Only if you've got more than $100K in a single account, Chas. Otherwise, your money is Federally insured.
Unless you think banks themselves are about to go belly-up, which seems - um, fanciful, at best.
Chaz is an know nothing about finance and economics.
call me a tin-foil crazy, but...
i think most major financial institutions are insolvent at this point and everything is set for the entire financial machine to grind to a halt. this crap is far from over.
call me crazy.
there is a difference between things being bad and things being apocalyptic.
Uh, the definition of "bank run" in your link includes this sentence: "Federal Deposit Insurance has ended the phenomenon of bank runs."
So, to answer your question: no.
Here's an interesting (to econ nerds like me) description of what happens when an FDIC regulated bank fails: http://www.fdic.gov/news/news/press/2007/pr07081.html
Actually, when Countrywide first started reporting its huge losses there was a run in California.
FDIC eliminates the risk, but it doesn't necessarily prevent people from panicking.
Yes, your deposits are insured, but it can take a while to get your money from the feds. So, just in case, you might want to stuff some cash in your mattress.
WaMu won't approve my parking kiosk debit this morning, so i dunno...
RUN TO THE BANK NOW!!! EVERYONE!!! GET YOUR MONEY BY 12 NOON OR IT IS TOO LATE!!!! BLAH!!!
As long as the CEOs don't have to take a pay cut, that's all that really matters.
I love the employees who "did not see this coming" Hell, this has been in the works for years!! Fuck I am glad I do not bank with those people.
Here is a thought for WaMu employees TAKE A DAMN ECON. COURSE!!!
Economists have a gag about minimizing personal loss at times like this: "First, don't panic. Second, make sure you panic first."
The only thing I have with WaMu is a credit card. So if the bank goes under, what exactly have I lost, other than a line of credit?
Will this affect the Bedford Falls Building and Loan company, too? I sure hope not...
The only reason you have to worry about a bank holding your deposits is:
a. they are in mutual funds or retirement accounts; or
b. you have more than $100,000 in checking and savings account at the same bank.
@ Gomez, Hell, if you have a CC then max that babe out and let them go under!! YEAH!!!!!
Similar to others on this thread, an "old fashioned bank run" is not a serious economic threat with FDIC in operation.
The serious threat is the independent currency traders out there... As we know, countries are already making moves to diversify their dollar holdings into other currencies --yuan & euros being popular-- which is just sensible.
However, if something triggers currency TRADERS to dump a significant portion of their dollar holdings for other currencies, --even 5%, it is claimed--, they could depreciate the value of the dollar in a free-fall. Such a free-fall could not be stopped by the US Central Banks purchasing up all the extra flapping supply of dollars (which is the standard process to prop up the value of a currency value drop).
Check out "The Future of Money" by Bernard Lietaer, a former currency trader and one of the architects of the Euro itself.
I think you'd like what he has to say Charles. I'd be happy to lend you a copy of the book if you can't acquire one.
@ Gomez: If WaMu went under, the FDIC would take over until some other bank purchases all of its assets (buildings, computers, deposit accounts, any debt you might owe on your credit card, etc) - and all WaMu customers would then become customers of the new bank. This usually happens in a matter of days - so fast you might not even know about it until afterwards - because all banks want more deposits and more customers. In the meantime if you want access to any money you had deposited with the failed bank, the Feds would cover it.
Good thing we've got our trusty pal China watching our economic six o'clock. They'll just jump in, scoop up all those loose dollars at bargain-basement prices, then hold onto them for about hundred years or so, until we either buy everything we need directly from them (pesky lead-poisoning issues notwithstanding), or they in turn buy up everything we currently still own.
Guess I should have taken that Mandarin course in HS after all...
I don't think it's certain that China would do that, or be able to do that. With a dollar-value in free fall, the US Central Banks could spend(waste) literally trillions trying to prop it up, to no avail. Other currencies would likely drop in value also (since most countries have dollar holdings, and those holdings would evaporate in value, lowering their overall 'basket' of value.)
I'm not certain that it would be in any country's interest to then purchase a huge amount of a low/no-value currency. I don't believe that occurred in any of the currency collapses we've seen across the 80's and 90's (baht, rouble, Argentine peso). ((But then, perhaps it would be a strategic move considering the US's place in the world. On the other hand, since the rest of the world is riding on American consumerism (not manufacturing) to keep everything afloat, once Americans have no money with which to purchase, we may become economically useless.))
In those cases investors fled the country and the currency, leaving it to rot on the ground. The IMF then moved in to restructure requiring the gov't to set exorbitant interest rates (like 30+%) to re-establish a favorable environment for loans. These adjustments/rates led directly to a massive unemployment and a depression and then what is known as "IMF Bread Riots".
If the U$D plummets, there would be no real safe currency in which to loan the US cash, as the entire world's currencies would be affected severely. One wonders if the IMF's 'structural adjustment' would be effective at all. I'm not clear on all the ramifications, but there would likely be a worldwide depression that would affect even mighty China.
Clearly it's in no-one's interest to precipitate a dollar collapse, but it could happen via the uncoordinated actions of many minor players.
And yes, you should have taken that Mandarin course in HS. You still have time to start, however. :)
Here's the States of Unrest article and map I was looking for regarding riots/resistance to IMF policies in the 'global south'.
One wonders how coordinated American's could be in the face of such economic abuse...
I guess I was focused more on our importance to China as a purchaser of all the cheap, labor-camp & sweatshop manufactured crap they churn out on an annual basis. Being one of their most important trading partners - in a decidedly one-way direction of them-to-us - could China really afford to have our consumer-based economy go into the toilet?
I mean, who else is going to buy all that stuff? And what are the consequences of a collapse (or at least a serious reduction) in China's current trade surplus if we stop buying it?
Comte, you're totally right. Who else WOULD buy all that crap if we can't? Since China is still relatively communist, and many industries are under control of the military, they can switch gears rather quickly at times (such as when they suddenly stopped massive logging due to environmental concerns).
But for the nascent capitalists there, they can't just stop. I have no idea of the ramifications of China's trade surplus if the dollar tanks. I doubt it's good though.
(Of course I hope the $ doesn't tank. I just hope we get complementary currencies up and running a.s.a.p. to stave of the worse of any financial messes the future holds.)
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