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People are withdrawing cash from banks to keep money at home
Posted by ModelElaine • 9/30/08 • Subscribe to this Discussion [RSS] • Report This Topic
Topics: bank, banks, money, washington mutual
Reportedly people have been withdrawing large sums of money from banks and prefer to spend it all or keep it under the matress rather than deposit in their checking accounts mortgage-refinance-and-loans.blogspot.com/2008/09/are-my-deposits-and-inves...
Is this going on in your area as well?
User Comments
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I've heard it i happening but I've seen no real reports on it here. There is no liquidity problem, but if everyone does it...there will be, uh oh.-
where are you located?
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I think that's a very dumb thing for people to do. A mass withdrawal is only going to create more problems I think. Part of the catalyst to the problems back in 1929 and the 30s was panic and if people are withdrawing, then it's out of fear or panic, which could theoretically create more problems.-
I think its because people have lost total faith in the whole banking industry. They want their money safe,and worry if the banks fail, they will loose their money. I don't know too much in this area, but you are right, this was one of the events that lead to the financial panic.
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It is no doubt common among panic stricken idiots. If you have more than your insured 100 grand in a single bank account you are a complete idiot on that count too. While it may be convenient, it is an obvious sign you have more money than brains.-
Or, perhaps, people who are aware the the FDIC has used more than half of its reserves already? -
MadameX
can you cite the source please so we can all read? thanks -
financialtraders.blogspot.com/2008/09/washington-mutual-fdic-insured-deposi...
However, if you read any of the news stories relating to the WaMu failure, I'm sure you saw the same thing reported--or could easily find multiple references by Googling related news stories. -
cool! thanks
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the banks are just money stealers. i would advise anyone to get their money out of america in general. the country is sinking and i think the world has seen that a long time. you can only abuse the citizens of a country so long. the sleezy hierarchy of the usa is rediculous and in keeping the slaves down the country effectively destroyed its future and the zillion aires just keep making more cash. im jelous of any one who lives anywhere but here -
My friend, Sean Rassmusen, wrote a great article about the bailout... and what it really means. I'm sure they are going to try and revive it somehow! Read this:
www.seanrasmussen.com/controversy/the-750-billion-global-meltdown/-
I saw your page, and saw the video of that girl making her speech, it was really an inspiration I'm adding it to my blog and sending it to friends everywhere.
and funny how they are now calling the bail a rescue plan. It amazes me the extent of greed this government and banks have. They're like deceptive cars salesmen; don' t care about the people, only about making a profit. -
@luvikavi: I'm glad that you were moved by the article and the video. I just wanted you to know that it was written by Sean Rasmussen, not myself. He deserves the credit. I, like you, just want everyone to know about it.
I totally agree with your second paragraph and would like to clarify, in my opinion, that the politicians (a.k.a. the government) are just puppets controlled by the banks.
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@ModelElaine: I haven't heard of anyone pulling there money out of the banks in the Dallas/Ft.Worth area
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A run on the bank was the last straw for WaMu. It is happening and it is stupid. Unfortunately, we can count on millions and millions of stupid people. If you have more than $100,000 in a bank account, open up a second (and third, fourth, whatever) account in another bank. Even if the bank goes under, the government will protect your account.
If you absolutely need to take your money out of the bank, buy a broad based index fund. It is a great time to go shopping for stocks.
The herd seems to be panicking, withdrawing money and selling stocks. If you follow the herd, you are likely to step in a cow pie.-
I believe hedge funds profited some fat gaines on the Down drop. No wonder market picked up at the close yesterday - hedge funds are covering their short positions. This is all a big players' game
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I find it very interesting that "federally insured" seems to create the impression of "perfectly safe" in so many people's minds. Has everyone forgotten that our government is trillions of dollars in debt with no plan on the horizon for turning that around?
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If the government is unable to cover the federally insured amounts, the paper money isn't going to be any good either. Inflation will destroy its purchasing power.
edited: Elaine. It isn't only the bigs. If you have money for investments, now is a great time to invest regardless of your size. There are some bargain basement deals out there right now. I do suggest a widely diversified portfolio that includes multinationals and foreign companies in case the foreign exchange rate turns even worse against us. -
I agree with X on this one. If you are diversified, I would keep contributing to your 401K, especially if your employer matches your contributions.
There is no way that withdrawing funds can help those funds match inflation; held cash will inevitably lose purchasing power as inflation increases.
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You can't blame people for panicking though I wouldn't want to keep a lot of money secured under a mattress. You exchange one security problem for another!-
But it gives you a good reason to sleep all the time.
Guarding the cash!
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Luckily I have found a way to avoid this problem altogether by simply not having any... Money that is.
Finally, a reason to feel good about my sub $20 bank account balance!-
sounds like a wise investment decision in today's economy
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Last week I found this picture of the last time we had runs on the bank. Now it seems that there aren't going to be lines anymore. We can just wire transfer our funds now.
www.eminiaddict.com/2008/09/run-on-bank-of-new-york-april-1933.html -
Great post Nine! I got a good laugh at that one. Who has hundreds of thousands of dollars in the bank? If you do I want to know how? Anyway,I agree with madamX when she said that she finds it interesting that "federally insured" makes us think that our money is safe. Hello! the government is in debt with no plans of a real "bailout"! -
I am located in Singapore and AIA, an insurance company affiliated with AIG was made to terminate at least 1000 or more policies because of the fear of AIG collapse.
I believe most people still have fears and are no longer confident with their banks. -
I don't know if you all are watching the markets, but there is some huge intervention going on here. The Plunge protection team is hard at work..
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I just heard on the news there is a rise in the amount of safes people are purchasing. -
If they withdraw enough money, it will be worth more as wallpaper. -
I saw this post yesterday and honestly thought... pffft! It won't happen here, not in rural Arkansas, not here... that's big city stuff. Boy was I ever wrong! I went to the Bank today to put some coins in my safety deposit box - and the Teller looked at me sort of dissapointed and ask --- "Are you going to empty your box too?"
Too? What?
She explained that in a single day, 20 people with safe boxes had been in to empty them and withdraw their savings accounts.
*shakes head* -
Yeah..dont put all your money in a bank...buy real estate, buy T-bills, buy obligations, buy gold, buy land, build your own business. Put money in the Bank for necessities only...and keep lots at home...to buy the next property, land, investment. I don't believe anymore in banks..In my country numerous banks are liquidated (bankrupt) or are forced to merge. From hundreds of banks now only less than 25. I am from Indonesia.
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It doesn't take a psychic to predict that home invasions are going to triple with people talking about keeping money at home, etc.
The FDIC is increasing insurance up to $250,000.00 and has the funding to cover the accounts from the figures that I have seen. Even the depositors of the weakest banks should be alright. It never fails to amaze me that people act without doing their homework. -
The reason the fdic fund works is because they can't run out of money. If the balance on the reserve gets low they have the ability to simply print more money...Of course the newly minted money is hardly worth the paper it is printed on. But you do get dollar for dollar whatever the amount that is insured. -
I think this is somewhat true, I know businessmen friends who withdraw great amounts of money from their bank accounts afraid of the bank closures and stuff. Especially since the stock markets all over the world is not doing very well. -
A run on the banks...that hasn't happened in a long time, damn our economy is fucked.-
Well, I am from Russia and this doesn't scare me. I remember the time when people lined up over night on the bank doorstep and there wasn't enough cash to give to everyone. First come first served was the deal. Once the cash ran out, there was no more left and people went home without their money. This situation doesn't seem as desperate as it was back then.
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That's just stupid. FDIC, people!-
FDIC is not a magical money supply that will never run out. -
FDIC only secures oh so much...what is it, like $200k or something?
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$100K per person per bank; $250 per retirement account per bank
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