Oh this doesn't sound good at all.
The Online International Herald Tribune reports that people stood in line for hours yesterday in California seeking to get their money out of some troubled banks. The banking sector is taking a real beating even as politicians and banking leaders are seeking to quell the stormy waters with calming words and emergency financial rescue measures.
Some people aren't buying it though. They want to be sure their money is safe.
Investors are worried, and banks are on Wall Street's lists for closure or even seizure by the government. The financial triage has begun, as the word is that the smaller banks will be allowed to fail and the bigger guys will get help.
"We have seen a 'too big, too important to fail' instance," said William Gross, the chief investment officer of the bond fund Pimco. "The market wonders: which institution is too small to bail out? Where is the dividing line? They seem to have picked on the regional banks as potential candidates to be the ones too small to bail out." ...FDIC insures accounts of $100,000 or less but that's not stopping people from trying to get their money out of troubled banks. The thing is, that for the most part, this list of troubled banks is being kept secret. Word is that "Banks in Colorado, Maryland, Georgia and California top privately-prepared lists of troubled banks being circulated on Wall Street and in Washington."
"It's about to start getting real bad," said Christopher Whalen, managing director at Institutional Risk Analytics. The Federal Deposit Insurance Corporation, he said, should just move on with the process and "close not just one but a half dozen institutions at the same time."
Foreign investors are probably a bit concerned as well, since they have been buying up large stakes in these US banks and helping to bail them out.
Then their are other foreigners who are trying to get their money out of US banks and into something else as confidence in the US dollar is getting more and more shaky.
Some reports say we are on the precipice of a global economic crisis. With so much tied into the American economy it's no surprise. As far as I am concerned, the Federal Reserve and our monetary policies have been disastrous. They allowed our dollar to sink and crash. They allowed easy credit to people who shouldn't have received it and they let the government bail out companies that should have failed because of their poor practices. This did not happen over night either. To top it all off, our current crop of presidential candidates are clueless and certainly bring no solutions to the problems, because they defer to the people like Fed Chair Bernanke, who is driving this bus. I'll say it again: Congressman Ron Paul was right regarding the US dollar and monetary policy. Unfortunately no one was listening.
One commenter on one of the banking articles that I perused today struck me as an interesting and wry spin on this whole banking mess: "most people aren't worried - they are already poor".
Looks like they may get a lot poorer.
But let's get to something that is more on the minds of most Americans....
What is Angelina Jolie and Brad Pitt going to name the twins?