Tuesday, January 26, 2010

Pop Quiz


Q: What do these two images have in common?










































A: Bank runs.

7 comments:

  1. Ok , i will step up and be the newbie and say i understand the photo, but not the chart ?

    ReplyDelete
  2. Don't forget: 'Attention depositors! Your money is no longer redeemable in specie. Anybody with metal in their deposit boxes must turn them in to this nice G-man.'

    ReplyDelete
  3. Ran across this today FDR at Market Ticker. I guess it is now legal for money market funds to halt redemptions.

    I"n a nearly unanimous vote, Money Market Funds now have the ability to suspend redemptions, courtesy of the SEC's just passed 4-1 vote. This explains the negative rate on bills: at this point, should there be another meltdown, money market investors will not, repeat not, be able to withdraw their money purely on the whim of Mary Schapiro. As the SEC noted: "We understand that suspending redemptions may impose hardships on investors who rely on their ability to redeem shares." Too bad investors' hardships considerations ended up being completely irrelevant."

    ReplyDelete
  4. Money Market Runs

    ReplyDelete
  5. The bottom looks like short term treasury rates.

    ReplyDelete
  6. The bottem is the graph of the 13 week treasury yield.

    It is near zero, meaning people are keeping their money in treasuries and not in the banks or elsewhere.

    This is a modern day bank run.

    ReplyDelete

The USA's political-economc system is best described as:

On Nov 2, 2010, I plan to vote (FOR or AGAINST) my incumbent congressman

 
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