General Question

Dig_Dug's avatar

Are you worried about the US banking problem?

Asked by Dig_Dug (4259points) March 17th, 2023

Banks sitting on losses of $620 Billion.

Observing members: 0 Composing members: 0

16 Answers

RedDeerGuy1's avatar

No. Is all imaginary wealth. No wealth fundamentally lost. Digital money. The few who reinvest into failure of the banks will either lose all or clean up big time. Such is the way of capitalism.

FDIC will protect most savings, and the management teams can find other jobs.

Is just good for the media companies. Easy reporting, and they don’t have to do much work on actual news and stories underrepresented.

janbb's avatar

@RedDeerGuy1 Actually not true. FDIC protects depositors; not investors as I learned to my chagrin last week. I am concerned.

KNOWITALL's avatar

It’s hard not to be concerned, as it affects a lot of people. Small business owners couldn’t access their funds!

RedDeerGuy1's avatar

@janbb Investors took the gamble and lost. They can find other places to invest. The investors who diversified will be ok. Capitalism still working. Fundamentals still ok.

Sorry I used the wrong word. Should be depositors not investors.

Edited

I don’t have a link but my Bloomberg Business news saying that other banks are bailing out some of the banks that are failing. So should be ok? At the least the investors in distressed banks will clean up rather nicely, but at great risk

ragingloli's avatar

Honestly, any company that wants a bailout should be forced to agree to be nationalised permanently, and their CEOs be turned into sausages.

JLeslie's avatar

On a scale of 1 to 10, I’d say a 3. I haven’t kept up with the story, but I think the banks having trouble might be bought by other banks and the depositors over $250k will be fine.

I’m not sure if the bank offered brokerage accounts also? They wouldn’t be protected by FDIC, but if the money is in stocks and mutual funds that are doing fine, then maybe it’s fine? I’m not sure. I was going to ask my bank that very thing. I have a brokerage account with one of my banks, and the money is in a fidelity mutual fund, and a couple of CD’s. I’m pretty sure the CD’s are FDIC backed, but the mutual fund wouldn’t be.

In the US savings and money market funds at banks aren’t seen as gambling, it’s considered to be no risk up to the FDIC limit and very low risk even above the limit, because our banking system is so stable the majority of the time.

Dig_Dug's avatar

@raginglolitheir CEOs be turned into sausages. YES! GA. No golden parachutes for these scoundrels.
@JLeslie These banks are in trouble because their CEO’s squandered the money on shady investments and schemes. They should be made liable for their misdeeds!

JLeslie's avatar

@Dig_Dug At minimum it warrants investigation. It certainly looks like they are irresponsible and possibly criminally irresponsible. For now they are walking away with millions in their pockets.

Acrylic's avatar

Not really. Been through this before, and likely will again. The economy ebbs and flows, but always goes up in the long run.

Dig_Dug's avatar

@JLeslie I know just like in the past. We keep bailing out these scumbags because “they are too BIG to fail” I say let them. Pick up the pieces and make a better system where you don’t reward the dirt-bags!

NoMore's avatar

No worries, I feel sure the Repubs will find a means of bailing out their CEO pals. I mean it’s not like asking to, I don’t know, forgive student loans or some heinous socialist atrocity like that. Get real now.

JLeslie's avatar

@Dig_Dug Most of the money was paid back to the government from TARP and the additional loan given to banks after TARP. The thing I hated about TARP was banks that were doing ok basically had to take the money for more than one reason.

It did create some even larger banks, which I don’t love.

The biggest frustration for me is CEO’s, and other c-level, walking away with multi-millions of dollars.

mazingerz88's avatar

I worry that it’s beyond my comprehension the complexities of how the banking system works. I think I’m not the only one. So we vote for, support and put our faith on elected leaders to keep our world relatively…safe. That’s a real hoot isn’t it?

Blackwater_Park's avatar

Certainly concern is warranted. All it takes is a a small run on banks, any bank and that bank will fail. Bad ideas spread like wildfire. The FDIC can’t cover it all. Banks are only required to keep 10% of deposits in reserve. Unfortunately, I do feel our currency is now trash.

Forever_Free's avatar

Absolutely concerned. It is not political nor anything to joke about.

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