A week ago the Federal Deposit Insurance Corporation (FDIC) took over California based IndyMac Bank. It was reopened on Monday, July 14 as IndyMac Federal Bank. On Monday and Tuesday of last week there was extensive news coverage of depositors lined up at the bank to cash out their accounts. The lines went around the block. Some people had lined up hours before the bank was due to open. They brought lawn chairs.
This behavior was both predictable and inexplicable. Predictable, because humans are prone to panic when they’re threatened with ruin. Losing access to all of your money because your bank locks its’ doors fits my definition of ruin. So it is completely understandable that some of the depositors would act out of fear.
Inexplicable, because there was never any risk that the depositors would lose a nickel due to the bank being closed. None.
Banks are required by law to buy deposit insurance from the Federal government. The more deposits the bank has, the more they pay in premiums. The deposit insurance guarantees that the depositors will get their money back if the bank fails for any reason. So you have to wonder why the people lined up, since they derived no advantage from doing so, but they did lose the opportunity to do something more profitable with their time.
I also wonder why the media coverage didn’t do a better job of pointing out this foolishness.
Federal deposit insurance does have a limit. You are only insured up to $100,000 held in any one bank. If you have multiple accounts at one bank, even if they are joint accounts with someone else, the total insurance coverage is still a total of $100,000. Many of the people interviewed in line at the bank had assets way over the limit with IndyMac Bank. Given how easy it is to keep accounts at several banks, you really have to question what these guys were thinking.
Even in an industrial, post-modern society like ours, the old expression “Don’t keep all your eggs in one basket” still makes sense.
Subscribe to:
Post Comments (Atom)
1 comment:
Dear,
I'm a korean living in seoul.(name: Oh Minseok)
Korean special investigative team investigated samsung
corporation.
But they did not work right.
Suspicious to have been bought off.
Samsung corporation had many crimes.
And the team investigated samsung corporation.
It contained korean companies samsung,hyundai,sk CEOs' illegal issuing
stocks or bonds. ( previous CEOs or present CEOs )
The quantity are plenty.
(Three company CEOs did(and are doing) many crimes to me.
Many koreans are knowing it.
But many koreans are bought off by illegal issuing stocks or bonds.
Korean prosecutors and judges and bureaucracy are also guilty.)
The team knew it.
Korean special investigative team must investigated this.
But they concealed it.
I ask for asking for this criminal investigation to prosecutors and presidents in any
country and THE WHITE HOUSE(http://www.whitehouse.gov ) and INTERNATIONAL COURT OF JUSTICE(http://www.icj-cij.org/ ) and INTERNATIONAL CRIME COURT(http://www.un.org/law/icc/) and UN(http://www.un.org).
And help the shareholders and me.
P.S)
Three companies are hacking me and trying to kill me.
And are suspicious to use my name and email illegally.
If you receive another message that I dictated above are not true,
it is not from me, but from three companies.
The things I dictated above are true.
Post a Comment