Saturday, July 18, 2009

Banker Hours Are Getting Even Shorter

The grand total for bank failures in the U.S. has now reached 57 in 09. My state, Georgia, is leading the way with around 15 bank failures. While most of these banks are small local banks, their closing can pose quite a problem. Many of my friends and acquaintances bank with the two or three large banks that are throughout the southeast, however many also bank with small local banks. They prefer small banks because the feel they provide better customer service, and appreciate the face recognization when they come through the door. Small banks often offer better "deals", and often call to check up on their customers. But ultimately, the majority of people who prefer small banks do so because they were tired of being spurned by the larger banks, and have absolutely no desire to go back.
So what's the big problem? Only 57 have closed out of a quadrillion of total banks in the U.S., right? Well, many economists believe that it was bank closings that really broke the camels back during the beginning days of the Great Depression. Remember the pictures of the long lines outside banks or "bank runs"? People were franticly going to banks to drawl their money out so they would have their money in hand. The populous then stuffs their earning under their mattress or in their cookie jars, which causes the enconmy to seize as the money cycle stops. The consumer stops (or slows) buying and the producers stop (or slows) producing, and then the collapse is in full swing.
Bank failures are a lot like job losses, you don't realize how bad it is getting until your neighbor loses their job. Next, you notice your friend loses theirs, then your Mom is out of work, and maybe even your own job is in question. There is now 16 states with unemployment at 10% or higher, 16 states is roughly 30% of the states in the union.
I'm not suggesting that you make a preemptive bank run, but I do hope we will be proactive this arena. Don't assume your bank is too "big" to fall, we've all seen many giants felled recently. I know our accounts are covered up to 100,000 (or more if you take further action), but I'm not sure I trust my government's "promise" that my money is secure. I could very well receive an I.O.U. in the not to distant future.

No comments:

Post a Comment