Roubini: The mother of all bank runs is underway!

[victorianpunk]

Originally Posted by evilnewbie

There are lots of middle class families who have over 100k money in the bank..... okay I will stop laughing now...

And even if Dick and Jane down the street did have over 100k in the bank, they could easily have multiple accounts and, therefore, be insured.

[sterlinggirl]

The problem is that credit is tightening, which causes people/businesses/cities/etc. to withdraw money from accounts when they can't get an easy loan. When they withdraw that money, the bank loses some of its reserves, which further reduces its ability to loan, which causes people to pull more out, and the cycle keeps repeating until the bank folds or the bank gets an infusion of cash.

People going to cash and buying gold instead of keeping money in the banks is part of the problem. When enough people pull money out of the banks, the crash becomes a self-fulfilling prophesy.

Roubini is right, IMHO....

[jaguar5822]

Originally Posted by ViewFromThePeak

Increased to 250K with the new bill, sparky.

For a year, then what? People run and pull everything over 100k? Sounds good to me I think everything will be better by then Mr. Midas