A matter of trust
They're not lined up on the sidewalks yet, but people definitely seem ready to get their cash out of America's financial institutions and stuff it in a mattress. Consumers reportedly pulled $89 billion out of money market funds last Wednesday alone, part of a week in which investors of all kinds withdrew $210 billion from those funds. The week before, it was $173 billion.
And they're jerking their dough out of banks, too:
By Wednesday, banks sensed a run on their accounts. They started stockpiling cash in anticipation of withdrawals.The banks are also worried that now that the feds are guaranteeing money market funds, people will pull funds out of the banks and head over there. And so, acting once again on the fly with no public process, the feds announced yesterday that the new "temporary" guarantees won't apply to money that wasn't in the money market accounts by last Friday.Banks, which usually keep an average of $2 billion in excess reserves earmarked for withdrawals, pumped that up to an astounding $90 billion by Wednesday, Lou Crandall, chief economist at Wrighton ICAP, told The Journal.
A historic moment like this calls for a level-headed, intelligent, trustworthy national leader to get on the airwaves and calm things down.
Wish we had one.
| Posted at 1:57 AM | Permalink |
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Comments (9)
I heard Fred Meyer is refusing checks drawn on Washington Mutual bank too.
Posted by Jon | September 22, 2008 5:50 AM
And no one coming. None of the four potential WH residents did anything to inspire anyone this weekend. Same ol same ol
Posted by J Ramsay | September 22, 2008 6:32 AM
"A historic moment like this calls for a level-headed, intelligent, trustworthy national leader to get on the airwaves and calm things down.
Wish we had one."
Maybe we do, but he has not a chance to be elected....Ralph Nader.
Posted by KISS | September 22, 2008 6:55 AM
At "W"s last shot on TV trying to calm the country down.....the idiot looked like a deer in the lights. Interesting that he read that statement from paper and it sounded like he did not even know what the hell he was reading. Then the famous pow wow on TV with Paulson-Pelosi -Reed and gang.....They all looked like their dogs had died on the same day! I think this is much more serious than they are leading on. We will never dig out of this one. I think this country needs a UFO landing or Jesus to appear so we get on to a new track. This train is crashing. Something out of this galaxy has to happen, world is off its axis.
Posted by DANNY | September 22, 2008 7:51 AM
Oh yeah...Jesus is coming alright;
Sarah palin said so...in tongues.
Posted by portland native | September 22, 2008 8:09 AM
How convenient. Pledge taxpayer liquidity as a stop gap measure to stem financial meltdown. The new WMD fear issue. But this time it rings true. Could this be the great hedge to keep the dems. in check vis-a-vis anticipated spending?
Notice, despite all the assurances of bailout that the Dow is currently down over 200 right now. If this ploy does not stem meltdown, then we've raided the treasury of middle class tax revenue to provide a golden parachute for some in the finance industry. Heckuva job Paulsen.
Posted by genop | September 22, 2008 11:17 AM
About a week ago I mentioned that if you had any money in washington Mutual it might be time to take it to another more solvent bank or credit union. It is also now very clear that if you have any sort of retirement funds you better manage them on your own, because the Wall Street people aren't going to do you any favors.
Posted by Dave A. | September 22, 2008 2:38 PM
Funny, WaMu just offered me a $75 gift card for opening a free checking account, and they asked for a $1 deposit ... not $100, just $1.
Naturally I could not refuse their generosity, as it will provide a $75 donation to the food bank (where the Masters of the Universe that ran places like WaMu will never need to go, despite having been responsible for sending so many others there).
Posted by George Seldes | September 22, 2008 9:59 PM
I got the same offer from WaMu last summer. So far, I've used it to fund my fantasy baseball and football leagues. I also took my dollar back once the $75 arrived. I guess I could go and get the balance of my money out, but I really can't be bothered at this point.
Posted by Chad | September 24, 2008 5:33 PM