"Give me the cash!"
They’re afraid of the coming runs and they’re preparing for them as best they can.
This doesn’t exactly seem like it will last, based on the most recent inflation figures. Banks prefer to make money, not watch it evaporate. International Loans in say Asia?
How much of that spike is because of all the business loans that were written off as bad debt, or bought as toxic debt in the financial bailout?
What does the author suggest the banks should do with the cash? Give it back to the government? Pass it out in the form of more bad loans?
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The coming inflation WILL cut it in half over the next 20 years.
They’re going to eventually need this money to make good on the debt they are hiding in their cooked books.
Maybe the hording is just puzzlement over what to do in an Obamao economy. It could also be that fewer legitimate borrowers are asking for loans. People are trying to pay down debt, and ride out the storm.
I would say they know Obama’s policies are a disaster and are preparing for the future.
Maybe no one wants to borrow.
With the current administration’s policies and programs why would a bank lend to anyone? Only ‘stupid’s’ would try to keep up with an ignorant, incompetent, spendthrift, hate America and destroy the Nation group of thugs.
Well, they ain’t hoarding mine. I’m doing that myself. :)
This can’t be true! Why I’ll bet there are at least three Freepers who will explain how they just got a loan for a new car a few days ago and so there is no way banks are hoarding cash!!
At least that was the posts I got when mentioning this a few weeks back.
How about another chart showing the “Ratio of cash to real-estate loans on which no payment has been made in six months but they haven’t foreclosed on because that would require officially booking the loss”?
That one would probably be sitting down around 7%.
Banks are “hoarding cash”?
That sounds crazy. Maybe they saw the heavy inflation coming, with interest rates so low people would be stupid to leave cash in the bank instead of buying land in the country.
"Give me the cash!"
First of all it’s NOT cash per se. It’s deposited capital. Beware of these kinds of stories. I’m NO fan of the banks in this country, and I’d like to stage my own coup, namely have at least 1/3rd of all American’s withdraw their money for a month or two.. But this article is inaccurate, in that, it tries to portray that the banks have actual CASH on hand.. It is not the case.
Tim-
They are actually acting very smart, there area a lot of bad loans on the books.. also if gov is dum enough to give you free cash and then sell you securities that pay you nice interest? hell why not
The problem isn’t adequacy of cash reserves.
The problem is adequacy of bank capital ... and the opinion is widespread that, at real market value, bank capital is less than zero at many, many banks.
Cash reserves and bank capital are entirely different things. A sound bank requires adequate cash reserves for deposit withdrawals in the short term and adequate bank capital for survival in the long term.
This problem is nothing that couldn’t be solved with regime change in Washington.
...and the only solution is for the government to take the banks over.
Now some will call this “fascism”, but we like to think of it as “wealth redistribution”....