What Is Backing Your Deposits in the Bank?
Is the bank really the safest place to keep your money? Robert Prechter joins the Mind of Money host Douglass Lodmell to discuss what backs bank deposits and how you can keep your hard-earned money safe.
We invite you to watch the interview below. Then read Robert Prechter’s free report, Discover the Top 100 Safest U.S. Banks. Continue reading
America’s Biggest Banks: How Safe Are They?
“The Coming Worldwide Bank run”
Lost in the clamor over the central banks’ “let there be liquidity” pronouncement, Standard & Poor’s just downgraded fifteen major U.S. and European banks.
The downgrade doesn’t mean Bank of America, Goldman Sachs, Citigroup, Barclays, UBS, Wells Fargo and others will close shop tomorrow. But the long-term credit downgrade does raise questions about their stability.
After all, the 2007-2009 financial crisis has supposedly passed. But during the two-year “recovery,” did most big banks really return to sound fiscal health? Well, Standard & Poor’s downgrade speaks for itself.
One reason for the downgrades was Standard & Poor’s own revision to its rating system. Nonetheless, CNBC reported (11/29), “The outcome of the re-rating of the biggest banks was worse than S&P has forecast for all banks.”
And apparently, the big banks were in worse shape in 2008 than most people realized. Thanks to the Freedom of Information Act, Bloomberg just revealed that banks got more bailout money from the Federal Reserve than was previously made public: Continue reading
Markets Aren’t Rational
EWI’s Brian Whitmer shows how the European financial markets move despite the news
As the news from Europe about bailouts and the euro’s viability changes by the hour, EWI’s European editor, Brian Whitmer, doesn’t see the uncertainty as a problem. In fact, he points out that when uncertainty blooms, you can really see that markets aren’t rational and that Elliott waves tend to become even clearer. He discusses the “uncertainty in Europe” in this excerpt from the November European Financial Forecast:
Markets Aren’t Rational
How many times did analysts blame the summer sell-off on “uncertainty in Europe”? But as stocks rallied over the past two months, notice that the European situation became more uncertain, not less, as the headlines in this chart attest. Who would have guessed that stocks could jump 30% amidst such uncertainty? Continue reading
Economic Insights from a Lord of Finance
By David Galland, The Casey Report
Of all the social memes related to the economic and investment landscape, none is more dominant than that there is a small cadre of powerful Wall Street money men who, working behind the scenes, effectively control investment markets, the global economy and the politicians that play such a big role in that economy.
Whether you call them fat cats, greedy bankers, soulless manipulators or unindicted co-conspirators, the one sure thing, in the minds of most, is that they wield the power behind all thrones and that it is their whispered agreements, invariably made in darkened rooms full of cigar smoke, that decide the economic fates of us all.
Over the years, I have met quite a few of these “Lords of Finance” and found them to possess the same wide range of traits, positive and negative, shared by all humans: fear, insecurities, self-delusion, high hopes, good intentions, social aspirations, good habits and bad. Continue reading
Foreigners Losing Confidence in Holding US Treasury and Agency Debt
By Bud Conrad, Casey Research
Foreign central banks buy US Treasury and Agency debt through accounts at the Federal Reserve, where it is held in custody. Without these central banks buying our debt, the US federal government would have to find a new source of funds or the result could be higher interest rates. Looking at the data on a monthly basis (and then multiplied by 12 to give the annual rate), here is the dramatic picture of how foreign central-bank purchases of our debt have shifted, from buying $500 billion to selling off $1 trillion. At this rate of selling over several months, interest rates would go higher – if other things were equal. Of course, things are not equal because the Fed has been forcing rates lower with its massive QE2 and other programs. QE2 was $600 billion over nine months, or an annualized rate of $800 billion per year. Since foreigners are selling off our government debt, Fed purchases of government debt are even more necessary. Continue reading
A Raging Case of Bailout Fatigue
By Doug Hornig, Casey Research
I’ve used the term outrage fatigue on numerous occasions in this forum as a way of trying to explain why there has been such a muted outcry from the general population as the tally of financial atrocities committed against American citizens has exploded.
August 22 was just another average day with another average headline that could easily have been ripped from some radical economic watchdog website (liberal or conservative, either one): Wall Street Aristocracy Got $1.2 Trillion from Fed.
But the line wasn’t the work of someone out there on the anti-capitalist or anti-government fringe. It was attached to an article from the very mainstream Bloomberg News. Continue reading
Bank Runs Can’t Happen- Right?
By Tim McMahon, editor
Banks are considered safe. This isn’t the Great Depression…
We have FDIC deposit insurance now so bank runs can happen right?
Even the “Urban Dictionary” equates the saying “money in the bank” with reliability.
You can wager money on what will happen, and if you have inside information and you’re 100% certain your bet is right, then your pay-off is assured; you might as well call it “money in the bank.”
As recently as 2008 there have been bank runs, perhaps even more recently as they generally aren’t widely publicized for fear of creating even more bank runs . Whenever people loose confidence in the system to protect them (or even delay their access to their money) there will be bank runs.
Washington Mutual Bank (WaMu) was the largest Savings and Loan in the United States but on September 15, 2008 it received a credit rating agency downgrade. In the next nine days WaMu customers withdrew $16.7 billion in deposits, which was definitely a bank run by any definition. This led the Office of Thrift Supervision (a division of the U.S. Treasury) to close the bank and sell it to Continue reading
Is Your Bank on the “100 Safest” List? Maybe You Should Find Out
Close to Collapse: Bailed-Out Banks Facing Bankruptcy
We want to trust in the financial stability of our bank. After all, most of us have money in these institutions.
In spite of our wishful thinking, the tide of bank failures has not stopped. And these failures are occurring well after the heart of the financial crisis — and even after some of these banks received bailouts.
“Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing.
The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators.
The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.”
Wall Street Journal (12/26)
Seven of the 98 small banks mentioned have already failed. Continue reading
