T Nation

Banks to Shut Down for One Week?


#1

"This from a friend in Atlanta with strong banking connections: �?? Reliable word that Bank of America branch managers just received a letter or memo from the USFed instructing them to perhaps be ready for a one-week universal shut-down of the banking system , including access to checking accounts, savings accounts and credit cards.

Reliable word has it that BofA bank branches received a shipment of signs last week, reading �??WE�??RE SORRY, BUT DUE TO CIRCUMSTANCES BEYOND OUR CONTROL, WE CANNOT BE OPEN AT THIS TIME.�??

http://www.congresscheck.com/2008/10/02/bailout-fixes-nothing-banking-system-collapse-approaches-climax/

"I will stop the motor of the world."
--- John Galt


#2

What do you suggest?

Should I convert all my money to gold and bury it in the back yard?


#3

Get out of debt. If you don't have debt start saving. You needn't do any thing drastic to protect yourself...maybe learn Chinese.


#4

Yes. Then PM me your address.


#5

I keep cash in a safe at my office. Glad I did, if that really happens. Cash will be king.

I personally don't think it will happen. The rioting would be nationwide. I merely posted it as a possibility, albeit a small one.


#6

Not in debt.

Saving is my other hobby.

But I feel the need to PANIC!


#7

Ultimate irony.


#8

I need to stockpile some weapons...


#9

and bullets and rations.


#10

When was the last emergency bank holiday in this country? 1933 under FDR?

Hey HH, it's playing out exactly like EG's book so far.


#11

Good God.

I had a very lengthy conversation with a community bank president tonight. This is the second conversation I have had with as many bank presidents in as many days.

Neither of them are worried in the least.

They are currently preparing for the upcoming farm loan season which, between the 2 banks will total over $20 million. These are short term loans, due 365 days from the day the dotted line is signed.

Neither of them hold bad paper. One bank refuses to do mortgages, the other requires %20 down.

I don't know what to tell you guys who are having fantasies about getting to watch the sky fall.

All of my cash is safely deposited in an FDIC insured bank.

I'd have loved to see how you doomsdayers acted 9 years ago.


#12

RJ, I hope you know the system well enough to know that FDIC is essentially a ruse which cannot possibility guarantee all deposits. It's simply a fraud. There is no way of backing up currency which can be inflated 9 times for every real unit of monetary worth. Were a large bank panic to occur, the FDIC reserves would be depleted extremely fast.

High level bankers often lack an understanding of fundamental economics. They are so involved with the inner workings of their business that they can't see the forest through the trees.

I've no way of assessing the credibility of this report. But if it's true, and there really is a bank holiday, then I would take that as bona fide proof that the end is very near.

Guess we'll know soon enough


#13

The FDIC will never have to. As long as people think there money is safe with a high insured amount then the bank runs will NOT occur. Thereby preventing many bank failures that would only happen if people panic and take their money out.

Nothing can help banks that are insolvent and they have always failed throughout history. What we don't want are failures due to lack of liquidity and this helps that.


#14

In my best Mufasa voice:

The circle life goes like this, young lions...

Falling home prices will affect confidence which will affect buying psychology which will affect home sales which will affect the economy which will affect employment which will affect creditworthiness which will affect availability of credit which will affect earnings which will affect stock values which will affect social mood which will affect employment which will affect consumer spending which will affect home prices which will affect confidence which will affect buying psychology which will affect home sales which will affect.....Ah, hell, you get the picture.


#15

The bankers I talked to said the ONLY thing in the bail out that would help them would be the raising of the FDIC limits. Not because anything financial, but because it will help put people more at ease.


#16

That's right. Raising the limit will likely keep banks from failing unnecessarily by keeping people from making a run on banks that are ok.


#17

The BOA closing signs memo is an internet hoax. All BS.


#18

And 99% of the community banks are more than okay. This is a big bank problem.

I hate to keep going back to the conversations I had, but I asked the bankers how this affects them.

My business is 100% dependent on farmers. If farmers don't get their home loans, they go out of business and so do I.

I asked them how the meltdown on wall street would affect their ability to make farm loans, and they said that in a worst case scenario money would cost more if the bank needed to get more money.

People should run from any national bank and go with sound, solvent community banks.


#19

I would not say all big banks. My business is with Suntrust - to my knowledge they were not heavy into subprime mortgages.

We are in the commercial construction side and we do have one job on hold because of financing that the developer can't get right now. But it is because they do not have any tenants right now.

The bank is requiring two anchor tenants. They are simply shutting off money for spec buildings. Nothing new here. This has happened quite often in the past.

I don't think it is the end of the world if they pass this thing in the house today. If it helps mentally, it may be good enough. However, they could do so much better. Problem is, we don't have enough people in this country that understand what eliminating the cap gains tax would do right now. And without pressure from the masses it will never fly in a democratic congress.


#20

Not entirely true. Wells Fargo is doing great right now. Citi, BOA, and JPMorgan aren't too far behind. This credit crunch isn't nearly as widespread as some analysts would have us believe, as you are well aware. The problem is that the loss of just a few large banks interrupts the flow of credit for everyone.

Today's Wells Fargo deal in buying out Wachovia should be a big sign to the Gov that the free market can solve this thing. A little competition goes a long ways. Citi was set to make the deal until Wells Fargo jumped in. Now Wells Fargo will be taking on all of Wachovia's assets in the deal (including the bad loans), as well as all operations, basically a complete takeover.