Paul Joseph Watson
Tuesday, September 16, 2008
You know things are bad when Yahoo.com, the most trafficked website in the world and usually a purveyor of mindless celebrity gossip, cooking tips and dating advice, features a top story about how Americans could lose their bank deposits following the collapse of Lehman Brothers.
For the Internet giant to prominently report that there is already a “slow motion run on banks” is indeed a landmark event, and precludes even the most ignorant American from claiming they were not forewarned about the unfolding economic catastrophe.
The article points out that although the Federal Deposit Insurance Corp. guarantees individual accounts up to $100,000, the FDIC fund only has about $50 billion to “insure” about $1 trillion in assets across the nation’s financial institutions.
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When Americans realize the fact that banks are “going to run out of money”, the article nonchalantly states, a run on the banks will accelerate.
The warning comes from top economist Nouriel Roubini, of NYU’s Stern School and RGE Monitor, who correctly predicted the severity of the credit crunch. Roubini says there is already a “slow-motion run on retail banks” occurring nationwide.
He advises that people with accounts over $100,000 in value should at least spread them out among different firms.
The use of such inflammatory language like a “run on the bank,” especially from the most visited website on the entire planet, is phenomenal and other news websites as well as financial advisors have been cautious to use such terms in an effort to prevent panic.
For example, we read in today’s Seattle Post Intelligencer that, “Sara Hasan, an analyst with Seattle’s McAdams Wright Ragen Inc., said she didn’t even want to use the word “run” — as in “run on a bank” — during an interview, because “these are very touchy times.”
Other advisors are more up front with their warnings.
“First off, go ahead and make a run on your banks. If you have money with a brokerage firm or bank that is in trouble, get your money the heck out of there!” writes Joe Ponzio.
“In reality, I don’t want to cause a run on the banks; but, I won’t prevent one by saying that everything is fine and that you should wait until it is too late. My recommendation: Move your important savings and checking accounts to banks that have a higher likelihood of weathering the storm,” he adds.
This article was posted: Tuesday, September 16, 2008 at 4:08 am