So just days after my mom and I were discussing why we should leave money in our bank account with Washington Mutual would you know that the bank fails (the biggest failure in US history too) and has to be taken over and sold by the FDIC.
We were discussing how one of the problems in say the pre-depression days is how everyone freaked out and took all their money out of banks and then the banks didn't have any money. So check this out:
"Simply put, WaMu was victimized by a classic "run on the bank." Customers withdrew $16.7 billion in a 10-day period following the bankruptcy of Lehman Brothers, leaving WaMu "with insufficient liquidity to meet its obligations," its regulators determined." (for entire article see here).
16.7 BILLION dollars in 10 days. Of course the bank is FDIC insured up to 100,000 (per account or person??) and it's not like we have ANYWHERE NEAR that kind of money. So pretty much doesn't affect me much at all.
But I'm sitting here trying to figure out what to make of all these events. Any thoughts?
And honestly, don't go running to take all your money out of your bank account. Then they collapse. See above. 16.7 billion dollars. 10 days. 1 bank. Wow.
Hey thanks for the compliment. So, it's actually a blog instead of a link. If you go to my dashboard you will see it under my regular blogspot. It's called weekly meal options, weeklymealoptions.blogspot.com
ReplyDeleteHi Mags :O)
ReplyDeleteSo thought I would give you some insight from a banker (not that I know everything or anywhere near everything about what is going on.)
One of the things that bakers are worried about is that this could be worse the the Great Depression...due to the fact that news travels so much faster then it did back in the late 1920's. It takes minets rather then days, weeks or months for people to find out there was something wrong with a bank or anything for that matter.
Have you ever heard that you are ONLY covered up to $100,000.00 with FDIC per bank? So not true. It is a little know fact that if you work your accounts correctly, have the right number of benificiarys, and so on you can actually be covered up to $1,000,000.00 at ONE bank. Thats ONE MILLION DOLLARS! At the bank I work at we have so many people come in wanting to take out money so they dont have any more then the $100,000.00 and all it takes is sitting down with our Personal Banker to resturcture some of the accounts and they are happy campers :O)
It does amaze me at how wraped up in the drama people get. I thought it was a wide known fact that part of what caused the Depression was that people took all of their money out of the banks and the banks didnt have the funds or the 'liquidity' to continue day to day busness.
Its sad and probably something that will hapen to more then one more bank in the next few years.
Another contruibuting factior was whether the bank took part in the 'sub prime lending' on home loans. That is a lot of where the problem came from for WaMu and most of the other banks that have failed or will fail.
Anywoo, my imput. Hope it helps a little. Any more questions let me know.