Wednesday, August 1, 2007

No Run On US Banks or Check Cashing Outlets Foreseen in Global Market Turmoil

Finally some good news, US Banks are likely to remain solid through the market turmoil, no matter how bad things get.

"With the US savings rate near zero, most Americans aren't going to be running to their bank and demanding to withdraw much, if anything." Said one leading economist. "Savings accounts typically have a near zero balance, and checking accounts typically have just enough money to cover this month's bills. Also, Home Equity Lines of Credit are pretty much tapped out for the average American. "

Further, with millions of Americans unable to even qualify for a checking account, many will unlikely even set foot in a bank. Americas thousands of Check Cashing outlets expect a mild uptick in their "Pay Day Loans" line of business. The outlets, after large investments in infrastructure over the past 10 years, expect to be able to handle the volume.

All of this points towards pretty short lines at the bank over the next few months, no matter how this plays out.

4 comments:

Anonymous said...

Excellent point.

Anonymous said...

No savings = no run on banks. The banks are safe!

BTW: congrats on the FDIC accessing your blog!

Market Factors said...

Thanks, man, very funny to see on sitemeter that fdic.gov accessed this post!

Leila said...

Great work.