[BillPeakOil]

http://peakworld.org/blog2.php/2008/03/ ... is-likely-

I agree with this article. I think Bear Stearns is just the beginning. I plan on pulling my cash out of the banks now just to be on the safe side. After all, its not like they are paying me enough interest to be worth the risk right now. And, its not like we can count on the FDIC if things get bad enough.

[PopeGideon]

I doubt it. At least not that bad.

Most Americans have less that 1,000 dollars in their banks.

Back in the good old days, the savings rate was actually positive, and maybe then there'd be something to run for.

Right now, I'm pretty sure that most of the people I know, if they found out that their bank was in trouble, would wonder how that impacts their next paycheck deposit and debit card.

That is, most people are living hand to mouth, so the real worry will be with direct deposit, not with getting out what's already in.

[peasea]

$this->bbcode_second_pass_quote('BillPeakOil', 'h')ttp://peakworld.org/blog2.php/2008/03/17/an-old-style-run-on-the-banks-is-likely-

I agree with this article. I think Bear Stearns is just the beginning. I plan on pulling my cash out of the banks now just to be on the safe side. After all, its not like they are paying me enough interest to be worth the risk right now. And, its not like we can count on the FDIC if things get bad enough.

[mekrob]

$this->bbcode_second_pass_quote('PopeGideon', 'I') doubt it. At least not that bad.

Most Americans have less that 1,000 dollars in their banks.

Back in the good old days, the savings rate was actually positive, and maybe then there'd be something to run for.

Right now, I'm pretty sure that most of the people I know, if they found out that their bank was in trouble, would wonder how that impacts their next paycheck deposit and debit card.

That is, most people are living hand to mouth, so the real worry will be with direct deposit, not with getting out what's already in.

[NeoPeasant]

Would it make sense to have a loan at the same bank, credit union or whatever where the bulk of your money is deposited, so that if the bank freezes access to your direct deposit money, they will not be in a position to demand payments on the loan from deposits that they are denying you access to?
I hope this question makes sense.

[Cid_Yama]

<i>and nearly every place accepts them</i>

That's just it. Those cards could all be turned off in an instant.

[mekrob]

$this->bbcode_second_pass_quote('Cid_Yama', '&')lt;i>and nearly every place accepts them</i>

That's just it. Those cards could all be turned off in an instant.

[MD]

$this->bbcode_second_pass_quote('NeoPeasant', 'W')ould it make sense to have a loan at the same bank, credit union or whatever where the bulk of your money is deposited, so that if the bank freezes access to your direct deposit money, they will not be in a position to demand payments on the loan from deposits that they are denying you access to?
I hope this question makes sense.

[aflurry]

you know, this same thread has appeared before, and it had just as many exclamation points in the title.

[Revi]

I like neopeasant's idea. Take out a home equity loan for exactly what you have in the bank, so they can't take away your savings. That might work. I know that when I paid my car loan off it was easily taken out of my savings. They can get their money back, and you can stash some cash in hard assets, etc. The interest rates just keep being lowered, so you might even make money on the deal.

[BigTex]

If you are really concerned, just stop the direct deposit on your paycheck and that will probably save you a little trouble if people start freaking out. It usually takes a couple of pay periods to turn off direct deposit.

OTOH, as others have said, most people have so little money in their checking account, a bank run wouldn't mean much. If your total exposure is $1,000, big deal. It's not like it's your life savings.

[aahala]

$this->bbcode_second_pass_quote('NeoPeasant', 'W')ould it make sense to have a loan at the same bank, credit union or whatever where the bulk of your money is deposited, so that if the bank freezes access to your direct deposit money, they will not be in a position to demand payments on the loan from deposits that they are denying you access to?
I hope this question makes sense.

[Kaj]

Just take a listen to Bush talking about the economy. To me he sounds so shit scared, in spite of his attempts at reassurance:

link

{oversized url replaced w/ link by SPG}

[Gerben]

$this->bbcode_second_pass_quote('BigTex', 'I')f your total exposure is $1,000, big deal. It's not like it's your life savings.

[dohboi]

Did anyone else notice that all lending between banks in England froze for a while this morning? In the wake of the BearStearns fiasco, the banks stopped trusting EACH OTHER with their money! If BS, one of the top seven investment banks in the world, can go belly up in a few days, who know what bank may fall next?

That's why the Bank of England had to helicopter in a few billion into the system to loosen things up.

Folks are freekin' out that are the most in the know. What's a tiny little investor to do?

Bank of England

[PopeGideon]

Kaj - shorten that link man, you're scrolling the page.

$this->bbcode_second_pass_quote('', '
')Would it make sense to have a loan at the same bank, credit union or whatever where the bulk of your money is deposited, so that if the bank freezes access to your direct deposit money, they will not be in a position to demand payments on the loan from deposits that they are denying you access to?
I hope this question makes sense.

[yesplease]

How likely and how imminent?

[alokin]

That does mean if you have your mortgage at bank x, which goes belly up, your loan will be sold and you have to deal with another bank and with another contract and another interest rate?
Do banks have to ask you before they sell your loan?
Can you refinance that with another bank of your choice?

[patience]

Maybe ignorance of the system details are helpful here. I know next to nothing about banking details, only what has rubbed off in forums like this. So I only see what is in the news here, and what local people are doing.

The news and forums say the sky is falling, and J6P only knows that he's having a tough time of it, being in debt. Local corps are stressed, and some laying off, so the economy is contracting. So, my thesis is, bank runs will happen when, 1) J6P panics based on what he has heard about, or 2) when enough major finance problems occur to panic J6P, such as HIS bank, or his friend's bank going down.

It's all about fear. No one can guess what it takes to get J6P out of his marketing-induced stupor. And that would be a sea-change for him. He doesn't want to believe anything bad can happen, and talks himself back into complacency if he hears bad news. I would have thought that he'd have panicked long ago.

But I think we are very close to major events waking him up. In any case, better too early than too late. I"ve only been able to convince two people that we have a serious problem here. A third friend figured it out himself. And, my kids know, having been around me so long, one in fact, directed me to this forum.

I'm convinced that when runs occur, it will start from some event that makes individuals unable to access their money/credit on a large scale. A govt declared bank holiday could do that, or Citi shutting off credit cards, etc..

Bottom line is, panic FIRST!

[BigTex]

I know a guy who has done some outside project management for some consulting projects for one of the Federal Reserve branches. Part of the gig when you do consulting work for them is you get the tour, get to hold a bar of gold, see the money, etc.

As he was telling me this, he mentioned that one of the employees had said that they had plenty of money on hand in case there was an event like a run on banks.

I thought that was a really bizarre thing for them to say to him, even if it's true. It's like it was something that had been discussed so much internally that the person who said it didn't think much of it.

It was probably just an offhand comment that didn't mean anything, but it stuck with me. This was 4 or 5 months ago.