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Poll

Should we cause a run on a bail out bank on purpose?

Yes, put it out of its misery0%0% - 0
No, let the government program do its thing100%100% - 3
Total: 3
2009-04-06 09:53:07
Diesel_dyk
Object in mirror will feel larger than it appears
+178|6296|Truthistan
PLEASE READ THIS BEFORE VOTING

I am not advocating that this be done, I am only posing the question on the presumption that we are a democracy and that in the US "the people" are the third order of sovereign.

The idea is that on mass we can make decisions that are within the power of the people which the government may be reluctant to make. That being said we could, if we wanted, decide that a bail out bank should not survive and bring about its end by having everyone withdraw all their deposits from that bank, in other words we make a run on an individual bank. If you think a bank is too sick to survive and that the government is wasting tax money to prop it up, or if their ties to the governmentt mean that its getting too much tax money why would we not act. Of course we are all made to believe that we must depend on the government to coordinate a rescue, but what if we acted to make some of these hard decisions that the govt and the Fed have refused to make. It would be a form of direct voter/consumer action that would force the FDIC to take decisive action and put the bank into bankruptcy.

Now once again I'm not advocating this, I am only posing the question. Do you think the people could play the role of the wolf to cut out the weak and the sick banks? Do you think we should?
2009-04-06 09:54:49
CameronPoe
Member
+2,925|6858
It would be the most ridiculous instance of shooting yourself in the foot ever the occur in the history of humanity and would also be the least likely thing you could possibly get people to do (government backed bank? -> 100% secure -> money will stream into it at a rate of knots).

Last edited by CameronPoe (2009-04-06 09:55:37)

2009-04-06 09:56:45
Man With No Name
جندي
+148|5877|The Wild West
some of us would just to bring on the inevitable race war
2009-04-06 10:38:14
Diesel_dyk
Object in mirror will feel larger than it appears
+178|6296|Truthistan

CameronPoe wrote:

It would be the most ridiculous instance of shooting yourself in the foot ever the occur in the history of humanity and would also be the least likely thing you could possibly get people to do (government backed bank? -> 100% secure -> money will stream into it at a rate of knots).
We are The Bank "resistance is futile"

So you think it would be futile and that a bank would survive. Fair enough answer.

But its also a question of whether you as a consumer and a tax payer want to do business with a bail out bank. You pay them once with fees and again with tax money. Are we helpless? A move by individuals could snow ball like a bank Gandhi, I make this long walk to the bank to pull my salt from it.
2009-04-06 10:44:12
CameronPoe
Member
+2,925|6858

Diesel_dyk wrote:

CameronPoe wrote:

It would be the most ridiculous instance of shooting yourself in the foot ever the occur in the history of humanity and would also be the least likely thing you could possibly get people to do (government backed bank? -> 100% secure -> money will stream into it at a rate of knots).
We are The Bank "resistance is futile"

So you think it would be futile and that a bank would survive. Fair enough answer.

But its also a question of whether you as a consumer and a tax payer want to do business with a bail out bank. You pay them once with fees and again with tax money. Are we helpless? A move by individuals could snow ball like a bank Gandhi, I make this long walk to the bank to pull my salt from it.
Anglo Irish Bank here in the Republic of Ireland was nationalised a couple of months ago. As a friend put it - if Anglo Irish were to fail now, having been bailed out, that would be the least of your worries (i.e. the entire nation would be completely and irreversibly fucked). So I promptly opened a regular savings account and a fixed term deposit account with them and shifted all of my money into it, especially given the 4.9% interest rate they were offering. Bailout = almost totally safe to invest in.
2009-04-06 11:00:49
Diesel_dyk
Object in mirror will feel larger than it appears
+178|6296|Truthistan

CameronPoe wrote:

Diesel_dyk wrote:

CameronPoe wrote:

It would be the most ridiculous instance of shooting yourself in the foot ever the occur in the history of humanity and would also be the least likely thing you could possibly get people to do (government backed bank? -> 100% secure -> money will stream into it at a rate of knots).
We are The Bank "resistance is futile"

So you think it would be futile and that a bank would survive. Fair enough answer.

But its also a question of whether you as a consumer and a tax payer want to do business with a bail out bank. You pay them once with fees and again with tax money. Are we helpless? A move by individuals could snow ball like a bank Gandhi, I make this long walk to the bank to pull my salt from it.
Anglo Irish Bank here in the Republic of Ireland was nationalised a couple of months ago. As a friend put it - if Anglo Irish were to fail now, having been bailed out, that would be the least of your worries (i.e. the entire nation would be completely and irreversibly fucked). So I promptly opened a regular savings account and a fixed term deposit account with them and shifted all of my money into it, especially given the 4.9% interest rate they were offering. Bailout = almost totally safe to invest in.
4.9% sounds like a good deal. But here in the US none of the banks are nationalized. It would be great if we had a federal bank, but what we have instead is FDIC insurance on deposits. So even if there were a run on a bank here the depositers would be safe.

You say you shifted your account to the nationalized Anglo Irish bank? From a different bank? tell us more, because it sounds like you did what I was proposing. If you took you money out of another bank, what happened to that bank?
2009-04-06 11:52:30
CameronPoe
Member
+2,925|6858

Diesel_dyk wrote:

4.9% sounds like a good deal. But here in the US none of the banks are nationalized. It would be great if we had a federal bank, but what we have instead is FDIC insurance on deposits. So even if there were a run on a bank here the depositers would be safe.

You say you shifted your account to the nationalized Anglo Irish bank? From a different bank? tell us more, because it sounds like you did what I was proposing. If you took you money out of another bank, what happened to that bank?
If you like, yes I have 'ran' from my usual bank, the Bank of Ireland (although I still hold a current account with it). Paradoxically, nationalisation is supposed to prevent systematic implosion of the banking sector but the perceived security of the nationalised bank prompts massive amounts of money to flee un-nationalised banks into the 'safe option'.

 

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