I realize that, but do you think that there is a reason that they close the banks on Friday afternoon right before the weekend, rather than any other day during the week? It seems to me that bank closings (especially when they are occurring in record numbers) are always bad economic news and the government would prefer to release bad news when people are the least likely to pay attention.
Trying....trying....trying not to have brain aneurysm..trying...... I agree Dr. Pepper! The general public is least likely to pay attention over the weekend! I, for one, do NOT want a FUCKING GOVERNMENT THAT IS IN THE PSYOPS CROWD!!!!! Motherfuckers (to the FDIC and Fed Res) - close the fucking bank if it needs closing!!!! Do not think that you can "Wait until the weekend, so as not to upset John and Jane Public." You motherfuckers (FDIC and Fed Res) I want a fucking FINANCIAL REGULATOR AND NOT A "HAPPY REGULATOR"!!!!! I do NOT want financial regulators "calculating" the best psychological time to close a bank - I want these fuckers to close a bank AT THE RIGHT FINANCIAL TIME!!!! May hell fire and brimstone come upon them for closing banks based upon psychology and not finance!!! We can debate "creationism v. evolution" or "6,000 year old earth v. 4 billion of years old earth" some time in the future, but, DAMNIT, if a bank is broke - close the DAMNED THING!!!! NO PSYCHOLOGY INVOLVED!!!! They are only fucking over the taxpayers by holding off the collapse by doing the "psyops" thing!!! -gastropod P.S. To the dumb! In the statements above I am NOT advocating violence of any sort towards the FDIC or Fed Res.!!!!!! I am expressing exasperation that they go by psychology and not good accounting principles and good finance to close bad banks!!! If, however, God decides to drop fire and brimstone on them for using bad accounting and finance principles....I won't disagree with Him
Psychology can be powerful though. Then again, I wouldn't mind seeing a few lines out the door of people trying to get their money out Makes plausible sense: Close Friday afternoon/evening. Saturday is very limited hours as is. Sunday's closed. Monday it reopens "business as usual" Everybody now feels better... I mean..God forbid you have to close during the week...the horror!
I never said anything of the sort... Your conclusion is based on your construction of an incorrect argument out of the two statements I made. The key mistake you're making is assuming AIG was a risky business. It wasn't and neither were Fannie and Freddie.
And neither were countless borrowers who signed up for a liar loan. Quit twisting the fact to suit your distorted views. The fact is AIG underwrote CDS against the subprime loans. They simply screwed up and like any responsible investors they should have paid the damn price for their mistake.
They do it on Friday after the bank closes to avoid a run on the bank and social panic. Come Monday morning anyone who wants to can walk into the same branch, but under the new name, and do any transaction they otherwise would do had the bank not been seized. Those who take hits are those with uninsured deposits. There have been many bank seizures of banks where I knew employees and officers. They're all kept in the dark until after the bank closes on Friday. Even when FDIC comes to town they arrive under assumed names, an assumed organization, and have necessities delivered to the bank saying "We're going to be doing some work late into the evening". The only parties privy to what's going down are the FDIC and the assuming bank. It is highly confidential. It takes more than a mouse click to do the "rollover" if you will. They work hard all weekend to make sure everything works Monday morning. They just can't pull it all off starting on Tuesday night and expecting to open Wednesday. As some locals have put it, "If the financial crisis were the Titantic, community banks are the third class passengers". Community banks are not allowed to borrow from the Fed. Only bank holding companies and still then they have to have a minimum net worth. I believe it's only the "member banks" which enjoy the priveldge of 0% Fed money where they go across the street and lend it to the Treasury at 4%. A third grader could make $5B/ quarter doing that. We're the suckers.
What is the number of US banks? >4,893 banks or savings institutions have more than $100 million in assets; http://wiki.answers.com/Q/Total_number_of_banks_in_US So 150 banks failing out of 5000 that is 3%. I bet in the restaurant industry the annual failure rate is probably twice as much. (edit: Boy, did I underestimate it) Just an observation..... Edit: Here is the data from Ohio: http://www.businessweek.com/smallbiz/content/apr2007/sb20070416_296932.htm "His researchâconsistent with similar studiesâfound that about one in four restaurants close or change ownership within their first year of business. Over three years, that number rises to three in five. While a 60% failure rate may still sound high, that's on par with the cross-industry average for new businesses, according to statistics from the Small Business Administration and the Bureau of Labor Statistics." So a 3% annual failure rate for an industry is pretty darn good!
30 B last year. BFD when you think about the feds dropping half a trillion here, a cool trillion there, and 1.25 trillion while you weren't lookin'. When the S&L crisis was in full swing, reasonable guesses of the cost were 500 billion, although it came out around 150 billion. And that's 150 billion in 1990 greenbacks which is about 250 billion in today's US Dollars Liteâ¢. So when it gets 8 times bigger then it'll be as big a deal as the S&L crisis. Look that up and see what happened to the markets.