
Retirees and those nearing that stage should generally be divesting themselves from the stock markets and have little reason to lock up their resources in long term bonds (excepting any monies they may be intending to leave aside for inheritance purposes). Return on Investment is less a concern at this stage of life than ready access to accumulated liquid assets.
That said, there's much to be said for keeping any such liquid assets spread across multiple banking entities in quantities less than $100,000.
True. Cd's are still covered by the FDIC as well. If you have a boat load of money just spread them out at different banks under the FDIC limit and you are good to go.
In the US, the amount of insurance coverage varies depending on how accounts for an individual or family are structured at the institution. The level of insurance is governed by complex FDIC and NCUA rules, available in FDIC and NCUA booklets or online. Basic Coverage is $100,000 for a single account and $200,000 for a joint account. As of April 1, 2006, Individual Retirement Accounts are insured up to $250,000.
or you could ask Brad Martin, he's got lots of Knoxville connections and still maintains his home out there in Walland at West Miller's Cove Road.
Nobody in the local media has any desire to ask these guys what is going on, they ought to know, they are in charge of the bank.
What difference do you think it would make if they did ask them? Do you think they would say, oh, the bank is in a lot of trouble? They're going to give a positive spin no matter what, until the very end. That's their job.
Wasn't there something on the news where depositors at IndyMac said they were told all would be okay, then those with savings over $100,000 got 50 cents for the dollar?
The way I understand it, once the bank was seized or taken over by the Feds, the doors were locked and the ATMs shut down and no one could get access to their money. To those with less than $100,000 in the bank, especially people on tight budgets with low balance checking accounts this could be disastorous. Many of my bills are auto-paid by my bank. Would these transactions go through on time? How long did it take for the bank to re-open and be fully operational again? I keep most of my money in the bank and use my ATM to pay for things. Now I feel like I should have a sock under my bed with an emergency fund in case of bank failure. The pictures of people jamming the bank to get their money made me think of the "It's a Wonderful Life" movie. Kind of unreal.
Funny how capitalists become communists just as soon as trouble starts.
Privatize profit, socialize risk.
"When the going gets weird, the weird turn pro."
Hunter S. Thompson
The FDIC was enacted by congress at FDR's behest in 1933 in order to stave off the "runs" on banks that prompted this whole thread. It has served that purpose extremely well down through the years. The point to quibble here is that the "capitalists" were already grousing about increased federal controls and regulations on private enterprise at this time and many were quite literally calling FDR a "communist." The capitalists of 1933 didn't want to "privatize profit, socialize risk," they wanted Laissez-Faire to rule the day. FDR wanted to do that for the overal economic stability of the nation.
Capitalists of today, having grown up in an environment where governments at all levels subsidize, regulate, incentivize, penalize, guarantee, insure, and otherwise become intimately involved business decisions, would be a different breed altogether from their predecessors. For both good and ill, governments and businesses are today coupled together far, far more intimately than was the case prior to FDR's first 100 days. That coupling came by acts of congress over the very loud objections of those Depression Era capitalists.
So what the hell is your point?
True happiness is knowing you are a hypocrite. -- Ivor Cutler
Only the capitalists didn't become communists when the trouble started. The capitalists were entirely prepared to ride things out under laissez-faire conditions. The FDIC (and Gonzone's point quoted above can only be referencing the FDIC within the context of this thread) was created by government over the objections of the capitalists. He was either historically mistaken or being disingenuous in order to get in a shot.
Two quotes:
"Government is the problem, not the solution."
"The government will guarantee your money when these banks fail."
Both these quotes from right wing ideologues. Nothing disingenuous about what I'm attempting to convey (however poorly worded it is at times).
"When the going gets weird, the weird turn pro."
Hunter S. Thompson
A = Capitalist
B = Right Wing Ideologue
and
A = B,
Then I agree there is hypocrisy at play here, not that this constitutes an unusual state of being for any politician, political party, or ideology (even my own).
And I'm sure George Soros will be bitterly disappointed to learn he's a right wing ideologue. :->
Yeah, you got me there.
And made me laugh too!
"When the going gets weird, the weird turn pro."
Hunter S. Thompson
The Indymac ATMS worked all weekend, and all bills were paid on time as soon as the Fed took over Friday night. The bank opened on Monday so anyone who wanted to close out their accounts or withdraw could access it. This post is more fear mongering than anything. If you have more than 100K socked away in the bank (why you would have that much in a savings or CD account earning jack shit for interest I havent a clue but I digress...) take it out and deposit it at another bank up to the FDIC insured limit and so on.
Thanks for letting people know. Generally when a bank closes it is a blip to the consumer.
On this I disagree to some extent. There are probably many retirees with their money strictly in savings and CDs. For them the stock market is not a good investment at this time. If fact, there is not much of anything but CDs that are a good investment for retirees at this time. They don't generally plan for a 7-14 year return.
Retirees and those nearing that stage should generally be divesting themselves from the stock markets and have little reason to lock up their resources in long term bonds (excepting any monies they may be intending to leave aside for inheritance purposes). Return on Investment is less a concern at this stage of life than ready access to accumulated liquid assets.
That said, there's much to be said for keeping any such liquid assets spread across multiple banking entities in quantities less than $100,000.
True. Cd's are still covered by the FDIC as well. If you have a boat load of money just spread them out at different banks under the FDIC limit and you are good to go.
In the US, the amount of insurance coverage varies depending on how accounts for an individual or family are structured at the institution. The level of insurance is governed by complex FDIC and NCUA rules, available in FDIC and NCUA booklets or online. Basic Coverage is $100,000 for a single account and $200,000 for a joint account. As of April 1, 2006, Individual Retirement Accounts are insured up to $250,000.
Wachovia in trouble...
____________________________
"It's gettin' so a businessman can't expect no return from a fixed fight. Now, if you can't trust a fix, what can you trust?"
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