I recently read a sensational piece on ABC News about potential bank failures.It’s a relatively long but interesting read.
The story notes that 10-25 regional banks are “treading water right now” and states that profits of FDIC-insured banks are down a whopping 86%. Our current situation is likened to the Great Depression and we are told that 15 banks could easily fail before year end. Another Chicken Little tidbit: there’s not enough insurance to cover all the money in banks right now, so anyone with more than $100k in the bank may be in trouble.
I can appreciate the information presented in the article, but it’s rather irresponsible. The story riles people up and offers no advice on how to weather the storm nor tips on what we can do to prevent the stated disasters.
As I read articles like this I have to remember that I don’t understand the intricate financial system—I’m an engineer. Journalists don’t understand it, nor do lawyers or politicians. In the end, we should trust the economists who are equally vested in the system. No one wins when banks fail. The sky is not falling, but if it is, your 100k+ in the bank won’t matter anyway :)