Of Bank Runs, FDIC Insurance Limits, and Being Underfunded!
By: John Lillpop
Until quite recently, the advantages of being underfunded (poor) were under appreciated in these quarters. To me, poor has always meant less material goods, less influence, less party time, less everything.
Which is not cool by any standards.
But then a funny thing happened on the way to the food line the other day.
Senator Charles Schumer (D-New York) shouted “Bank Failure” at the top of his socialist lungs while standing in line at mortgage giant IndyMac. Apparently, IndyMac has its stirrups entangled in some shady loans and, perhaps, some good old-fashioned fraud, and Schumer was being a good soldier by playing town crier.
Or should that be village idiot?
In any event, alerted to the deteriorating conditions at IndyMac, the federal government arrived in Pasadena last Friday to take over the joint and calm the unease that crazy Charles had unleashed.
Of course, cynics will immediately spot the insanity in all this.
How in the hell are bureaucrats from the federal government, which is trillions of dollars in debt, and ringing up hundreds of billions of additional debt each year, going to help? What in the world do these freaks know about fiscal responsibility and frugality?
Nonetheless, the fed took over the reigns at IndyMac and immediately strutted their stuff by renaming the bank. It’s now Indymac Federal Bank, a much safer and more secure handle for an institution that handles scores of billions of deposits by unwashed masses.
Somehow, the new name and the knowledge that the federal government had taken over did little to quell the angst of IndyMac customers.
Quite the opposite, in fact, as the fed takeover precipitated a major run on IndyMac Federal Bank, with some customers arriving as early as 1:00 AM and camping out overnight in order to withdraw their assets before loony bureaucrats could give their money away to illegal aliens, homeless beggars, or scalawags like Governor Arnold Schwarzenegger who continues his urgent search to find $16 billion with which to balance the state budget.
Particularly vulnerable among IndyMac Federal Bank clientele were well-heeled blokes with more than $100,000 on deposit, the maximum amount covered by FDIC insurance.
Pity the poor devil with $110,000 in an IndyMac savings account. Such a chap or chapess had to endure the indignity and outrage of sleeping on the ground overnight just for ten thousand dollars.
What has our once great nation come to?
In my case, the IndyMac Federal Bank run finally gave me a reason, albeit a meager one, to appreciate my poverty ever so slightly
Namely, there was absolutely no reason for me to get out of bed at midnight to begin an overnight vigil at IndyMac Federal Bank.
Instead, I slept in until noon, and then went on-line to verify that the fed had not plundered that small fortune in my vacation savings account which, as it turns out, will not be wasted in decadent frivolity in Honolulu on New Years Eve, but will instead be used to fill my jalopy with the best gallon of gasoline that $5.00 can buy!
All of which goes to prove that the quip attributed to Mae West, “I’ve been rich and I’ve been poor. Rich is better!” may be vastly overrated!