[Cashmere]

I consider it a very bad sign - <b><i>a VERY bad sign</b></i> - that my main bank felt it prudent to send out a letter to all of its clients today indicating that, "we're in fine shape", and "no FDIC insured depositor has ever lost money."

WTF is that?

It's the same damn thing as my wife coming up to me and saying, "I just want you to know dear, I haven't cheated on you and you have no reason to worry."

DAMN!

[chris-h]

and the name of your bank is ?

[ReverseEngineer]

Empty your Bank Account TOMORROW.

Reverse Engineer

[killJOY]

"Never believe anything until it has been officially denied."--Claud Cockburn

[DrillBites]

Oh, don't worry at all, after all a corporation or government would NEVER lie to you, would they... I mean really... DDT is good for the environment, Saddam had massive stockpiles of WMD, genetically engineered food is good for you, and there is no such thing as global warming. Really. Its OK to trust the banks, I mean after all they are all insured by the Federal Reserve Bank, which is actually a privately owned corporation and currently driving down the value of the Dollar on the international market.

Whether or not your bank was safe yesterday is one thing, but I feel that the real question is "Will it be safe tomorrow??"

[kpeavey]

If you go to the bank today to withdraw all your money, I wonder if they will let you have it. There is another thread on the subject somewhere around here.

Small towns with few banks can present a problem if employer payroll accounts and the employee checking/savings account share the same bank. If your paycheck is no good and your deposits are on hold you get screwed from both ends.

When a plane is about to crash into the side of a mountain the captain will reassure the passengers that all is well to avoid a panic.

If all is well, why would the bank send out letters to everyone telling them all is well?

Your kid borrows your car. 2 hours later you get a call "Everything is fine dad, the car has great insurance, there is nothing to worry about."

Your wife calls you at the office, leaves a message with the secretary: "Everything is fine dear, we have great homeowners insurance, there is nothing to worry about."

I can smell the bullhsit from here.

Max out the ATM card if the bank is closed.
Be in line when the doors open.

I hear news like this, I invest in more stored food.
I think I will pick up extra today, after I stop at my bank.

[Cashmere]

I've got a ton of money in this bank. There is no way of withdrawing it all.

The bank was on the watch list of 100 banks compiled by some guy right after Indy Mac.

I'm not worried about the money being locked down for a while, and, as the 10th bank failure of the year, the FDIC would have the reserves, no problem, to open the bank on Monday.

But I will certainly set the gears in motion to move the money - the real risk is that Leh and WB decide to sh-t the bed on the same Friday, and we get a systemic convulsion.

It's just a huge hassle - lots of things tied to the account.

Read the letter yourself:

[vision-master]

I've got a ton of money in this bank. There is no way of withdrawing it all.

The bank was on the watch list of 100 banks compiled by some guy right after Indy Mac.

I'm not worried about the money being locked down for a while, and, as the 10th bank failure of the year, the FDIC would have the reserves, no problem, to open the bank on Monday.

But I will certainly set the gears in motion to move the money - the real risk is that Leh and WB decide to sh-t the bed on the same Friday, and we get a systemic convulsion.

It's just a huge hassle - lots of things tied to the account.

Read the letter yourself: Scary Bank Letter

So, do smart highly educated "creeps" write these things?

Are most ppl really taht stupid?

Talk about a run-on-the-bank.........

[Jotapay]

1. They see a bank run as a possibility.
2. They are probably experiencing some large withdrawals.
3. They are concerned as they are probably not in the best position regarding their books.
4. They feel real concern.
5. They are prudently trying to manage perception and forestall any mass run on deposits.

[Revi]

At least they are covered by the FDIC. I am worried about our local bank, but what can I really do? I don't have much in there anyway.

I think it's time to get things we really need, because the bank system seems to be tanking and it may be difficult to buy things soon.

[emersonbiggins]

I am worried about our local bank, but what can I really do?

Consult a Bank of branch near you...

[Roccland]

I consider it a very bad sign - <b><i>a VERY bad sign</b></i> - that my main bank felt it prudent to send out a letter to all of its clients today indicating that, "we're in fine shape", and "no FDIC insured depositor has ever lost money."
WTF is that?
It's the same damn thing as my wife coming up to me and saying, "I just want you to know dear, I haven't cheated on you and you have no reason to worry." DAMN!

Unless you withdraw your money.

It is gone.

Really...read this: Whether it’s the Chinese Central Bank (BOC), the Fed, the ECB, and then all the other world financial institutions of every type, insurance companies, gigantic retirement funds, other banks, you name it, the present losses of capital to the world financial system is pervasive worldwide.

Nobody will escape the wrath of this deleveraging, and that is why I call it Credit Crisis II. Credit Crisis I was only the preliminary round…Credit Crisis II is characterized by the realization that the gigantic losses of capital cannot be purged from the financial system, even with big public bailouts. And that this deleveraging cannot be stopped. There are too many interlinkages. And, without writing a book on this, the next victim when Credit Crisis II unfolds, will be massive world currency instability. This will make any of the banking and currency crises we have seen since WW2 look like child’s play. It is not clear when Credit Crisis II begins but it is threatening already.

This is happening now.

[Jotapay]

5. They are prudently trying to manage perception and forestall any mass run on deposits.

Sending out such a letter seems counter to this goal, but I guess they are counting on most people being idiots.

At my old corporation (a financial services company), every person who was fired elicited an "Person-x decided to pursue other opportunities outside the company. We wish them luck," email sent to everyone in the entire company. Every single person who quit on their own never produced such an an email. Everyone knew about the hypocrisy. It is so prevalent in fact, there is a Dilbert comic strip about it.

The people who run these finance companies are incredibly arrogant and think the rest of us are really, really stupid. The owners of this bank are putting off some strong fear pheromones with this letter.

[Roccland]

Sending out such a letter seems counter to this goal...

Denial of rumor = truth

[RonMN]

Rather than withdraw money...just move a large portion to your checking account in the same bank (if you don't have a checking account with them, create one).

Then go to another bank & start another checking account & write a large check from the first account into this new account at the new bank.

Once in your checking account, you can move the money any where, any time, simply by writing a check.

It's time to stop thinking of earnings & interest...at this point it's all about PRESERVATION!

[Tyler_JC]

The 2nd quarter results were actually pretty good for NWSB.

Net income was up 17% and return on equity was up.

The bank looks pretty good on paper as of July, 2008.

If their balance sheet deteriorated to the point where they are verging on insolvency in one month...that's a scary sign.

[emersonbiggins]

You can also write a cashier's check straight from your savings to an account at another institution (if you don't like briefcases ).

[Revi]

Thanks for that link, Rocc. I feel a lot better now.

It's not just your local bank. The whole world financial system since WW2 is going down. Great...

[pup55]

Well, after checking their financials:

NWBC

the additional argument can be made that they really are not in all that bad shape, and they just want to talk the business up a little bit.

According to their profile, they are competing against NCC, which is struggling, and MTC which is also getting beaten up. Maybe they want to benefit from possible bank runs from those two banks. That money has to end up somewhere.

According to their 10Q they do have about 1.3% nonperforming loans, compared to 1.0% in December, and also, they had a decrease in deposits by $158 million in that time, only a couple of percent, but that could be just the economy slowing down or something. Their competitor NCC which is losing a lot of money, claims to have 3% nonperforming loans at the moment.

Now, it is quite true that even though performing, a lot of these loans could be on the books for a lot more than the underlying property is worth, and in fact, this is likely, but there is no real way to tell on that what is real and what is not, except for believing the officers of the bank when they tell you this is the case.

So unless they know something that we don't, maybe what they are saying is just friendly PR by the officers, and nothing to worry about. Anyway, for every PO.com poster that gets a letter like that, there is a little old lady that says "how nice, my bank is nice and safe" to offset it, so maybe the net impact on deposits is close to zero.

[patience]

Fact: We are in the midst of the greatest credit debacle in history.

Fact: The US govt and the FDIC have taken unprecedented actions to try and cope with this.

Fact: Some banks have failed anyway this year, one of them being a very large one. (Indymac)

Fact: Shenanigans were pulled with regard to Bear Stearns, to "prevent a meltdown", according to Bendover.

Do whatever you gotta do. My money AIN'T in a bank.