Top Economist: Americans should be worried about bank...

[katty]

more:
http://finance.yahoo.com/tech-ticker/article/56994/Top-Economist-Americans-Should-Worry-About-Bank-Deposits-if-Congress-Doesn%27t-Act?tickers=LEH,MER,BAC,AIG,WM,%5EDJI,%5EGSPC

Top Economist: Americans Should Worry About Bank Deposits if Congress Doesn't Act

Posted Sep 15, 2008 12:58pm EDT by Aaron Task in Investing, Recession, Banking
Related: LEH, MER, BAC, AIG, WM, ^DJI, ^GSPC
Updated from 12:58 p.m. EDT

With the "financial storm of the century" hitting financial institutions, many Americans are worried about the safety of their bank deposits. While the FDIC insures individual accounts up to $100,000, the reaction to IndyMac's failure this summer -- lines outside retail branches -- shows Americans have limited faith in the Federal Deposit Insurance Corp., which guarantees individual accounts up to $100,000.

Update: "The banking system is safe and sound," Treasury Secretary Hank Paulson declared at a mid-afternoon press conference Monday, seeking to ameliorate such concerns.

"Nothing is more important than the stability and orderliness of our financial markets regulators remain vigilant," Paulson continued. "We're working through a difficult period in our financial markets right now as we work of some of the past excesses, but the American people can remain confident in the soundness and resilience of our financial system."

But Americans are justified to be worried, says Nouriel Roubini, of NYU's Stern School and RGE Monitor, who notes there is already a "slow-motion run on retail banks" occurring nationwide.

That "run" could accelerate as people realize the FDIC fund has about $50 billion to "insure" about $1 trillion in assets at the nation's financial institutions, says Roubini. "They're going to run out of money" unless Congress acts soon to recapitalize the FDIC.

[Double T]

1. bush and cheney better get those presses at the mint running 3 shifts.

How did these A-holes ever get elected.....twice? Oh Yeah.....

[katty]

2. their admin motto: take the $ and run, bush having a big

financial pow-wow with the feds today--AIG wrangling going on now

[no_hypocrisy]

3. Not enough lifeboats on the Titanic again . . . .

[kurt_cagle]

4. Paulson said the banking system is safe and sound?

Considering that every time he has made assurances about how there's no problem, just move on folks, etc., a crisis erupts right there. I can't think of one time in the last two years that he's not been completely wrong (or was lying).

People ARE withdrawing their money, right and left, and moving them into treasuries temporarily until they can get them someplace safe (no one trusts treasuries either in the long term, but there's too much riding on their stability short-term for Paulson to f**k that up too). My money at this point is in a Canadian bank, which, while not completely immune, has generally had better regulation that the US banks.

Goldman Sachs (which looked like it had managed to come out relatively unscathed last October) is now reporting trouble. Lehman's just been picked up by Barclays of London (which, if memory serves, was nearly wiped out itself by bad investments a few years ago due to a rogue trader). Keep in mind that this radioactive paper is not going away, it's just getting moved from bank to bank.