Monday, March 27, 2023

Bank Failures and Downturns

With the recent increase in bank failures a lot of people are worried. It’s not really a problem -unless you are concerned about money, income, and paying bills. Then there’s the whole economic collapse thing. If you aren’t worried about those things it’s not an issue. 

In the real world, it’s an issue. 

I wasn’t too worried about my local bank but then they sent out an e-mail stating how everything was fine. That had me worried. I’ve had one my banks go under before and that was well before the 2008 crash. The bank I had my house mortgage with went belly up in the 80s. 

Funny thing about that. That bank wasn’t my first choice for a mortgage but my first choice refused me. Eventually the bank that refused me took over the failed bank and ended up with my mortgage anyway. The thing about owing money is that someone will take over your debt. 

It’s the savings side that’ll get you. The easiest thing to do is to keep deposits under the $250,000 insurance limit. The government may cover more but don’t count on it. One thing to keep in mind is that while you’ll get your money back it might take a while. Don’t put all your eggs in one basket. 

There is some concern that the fund that backs the Federal insurance would soon run out. The numbers don’t look good. It’s my guess that the government would step in with a huge inflow of money to cover the losses. They have the printing presses after all. 

It’s going to be tough for people who are heavily leveraged with loads of debt. I’m no financial advisor but it would seem that reducing that exposure would be a high priority. Most people will probably muddle through. Just guessing, but it doesn’t seem like a full blown financial collapse will hit just yet.

Even if that would happen it’s not the end of the world. There’s a period when everything resets, but then life goes on for most people. The trick is to get through the tough transition phase without missing too many meals.



  1. My mortgage was sold to a different mortgage company. I was just notified.

    1. Surprise! Don't you just love it when that happens?

  2. Just last year I did a refinance on my mortgage. Went from 4.75% down to 2.5%.
    Been debating about withdrawing cash out of savings tho. Finally decided that I have enough stashed cash , to pay all bills for at least six months or more. So just left the savings alone.
    Figure if it crashes , it will all be just tissue paper anywho at that point...

  3. You did good Spud keeping enough cash on hand for 6 months. Not like the interest is worth much.

    Both me and my wife have a local bank and a credit union account so if glitches occur, we still have options.

    1. I'm dealing with a local bank and credit union too. Then there are credit cards from National banks. My local bank and credit union can't replace lost debit cards if I'm out of state. A National bank will replace cards lost when traveling.

    2. We do pretty much the same Sixbears. We have a B of A. account which is set up to disburse all monthly payments like mortgage, insurance etc. It also receives our SS checks ,
      On the other hand , we have an account at the credit union , that her paycheck goes to and also our savings is there.
      This past year they've really tried to get me to put it into a CD for higher interest , but I politely decline the thought. As I like having access to my savings on demand !
      Better off putting it into food storage lol , considering the rise in food etc. Has been much more than what interest they might pay...