From the Great Depression:
When I hear the words "bank run," I tend to think of scene quite similar to the one shown above--or at very least the ending to Mary Poppins (which then reminds me of a man with a wooden leg named Smith, but that's neither here nor there). I usually don't associate the phenomenon with this modern age or time.
As it turns out, however, bank runs are still within the realm of possibility in the 21st century. Just take a look at poor IndyMac. The Feds sezied control of the bank this week, citing a massive run on deposits resulting in the second-largest bank failure in U.S. history.
Oh shit.
Hopefully, if you're not worried right now about the economy, you're studying for the bar and completely preoccupied. (And from today's date you should infer that I'm procrastinating by way of this post.) Otherwise, you might want to take a hard look at what's going on around us.
Of course, the irony here is that bank runs sort of operate on drawing attention to precarious financial situations, and the snowball effect that such alarm brings.
Just ask good ol' Chuck Schumer (D-NY) about how this works. He was the one who complained to the FDIC & the OTS about IndyMac's troubles two weeks ago. Since then, depositors have withdrawn $1.3 billion from the bank. Smooth, Chuck, smooth. You gotta love his response, though, to the situation. He blamed the failure on "poor and loose lending practices," as well as insufficient regulation, and told the OTS chairman that he should be "spending less time playing politics and more time doing his job." Snap.
Well, I'm sure Chuck didn't help with the matter. Now I'm just waiting for him to challenge the 21st Amendment and really send us back 90 years. You can bet your sweet ass that I'd turn bootlegger in a heartbeat if Prohibition were to rear its ugly, puritanical head once again.
How much fun would that be?
Postscript. The John Nemeth Bank was organized in 1917. In 1920, it changed its name to the American Union Bank (pictured above). The Superintendent of Banks closed it down on August 5th, 1931.
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on Saturday, July 12, 2008 at 7:50 AM.
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