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Is The Largest Weekly Inflow Into Bank Savings Accounts On Record, A Flashing Red Alarm?

Tyler Durden's picture





 

When one thinks of America, the word "savings" is likely the last thing to come into a person's head, for the simple reason that the vast majority of Americans don't save: recall that in September the personal savings rate dipped to 3.3%, the lowest since 2009 save for one month.

On the surface this makes sense: the average US consumer, tapped out, with more spending than income, has no choice but to max out their credit card, and eat into whatever savings they may have.

This is usually as far as most contemplations on savings go. And this is a mistake, because at least according to official Fed data reported weekly as part of the H.6, which lists the data on the various components of M1 and, more importantly, M2, the real story with US savings is something totally different.

As a reminder, the H.6 lists the bank sector "liability" equivalents of the components that make up M2, which as most know comprises of M1, or physical currency in circulation at just over $1 trillion as well as Checkable and Demand deposits, amounting to $1.4 trillion, and the various M2 components which comprises of Savings Deposits, the largest component of M2 at $6.6 trillion, a modest amount of Time Deposits, and an even more modest amount of Retail Money Funds.

It is the Savings Deposits component that is of most interest. Recall that the primary definition of a savings account is, naturally, an amount of cash parked with an institution for a longer period of time, in exchange for receiving interest (or no interest in the era of The Great Chairman), which also have a limitation on the number of withdrawals: six per month at last check. Savings accounts also encompass the broader Money Market account category, which has a higher floor requirement than an ordinary savings account. 

At first blush one would balk at the concept of a Savings Account in the New Normal: after all who in their right mind would face the counterparty risk associated with having money in a bank, especially money that has withdrawal limitations, if there is nothing to be gained in exchange, because under ZIRP nobody collects any interest, and won't until the system finally collapses.

Well prepare to be surprised.

The chart below shows the time progression of the largest Savings Component: total Savings Deposits at Commercial Banks, which at $5.6 trillion in the week ended November 5, 2012, is also the largest single component of M2, and thus broader money stock of the US (accessible source data via the St Louis Fed).

The chart above hardly shows any slowing down in cash entering Savings Accounts. In fact, quite the opposite. As we have conveniently highlighted, the historic rate of growth in this category of about $200 billion per year, aka the "pre-New Normal" regime, nearly quadrupled to just shy of $700 billion, with a distinct break when Lehman failed aka the "post-New Normal". That's $700 billion per year entering what the Fed defines as a "Savings Account." And all it took to get everyone to scramble to the uncompensated safety of savings accounts? A near collapse of the entire financial system!

This topic alone is worthy of a far greater discussion, because there is a distinct possibility that what the Fed discloses as a "savings account" book entry may simply be a book entry "plug" at the bank level to account for the surge in Excess Reserves into the banking system, after applying an appropriate reserve discounting factor: one way of thinking of M2 is the full lay out of the monetary system using base currency and Fed Excess Reserves and applying a Fractional Reserve banking multiplier. At last check the, multiplier from currency outstanding (1.08 trillion) to total M2 ($10.3 trillion) was 9.5x, in line with the historic ratio of ~10x.

A better representation of the very tight correlation between M1, which captures both currency and physical excess reserves, and M2 can be seen on the chart below.

As can be seen M1 is M2 just with a multiplier factor of ~4.5x.

What has been unsaid so far, is that to Ben Bernanke and the champions of the status quo, money in Savings Accounts would be far better used if it were to be dumped into stocks. After all, the primary reason for the urge by the Group of 30, Tim Geithner, Bernanke and the SEC to crush money markets and to make them even more uneconomical is to pull all the cash contained there and to have it invested into bonds, stocks, and other risky products.

In summary, the more money allocated to Savings Accounts, the more Bernanke's attempts to rekindle the "animal spirits" fail. And while this cash is at least on the surface what is known as "money on the sidelines", the flipside also is that should this money ever leave the "sidelines", modestly at first, then all at once, then the Fed's moment of reckoning will come, as that will be the moment when the Fed's ability to keep inflation grounded in "15 minutes" or less, will be thoroughly tested.

Paradoxically, Bernanke wants this money to re-enter the risk markets, and/or the economy, but not in a way that leads to hyperinflation. After all there is $10 trillion in electronic "money" in the US system, and only $1 trillion in cold, hard cash available for cash claims satisfaction.

All that brings us to the topic of today's post: weekly changes in the amount of cash held in Savings Deposits at Commercial Banks. As the chart below shows, rapid, dramatic shifts, characterized by massive inflows of cash into such savings accounts usually coincide with times of great monetary stress: the three biggest episodes in history to date have been the 2008 Lehman failure, the August 2011 Debt Ceiling Crisis and associated US downgrade, and the May 2009 First Greek failure and bailout. 

Those three episodes represent the biggest weekly Savings Deposits inflows number 2 through 4.

When was the largest ever inflow into Savings Deposits at Commercial banks, at $131.9 billion in one week? This past week.

Why?

We don't know, but the people who control $5.6 trillion in US commercial bank savings deposits - certainly not the vast majority of the US population who have virtually no money saved up, but the true 1% - just decided to park the most cash on a week over week basis into their savings accounts in history.

Perhaps ask them why they did it...

Source: H.6

 


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Tue, 11/20/2012 - 17:50 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Why?  Because the Muppets are going to cash?

Lol, silly Muppets, cash is trash!

Tue, 11/20/2012 - 17:56 | Link to Comment Gene Parmesan
Gene Parmesan's picture

Fill in the blank.

"electronic cash" in a bank < paper cash in hand < ______________

Tue, 11/20/2012 - 18:01 | Link to Comment knukles
knukles's picture

FDIC Insurance

Driven by FDIC insurance.
At a TBTF bank?
Priceless!

Tue, 11/20/2012 - 18:31 | Link to Comment Mark Carney
Mark Carney's picture

This is absolutely nuts!  I am going to have to read read this again, for I cannot get over how obsurd this is....what's up INDEED!

Tue, 11/20/2012 - 18:44 | Link to Comment ndotken
ndotken's picture

1. Sell Billons in AAPL @ $550/share
2. Deposit money in Savings Aacount
3. Wait one week for AAPL to fall to $507/share
4. Buy Billions in AAPL at $507 with money in Savings
5. Book gain of $53/share

It ain't rocket science.

Tue, 11/20/2012 - 18:44 | Link to Comment fonzannoon
fonzannoon's picture

do money markets inside brokerage accounts count as savings accounts? Because if they do not that theory goes out the window, no offense.

Tue, 11/20/2012 - 18:59 | Link to Comment Urban Redneck
Urban Redneck's picture

"Money" in a Money Market Fund at a brokerage does one no good if the fund halts redemptions and they want to buy on the cheap while there is blood in the streets.

Tue, 11/20/2012 - 19:01 | Link to Comment fonzannoon
fonzannoon's picture

I agree with that. The comment above me was illustrating the idea that someone sold an equity, wants to park money in cash, with the intention of buying equities again soon. In that case a money market is where they would go.

Tue, 11/20/2012 - 20:15 | Link to Comment nonclaim
nonclaim's picture

You can, most likely, opt-out of overnight sweeps but there may be low limits on the cash amount left sitting there and high risk of "commingling" in case the broker folds. (Not that there's any guarantee that the sweeps actually happens as advertised, but probably do.)

Tue, 11/20/2012 - 21:18 | Link to Comment disabledvet
disabledvet's picture

Bearer bonds. Or "pre paid debit cards." not in dollars of course.

Tue, 11/20/2012 - 22:30 | Link to Comment TruthInSunshine
TruthInSunshine's picture

The Government is now beginning to lose the propaganda war badly. All of their headlines, memos, talking points & other bullshit, pumped out relentlessly through their official channels and the proxy main stream media (with every newspaper, cable station, network, magazine and radio station owned by 6 corporations), that allege that there's some sort of a "recovery, soft but sure," are now being dismissed even by the average sheeple (there's been a "whiff" or mild illusion of something remotely and temporarily resembling a stabilization only due to unsustainable, insane, batshit-crazy debt printing and federal reserve sponging/monetization of that debt, with the Fed now holding the illustrious title as one of the world's most toxic repositories/pustules).

The sheeple can no longer even passively ignore the massive spread between what they're seeing and experiencing in their personal lives and what is being parroted to them by the government and media.

The delay in taking the medicine this nation should have taken in the wake of the 2008 crisis will turn out to be an economic & social textbook historical lesson for the ages as to what NOT to do in the face of the massive structural economic crises the U.S. and global economy face today.

I only hope that the very painful chapter of American History about to unfold destroys any remaining confidence that holdout citizens, who still deposit trust & faith in the integrity & competency of benevolent government as their protectorate, may have in fractional reserve banking charlatanism  and in the wisdom of allowing a banking/financial-military/defense-Wall Street plutocracy to be allowed to suckle to maturity from the taxpayer subsidized teat of the state and deeply capture the respective branches of government, and its various politicians, regulators and other appendages.

Tue, 11/20/2012 - 22:44 | Link to Comment old naughty
old naughty's picture

Parmesan:"...fill in the blank."

Fxck the B_ANKS. There.

 

btw, why is it we muppets are always behind the curve.

In other words, they have tricks up their sleeves all the fxcking time?

 

 

Tue, 11/20/2012 - 23:10 | Link to Comment Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

7 days to bitcon block reward halving (from 50 btc/10 minutes to 25 btc/10 minutes).

 

Benefactor will be printing US$800,000 per each new bitcoin created.  In one week.

 

Hmmm....   Keep fiat, or buy btc...  Hard choice, right?

 

At any rate, change we can believe in.

Wed, 11/21/2012 - 00:09 | Link to Comment SpeakerFTD
SpeakerFTD's picture

Great comment, except for one rather important detail.   Historically, at times like this, the tendency of the mob is to snarl for more government, not less.    In their fear and confusion, your "holdout" citizens are likely to end up demanding a government that will prove to be even more unpalatable than our current travesty.

Wed, 11/21/2012 - 00:12 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Only if the government can deliver moar bread & circus. And quickly! For the throngs are angry & restless!

Wed, 11/21/2012 - 00:13 | Link to Comment ronaldawg
ronaldawg's picture

Hey Mr. End the Fed:

You are getting in the way of the reinflation of the housing bubble. 

I heard on CNN at the airport that housing starts were up, home inventory was down, prices were up and new homeowners were entering the market.  What happened to the 2 million homes either waiting foreclosure or already foreclosed on I don't know. 

Wed, 11/21/2012 - 00:17 | Link to Comment TruthInSunshine
TruthInSunshine's picture

According to The Bernank (per his presser today), the shadow inventory of millions of empty/foreclosed homes will be rented out! Muhahahahaha!!!

Wed, 11/21/2012 - 07:19 | Link to Comment BeetleBailey
BeetleBailey's picture

+100

Tue, 11/20/2012 - 19:08 | Link to Comment knukles
knukles's picture

Depends on which money market.

There are money market mutual funds (non bank deposits, having $1 NAV's, etc.) which are picked up in the aggregate data but not under discussion, here....
Here is referring only to bank deposit savings accounts, some of which are termed "money market saving accounts", also picked up in the aggregate data.

They're two entirely separate deals, the commonality being that they both have "money market" in the name, hold other people's money and supposedly pay interest..

 

Tue, 11/20/2012 - 19:18 | Link to Comment fonzannoon
fonzannoon's picture

I realize I sound like the guy in something about mary pitching 7 minute abs but what you said is basically my point. Bank savings accounts is not where money leaving the market, with the intention of re entering the market, is going.

Tue, 11/20/2012 - 19:26 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

where ever your money is that is where they will come for it..after all it's not yours somebody else made it ..as spoke by a President of these here United States..they will tell you what is on the agenda if you listen..ala Bush and THE NEW WORLD ORDER. yes they are that blatant in your face..but America goes full eyes wide shut.

Tue, 11/20/2012 - 20:06 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

So they will be bringing shovels to my midnight garden cousin Eddy style?

Wed, 11/21/2012 - 02:02 | Link to Comment jeff montanye
jeff montanye's picture

imo probably not. and the pit bulls, electric fences, assault rifles, semi automatic shotguns and pistols may well deter those who suspect the pit bulls, etc. are probably guarding something worth persuading you to share.

Wed, 11/21/2012 - 11:20 | Link to Comment e-recep
e-recep's picture

yes, if they need to.

Tue, 11/20/2012 - 19:58 | Link to Comment knukles
knukles's picture

Hi Fonz.
I wasn't thinking of any priority of choice or making suggestions between the two types of accounts, merely differentiating between them as many do not realize there are more than one.  
Might note that with most of the brokerage firms related to big banks (as in most) wind up giving the account holder an option between deposit type or traditional fund type... which most people ignore.  And generally wind up with the deposit as they didn't "opt out" for the traditional fund type...
Their choice will be impacted BTW, with the change in the FDIC limits reverting back to the older,, lower levels.

It is what it is...
And I read the fine print so's not my problem and if it turns to warm soft poop, I'll have made my choices and have earned it myself.

:)

Tue, 11/20/2012 - 20:14 | Link to Comment fonzannoon
fonzannoon's picture

I'm with ya, I just don't think some peope understand the difference. Thanks to you and Tyler for pointing it out. Here is some food for the brain for you. Some insurers that deal in annuities have eliminated money markets. They substitute them with bond funds. Some even go a step further and have "triggers" that push money out of equities into the bond funds automatically if the equity markets go down too far. Central planning knows no bounds.

Tue, 11/20/2012 - 21:39 | Link to Comment disabledvet
disabledvet's picture

"insurance companies on auto pilot." that ain't Central Planning tough guy. That's SCARY. Interest rates have NEVER been this low. "it must be the lack of spending" of course. No wait "it's all that new debt" the Fed Chairman says we need. No wait! It must be "the positive rate of return for...".... I lost my TRAIN of thought again. What was the question again?

Tue, 11/20/2012 - 21:55 | Link to Comment fonzannoon
fonzannoon's picture

IMO Insurance companies are scrambling to reach TBTF status.

Tue, 11/20/2012 - 19:11 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

3.3% savings rate....Gee-Whiz, I wonder how many people are actually buying assets in lieu of banking savings?

Example: 1. Pay Mortgage electronically, 2. Pay bills electronically, 3. Buy Gold/Silver electronically, 4. Draw remaining money out of the bank, 5. Put aside living exp in cash, 6. Put aside play money in cash.

I think the real problem out there is simple. I pay cash 95% of the time, so when I get home from shopping and see just how much I've spent, I feel guilty, and so I tend to go easy on spending for a while....conversely, when I paid everything on Credit (years ago), I didn't feel guilty at all as I rarely saw the cash in the first place, I only saw digits, and digits on bank statements each month aren't half as scary as discovering how little paper you have left in your wallet each and every day.

Complacency is a formidable opponent to saving and wealth accumulation.

PS. Yes, I'm aware what I do constitutes a 'Bank Run'....and fuck-em!

Tue, 11/20/2012 - 19:30 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

If the average US income is $46,326pa with a labor force of 155.5M, that's only $237.7B in savings or ~ 1.5% GDP, or ~ 1.4% of Total US Debt.

Tue, 11/20/2012 - 23:53 | Link to Comment Mary Wilbur
Mary Wilbur's picture

I too am using cash much more than I used to, but for a different reason. I became concerned that I was using my debt card often enough that the odds of some criminal or desperate person compromising it were too high for my comfort. So I started useing cash for routine purchases except for gas. The side effect has been to make me a lot more aware of how much money I spend, which has been a plus for me, and I am in the process of getting completely out of debt.

Wed, 11/21/2012 - 14:34 | Link to Comment roadhazard
roadhazard's picture

I can not believe anyone would use a debit card. You are just asking to have your bank account stolen. Stupid, stupid people. You are protected with a credit card. ATM's are just a bad as debit cards.

  

Wed, 11/21/2012 - 10:43 | Link to Comment mccoyspace
mccoyspace's picture

Same here. Trips to the grocery store and gas are on the debit card. Otherwise I take out my budgeted weekly cash allotment and use that for everything else. Whatever change/small bills are left over at the end of the week goes into a jar for supplemental small PM purchases.

Tue, 11/20/2012 - 19:21 | Link to Comment Tyler Durden
Tyler Durden's picture

Retail Money Funds: $625.5 billion

Separate.

Also as a curious fact, Institutional Money Funds are outside of M2 for monetary aggregation purposes: they are aggregated in shadow banking, and we disclose them quarterly when we collapse the Z.1 shadow banking aggregation.

Tue, 11/20/2012 - 19:24 | Link to Comment fonzannoon
fonzannoon's picture

Thank you kindly.

Tue, 11/20/2012 - 20:34 | Link to Comment DaveyJones
DaveyJones's picture

Curious Fact - They are getting more curious as the days go "buy"

Nice New Piece on William Black and the Government's decision to not prosecute Goldman.

The only ex- banking regulator acting like an Icelander:

http://www.deepcapture.com/professor-william-black-flunks-bethany-mclean-for-issuing-hall-passes-to-goldman-sachs-and-wall-street/ 

Think I've said this before. William Black is the most objective measuring device for how fast and far we've fallen in two decades

Wed, 11/21/2012 - 00:21 | Link to Comment SafelyGraze
SafelyGraze's picture

interesting thread here.

like forensics.

school in session.

thanks tylerz and fonzes and knuckles and what not.

helpful discussion for those of us who sometimes stand and lurk.

Wed, 11/21/2012 - 09:26 | Link to Comment stockscooter
stockscooter's picture

There is virtually no difference between savings accounts and money markets.  They are both demand deposits backed by FDIC. The Big boys know how to manipulate bankers.  In '06-'07 period, FDIC coverage went exponential, by them lifting the maximum that could be insured.  You can put billions in the bank today and have full FDIC coverage. That's why the money is there.The Big boys know something, which they are fearing. Follow that lead...

 

Tue, 11/20/2012 - 19:03 | Link to Comment Magnix
Magnix's picture

1. close your savings acct

2. buy all of your savings in gold

It ain't rocket science too!

Tue, 11/20/2012 - 19:23 | Link to Comment Urban Redneck
Urban Redneck's picture

You do realize that $139B is in those savings accounts

Which at $1730/oz -

would equate to 75 million ozs or 2,400 TONS of additional gold demand.

I don't think Ben can print GLD that quickly, without sending actual gold to high five figures per oz. 

 

Tue, 11/20/2012 - 23:21 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You do realize that if the price of gold is increasing then the value of fiat is decreasing and this means the amount of dollars in deposit in real terms has not increased at all.

Wed, 11/21/2012 - 05:44 | Link to Comment Urban Redneck
Urban Redneck's picture

The fiat is just looking for a safe short term parking place, not a significant ROI.  The problem with your analogy (over the short term) is its inverse & its scalability.  There simply isn't enough real or even fake gold to absorb the volume of dollars in the marketplace, much less hiding on bank balance sheets.  Furthermore, if the price of gold is falling then does this mean that the amount of dollars on deposit in real terms is increasing?

Wed, 11/21/2012 - 09:47 | Link to Comment Withdrawn Sanction
Withdrawn Sanction's picture

There simply isn't enough real or even fake gold to absorb the volume of dollars in the marketplace, much less hiding on bank balance sheets

[at today's dollar price of gold].  In fact, there is exactly as much gold as we need, IF the price were allowed to adjust properly.

Tue, 11/20/2012 - 22:59 | Link to Comment AllWorkedUp
AllWorkedUp's picture

Eventually that money will find its' way into gold and silver but not until they are at much higher prices and GLD is finally exposed as a fraud.

 

Tue, 11/20/2012 - 19:11 | Link to Comment The Count
The Count's picture

Sure, and you have the crytal ball than knows all, right? Please.....

Tue, 11/20/2012 - 19:13 | Link to Comment derek_vineyard
derek_vineyard's picture

gain is only $43/ share  and why would you yake the money out of your brokerage (as if they would let you) and put it into a bank while waiting for trade to play out?  

Tue, 11/20/2012 - 21:46 | Link to Comment disabledvet
disabledvet's picture

Are you trying to say "bankers don't take cash" now either? I bet dollars to donuts there are a few bank Presidents with loaded guns in the office "for when the Government guy comes too." of course the real good might just park their money in a rail car...or an oil tanker. Hell if the price of lumber goes sky high even a...

Tue, 11/20/2012 - 22:15 | Link to Comment Kali
Kali's picture

True story:

Was at a Buf-fart WF branch the other day doing some biz (not my choice, my customer's).  Lady at teller window was paying her mortgage.  The woman gave the teller a check and a $100 bill.  Teller runs the check thru the "HOmeland Security we scan every check so we know how much $$ you have machine" and looks at the lady and says, "this  check is only for $1000 your payment is $1100. "  Lady picks up $100 bill laying in front of the teller and says, " $100 plus $1000 is $1100. Correct?"  No apology or "oops" from teller to lady.

Shit, banks don't even RECOGNIZE cash when it's sitting in front of them.

Tue, 11/20/2012 - 19:50 | Link to Comment marketheretic
marketheretic's picture

The only problem is that the aggregate amount of cash doesn't change since when you sold there was a counterparty who bought, while you booked a gain someone somewhere booked a loss, and when you bought back AAPL your cash moved from one ledger entry for you to another for the seller.

Tue, 11/20/2012 - 22:40 | Link to Comment EHM
EHM's picture

Exters pyramid.

Tue, 11/20/2012 - 18:38 | Link to Comment Treeplanter
Treeplanter's picture

Obama just sold his treauries.  Moochelle wants cash.

Tue, 11/20/2012 - 18:11 | Link to Comment EscapingProgress
EscapingProgress's picture

toilet paper

Tue, 11/20/2012 - 18:15 | Link to Comment Gene Parmesan
Gene Parmesan's picture

It's certainly more absorbent.

Let me try again with a better comparison:

$1 in the bank < $1 in hand < $1 spent on ____________

Tue, 11/20/2012 - 18:18 | Link to Comment Wakanda
Wakanda's picture

toilet paper

Tue, 11/20/2012 - 18:21 | Link to Comment JPM Hater001
JPM Hater001's picture

This is the steady rise of severence checks going into the banks.

Tue, 11/20/2012 - 18:18 | Link to Comment Michaelwiseguy
Michaelwiseguy's picture

He who panics and converts their paper money to Gold first, Wins!

Tue, 11/20/2012 - 21:50 | Link to Comment disabledvet
disabledvet's picture

If he works as a Government Banker I would agree with that. Absooooolutely.

Tue, 11/20/2012 - 18:28 | Link to Comment Leto II
Leto II's picture

50 rounds of .22lr

Tue, 11/20/2012 - 23:24 | Link to Comment SelfGov
SelfGov's picture

HOLY CRAP THANKS FOR THE REMINDER!

Went through my last box weeks ago teaching my kid.

Fleet Farm tomorrow for sure.

Tue, 11/20/2012 - 18:57 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

I think the concept of 'Greater Than' is a bit beyond some people...oh...hang on...$1 worth of Toilet Paper is indeed greater than a $1 note or 1's-&-0's. *slaps forehead with hand*

Tue, 11/20/2012 - 20:10 | Link to Comment CCanuck
CCanuck's picture

Hookers?.....Coke?? you do know its only a buck, she's gonna be ugly, and the coke might taste like baking powder.

Tue, 11/20/2012 - 18:20 | Link to Comment formadesika3
formadesika3's picture

Why the spike in November 2010?

Tue, 11/20/2012 - 20:30 | Link to Comment Being Free
Being Free's picture

Elections????

Wed, 11/21/2012 - 03:14 | Link to Comment MsCreant
MsCreant's picture

Folks banking their bribes. OHHHHHHHHHH! Got it.

Tue, 11/20/2012 - 19:00 | Link to Comment Mentaliusanything
Mentaliusanything's picture

10 Trillion in "Electronic Money" but only 1 trillion of folding paper.

Between a rock and a hard place should a Run happen I think.

The printing is strong in this one Luke Skywalker.

Tue, 11/20/2012 - 21:02 | Link to Comment Dingleberry
Dingleberry's picture

We have learned many things since the 2008 debacle.  The printing press is mightier than the sword. 

#1, there is no such thing as the "bond vigilantes" when it comes to taking on Uncle Ben. His dick is a lot bigger than theirs.......combined.  

#2, the question of "solvency vs. liquidity" is a moot point. There are a shitload of TBTF banks (and probably the entire banking sector) that are beyond insovent.  The "liquidity" provided by Uncle Ben sure as hell looks like it's keeping them alive (yeah, I 'm talking to you Citibank and B of A).  Plus, abandoning all standards of accounting didn't hurt.....And don't even mention Bear Sterns. You are too intelligent for that.

These numbers mean nothing.  At least for now. Wake me when they do. For now, enjoy the inevitable Youtube videos that will no doubt show the huddled masses (Obamanites) stampeding thru Wal-Mart and trampling over their fellow shoppers in a mad dash to save a buck on a TV or something.....

Tue, 11/20/2012 - 21:55 | Link to Comment disabledvet
disabledvet's picture

But I keep telling myself "they've got to have a plan in case that happens." I mean it's not like flying planes...you know...flying...

Wed, 11/21/2012 - 08:10 | Link to Comment Incubus
Incubus's picture

The Fast & the Furious: Hypertrade

 

"I live my life one financial bubble at a time. Nothing else matters: not the debt, not the country, not the dollar and all its bullshit. For those ten seconds or less, I'm free."

Tue, 11/20/2012 - 18:13 | Link to Comment AGuy
AGuy's picture

My guess is that people are exiting stocks and putting the cash into savings accounts. They are either cashing out stocks because of the pending capital gains tax, or because the stock market has been declining since QEternty was announced. If you're not going to invest in stocks, where else to go? Bonds?

FYI:I know some is going to say "PMs!" Since the majority of people are not interested in PMs I am leaving that off their option list. If someone isn't interested in PMs they simply will not consider it an option. Perhaps the majority  plan is also to reinvest back into stocks after the correction is over, so savings makes sense for a short term place to park their cash.

Tue, 11/20/2012 - 18:18 | Link to Comment WhiteNight123129
WhiteNight123129's picture

China retail, India Retail, indonesia retail (you can look at financial statements of bank like danamon, they ahve a huge Gold collateral lending business for retail), Vietnam retail is buying. The west population has become the dumbest. When the west retail goes into Gold it will be the most difficult phase for Gold, that is the one we have to kiss buy-back PMs and find alternatives.

 

 

Tue, 11/20/2012 - 18:20 | Link to Comment fonzannoon
fonzannoon's picture

Why not just keep it in their money markets inside their managed accounts if it is for short term? Better yet why not buy an extremely short term treasury etf? Pulling that money from the market and putting it into the bank takes more work. Someone would only do that if they had no intention of going back into equities anytime soon.

Tue, 11/20/2012 - 18:41 | Link to Comment NotApplicable
NotApplicable's picture

Put it back in???

Why would somebody further risk their ponzi winnings within the ponzi?

You're confusing a rigged casino with its facade (captial formation market).

It's a Madoff World out there. You either steal succesfully, or you're stolen from.

Got OPM?

Tue, 11/20/2012 - 18:58 | Link to Comment ArkansasAngie
ArkansasAngie's picture

Apparently

Gawd dammit

What's a consistently ethical/moral person to do?

Tue, 11/20/2012 - 20:47 | Link to Comment UP Forester
UP Forester's picture

Buy ammo.  It's still cheap, you can still get it, and the price will only go up.

Sure, you can't eat it, but you can eat what you use it on....

Tue, 11/20/2012 - 23:21 | Link to Comment Uchtdorf
Uchtdorf's picture

I refuse to eat zombies.

Wed, 11/21/2012 - 08:19 | Link to Comment TuesdayBen
TuesdayBen's picture

They don't refuse to eat you.
Better with heavy chicken wing sauce.

Wed, 11/21/2012 - 01:39 | Link to Comment Manic by Proxy
Manic by Proxy's picture

Zombies? If so, we definitely need a good cookbook - like "The Walking Dead Compendium: From Butchery to Barbecue".

Wed, 11/21/2012 - 03:17 | Link to Comment MsCreant
Tue, 11/20/2012 - 20:23 | Link to Comment Dawnofinsanity
Dawnofinsanity's picture

Could there be an algo's on savings accounts?  It doesn't make sense.  It could be a hedge against the market crashing but alas the 3.3% isn't very inticing. 

Tue, 11/20/2012 - 20:03 | Link to Comment AGuy
AGuy's picture

I believe money market accounts are including in the savings account category. There is really no difference between a MM account and short term Treasury ETF, since most MM invest in short term USG debt. The one difference is that if you invest in an ETF your going to have to pay a trading fee to buy into it. Generally when you cash out stocks the funds are automatically deposited into a MM or savings account.

Tue, 11/20/2012 - 20:16 | Link to Comment fonzannoon
fonzannoon's picture

see Tyler's post above.

Tue, 11/20/2012 - 18:23 | Link to Comment lasvegaspersona
lasvegaspersona's picture

When I was 6 I had a passbook savings account. Do they still exist? Is this what muppets still use? I feel superior for not knowing this somehow.

Tue, 11/20/2012 - 18:37 | Link to Comment RobD
RobD's picture

We had a passbook savings account for our kids three years ago. Had a direct deposit going into it and it was getting zilch for interest so I pulled it and bought gold and silver for them. They have done pretty good since then.

 

Edit: Well until there recent canoe accident they had at summer camp, I told them not to take there stash but you know kids, they never listen to old dad :)

Tue, 11/20/2012 - 18:41 | Link to Comment NotApplicable
NotApplicable's picture

Darn kids, just won't stop playin' with it!

Tue, 11/20/2012 - 19:11 | Link to Comment knukles
knukles's picture

Good point.

Wash sales... sell now, lower tax rate, wait (what is it, 30 days, still?) repurchase establishing higher new tax cost basis.

Tue, 11/20/2012 - 20:21 | Link to Comment Harbanger
Harbanger's picture

Stock, bond and cash holders are going to get CRUSHED.

Tue, 11/20/2012 - 18:53 | Link to Comment ArkansasAngie
ArkansasAngie's picture

No ... muppets aren't smart enough to be in cash.

Something big this way cometh.

Entrails reading r us.

Tue, 11/20/2012 - 18:53 | Link to Comment CashIsTrash
CashIsTrash's picture

you rang??

Wed, 11/21/2012 - 01:53 | Link to Comment archon
archon's picture

The main reason inflation has been so tame is that all the liquidity out there is not in the hands of the consumers.  The last thing you want right now is to unleash a flood of liquidity into an inflationary market.  A massive transfer of liquidity into savings concerns me, since that could trigger a spike in inflation if people start spending it.

Tue, 11/20/2012 - 21:47 | Link to Comment stocktivity
stocktivity's picture

somehow it's "Sandy" related

Wed, 11/21/2012 - 03:19 | Link to Comment MsCreant
MsCreant's picture

A real beach.

Tue, 11/20/2012 - 22:20 | Link to Comment stockscooter
stockscooter's picture

FDIC is unlimited protection if you don't except any yield.  The big boys just protected some big money.  This ain't the little guy...

Wed, 11/21/2012 - 06:15 | Link to Comment Cian
Cian's picture

10:1 electronic to physical?! QE infinity during a massive liquidity trap aka money magnet. Talk about an inflation time bomb. Bernanke is like the guy who's jumped off the cliff attemting to fly... So far so good, so far so good, SPLAT. Lets hope he has a bag of tricks ready to roll out when that wall of money comes flooding out. My bet is hedge yourself for inflation and get a black suit out out for Fiat's funeral.

 

Tue, 11/20/2012 - 17:52 | Link to Comment SMG
SMG's picture

It's almost like they get important information before the rest of us...nah, that would be cheating.

Tue, 11/20/2012 - 17:53 | Link to Comment r3ardensteel
r3ardensteel's picture

And they would get thrown in jail as soon as they're found out and not be given seats in government instead...right?

Tue, 11/20/2012 - 17:59 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

With the SEC House of Sex, one may never know.

Tue, 11/20/2012 - 18:22 | Link to Comment JPM Hater001
JPM Hater001's picture

Mother nature knows and she is a scornful bitch at times.

Tue, 11/20/2012 - 18:57 | Link to Comment IndicaTive
IndicaTive's picture

It's not nice to fool Mother Nature....

http://www.youtube.com/watch?v=LLrTPrp-fW8

Tue, 11/20/2012 - 21:16 | Link to Comment Jugdish
Jugdish's picture

House of sex? You mean house of masterbaters. The dudes sit around and watch porn and chronicly masterbate. House of Masterbaters.

Tue, 11/20/2012 - 17:52 | Link to Comment eatthebanksters
eatthebanksters's picture

My question is: are banks as safe as twinkies?

Tue, 11/20/2012 - 18:12 | Link to Comment cossack55
cossack55's picture

The life span of a Twinkie far exceeds that of any non-TBTF bank.

Tue, 11/20/2012 - 18:24 | Link to Comment JPM Hater001
JPM Hater001's picture

Twinkies will make it through the apocalypses...Banks?  Meh...

Tue, 11/20/2012 - 23:30 | Link to Comment Uchtdorf
Uchtdorf's picture

Hey, somebody dropped a Pop-Tart on the sidewalk near my home recently. I left it there to see what would happen. Three weeks later it was still there. Not even the ants would eat it in all its maple frosting wonder.

Tue, 11/20/2012 - 17:54 | Link to Comment woggie
woggie's picture

the beast is on the gobble and all that matters is we're all headed for it's belly
http://youtu.be/ntmthFyaYzY

Tue, 11/20/2012 - 17:57 | Link to Comment The Proletariat
The Proletariat's picture

Funny....I just parked some more savings in bullion...stored on a boat...

Tue, 11/20/2012 - 18:00 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Be careful. There's been a massive wave of boating accidents, as well as thefts from boats, as well.

Tue, 11/20/2012 - 18:39 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

I had to sink 3 decoy boats just to keep the banksters away.

Tue, 11/20/2012 - 19:12 | Link to Comment knukles
knukles's picture

I saw those jokes... "waves" of boating accidents...

Tue, 11/20/2012 - 20:39 | Link to Comment sosoome
sosoome's picture

They'll make boat accidents illegal, watch.

Tue, 11/20/2012 - 23:02 | Link to Comment logically possible
logically possible's picture

They'll just start taxing boating accidents. That will be one of the next Harry Reid bills put before the senate.

Wed, 11/21/2012 - 03:22 | Link to Comment MsCreant
MsCreant's picture

Random black hole, who knew?

Tue, 11/20/2012 - 17:56 | Link to Comment Dr. No
Dr. No's picture

Makes sense.  The 1% are liquidating capital gains before the tax hit.

Tue, 11/20/2012 - 18:09 | Link to Comment buzzsaw99
buzzsaw99's picture

the slope of that line has been steady for FOUR YEARS

Tue, 11/20/2012 - 18:27 | Link to Comment kaiserhoff
kaiserhoff's picture

I think I've seen that graph before..., oh yes, gun sales.

Tue, 11/20/2012 - 22:43 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Four years... yes. Somewhat of a puzzle. Well, it isn't due to me. Tomorrow I will put a bit over 2K into bank checking acct to cover the check I wrote for annual home tax.

Most people that I know have only a bit in the bank for a month or so of routine expenses.

four yrs... ?

 

Tue, 11/20/2012 - 18:14 | Link to Comment dwdollar
dwdollar's picture

They don't have to put it in a savings account to mark it as a sale.

Tue, 11/20/2012 - 18:32 | Link to Comment Pejorative Requiem
Pejorative Requiem's picture

Bingo

Tue, 11/20/2012 - 17:57 | Link to Comment gamera9
gamera9's picture

FDIC insured, Sleep well,

Tue, 11/20/2012 - 20:49 | Link to Comment Zero Govt
Zero Govt's picture

What, another Govt program nobody trusts?

..someone cut the Govt a break... like neva.

Tue, 11/20/2012 - 17:58 | Link to Comment Dre4dwolf
Dre4dwolf's picture

Lol ratards save in a bank account, worst place to put anything.

Buy a safe stick it in your wall / sleep well, and when the bank runs happen and the banks are closed you can sit home drinking hot chocolate instead of waiting on line like a clown.

Tue, 11/20/2012 - 18:17 | Link to Comment Wakanda
Wakanda's picture

Hot chocolate?

Tue, 11/20/2012 - 18:28 | Link to Comment SokPOTUS
SokPOTUS's picture

...with Vodka...

Tue, 11/20/2012 - 18:39 | Link to Comment RobD
RobD's picture

Marshmallow flavored Vodka...Wife says it's great in hot chocolate.

Tue, 11/20/2012 - 22:34 | Link to Comment jomama
jomama's picture

with dark rum.

Tue, 11/20/2012 - 17:58 | Link to Comment Wakanda
Wakanda's picture

"Perhaps ask them why they did it..."

OK 1%, why did you park the FRNs in the banks?

Tue, 11/20/2012 - 18:28 | Link to Comment Raymond K Hessel
Raymond K Hessel's picture

I owe a dollar plus you owe a dollar is a wash.

Tue, 11/20/2012 - 19:13 | Link to Comment knukles
knukles's picture

No no no...

You both owe your dollars to me!

Tue, 11/20/2012 - 22:24 | Link to Comment stocktivity
stocktivity's picture

It's all Bullshit!

 

Tue, 11/20/2012 - 23:30 | Link to Comment Mary Wilbur
Mary Wilbur's picture

I need to pay off my mortgage.

Tue, 11/20/2012 - 17:59 | Link to Comment fonzannoon
fonzannoon's picture

Who knows why they did it. I don't think there is a coordinated stock market crash coming if that is what is being implied here. What interests me more, is when we get NIRP, will those people pay the bank to hold their money? Or withdraw those assets and decide to just hold cash and perhaps hard assets?

 

Tue, 11/20/2012 - 19:02 | Link to Comment ArkansasAngie
ArkansasAngie's picture

Philosophically, I simply cannot swallow NIRP. 

 

Tue, 11/20/2012 - 19:47 | Link to Comment Urban Redneck
Urban Redneck's picture

You wouldn't have negative rates in a deposit account, it would create a bank run which the banks cannot afford.  There might be a transition to simple non-interest bearing accounts, particularly if there is some quirky resolution to the deposit insurance expiration.  At the end of the day, banks can get medieval literally park cash in their safes, just like their customers, instead of converting the deposit to digital and searching for NIM in the ocean of NIRP which can be fatal, they'll just make up for it with higher fees...

Tue, 11/20/2012 - 20:16 | Link to Comment fonzannoon
fonzannoon's picture

You would think so and I would have agreed. Now I think people would pay a few bps for the privelage of having a TBTF safeguard their money. Wonders never cease.

Tue, 11/20/2012 - 20:44 | Link to Comment Urban Redneck
Urban Redneck's picture

Small customers usually have fewer options than large customers.  But the fact is that every revenue and expense in a banking operation is converted to an interest rate for internal discussion (i.e. fees +100bps, branch ops -90bps), so if the CM guys or the Fed go nuts and start saying -25bps overnight, then they'll find an offset, but even at only 10-1 leverage there's only so many of the smaller customers that the bank can afford to lose before TSHF.

Tue, 11/20/2012 - 22:49 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

NIRP? It can be worse than NIRP.

TPTB have discussed 'time dated money' that is worthless if not spent prior to the date stamped on the FRNs.

Question: Is the 'date stamp' applied when the money is withdrawn from a bank savings acct ? When a pay check is converted to cash ? When a pay check is deposited in bank ?

Lots of questions...

Tue, 11/20/2012 - 18:01 | Link to Comment kito
kito's picture

man this rabbit hole gets weirder by the day.............now "anti" bank runs are as ominous as bank runs............i give up..............

Tue, 11/20/2012 - 18:05 | Link to Comment fonzannoon
fonzannoon's picture

No way Kito I think this plays right into your theory. Money flows to the bank first. NIRP kicks in with higher tax rates and that money leaves the bank, finally, in the form of CASH. Thats when fractional reserve banking gets nailed.

Tue, 11/20/2012 - 18:41 | Link to Comment LasVegasDave
LasVegasDave's picture

indeed.  think of the bank as the first floor window, and the ground as the end of fractional reserve banking.

those bags of cash are falling past the windows outside floors ten through two

the fed sees the cash, but doesnt see the ground coming up at 100 mph.

once that bag of cash hits the ground there will be a mad scramble to withdraw it to buy AG, AU, .308 Winchester and farmland.

God speed m'boy.

 

Tue, 11/20/2012 - 20:27 | Link to Comment CPL
CPL's picture

Actually it's weirder than that. 

It's an indication that the mob believes there will be an interest rate jump which is about the worst thing that can happen for anyone that owes money and bond schemes.

Tue, 11/20/2012 - 18:45 | Link to Comment kito
kito's picture

yes fonz, for the average person, you are correct. i know people here shiver when i say it, but physical cash is still one of the kings..............you want to have a good pile of it OUTSIDE the banking system......get it while you can...........as far as nirp for large companies, it seems corporations with huge amounts of digi-dollars will have no choice to suck it up and pay to have their digital dollars parked in the bank.....they are too scared to gamble........they cant remove it physically from the banks...these companies dont see any reason to invest it in a lifeless economy........so they sit and wait, sit and wait, sit and wait.............................

Tue, 11/20/2012 - 18:59 | Link to Comment fonzannoon
fonzannoon's picture

Let me tell you something man. Seeing normal people that I run into everyday smashing their fists on the ATM machine in the days after that storm when anyone that was open was taking cash changed the way I look at things. You know I am a big PM fan but I was always open to the idea of cash. Now more than ever.

Tue, 11/20/2012 - 19:23 | Link to Comment kito
kito's picture

i would have at least enough to cover the mortgage/rent, taxes and necessities (although you shouldve stocked up on those by now so you dont need as much later on) for at least 6 months.......OUTSIDE the bank.

Tue, 11/20/2012 - 19:27 | Link to Comment fonzannoon
fonzannoon's picture

When that storm hit they shut down every bridge and tunnel. There was no way off this island. So i need everything you said plus a boat/helicopter.

I decided I am outta here. Where I don't know. But If TSHTF and I am the only one leaving shoprite with my purple hat and cane and glass shoes with goldfish in them the people around me are going to know somethings up.

Tue, 11/20/2012 - 19:42 | Link to Comment kito
kito's picture

ha ha!! nice fonz...............

Tue, 11/20/2012 - 20:04 | Link to Comment Big Corked Boots
Big Corked Boots's picture

I endured trips to see the relatives in NJ and PA all thru my childhood. My father, God rest his ignorant soul, declared that he would never live in places like that. Lawn Gyland was home. He wasn't too happy when yours truly, at the age of 13, displayed a knowlege of geography by asking why it takes 2 to 3 hours to drive to the mainland United States. And that was Fort Lee, mind you.

Today, someone in a towel writes an email about a bomb and fucking Bloomberg mobilizes his troops by sealing off the exits. NFW I would ever live on that overpopulated sand bar now.

If you have to be in the NY area, and can tolerate the taxes and leftist state government, then Hunterdon County, bitchez. If not, let us all know where you end up - we might like to try it.

 

Tue, 11/20/2012 - 20:31 | Link to Comment kito
kito's picture

hunterdon is great call....our family has been looking there...........right across the border in bucks county is probably better............

Tue, 11/20/2012 - 20:38 | Link to Comment fonzannoon
fonzannoon's picture

Kito I took my daughter to sesame place this summer, is that in bucks county?

Tue, 11/20/2012 - 20:49 | Link to Comment kito
kito's picture

dont know, lets google it.............

Tue, 11/20/2012 - 20:55 | Link to Comment fonzannoon
fonzannoon's picture

I belive it is, sorry did not mean to ask you to do my homework, was not sure if you knew off the cuff.

Bucks County eh?

My mother in law works for a huge company in Cherry Hill NJ. She just got word her job was moving to somewhere called "King of Prussia". I checked it out.  Actually seems like a decent spot.

Tue, 11/20/2012 - 20:54 | Link to Comment kito
kito's picture

yep....but further out there..........i was thinking right by the nj/pa border like new hope, in the lehigh valley........

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