What Does A Bank Run Look Like In 2008? A Lot Like 1912.

The FDIC was created in 1933 by the Glass-Steagall Act, and provides $100,000 of deposit insurance to checking and savings deposits. “Bank panics” used to be fairly common, and the FDIC was intended to instill confidence in the banking system after the Great Depression. The most recent big failure, that of California bank IndyMac, will cost the FDIC between $4 and $8 billion, and they estimate that about $1 billion of IndyMac’s deposits are “potentially uninsured,” meaning that the depositors had more than $100,000 on deposit. So what does a bank run look like these days?

Well, we took a peak at the Library of Congress’ photo collection and we realized that a bank run in 1912 looks a lot like a bank run in 2008, even though a much higher percentage of the modern day depositors will be leaving with smiles on their faces and their money in their pockets. Some things never change.

Photos: (Library of Congress, Run on East Side Bank, N.Y. 2/16/12)
(AP Photo/Kevork Djansezian)

Comments

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  1. I guess they’ll have to bring in the old strike breakers, like they had in the teens. Of course, they can’t bust heads like they used to, so I guess they’ll tell stories that go nowhere.

  2. jwlukens says:

    People sure liked hats a lot more in 1912.

  3. @jwlukens: Every president wore a hat at their inauguration until JFK, after that, hats for men fell out of style.

  4. mac-phisto says:

    @Git Em SteveDave is a poor substitute for LindsayJoy: no, now they just incapacitate you with tasers.
    depositor – “i’d like to withdrawal all of my mon…”
    ZZZZAP!
    bank manager – “what was that? i didn’t quite get that. you’d like to keep your money here? convulse uncontrollably if that’s a yes.”
    ZZZZAP!
    bank manager – “ok, great! NEXT!”

  5. Christovir says:

    @jwlukens: For real. You notice the guy on the right appears to be both wearing a bowler hat and carrying a fedora hat under his arm?

  6. Shappie says:

    I thought it was $100k protection per bank? Example, if I had 2 accounts with $80,000 in each, I would only be insured for $100k total. Am I wrong to think this?

  7. sleze69 says:

    So where’s the list of banks that AREN’T likely to go tits up? My buddy works for Citizen’s Bank and he laughs at other banks because they didn’t get involved in the subprime market. I GUESS they will be ok.

    Are there any other banks that are in good shape?

  8. Jakuub says:

    @sleze69: Wearing the Bowler, had the box it came in with him, to hold all the money he’s hoping to get out of the bank, would be my guess.

  9. betatron says:

    Indy Mac. Sounds a lot like Freddie Mac and Saly Mae, right? One of the other articles here pointed out that Indy Mac has Countrywide’s DNA through and through; Countrywidespun off Indy Mac as a means of collateralizing Countrywide Financial loans too big to be sold to Freddie Mac and Fannie Mae [wikipedia].

    I just bothered to read the references last night and was appalled to discover this.

    Therefore, regardless of their official FDIC status or anything else, Indy Mac was not a bank, trust or anything else: it was just a fraud machine. “Bank Run” inappropriately aggrandizes its failure. It’s nothing more/less than Countrywide, Part Deux.

  10. wgrune says:

    @Christovir:

    I think that’s a bowl to put his change in.

  11. madox says:

    FYI, the Glass-Steagall Act was basically eliminated in 1999 by the Gramm-Leach-Bliley Act, signed by Clinton.

  12. boredboy says:

    @jwlukens: Actually it’s a common error, JFK did in fact wear a hat at his inauguration

    [www.snopes.com]

  13. Bladefist says:

    Now just think, if the FDIC was privatized, rather then through the government, the insured amount could be 10x higher. The 100k thing never seems to change, even though as inflation moves along its happy way.

    Note: the FDIC has an allotted money on hand as well, just like a private company would. A depression would wipe out the FDIC just as quickly. There is not infinite money in there.

  14. homerjay says:

    This is ALL because of that wonderful, fateful, supercalifragilisticexpialidocious tuppence!

    Wow, that was really gay of me.

  15. MayorBee says:

    @homerjay: Good to see you’ve come over to the dark side. Now tell me, who was it that recruited you, so we can get them their toaster.

  16. shoelace414 says:

    @Bladefist: If FDIC was privatized then they would only pay out if no banks were collapsing. Once a bank or two collapsed then they would figure out a way to lower the 100K mark to closer to 5K. Also, the 100K was set in the Carter Administration I believe.

  17. I don’t have $100k in the bank or anywhere close. But if I did, I can’t imagine keeping over $100K in a single account to be at risk for not qualifying for FDIC insurance.

  18. homerjay says:

    @MayorBee: Come on! I just bought a new toaster!

    I wish someone had given me a copy of the gay agenda before I decided to be gay. The free toaster is probably right there in it.

  19. VA_White says:

    My favorite part of that picture are the mannequins in the window. They look like Disney Main Street USA cast members.

  20. Bladefist says:

    @shoelace414: No. It would be a contract, the same it is with the FDIC. How often do banks fail? It sounds extremely profitable.

    I’m sorry you have 0 faith in privatization.

  21. perruptor says:

    @jwlukens: “People sure liked hats a lot more in 1912.”

    There were more pigeons in those days.

  22. camman68 says:

    FWIW – each “depositor” is insured up to $100,000. For example, if a CD is worth $300,000 but it has three owners (or beneficiaries), it is fully insured.

  23. lockers says:

    @Bladefist: The point of the FDIC is that markets do fail, and the very fact that it is required of banks to participate makes sure we don’t have the massive market failures of the past. You are amazingly ignorant of history if you say that the market can save itself from its participants.

  24. zigziggityzoo says:

    @camman68: not quite true. that account’s depositor is three people, therefore it’s insured for up to $100,000. If each of those three people had their own individual accounts at the same bank, those too would be insured up to $100,000, even though they have that CD jointly.

  25. lincolnparadox says:

    There is no good reason to kept money in American dollars right now. If you have that much money lying around, buy gold.

    Sheesh, I wish I just had over $100K lying around in a bank.

  26. madanthony says:

    Well, the main difference is that the people in the lower picture had absolutely no reason to be there. The bank had already closed on the 11th, and depositors were either insured (and could access their money other ways, like via ATM) or too late to do anything.

    So people have gotten dumber.

  27. thebluepill says:

    If the average Regional bank will cost the FDIC $6bn (Between $4bn-$8bn), and 150 banks are expected to fail in the next year or so.. thats $900bn.. Dont think they will be able to cover that..

  28. My understanding was that a if your married. you can safely keep 400k in a bank. 100k per person, and then 200k in a joint account. It has something to do with payment on death clause or something like that.

  29. Bladefist says:

    @lockers: I could say the exact same about you. Historically the markets can be very volatile. Just early this week, we were on another scare. Yet starting yesterday, the markets are behaving beautifully.

    Like I purposely mentioned above, the FDIC does have an allotted amount of money. In other words, In the event of a depression, you are still screwed. The amount of money they have is in the billions. That’s enough for 1 or 2 failing banks. Not all of them.

  30. MeOhMy says:

    @Bladefist: Kinda like the “contract” you have with your health and auto insurance underwriters in which you pay them oodles of money over time but when the shit finally hits the fan they try every which way imaginable to weasel out of it? “Oh, we insure your deposit up to $1,000,000 but only if every deposit you ever made in your account was made from one of our ATMs *or* with a human teller named ‘Roberta.’ It’s right there on page 29 of your policy declaration. Sure I can show you…do you have a magnifying glass?”

    Not that I trust the government to do any better of course…

  31. razzmataz says:

    To those talking about the 100k amount – originally the FDIC only insured accounts up to $10,000. Then sometime in the 80’s, Reagan upped the amount to the current $100,000 cap… Just a bit of fun history for y’all.

  32. Wormfather is Wormfather says:

    @mac-phisto: Dont tase me bro!

  33. Angryrider says:

    Heh… Looks a lot like the banks during the Lunar New Year.
    I’m happy I have an account with an international bank. At least they weren’t foolish enough to lend out a lot of subprime mortgages.

  34. FilthyHarry says:

    So the problem of people not trusting banks was fixed by expecting them to trust the govt? hah!

  35. Bladefist says:

    @Troy F.: A Bank is not going to be as ignorant and as ‘accepting of the small print’ as Joe Bob – Professional idiot.

  36. lockers says:

    @Bladefist: the FDIC is explicitly guaranteed by the federal government. Yes they have only $56 billion in reserves, but if that becomes exhausted the government just lends them treasuries. If your privatized solution has the same spike, the insurance company goes bankrupt in a failing market. How exactly is your privatized solution going to prevent a market meltdown?

  37. Imaginary_Friend says:

    @sleze69: Bankrate’s “Safe and Sound” ratings, for what it’s worth:

    [bankrate.com]

  38. Wormfather is Wormfather says:

    @Bladefist:

    I think I disagree with you on privitization. If multiple banks failed, I could totally see an insurer declaring insolovency. Then again we thought that would happen to re-insurers after 911 and it didnt.

    How about this, banks have to buy private insurance and then those private insurance companies are backed by FDIC.

    I think this would solve the regulitory problems as the insurance companies would be audiding the banks hourly and if they colapsed you’d still be able to fall back on that $100K (which should be at least $250K now).

    @lockers: New policy or not, lets kill the name calling, I’ve been guilty of it, but still we’re trying to have a better blogging experence.

    And remember, if, er, when the world finacial market colapses, it wont matter where your money is, CD, Bond, Stock, Bank or even that shoe box.

  39. PunditGuy says:

    @Bladefist: How is your private-industry scenario different from life before the FDIC? Are you saying that some enterprising underwriter could have made billions by insuring banks, if only they had been as smart as you?

  40. Wormfather is Wormfather says:

    @lockers: “but if that becomes exhausted the government just lends them treasuries

    Because flooding more money from the treasury always helps. What happened last time they did that? Oh yeah, this happened. And by this I mean everything that’s going on right now. Yes, that includes my poor fish jumping out of his tank and suiciding himself on the hardwood floor :(

    I digress, but yes, cotton is better than polyester!

  41. Bladefist says:

    @lockers: My idea works under a few assumptions:

    1) A true depression will exhaust everything
    2) The private company has more money then the 56 billion
    3) There are still some market regulations to prevent a depression, as there are now.

    I don’t see the FDIC as an organization that prevents depressions. I see them as a fail safe for banks. Not every bank is going to fail at the same time. We have regulations for that. How many banks have failed in the last 10 years? It’s minimal.

    If you can get your mind of depressions, and think about when typical banks go under, how everyone would benefit by actually getting their money back. Competition would also drive down the price of the insurance.

    And to those thinking about rip offs. These are banks we are talking about. Not contracts between people and their car insurance that they just sign and not read the small print.

    OR we could just drop the $100k rule, and be done w/ it. One must ask, why is it capped? I’m guessing you government lovers will never be over the $100k rule, so hating on the big bad wolf (private companies) is easy.

  42. failurate says:

    It’s too hot for hats in July. February is perfect hat wearing weather.

    The guy with two hats… the one he is carrying is for his barbershop trio outfit, he’s on his way to a gig.

  43. Wormfather is Wormfather says:

    @PunditGuy: I think it’s more of a thing akin to social-security, both SS and FDIC are institutuions that the elderly trust and feel strongly about, it takes a bit more than lobbying to change them, even if it isnt the best solution.

  44. yasth says:

    @Bladefist: Ummm the entire idea of the FDIC being federally backed is that the federal government is implicitly saying, if the worst happens and the banks need more the feds’ll print more.

    Yes it is an inflationary action, but eh, a touch more inflation won’t kill us, and the market reaps a great benefit. Few bankers will argue with the FDIC in theory (though of course they may disagree on practice such as acceptable reserve levels etc.), as it means a nasty rumor is unlikely to spark a bank run.

  45. Wormfather is Wormfather says:

    BTW, I love that there are two conversations going on in this thread…I should have picked the one about hats.

  46. lockers says:

    @Wormfather is Wormfather: Saying you would be ignorant of history if you do something is not name calling. It is historical fact that markets can’t stop participants from breaking the market. I would appreciate if you could stop reading into peoples comments and assigning guilt where there is none.

  47. camman68 says:

    @zigziggityzoo: I spent quite a bit of time at the bank yesterday. Additionally, I have looked this up online.

    If my grandmother (revocable trust) has $300,000 in CD’s and there are three beneficiaries, EACH of the beneficiaries is insured up to $100,000. Therefore, there is $300.000 in insurance protection. (I was very surprised by this).

    The FDIC has an online calculator that will tell you the amount you are insured for.

    http://www.fdic.com/edie

  48. lockers says:

    @Bladefist: no, the FDIC is there to reassure depositors that there money is safe in banks. Would be depositors rightly feared that if they had money in the bank. This created a lack of funds for all banks, hence the creation of the government guarantee to a reasonable limit. Reserve banking doesn’t work if they have no depositors.

  49. uomdeacon says:

    Fascinating pictures.
    This makes me think though. I keep my money in an online account…how does one go about making a bank run on an online banking institution?

  50. Wormfather is Wormfather says:

    You guys are going to love this:

    So what happens if multiple banks fail and the govenment has to bail the FDIC out?

    Not “a touch more inflation” more like…

    [en.wikipedia.org]

    The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services. This results in an imbalance between the supply and demand for the money (including currency and bank deposits), accompanied by a complete loss of confidence in the money, similar to a bank run.

  51. Wormfather is Wormfather says:

    @lockers: You’re right (about my misreading the comment) my bad, appologies.

  52. Bladefist says:

    @lockers: Calling someone ‘ignorant’ of anything is rude. Things aren’t always so black and white. We can look at history and draw our own interpretations. I forgive you.

    @yasth: Please note I said nothing about removing the FDIC, or any other market regulations we currently have. Okay, well maybe I did. Crap. What I meant to say, create a system of private insurers that banks can opt-into. And give their consumers a higher level of insurance should the bank fail. FDIC, as far as I know, is optional as well. I know above I said privatize the FDIC. I shouldn’t have worded it as replacing the FDIC.

    It’s just like car insurance. We all have to get liability insurance. Some people, who drive nicer cars, or have more money, opt-in for the full insurance that covers everything. I think banks should do the same. If you are 70 years old, retiring, do things the old fashion way, you may have more then 100k in your bank. And you could lose a lot of money.

  53. MeOhMy says:

    @Bladefist: So you’re saying the bank would be insured vs. the individual account holder? Not sure how that would work – if the bank has gone titsup, how – or why – would the bank make a claim on your behalf? I’d rather have my agreement be between me and the insurer…at least not having to rely on a defunct middleman operation would shorten the path to total loss!

    Maybe the bank’s insurance policy would keep them solvent, but I have to imagine once a bank makes a claim it’s probably a sign that most depositors better move on…which means they have to get their money out.

  54. Wormfather is Wormfather says:

    @Troy F.: when a bank fails, federal regulators take over, they could come in, contact the insurer they have on file for that particular bank and start handing out the money.

    I’ll take mine in pennies, tyvm.

  55. Bladefist says:

    @Troy F.: The bank would setup the insurance. But like with the FDIC, the customers would be the ones that were insured.

  56. Grabraham says:

    sounds like-
    Welcome to the Depositors Insurance Fund (DIF).
    The DIF is a private, industry-sponsored insurance fund that insures all deposits above Federal Deposit Insurance Corporation (FDIC) limits at Massachusetts-chartered savings banks. The DIF has been insuring deposits since 1934.

    At DIF member banks, the FDIC insures all deposits up to $100,000 per depositor except self-directed retirement accounts, which are insured up to $250,000 per depositor. All deposit amounts above the FDIC limits are insured in full by the Depositors Insurance Fund.

    The combination of FDIC and DIF insurance provides customers of Massachusetts-chartered savings banks with full deposit insurance on all their deposit accounts. No depositor has ever lost a penny in a bank insured by both the FDIC and the DIF.

    DIF insurance coverage requires no applications or special forms. Depositors automatically receive this added insurance benefit at no cost whenever they make a deposit to a new or existing account at a DIF member bank.

  57. MeOhMy says:

    For whatever it’s worth, the word “ignorant” should not really carry an insulting connotation. I hereby propose that to avoid ambiguity, when we wish to use “ignorant” in an insulting manner we should use the contraction “ign’ant” instead. :-D

  58. lockers says:

    @Bladefist: The 100k rule is stated very clearly. Putting money in a fractional reserve bank is a risk over 100k. Ultimately it is a persons responsibility to weigh risk versus benefits when it comes to your personal wealth. If putting money in the stock market is to risky, why would you put money in one basket that could be lost when the bank fails?

  59. yasth says:

    @Bladefist: There are options to insure depositors for more than $100k today [www.promnetwork.com] Most any credit union has private deposit insurance up to 250k. And there are options for larger amounts. Most banks decline to exercise these options however.

    I believe that banks trading to the public are actually required to have 100k fdic insurance. Commercial banks are not required to do so IIRC.

    The key thing is though, at the end of the day banks aren’t exactly screaming for private FDIC insurance. For one thing it would pose massive conflict of interest problems (most insurers are required to invest a certain amount of their money in safe stable investments… like banks), and by far the biggest reason is that when you want to make people trust you a federal government office is a quick and dirty way to do so.

  60. Asvetic says:

    Is this where I say, I’m glad to be part of a Credit Union?!

  61. ARP says:

    @Bladefist: Hey Bladefist. I’m having a little trouble figuring out your proposal (seriously, not trying to be sarcastic). Your theory is that Banks will obtain private insurance to cover your funds, correct? So, once the bank recovers the funds (assuming it can) is there any “guarantee” that the bank will pass that on to me? Or, is this where the free market kicks in an we have to shop for our bank based on the strength of their word and hope that one month later, they don’t drop the insurance, reduce benefits, weasel out, etc? Or just live with the fact that our money won’t be backed and its up to us to chose the bank with the most stabilit? [Entering condecension here]So, we have to become experts on the financial and banking markets to pick where our money goes?

    @Wormfather is Wormfather: I also like that everyone is wearing a suit. I think people should wear suits more, especially during a bank run. It gives a bit of class to the whole event.

  62. Wormfather is Wormfather says:

    @ARP: LOL

    re: your comment to blade: As far as how it works, think of it like car insurance. You’re state (unless you live in NH) demands that you have auto-insurance, and most states have state minimums. You can insure for more if you like, but state minimums have to be met.

    Now lets say a car hits you, is at fault and is uninsured or said insurance company goes belly up, well thats when your insurance (in this case the FDIC) will kick in.

  63. Tmoney02 says:

    @sleze69: I think your buddy needs to stop laughing. While I can’t say for sure Citizen banks situation, first thing I can say is no bank is immune.

    1)That is why their is so much hand wringing and worry, because all the bad loans were bundled together with good loans and nobody, nobody, knows how many bad loans any of the financial company’s own. Since the loans can’t be valued because nobody knows how valuable they are they cant be sold. So every company is siting with a potential hot potato they cant get rid of, and have to continue downgrading the value of their loans trying to take a stab into the dark at what somebody would pay to take over the loans.

    2) Citizens bank is a part of Citizens Financial Group, Inc. (“Citizens”) which “is a wholly owned subsidiary of The Royal Bank of Scotland Group plc (“RBS”)”
    So citizens may be fine but if the mothership isn’t then that isn’t much better. So lets take a look at the one year chart of RBS…

    [finance.google.com]

    11.50 a share to 3.00 a share now in one year. I wouldn’t be laughing….

  64. Bladefist says:

    @ARP: The bank wouldn’t recover your funds. The insurance company would pay you directly. It’s really the same as the FDIC, but covers the extra money.

    It would appear it already exists. Comments above me have made that clear. So it appears I am not the first genius to think this up.

    I have explained it as clearly as I can. Some people here just hate monger anything private. When you trust your government more then your neighbor, you’ve lost your mind.

    Anywho. Good debate. I’m moving on!

  65. sventurata says:

    @jwlukens: Check the photo dates. In general, people wear hats more in February than July, methinks…

  66. Froggmann says:

    Big diffrence in the photos, people dressed better back then.

  67. dlgreenwald says:

    I found the statement in this article implying FDIC limits highly misleading. You state that “that the depositors had more than $100,000 in a single account.” In reality “The basic insurance amount is $100,000 per depositor, per insured bank.” So if you have $1,000,000 in 10 different accounts at one institution, you are only going to get $100,000 out of FDIC.

    See [www.fdic.gov]

  68. FrankTheTank says:

    I feel like you could have put a photo of Apple Stores last Friday and it would look pretty much the same.

    Point being that any crowd looks the same, the fact that the RESULT is entire different is really the key issue. We DIDN’T have a bank run. People DIDN’T lose their money. Only idiots who don’t understand the banking system lined up to get their money.

    Bigger point, people are idiots.

  69. CaptRavis says:

    Moms, Pops. and Grandma’s aren’t going to get the short shrift. It is those shady businessmen, with half million dollar sweep/treasury management accounts posing as operating accounts funded from no collateral loans that shady loan officers told them could beat the spread on the interest due.
    I have yet to meet a little old lady over the age of 59 1/2 that wasn’t scared shitless about putting more than 100K in an account regardless of the ownership types. Plus, why would a new accounts officer open one 200,000K CD when they could open two 100,000K CD with different ownerships and get paid their an extra $2.00 commision?

  70. Trai_Dep says:

    Wow, were goths popular in 1912!

  71. SOhp101 says:

    I have to disagree with the privatization of the FDIC for several reasons:

    1. No one thinks the US Government is going to fail. That also means that insurance companies (like the FDIC) backed by the Federal government will be trusted more as well. Turn that private and suddenly after one bank failure the insurance gets a lot more expensive or people start getting real nervous.

    2. The purpose of FDIC insurance is to promote bank stability and also stability in the money supply & economy. If this were to be run through private means, that would change the objective because companies would be trying to turn a profit. It doesn’t sound like a very profitable business, at least to me.

    3. Private capital. The FDIC does have a ton of money (and the full support of the US Government) that it can utilize out when banks go under. A private company won’t be able to do that and will have to end up closing just like the banks it’s trying to prevent from closing.

    Most banks never, ever, completely close. The FDIC usually arranges to get that bank to be purchased by another, and if there are a ton of bad loans, the FDIC will absorb that cost. IndyMac is a huge bank though so they’re going to have a very hard time finding someone willing to take on their accounts–especially since they’re associated with Countrywide.

  72. jamesdenver says:

    That photo reminds me of my grandma and great aunt – who would dress up to go downtown and go to the bank and pay their phone bill.

    And also had some great money management skills: Save and don’t buy anything.

  73. SBR249 says:

    I thought the FDIC insures $100K per depositor per bank. That means no matter how many accounts one has at a particular bank, one person can only be insured by the FDIC up to $100K at that bank.

  74. ARP says:

    @Trai_Dep: Yep, its strange how much they love steampunk….wait….

    @SOhp101: I think your answer implies this (as others have), but the psychology of the US government backing the accounts is often just as important as the actual ability to pay out a claim.

  75. Imaginary_Friend says:

    @Trai_Dep:
    Wow, were goths popular in 1912!

    And frottage too! Who knew?

  76. ahwannabe says:

    @Trai_Dep: As a matter of fact, they were!
    [en.wikipedia.org]

  77. @Git Em SteveDave is a poor substitute for LindsayJoy: Also, fewer people could afford hats after the banks lost all their money.

  78. snoop-blog says:

    I’m investing in a good ole fashioned shovel and mason jar!

  79. Inglix_the_Mad says:

    @Bladefist: No. It would be a contract, the same it is with the FDIC. How often do banks fail? It sounds extremely profitable.

    I’m sorry you have 0 faith in privatization.

    I have little faith in privatization, because of humanity. Capitalism and Communism both suffer from the same problem: People are greedy. Capitalism tries to make that work for itself, but in truth, it falls far short. The problem is that the ideal of Capitalism doesn’t realize the depths of depravity people are willing to go. People will stab others in the back, heck they’ll take food from babies, if they think they can get away with it.

    Communism and Laissez-Faire Capitalism both depend on human beings to be something they’re not: perfect. Every three or four letter government agency that exists to police industry, came about because industry proved (often repeatedly) that it couldn’t be allowed to police itself. Still, one must be careful of government too.

    We’ll be stuck with a shifting hodgepodge of government and business for quite some time yet. Killing Corporate Personhood would probably be a good start. Killing regulation having the force of law (without a vote from Congress) would be another.

  80. stinerman says:

    @Bladefist:

    Many banks have optional insurance that you can pay a nominal fee to get. My credit union actually has additional private insurance through ESI. My co-members and I are insured to the tune of $350,000 and we don’t pay a dime extra.

  81. stinerman says:

    @Inglix_the_Mad:
    Killing Corporate Personhood would probably be a good start.

    I’ll do you one better. Killing corporate personhood would fix just about everything.

  82. Rectilinear Propagation says:

    @Grabraham, @stinerman: There’s also American Share Insurance. If the credit union is also insured by the NCUA they can get Excess Share Insurance from ASI.

  83. Talk about a generation of whiners. People smiling in the 1912 pic: At least 2. People smiling in the 2008 pic: 0. Add to it the 1912 folks weren’t FDIC insured.

  84. mbd says:

    Actually, in 1912 the people on line were in a panic because they all knew that when the bank ran out of money, they were screwed. In 2008 the people on line are merely being inconvenienced. Everyone will eventually get their money, up to the insured limit.

  85. perruptor says:

    @postnocomments: “People smiling in the 1912 pic: At least 2.”
    That’s the effect of the frottage.

  86. RagingBoehner says:

    @Bladefist: How much do banks pay in FDIC premiums? Do they pay? That would be key to determining the actuarial rate for account insurance. Perhaps there is such a private entity now that offers third-party insurance policies on amounts over $100,000.

    The real issue here is solvency — if that third-party fails then you’re still up a creek. If the federal government fails to pay it’s debts, well, I don’t know maybe it’s time to just grow a garden in my 50 sqft lawn to sustain myself.

  87. dangermike says:

    @madanthony: I don’t know, at $300 per day, it can take a while to extract several tens of thousands of dollars.

    Banks don’t hold onto money. They lend it out. Life will be much easier for those first 10% or so of depositors who can extract their funds directly from the bank’s liquid assets. When that reserve gets depleted, the FDIC will have to channel money to cover the transactions, and that might take longer than many people can wait. We are already getting reports of an 8-week hold on Indymac checks. Anybody living off of their savings will have to wait that long to… live. Afterall, when we say save enough for several months worth of expenses, we mean have enough in the bank for those months of expenses. If that bank happened to be Indymac, it is a very pressing matter to release those funds ASAP.

  88. Techguy1138 says:

    @Bladefist:

    Normally you seem to have your facts straight but you got it all wrong on this one.

    The FDIC insurance on bank accounts has changed over time. I believe that it started at 10k.

    There is no way a private equity firm could insure bank accounts. They would be forced to run at a profit and that would put in in cahoots or competition with the very organizations that they are to help.

    The US government reduces but doesn’t eliminate risks associated with banking. People can loose faith in a private company making the backing useless.

    With government backing the system is guaranteed to have as much faith as people have in the government. If there is no faith in the government the currency will have no value anyway. A private fund couldn’t do any better unless they were willing to back the insurance in a commodity and keep it on hand, such as gold.

    Well run banks should not need such insurance.

  89. Techguy1138 says:

    @Techguy1138:

    Turns out that the initial limit was $2500 way back in 1934.

    You can check the history out at fdic.gov

  90. bobacus says:

    @bladefist Man i read all your comments. That repubthug thinking about “free market” stuff has gotten us into this situation. “EHHH who cares, the MARKET will figure it out” IS just plain IGNORANT. (yes I said it) Guess what, the tried the “free market” approach once. And it lead to the GREAT DEPRESSION.
    I fear that our banking and monetary safe guards have been eroaded so much these past 30 odd years because so many like you bought into the “free market” idea. Do you even know where that theory comes from? It comes from Wealth of Nations by Adam Smith. And even he said regulation is needed and didn’t even like banks! It is just groups like the Heritage Foundation (started by a Banker) who has twisted this whole free market theory.
    So please for all that is holy. Stop listening to people who have twisted what others have said for there own benefit economically and politically. Actually look some stuff up. The internet is a wonderful place. Its not about a political affiliation. It is about economic theory. But I guess you aren’t into that, seeing as you have a elephant as your icon. What a waste.
    Go on blaming democrats for the problems we are in. Guess what. Republicans are as much to blame, if not more.

  91. mac-phisto says:

    @Techguy1138: ht on – & the most recent change was to raise the limit on retirement accounts to $250,000 – i believe that change was made within the last few years.

    this was in response to pressure from certain forces within the government to raise the limit, but instead of an across-the-board increase, they opted to just increase retirement accounts.

  92. mac-phisto says:

    @mac-phisto: should be right on at the beginning there. sorry. today’s “better lifehacker” update killed my post preview.

  93. SOhp101 says:

    @ARP: Basically yes. Faith does wonders in areas besides religion.

    And as a comment to most responses to bladefist, it’s obvious that he’s clearly a neo-con who doesn’t know any real economic theory. I don’t see why people even have to bother debating with him. Personal attack? Maybe, but it’s because he’s pretty much wrong.

  94. failurate says:

    It appears that hat wearing was a year round thing back then. This picture from August 1914 suggests that light colored hats were standard Summer attire.

    [lcweb2.loc.gov]))

  95. failurate says:

    Sorry, crappy link.
    [memory.loc.gov]

  96. ARP says:

    @SOhp101: Bladefist is a long time commenter here and is generally respectful (even if I believe him to be wrong about most things). So, no personal attacks for me, thank you.

    We’re on this board to exchange ideas and debate. Its even fun to “hate-watch” his sort of comments (kind of like watching a little bit of Faux News, just to remind yourself how biased and wrong they are).

  97. Consumerist-Moderator-Roz says:

    @SOhp101: Debate the idea, don’t attack the poster. Read the comment code.

  98. ARP says:

    @failurate: I love that we’re keeping the hat and suit thing going. I’m very tempted to start wearing a suit (and light colored hat) to the grocery store, get my oil changed, etc. and speak in very pleasant and respectful tones.

    “Good day to you sir [mam]” [tips hat]. How are you on this fine day.”

  99. SinisterMatt says:

    @jwlukens:

    I wish we still wore hats like that. I think they look kind of cool and dapper!

    Oh, and I would add a line by George Hegel:

    What we learn from history is that no one ever learns anything from history.

    Cheers!

  100. MeOhMy says:

    @ARP: I will join you, but only if you join me in growing one of those awesome mustachios and using the phrase “I’ll give you what-for” as often as possible.

  101. duncanatrix says:

    I’m going to hate myself for pointing this out:

    “Well, we took a peak at the Library of Congress’ photo collection…”

    (“peak” should be “peek.”)

  102. poetry1mind says:

    That picture really scared me…reality

  103. SOhp101 says:

    @ARP, Consumerist-Moderator-Roz: Yeah, I choose to ‘hate’ after reading someone’s particular comments, but thanks for the reminder.

  104. SOhp101 says:

    And just as an addenum, I think my previous comment shows more than enough reason why I don’t consider him to have much credit in this area of ‘debate.’