[EconProf]

I used to teach Money and Banking. While its true that we have all sorts of safeguards in place now that were not there in the Great Depression and in the numerous bank runs and “panics” of the 19th century, never discount the power of mass psychology to unhinge everything. The speed with which data and rumors now can spread, combined with a lack in faith in what our government and Fed officials tell us could change the rules in unpredictable ways.
The post-mortems on Bear Stearns now show that it should not have happened. Looking back, it appears that the Fed and Treasury did not act quickly and forcefully enough early on. The top guy at B-S kept issuing reassurances that were belied by the data. An injection of liquidity sooner could have prevented the panic that made the over-leveraged, sloppily-run company survive, albeit in reduced form.
This rush for liquidity by depositors could hit a lot of banks in the coming week. The public may not be placated by Treasury and Fed reassurances and start switching their deposits from well-known weak banks to strong ones.
May you live in interesting times.

[EconProf]

I used to teach Money and Banking. While its true that we have all sorts of safeguards in place now that were not there in the Great Depression and in the numerous bank runs and “panics” of the 19th century, never discount the power of mass psychology to unhinge everything. The speed with which data and rumors now can spread, combined with a lack in faith in what our government and Fed officials tell us could change the rules in unpredictable ways.
The post-mortems on Bear Stearns now show that it should not have happened. Looking back, it appears that the Fed and Treasury did not act quickly and forcefully enough early on. The top guy at B-S kept issuing reassurances that were belied by the data. An injection of liquidity sooner could have prevented the panic that made the over-leveraged, sloppily-run company survive, albeit in reduced form.
This rush for liquidity by depositors could hit a lot of banks in the coming week. The public may not be placated by Treasury and Fed reassurances and start switching their deposits from well-known weak banks to strong ones.
May you live in interesting times.

[EconProf]

I used to teach Money and Banking. While its true that we have all sorts of safeguards in place now that were not there in the Great Depression and in the numerous bank runs and “panics” of the 19th century, never discount the power of mass psychology to unhinge everything. The speed with which data and rumors now can spread, combined with a lack in faith in what our government and Fed officials tell us could change the rules in unpredictable ways.
The post-mortems on Bear Stearns now show that it should not have happened. Looking back, it appears that the Fed and Treasury did not act quickly and forcefully enough early on. The top guy at B-S kept issuing reassurances that were belied by the data. An injection of liquidity sooner could have prevented the panic that made the over-leveraged, sloppily-run company survive, albeit in reduced form.
This rush for liquidity by depositors could hit a lot of banks in the coming week. The public may not be placated by Treasury and Fed reassurances and start switching their deposits from well-known weak banks to strong ones.
May you live in interesting times.

[EconProf]

I used to teach Money and Banking. While its true that we have all sorts of safeguards in place now that were not there in the Great Depression and in the numerous bank runs and “panics” of the 19th century, never discount the power of mass psychology to unhinge everything. The speed with which data and rumors now can spread, combined with a lack in faith in what our government and Fed officials tell us could change the rules in unpredictable ways.
The post-mortems on Bear Stearns now show that it should not have happened. Looking back, it appears that the Fed and Treasury did not act quickly and forcefully enough early on. The top guy at B-S kept issuing reassurances that were belied by the data. An injection of liquidity sooner could have prevented the panic that made the over-leveraged, sloppily-run company survive, albeit in reduced form.
This rush for liquidity by depositors could hit a lot of banks in the coming week. The public may not be placated by Treasury and Fed reassurances and start switching their deposits from well-known weak banks to strong ones.
May you live in interesting times.

[EconProf]

I used to teach Money and Banking. While its true that we have all sorts of safeguards in place now that were not there in the Great Depression and in the numerous bank runs and “panics” of the 19th century, never discount the power of mass psychology to unhinge everything. The speed with which data and rumors now can spread, combined with a lack in faith in what our government and Fed officials tell us could change the rules in unpredictable ways.
The post-mortems on Bear Stearns now show that it should not have happened. Looking back, it appears that the Fed and Treasury did not act quickly and forcefully enough early on. The top guy at B-S kept issuing reassurances that were belied by the data. An injection of liquidity sooner could have prevented the panic that made the over-leveraged, sloppily-run company survive, albeit in reduced form.
This rush for liquidity by depositors could hit a lot of banks in the coming week. The public may not be placated by Treasury and Fed reassurances and start switching their deposits from well-known weak banks to strong ones.
May you live in interesting times.

[EconProf]

TemekuT: It sounds like you got a voluntary reassessment for your property value as of January of this year (for tax payments due in Dec. and next April). It does NOT sound like this is a response to your appeal.
We must be careful about the dates here because it gets tricky. Your appeal, presumably filed last November, was based on your claimed value as of January of that year. I believe you have not yet got an answer on that. Expect a call from the Assessor’s office with an offer to compromise. If you don’t agree, then you are entitled to a hearing.

[EconProf]

TemekuT: It sounds like you got a voluntary reassessment for your property value as of January of this year (for tax payments due in Dec. and next April). It does NOT sound like this is a response to your appeal.
We must be careful about the dates here because it gets tricky. Your appeal, presumably filed last November, was based on your claimed value as of January of that year. I believe you have not yet got an answer on that. Expect a call from the Assessor’s office with an offer to compromise. If you don’t agree, then you are entitled to a hearing.

[EconProf]

TemekuT: It sounds like you got a voluntary reassessment for your property value as of January of this year (for tax payments due in Dec. and next April). It does NOT sound like this is a response to your appeal.
We must be careful about the dates here because it gets tricky. Your appeal, presumably filed last November, was based on your claimed value as of January of that year. I believe you have not yet got an answer on that. Expect a call from the Assessor’s office with an offer to compromise. If you don’t agree, then you are entitled to a hearing.

[EconProf]

TemekuT: It sounds like you got a voluntary reassessment for your property value as of January of this year (for tax payments due in Dec. and next April). It does NOT sound like this is a response to your appeal.
We must be careful about the dates here because it gets tricky. Your appeal, presumably filed last November, was based on your claimed value as of January of that year. I believe you have not yet got an answer on that. Expect a call from the Assessor’s office with an offer to compromise. If you don’t agree, then you are entitled to a hearing.

[EconProf]

TemekuT: It sounds like you got a voluntary reassessment for your property value as of January of this year (for tax payments due in Dec. and next April). It does NOT sound like this is a response to your appeal.
We must be careful about the dates here because it gets tricky. Your appeal, presumably filed last November, was based on your claimed value as of January of that year. I believe you have not yet got an answer on that. Expect a call from the Assessor’s office with an offer to compromise. If you don’t agree, then you are entitled to a hearing.

[EconProf]

Here’s a doomsday scenario that, while not likely, could play itself out in the next few days or weeks as a result of the IndyMac failure. Consider these events:
1. The many depositors with over $100k in their IndyMac accounts are SOL.
2. Depositors in other smaller and weaker banks across the country with over FDIC limits in their accounts panic and withdraw.
3. The weakest banks (Downey, WaMu, Wachovia, etc.) face the biggest flood of withdrawals.
4. The strongest banks get stronger, the weakest fail. (note to stocktradr: Go long on Wells, short Wachovia).
Whether this happens or not, we’ll know in a few days.

[EconProf]

Here’s a doomsday scenario that, while not likely, could play itself out in the next few days or weeks as a result of the IndyMac failure. Consider these events:
1. The many depositors with over $100k in their IndyMac accounts are SOL.
2. Depositors in other smaller and weaker banks across the country with over FDIC limits in their accounts panic and withdraw.
3. The weakest banks (Downey, WaMu, Wachovia, etc.) face the biggest flood of withdrawals.
4. The strongest banks get stronger, the weakest fail. (note to stocktradr: Go long on Wells, short Wachovia).
Whether this happens or not, we’ll know in a few days.

[EconProf]

Here’s a doomsday scenario that, while not likely, could play itself out in the next few days or weeks as a result of the IndyMac failure. Consider these events:
1. The many depositors with over $100k in their IndyMac accounts are SOL.
2. Depositors in other smaller and weaker banks across the country with over FDIC limits in their accounts panic and withdraw.
3. The weakest banks (Downey, WaMu, Wachovia, etc.) face the biggest flood of withdrawals.
4. The strongest banks get stronger, the weakest fail. (note to stocktradr: Go long on Wells, short Wachovia).
Whether this happens or not, we’ll know in a few days.

[EconProf]

Here’s a doomsday scenario that, while not likely, could play itself out in the next few days or weeks as a result of the IndyMac failure. Consider these events:
1. The many depositors with over $100k in their IndyMac accounts are SOL.
2. Depositors in other smaller and weaker banks across the country with over FDIC limits in their accounts panic and withdraw.
3. The weakest banks (Downey, WaMu, Wachovia, etc.) face the biggest flood of withdrawals.
4. The strongest banks get stronger, the weakest fail. (note to stocktradr: Go long on Wells, short Wachovia).
Whether this happens or not, we’ll know in a few days.

[EconProf]

Here’s a doomsday scenario that, while not likely, could play itself out in the next few days or weeks as a result of the IndyMac failure. Consider these events:
1. The many depositors with over $100k in their IndyMac accounts are SOL.
2. Depositors in other smaller and weaker banks across the country with over FDIC limits in their accounts panic and withdraw.
3. The weakest banks (Downey, WaMu, Wachovia, etc.) face the biggest flood of withdrawals.
4. The strongest banks get stronger, the weakest fail. (note to stocktradr: Go long on Wells, short Wachovia).
Whether this happens or not, we’ll know in a few days.

[Author]

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