My eight-year-old followed his elders’ advice and started a bank account. In Washington Mutual.
Bonds! Chattels! Dividends! Shares! Bankruptcies! Debtor sales!
Opportunities!
Thank God for the New Deal.
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13 comments
September 25, 2008 at 10:56 pm
bitchphd
Yeah, that’s where PK’s savings account is, too. Oops!
September 25, 2008 at 11:05 pm
Colin
Upsides:
1. He’s not a WaMu shareholder.
2. It’s not every day you get to be part of the greatest bank failure in history.
3. He can now say he banks with J.P. Morgan.
4. Excuse me, J.P. Morgan Chase.
5. If he wants out, state-owned AIG offers lovely annuities.
September 25, 2008 at 11:39 pm
ari
All of our money, including the kids’ accounts, is (was?) at WaMu. Does anyone know what comes next? Am I allowed to make a run on the bank tomorrow? How about a jog? Or will the reanimated corpse of J.P. Morgan meet me at the door, menace me with a gold-tipped cane, and call me a filthy Jew (this is unfair, of course, as the House of Morgan was in cahoots with the Rothschilds, right?).
September 25, 2008 at 11:59 pm
andrew
FDIC info page.
September 26, 2008 at 8:11 am
Fats Durston
I’m so glad I haven’t been frittering away all my excess cash in “savings”. Take that, industrious ants!
September 26, 2008 at 10:43 am
bitchphd
I’ve been sort of thinking of making a run on WaMu for a while now, but having just opened a new savings account (mostly for the purposes of protecting ourselves from their extortionate overdraft fees, plus trying to collect enough $ to cover closing costs), I’m going to just trust in the New Deal.
It was kind of a challenge yesterday trying to explain to PK what it means when a bank fails, though. If Eric has any clever suggestions about how to make that clear to a kid, please share.
September 26, 2008 at 10:55 am
Vance
I guess I would start with the concept of an account. To the customer, it’s as if the bank just kept our money in a pile. But of course the bank doesn’t really do that. And therefore they don’t have all that money on hand. Have you gotten this far?
September 26, 2008 at 12:10 pm
KRK
I agree with Vance’s starting point. I recall being terribly disappointed as a kid when I went to withdraw money from my savings account and the teller just took some bills out of the drawer rather than going into the very impressive vault to fetch my own personal money.
September 26, 2008 at 12:12 pm
Sybil Vane
Don’t run on WaMu. It will take a lot of other failures before people really need to worry abotu FDIC insurance being moot, I think. A big run just increases market panic, thereby increasing the likelihood of that happening.
September 26, 2008 at 3:03 pm
bitchphd
Vance, yes, he already knows that. It was the distinction between “the bank failing” and “but the people who will lose money are the stockholders, not the people who have deposits in the bank” that was a little tough.
September 26, 2008 at 8:51 pm
Elyse Grasso
I’ll admin I never saw the whole movie until I was an adult, but there are some bits of “It’s a Wonderful Life” that seem to do a fair job of explaining how banks work.
Kind of depressing to have that particular aspect of the movie become so topical…
September 26, 2008 at 9:42 pm
bitchphd
Oh goody, now the bank that’s taking care of our mortgage seems to be in trouble. I actually do sort of wonder what will happen to this house buying plan if they go under. Hmm.
September 27, 2008 at 12:57 am
Vance
B, I don’t think the fact that ownership of the bank is mediated by stock is essential here….if there’s a point about loss I’d want to make to him, it would be about deposit insurance. But I’m not speaking from experience (my daughter is 4, and without meaning to, I seem to have put off teaching her about money at all so far).