Bank Runs Feared

[randallscott35]

Originally Posted by dalakhani

Okay, I am going to feed into the hysteria. Bank runs are indeed very possible...if the government takes off the respirator.

Banks can make money right now because of the steep yield curve. Consumers and businesses can still make payments on adjusting rates because the adjustments are in many cases driving payments DOWN. Now what happens if the government stops intervening and yields start to climb? It doesnt take a rocket scientist to see how the dominoes will fall.

The US will do everything in its power to keep rates low for as long as the eye can see. A rise in rates will be devastating to the economy regardless of what bernanke or anyone says. We are buying time right now...and we need a lot of it to fix this mess.

So has the economy hit bottom? I think there is validity to the statement that we were as close as can be in the fall of 2008 without it completely toppling. Could we be there again?

Rates are going to have to stay low and the government is going to keep having to play a large role in our economy. Unless of course there is a better plan. If so, Im all ears.

Let people continue their false sense of FDIC etc....Electronic bank runs have already happened when MM funds broke the buck back in Sept '08.