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183 Comments
- vondrak, on 07/17/2008, -8/+105I'm not an economics major by any means, but doesn't this kind of speculation cause people to run to those banks and withdraw all their money thus causing the bank to go under faster?
By no means am I saying the solution is to keep your money in a failing bank, I'm just wondering if this is more of a self fulfilling prophecy than a prediction. - inactive, on 07/17/2008, -1/+83Not to worry I converted all my money into gold, rice, and, 9mm rounds.
- brbubba, on 07/18/2008, -0/+39Sweet. Can I come live in your cabin when all the banks go under? I can do laundry, dishes, and I am a good handyman. I'll try to bring two females with me, but I can't guarantee anything.
- postaldave, on 07/18/2008, -5/+33is it me or is the media TRYING to run the economy into the ground.
- sesstreets, on 07/17/2008, -3/+29And I'm in none of those.
- buba1243, on 07/17/2008, -4/+30The solution is that the vast majority of people don't have more then 100,000 in the bank so they have no worries. If you have more then 100,000 in a bank account you are either stupid for not putting money somewhere you can get a good return or you can afford to lose it.
- shutaro, on 07/17/2008, -0/+23Sound investments, all.
- Khast, on 07/18/2008, -1/+20:P Foreign currency....at the rate we are going, keeping cash under the mattress will only lose value. Keep Euros, Pounds, or even Canadian...at least if the US dollar fails, you still have something worth money.
- dood, on 07/18/2008, -0/+18Gotta sleep some time.
- CobaltBlue, on 07/18/2008, -0/+18Yeah, a second quarter profit of 1.75 Billion dollars almost always is a death knell.
- subarusqueege, on 07/18/2008, -0/+15Your 100k insurane is only good so long as they do not spend all the 56 billion they have to insure with. You can already wipe 10 billion off that since IndyMac
- inactive, on 07/18/2008, -0/+15the Conspiracy theorists were correct.
- merripen, on 07/18/2008, -2/+16Colorado Federal Savings Bank
Eastern Savings Bank, FSB
Integrity Bank
Ameribank, Inc.
First Priority Bank
First Security National Bank
Magnet Bank
Security Pacific Bank
First National Bank of Brookfield
The State Bank of Lebo
ABC news links their story to a word doc? Strange. - stealthc, on 07/18/2008, -0/+9Being able to say "I told you so" doesn't feel as good as I thought it would.
- xcheats, on 07/18/2008, -3/+12Or maybe because the site is hosted on Geocities...
- inactive, on 07/18/2008, -0/+9sure
- masterjjx, on 07/18/2008, -0/+9Never even heard of any of those banks
- inactive, on 07/18/2008, -0/+9coffee lots and lots of coffee
- TheAbsintheHare, on 07/18/2008, -0/+8The government has been broke for a long time, hence the national debt.
- KittySpark1es, on 07/18/2008, -0/+8Digg to bring these bank down quicker! Come on guys....digg effect! hahaha
- chicagospur, on 07/18/2008, -2/+10That's the problem. Most of their customers don't know that FDIC covers any investment under 100K. So the customers panic and pull their money. Then word gets around and the bank is done for.
- Risingashes, on 07/18/2008, -1/+8@jabiggs3 Whoever you have listened to in forming your opinion has either mislead you or you've misunderstood what they have said. Fractional banking is a mandated minimum level of reserves, getting rid of regulation would remove this minimum and would in fact increase the money multiplier.
The multiplier was not the result of federal banks- federal banks were the result of the multiplier (amongst other reasons). The multiplier was caused by modern banking practices which allowed lent funds to be deposited back in to the system effectively increasing the money supply (this money can either be unspent loan proceeds, salary proceeds or sale proceeds- all but the first unable to be attributed as loaned money and therefore cannot be controlled).
Federal banks are designed for the dual purpose of maintaining steady inflation (usually a goal of 2-3%) and curbing the severity of booms and busts that naturally occur in the economy (by slowing both booms and busts through interest rate manipulation by charging fees on mandated reserves). The problem recently is the huge amount of pressure that the executive branch has but on the Fed to provide them with loans in an effective boom time- leading to massive debt coming in to a bust (the consequences of which you are seeing the beginnings of now). The system isn't broken- the people in charge are.
Getting rid of the Fed would compound the problems you are having and would endanger the future. The reason people that know better are pushing for this is that they know that it'll never be implemented because it makes no logical sense and will therefore be blocked- giving them the ability to say that their solution would have worked without actually having to be tested.
I hope some of what I said was straight forward enough to make you question your views. If you want to read - a8ksh4, on 07/18/2008, -1/+8"The good news is that all the banks are FDIC-insured, which means that up to the first $100,000 of your deposits are guaranteed by the federal government."
So the bank goes under, my govt borrows n thousands of dollars from China to reimburse me, I pay back n thousands of dollars in additional taxes and funding for any useful federal programs gets cut to pay back china, and that's just the good news. Sweet! - inactive, on 07/18/2008, -0/+7 Again.
- Nimsim, on 07/18/2008, -0/+6hence the rice
- kolobcreek, on 07/18/2008, -0/+6Is anyone else tired of these ivy league losers exercising gross negligence then getting their ivy league buddies in government to make us foot the bill?
the people responsible need to be put in prison or where ever it is they put rich people. - inactive, on 07/18/2008, -0/+6I'll volunteer to be the first female. I can cook, sew, iron, can food, able to grow a pretty mean garden, I am pretty good at catching fish, and I have ammo to contribute too:)
- BionicPimp, on 07/18/2008, -1/+7For the most part, that's true, but there is a Perfect Storm scenario that is much more scary than you think. The FDIC is a Government owned Corporation. It has an Insurance fund of about $52 Billion dollars, which is accumulated from premiums paid by each of the insured banks. IndyMac is the largest bank failure in US history, but it's not the largest bank. Still, about 10% of the DIF fund was used to pay back the banks customers during the bailout.
Now imagine if one or two of the *largest banks* in the US failed...They could easily exhaust all $52Billion dollars paying back banking customers. Once that fund is used up, they don't have any more money to pay back the people.
Now, I assume that the Govt would simply print more money to put into the fund should that happen, but there still would be a period of time where some people would not have access to their money. That means some people would not be able to pay their rent on time, buy food, buy gas...etc.
The FDIC is like the shocks in your car...it can handle the small bumps in the road, but it has a hard time with the potholes.
"At the end of 2007, the DIF had a balance of $52 billion. Bank failures represent a cost to the DIF if the FDIC has to repay depositors from the Fund. The failure of IndyMac Bank in July 2008, one of the largest bank failures in US history, is projected by the FDIC to cost the DIF between $4 billion and $8 billion [8], or approximately 10% of the entire Deposit Insurance Fund." ( from wikipedia: http://en.wikipedia.org/wiki/Federal_Deposit_Insur ... - trafficlight, on 07/18/2008, -0/+6I wish i had $900,000 to secure...
- Ryan2845, on 07/18/2008, -0/+6Not surprised, some of these banks are TINY.
For example:
"The State Bank of Lebo" has ONE branch location, in Lebo, KS which has a population of 961 people.
I'm not sure that is quite on the same scale as IndyMac - Hangly, on 07/18/2008, -0/+5"Conspiracy theorist" is just the modern term for "pragmatic realist."
- frelk, on 07/18/2008, -3/+8Hopefully, this story will cause people to run to their banks and withdraw all their deposits for safety's sake... wait a minute.
Remember that if you have less than 100,000 in your account its completely insured with the FDIC, which means you don't have to panic about your bank collapsing. - jakewastaken, on 07/18/2008, -5/+10Here's a list of the top 100 banks likely to go under. It was also generated using the Texas Ratio. I submitted it yesterday but nobody gave a damn. I guess the number 10 is just more exciting.
http://www.geocities.com/tubeguy@rogers.com/troubl ...
http://digg.com/business_finance/Unofficial_Secret ... - jpmoney03, on 07/18/2008, -1/+6The money multiplier effect must exist unless you plan to do away with credit completely. It is caused when I deposit money in a bank and then the bank turns around and borrows it to somebody else. Eventually that money ends up at another bank which then turns around and loans it out again. The only way to remove the money multiplier effect is to get rid of lending completely.
- whataboutdave, on 07/18/2008, -0/+5Bad news makes good news.
- allengeer, on 07/18/2008, -3/+8With a Texas Ratio of around 45, it shouldn't be on that list.
- Ajajadude, on 07/18/2008, -0/+5Same here. But, you never know...
- cadmiumpaint, on 07/18/2008, -1/+6The question is, once the bank goes under and the FDIC comes in to save the day, how long does it take for you to be able to access your money? Is this a potential Katrina kind of situation where you wait weeks and months for the Fed Gov to cut you a check?
- psysop, on 07/17/2008, -5/+10smash the piggy
- HeyArnold, on 07/18/2008, -4/+8FUD!
that's all.
digging down starts in 3, 2, 1.... - kelmaster1, on 07/18/2008, -0/+4"may the small banks be damned"
- zjbird, on 07/18/2008, -8/+12Congratulations! You've made the most boring top 10 list on digg so far!
- Photokon, on 07/18/2008, -0/+4Another important thing to note about banks being in trouble is the percentage of "brokered deposits" for a bank. Indymac had something like 30%, and that is a lot of hot money. Some banks that are on the verge have upwards of 70% brokered deposits. Brokered deposits are deposits that are easily moved and the people share no ties to the bank, a la a community bank where everyone in the town banks at.
- jpmoney03, on 07/18/2008, -0/+4This is in the wrong spot.
- Hangly, on 07/18/2008, -1/+5The FDIC was created 70 years ago to deal with individual banks failing, not an entire industry.
There is only enough money to cover the first 1% of claimants. The rest are SOL. - Chalks777, on 07/18/2008, -1/+5Just so you know, you can _easily_ have more than $100,000 insured by the FDIC at a single bank:
acct 1, your name, insured $100k
acct 2, wife's name, $100k
acct 3, your name and wife's name, $200k
IRA, your name, $250k
IRA, wife's name, $250k
That's $900,000 insured by the FDIC. You can get more insured at a single bank by putting POD to your children on the accounts. - cholesterolnews, on 07/17/2008, -8/+12this is frightening
- Black6x, on 07/18/2008, -0/+4Didn't IndyMac have a ratio of 50?
- postaldave, on 07/18/2008, -1/+4i agree, but no bank has enough cash on hand to pay everyone on any single day. when they pick A BANK on the news you can crash a perfectly fine bank.
one website no, but when everyone piles on one given bank you can take down any bank. - stealthc, on 07/18/2008, -0/+3You know what could prevent the problems of a run on the bank?
Actually having in your vaults what you say you do.
I know, it sounds so scary. I know fractional reserve banking, the practice of making up imaginary paper and digital "money" is so much more fun for the bankers, than sticking to reality, but doesn't everyone see where this is going? -
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