Calm Down!!!

[DaveT]

I'm seeing threads and links pronouncing as unalterable truth that the Great Depression II started this morning as stock markets are down another 5%. We are doomed, and there is no hope.

Well, that might be exactly what comes next, but come on. Nobody knows.

What we do know is that the mechanism for an abrupt ecomomic collapse is a global run on the banks, as virtually everybody races for the teller window in hopes of getting their money out before everybody else does.

Let's everybody take a chill pill. If we are on the way to the bread lines, I am going to hate it as much as anybody. I just don't think it makes any sense to speed up the collapse with our own unreasoning fear.

The only thing we have to fear, is fear itself.

[Donnachaidh]

1. too bad the Senate didn't take a chill pill

They just handed the keys to the Treasury to a Wall Street minion.

[billyoc]

2. This is the internet, nobody wants to hear any of your "Calm down" bullshit.

:rofl:

[MercutioATC]

9. Yeah. FIRE! FIRE!!! FIRE!!!

500-point single-day drops aren't anything to be especially concerned about, especially in light of the increasing level of volatility we've seen over the last 6 months.

String a couple of weeks of losses together and this could get ugly, though.

[cali]

3. much too much common sense in your post, Dave

it'll never fly with the melodramatic crowd.

[stray cat]

4. What happens if all my worse fears come true?

If someone is threatening me with a gun its not my fear that is the most dangerous object.

[Geek_Girl]

5. I'm getting a raise

and my husband got a notification from his company that his job is secure. It'll be rough and if you work in finance or construction you may want to look for a different career field but I don't think it's the great depression yet.

[Done]

6. THERE'S GONNA BE A RUN ON THE BANKS?!!?!?

OH GOD, I GOT TO GO GET MY MONEY NOW!!!

:wow:

[margotb822]

8. How can I make a run on my online bank?!?!

Oh noes!!

[DaveT]

10. That's funny!!! Thanks.

Everybody else: Come on, mock my pollyanna attitude, but do it with good humor. Anything but this mopey whiney o woe is us routine.

Whining will not stop the carnage any more than laughing at it will. But I'd rather spend my last hours before becoming a hobo in mirth than in mourning.

[dhpgetsit]

7. Steel your nerves.

The Cons will try to use your fear against you.

[NNN0LHI]

11. I am staying calm its the other 300 million Americans I am worried about

When people become cold and hungry they become dangerous.

Anarchy is not our friend.

Don

[LeftHander]

12. The run on the banks all ready occured.....

It was called making bad loans, back by Bush Administration policies.

Republican Kool-Aid drinking bank underwriters believed fully in the "sound policies" of Republican Fiscal responsibility.

So they wrote bazillions on bad loans and the American people ate it all up...

So suddenly when someone looked...all the profit reports were based an fraudulent reporting of the value of the real estate holding banks had invested in.

Add on top of the the ability for historically greedy and selfish investment banks to be more like "banks" resulted in the banking of other banks deposits with fucked up investment vehicles.

I am not an economist I can see that.

The fox told the chickens he needed all the eggs to keep them safe from wolves.
The fox opened to door and the wolves are eating all the chickens...
The fox ate all the eggs.

[DaveT]

13. Always look on the bright side

of economic meltdowns.

Today's global stockmarket sell off pretty well mulches McCain's gambit of "turning the page on the economy."

[Beregond2]

14. How many people have more than a quarter million in the bank?

No matter what happens, there won't be a "run."

[DaveT]

15. Er, I really hate to contradict my own premise, but

that 100K and now 250K "insurance" will not mean shit if there is a universal collapse of confidence in the banking system.

Deposit insurance was designed to prevent individual banks from having to close their doors. The concept has worked perfectly for 70 or so years as we have not seen anything like the current "crisis" of confidence.

To conform my Calm Down injunction with this particular Panic Now post -- the notion of a global run on all the banks simultaneously is the logical conclusion of this morning's stock sell off. Stock traders are guessing that the unwillingness of lenders to lend will not be mollified by the various "bailout" measures being enacted around the globe. If fewer and fewer people can borrow money, more and more business activity will be shut down -- which leads to more contraction of business activity.

When this economic collapse accelerates, people who have some liquidity of stored in banks might well all get the same idea at the same time -- and "run" to the bank to get their money out before everybody else gets their money out.

In booms as well as busts, banks do not have "your" money. Confidence is what makes the banking system work and when confidence vanishes . . . .



Help now!!! I'm scaring myself to death . . . .


This is not happening. Yet. And, in truth, it probably won't. But if it does happen, it will because people panic en masse.

Don't be the first, OK?

[Beregond2]

16. I still don't see why anyone would pull their money out of a bank.

Is it going to be safer under your bed? If it's guaranteed, it's guaranteed.

[kurt_cagle]

18. The Collapse of Insurance

Guarantees are only as good as the guarantors. The FDIC does not in fact have a magical stash of money that gets created every time you open up a bank account. When a bank collapses, the FDIC has to borrow that money from the credit markets in order to pay back the creditors. Right now, those markets are frozen - even states like Massachusetts and California can't get credit, so you can bet that while you may *eventually* get that money back, it may take years for you to recover it.

[Beregond2]

21. Gotcha. Of course it's all academic to me, as I'm worth nothing.

[TZ]

20. Runs on banks HAVE been happening

Or did you miss what happened to Wa Mutual? The buyout was preceeded by a run of REGULAR customers withdrawing money from their accounts.
THe rumors of the FDIC going bankrupt aren't exactly helping.

[JuniperLea]

17. If it's that far gone, Dave...

Then the money is worth nothing anyway... just trying to cheer you up, dude!

:silly:

[Chimichurri]

19. greater than 39 to 1 on the downside - and that's worse than even the Great Depression

Also the volume was only about 2.2 million to the upside versus 506-million to the downside when we looked - again, Depression starting kind of numbers.

http://www.urbansurvival.com/week.htm

[Bryn]

22. I am not worried about stock market

All I want is to just get rid of Wall Street and Stock Market. They can crash for all I care. Billions of dollars should go to health care for us all, affordable homes, jobs, loans to start businesses like Pop & Mom shops, stores, etc. Screw the dirty rich, bigots, crooks, gamblers, con men..you name it. I am sick of them all.

[defendandprotect]

23. Let's be clear this is simple criminality, corruption by capitalists once again ---

bail outs didn't work before and won't work this tme --

We need Reid/Pelosi to take over the financial markets and apply REMEDY and RE-REGULATION --

That's all that will work --


Also see C-span .. Waxman hearings --
and Nader in INFORUM --