Slog - Comments on The Fed Abstracting Away Banking Pain http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain Anthony asks if this: is bad. Anthony, it depends on how abstract you want to be. When you save money at a bank, most of the money gets lent out to someone else. Look at your account balance. Shift the decimal place one to the left. That's about as much of your money your bank actually keeps around. The whole banking system relies upon the notion that: 1. These loan investments (made with your money) will eventually be repaid. 2. Huge numbers of people won't ask for all their money back at once. Let's say 1 ends up being false--say... Copyright 2008 Fri, 01 Aug 2008 15:45:29 -0800 Sat, 02 Aug 2008 21:36:17 -0800 http://www.movabletype.org/?v=3.34 http://blogs.law.harvard.edu/tech/rss Comment by tomasyalba Fricking genius illustration. Just lovely work. Thank you!

]]> tomasyalba http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091690 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091690 Money Fri, 01 Aug 2008 15:56:27 -0800 Comment by Non You're one of the best things going for this paper, Science.

]]> Non http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091716 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091716 Money Fri, 01 Aug 2008 16:16:01 -0800 Comment by Gitai Jonathan, pull your money out now. WaMu has lost access to the repo loan market and the rate they have to pay on commercial paper has gotten bigger. People who sell CDOs on WaMu have started requiring cash up front an increased their rates to 13%. That translates into them betting that the odds are 50% that WaMu will default within five years. It probably won't affect you, since you're under the $100k mark, but save yourself the potential trouble.

]]> Gitai http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091724 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091724 Money Fri, 01 Aug 2008 16:19:42 -0800 Comment by coffeeboss Thank you for this (with absolutely no hint of snarkiness)!

]]> coffeeboss http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091728 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091728 Money Fri, 01 Aug 2008 16:22:00 -0800 Comment by Ben But I don't waaaaanna pull my money out of WaMu!! I've had genuinely good customer experiences with them!

]]> Ben http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091739 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091739 Money Fri, 01 Aug 2008 16:26:35 -0800 Comment by Will in Seattle Oh, just go with BECU or WSECU or SECUWA like the rest of us, Ben.

]]> Will in Seattle http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091750 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091750 Money Fri, 01 Aug 2008 16:39:33 -0800 Comment by PopTart Another masterful post. Your ability to take abstract and sometimes difficult concepts and distill them down so that non science, math, econ people can understand them is awesome. Having worked as a technical writer for years I know how hard it is to do that and how much talent as a writer it takes. You are an asset and we're lucky you take the time to Slogucate us.

]]> PopTart http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091786 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091786 Money Fri, 01 Aug 2008 17:01:23 -0800 Comment by I disagree with what you said WaMu isn't going anywhere. Their stock price and profits may suffer for a few years, but they are very well capitalized and have a ton of liquidity. They overexposed themselves in the mortgage market, but they have enough other products that they will survive.

]]> I disagree with what you said http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091794 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091794 Money Fri, 01 Aug 2008 17:14:13 -0800 Comment by JA3 Jonathan will eventually bring SLOG to ruin if he continues approaching every issue with facts and common-sense explanations rather than knee-jerk emotional reactions.

Seriously, great job.

]]> JA3 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091873 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091873 Money Fri, 01 Aug 2008 20:20:21 -0800 Comment by E I've got $ in WaMu too (because they bought out Great Western Savings & Loan years ago), and have been worried because its stock has hovered between $3 and $5 a share for the last month. Stories of J P Morgan buying them have been in the news since January. I can't figure out why WaMu's got such a low value right now, compared to most "financials" because there hasn't been any news of of them suffering losses, because of massive subprime loan defaults.

]]> E http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091938 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1091938 Money Sat, 02 Aug 2008 08:33:55 -0800 Comment by F FDIC is an insurance organization, and as such the money that is used to cover bank failures comes from premia paid by the banks themselves. Furthermore, the amount they pay depends on how likely they are to go bankrupt (based on risk of investments and the amount of reserves they keep).

Ultimately, like all insurance, we all pay a small portion of our deposits to guarantee against catastrophic failure. You may not like that you haven't been given a choice in this matter, but it's not some sinister scheme.

]]> F http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1092002 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1092002 Money Sat, 02 Aug 2008 12:40:57 -0800 Comment by zach the collapse of these banks is terrifying and i'm totally weirded out that no one is really conscious of the precipice the entire banking system is teetering over.

]]> zach http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1092086 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1092086 Money Sat, 02 Aug 2008 21:19:35 -0800 Comment by nicole jonathan golob is fucking awesome. that's all i have to say.

]]> nicole http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1092089 http://slog.thestranger.com/2008/08/the_fed_abstracting_away_banking_pain#c1092089 Money Sat, 02 Aug 2008 21:36:17 -0800