What Is Backing Your Deposits in the Bank?
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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
Using the MIP to Decide- When to Refinance
The MIP (Moore Inflation Predictor) is our proprietary index that projects future inflation rates one year into the future.
It uses a “fan” style with varying level of likelihood that certain rates will be attained. If you are considering refinancing (see When is it Right to Refinance? ) naturally you want the best rate. In order to determine the timing just look at the MIP chart.
From it you can determine when the next bottom will be occurring. Even though the MIP tracks and predicts the “Inflation” rate, interest rates tend to track fairly well with Inflation. So when the inflation rate is bottoming the interest rate should be bottoming as well. And this makes sense because 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
Fraud at Goldman Sachs
Goldman Sachs Group this week reminded everyone why it is one of the biggest names on Wall Street.
The firm’s first-quarter earnings, released Tuesday, show Goldman netted nearly $3.5 billion. This comes just days after the Securities and Exchange direction sued Goldman for fraud, putting the firm on the defense.
Goldman is a polarizing force on Wall Street. Depending on whom you ask, it’s a firm of geniuses … or maybe evil geniuses. No matter, Goldman has been wildly successful. It took plenty of risks and emerged from the financial crisis stronger than ever. And now the firm is striking back against the SEC’s charges. Continue reading
Banks are Still Not Healthy
Are Banks Going Bankrupt? “NO!”, say banks
By Olivier Garret, CEO, Casey Research
On April 21, Treasury Secretary Timothy Geithner said the “vast majority” of U.S. banks have more capital than needed.
“Currently, the vast majority of banks have more capital than they need to be considered well capitalized by their regulators,” Geithner said in testimony to a congressional oversight panel on the government’s financial rescue program.
Geithner’s remarks come on the heels of a surge in reported quarterly profits by the big banks.
One of these banks, Bank of America (BAC), the world’s second largest in terms of market capitalization, booked a first-quarter net income of $4.247 billion – 6% more than it made in all of 2008. Continue reading
Saving the Banks will Accomplish – Nothing
Editor’s Note: The old saying is that during a deflation cash is king. This is because as prices fall money becomes more valuable (i.e. it buys more). So it makes sense to hold onto it as long as possible and wait for it to increase in value. Because people hold onto their money it becomes scarce and harder to come by.
During a deflationary recession people also hold onto their money because they are uncertain about the continued supply of money (will they lose their job due to the recession, etc) so they in addition to holding money for appreciation, they are also “saving for a rainy day”.
Conversely during inflationary times money is becoming less valuable (buys less over time) so people want to get rid of it before it loses too much purchasing power and they even borrow as much as possible so they can pay it back with less valuable dollars. Keep that in mind as you read Andy Gordon’s excellent article on why bailing out the banks won’t help the economy. ~ Tim McMahon, editor Continue reading
