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[nimblebear]

Everyone thinks its the biggies. Hardly anyone is thinking about their local small bank or medium regional bank. Perhaps some are, like those with deposits larger than $100k who have been withdrawing steadily and heavily.

And worse no one has mentioned any of the thousands of small towns and cities that need money to function, and also are finding they have invested in toxic waste as well, and now finding they are losing millions overnight. Remember orange county ?

try repeating that across hundreds of small towns, municipals and cities who everyone "thought" conservatively invested.

here is an excerpt of and article from Jim willie who publishes something called the hat trick letter:

"The bank runs have begun in earnest. Nevermind the big banks for a moment. The smaller ones are entering seizures. The small and medium sized cities are also entering seizures. Here are two stories, one about a city and another about the bank "holiday" coming.

This from a friend in Seattle: "I was talking to my neighbor last night. He is in finance in the county government, King County (Seattle). He said there are some very secretive budget talks being held, very hush, hush. Apparently, the county has lost around $200 million of taxpayer money in toxic paper investments, with huge implications on the budget. He says he is not privy to the details, but he is taking a 10-day vacation starting today, because he has nothing to do since everything is in flux."

This from a friend in Atlanta with strong banking connections: "Reliable word that Bank of America branch managers just received a letter or memo from the USFed instructing them to perhaps be ready for a one-week universal shut-down of the banking system, including access to checking accounts, savings accounts and credit cards. Reliable word has it that BofA bank branches received a shipment of signs last week, reading "WE'RE SORRY, BUT DUE TO CIRCUMSTANCES BEYOND OUR CONTROL, WE CANNOT BE OPEN AT THIS TIME."

So the banks are in need of a respite, a break, a holiday. They need to shore up their positions. Economists and bankers avoid revealing the consequences of extended absence of short-term credit supply. Imagine all the supply chain DELIVERY routes being interrupted for lack of short-term credit, certain to interrupt the supply of food, gasoline, building materials, basic household wares, simple hardware, and more. The short-term credit would certainly also disrupt payroll streams for companies, inventory supply for retail chains, durable goods purchases by consumers (like washing machines & refrigerators), the maintenance of basic machinery (like cars, trucks, computer, communications), even cash dispensed at ATMachines.


(Folks I recall posting not long ago about supply disruptions and shortages of food. This is not scare tactics or folklore. This is based on an assessment of our current system, the fracturing already in place, and the very clear signs of major distress everywhere in the financial system. Just please take care, and protect yourself. get plenty of cash to tide you over for maybe a even a few months. There is nothing that says they won't simply just shut down the banking system for a period of time until they figure this mess out. The markets are not functioning as they should, and the "free market" mechanisms are not being permitted to work, because the government has ripped out many or limited many options which has created immense uncertainty, and causing banks and lenders to simply not be able to trust anyone or anything at present. Just think of the businesses who cant get money for short term capital needs, to meet payrolls, and worse, banks who will simply not lend because they don't have the access themselves to the credit facililties. The government is on overdrive, as is the Fed, and it can't keep up. It wasn't designed ever to handle a systemic breakdown anything even remote to this. The bailout as all will see is too late, too small, and too unstructured to properly deal with the root causes. Its is infact not even a plan. We are struggling mightily to keep money flowinginto this country from foreign sources. For all intents they have basically stopped, or slowed so substantially its cripling the foundation of the entire us economy and the world economy. If this happens we could see stocks worldwide simply implode. Perhaps another 30 or 40% at least. Lastly think of all the gas stations, refiners and middle men in the supply chain who all need cahs and liquidity to function for deliveries. We might see the nations fuel supply infrastructure having to be "nationalized" overnight to keep the economy working. Who knows what all would have to be nationalized ? Banks, Hospitals, Fuel, and on. Folks I can't emphasize any more strongly, how serious of a situation this is. Your's Truly NB)