With the banking system having serious difficulties should trust in American patience be stronger than desire to pull my money from banks that are on the list for having difficult times ahead?
News:As banks continue to struggle on the stock market, are people able to separate the difference between the stock market and their FDIC insured deposits? With the failure of Indy Mac, there are concerns that more banks will fail and might eventually become federal banks if they do just like Indy Mac. Will people as they continue to hear bad news about banks and other industries in the market be able to stay the course and know their money is safe? The Fed and the US Treasury is taking steps to back Indy Mac, but what exactly does that mean? They own or guarantee almost half of the mortgages in the U.S. which has a large amount of failures at the current moment. CNN had an article that explained what is happening with Indy Mac.
Observation:I have seen many people on the news reiterate strongly that depositors money is safe and backed by the FDIC. Most people today are having a hard time believing anything dealing with the government and the advice they are giving. That is why the question that started this article is so important. Investors, reporters, government officials are trying to ensure that people do not make bank runs. There is a fear that people will over react and pull all their money out of the banks completely crippling the system. As more banks continue to fail, it will be hard to convince more people that their money is safe. I currently have money in two banks that are currently in the cross hairs; Wachovia and Citigroup. Decisions, decisions!!
Discussion: Should a depositor (like me) trust that people are not going to panic and pull their money out of the bank that they know is having problems?