Will the Banks Run Out of Money? You Decide.

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Use this cash computer provided by y2knewswire.com

http://www.y2knewswire.com/cashcomputer.asp

-- sandi sand (sandihere@hotmail.com), March 08, 1999

Answers

While you're there, check out this excellent article, The Bank Blame Game

-- Online2Much (ready_for_y2k@mindspring.com), March 08, 1999.

And in a related theme. When the banks go down now they are spreading the cyber-terrorist cyber-hacker cause rather than thier inability to fix their systems

Cyber Terror Article from AP

I am generally not a conspiricy theorist, but this seems overly convient for gov "action".

-- LM (latemarch@usa.net), March 08, 1999.


Good article, I'm printing it out and giving it to a friend who manages a bank here in town.

-- bardou (bardou@baloney.com), March 08, 1999.

Results According to your assumptions...

You stated that working people would set aside $200 for day-to-day cash needs. That's a total of $27.8 billion in cash withdrawals.

You stated that households would cash out 0% of their savings (both savings accounts and mutual fund holdings). That comes to a total withdrawal of $0 billion.

You said that 0% of companies would reserve a two-week supply of cash to meet the January payroll. That comes to $0 billion.

You also said that businesses would withdraw 0% of their deposits. That's a total of $0 billion in cash withdrawals.

According to your numbers, this will be a total withdrawal of $27.8 billion.

You stated that the Fed would bring an additional $200 billion to the banks. This is on top of the existing bank reserves of $49.4 billion. This provides a total cash availability of $249.4 billion.

Summary: according to your assumptions, the banks will have a total of $249.4 billion in cash available. Cash withdrawals will be $27.8 billion.

Should your scenario come true, there will not be a depletion of cash.

-- OK let's (try@pollyanna.scenario), March 08, 1999.


Here's one that's a little more realistic (using their default answers):

Results According to your assumptions...

You stated that working people would set aside $3000 for day-to-day cash needs. That's a total of $417 billion in cash withdrawals.

You stated that households would cash out 10% of their savings (both savings accounts and mutual fund holdings). That comes to a total withdrawal of $33.3 billion.

You said that 15% of companies would reserve a two-week supply of cash to meet the January payroll. That comes to $18.8 billion.

You also said that businesses would withdraw 5% of their deposits. That's a total of $155 billion in cash withdrawals.

According to your numbers, this will be a total withdrawal of $624.1 billion.

You stated that the Fed would bring an additional $200 billion to the banks. This is on top of the existing bank reserves of $49.4 billion. This provides a total cash availability of $249.4 billion.

Summary: according to your assumptions, the banks will have a total of $249.4 billion in cash available. Cash withdrawals will be $624.1 billion.

Should your scenario come true, the banks will run out of cash. In fact, the banks will be $374.7 billion short of cash.

-- a (a@a.a), March 08, 1999.



Why would companies withdraw cash to meet payroll? They'll issue checks just like they always do.

__________________________________

Results According to your assumptions...

You stated that working people would set aside $500 for day-to-day cash needs. That's a total of $69.5 billion in cash withdrawals. [Red Cross suggestion]

You stated that households would cash out 10% of their savings (both savings accounts and mutual fund holdings). That comes to a total withdrawal of $33.3 billion. [Approx. % over-reacting to Y2K]

You said that 0% of companies would reserve a two-week supply of cash to meet the January payroll. That comes to $0 billion.

You also said that businesses would withdraw 0% of their deposits. That's a total of $0 billion in cash withdrawals.

According to your numbers, this will be a total withdrawal of $102.8 billion.

You stated that the Fed would bring an additional $200 billion to the banks. This is on top of the existing bank reserves of $49.4 billion. This provides a total cash availability of $249.4 billion.

Summary: according to your assumptions, the banks will have a total of $249.4 billion in cash available. Cash withdrawals will be $102.8 billion.

Should your scenario come true, there will not be a depletion of cash.

-- OK (somewhat@more.realistic), March 08, 1999.


Our small business will have some cash on hand to cover at least Jan and Feb 2000, but we are probably an exception, composed of hard-core GIs.

Banking integrity is a dice roll that is enormously dependent on what actually happens Y2K-wise over next six months (cf April 1 and beyond), state of the markets and the amount/degree of panic post-October.

I see panic and bank collapse as, most likely, a post-Y2K phenomenon, due to corruption of data and resulting loss of confidence (see Andy's banking thread of recent vintage) and the result of parallel panic that takes hold as supply chain begins to unravel in late January 2000.

-- BigDog (BigDog@duffer.com), March 08, 1999.


I don't see anybody figuring in the effects of foreign banking collapses and hyperinflation in those economy's. How much dollar amount of foreign held bonds will be redeemed as cash strapped investors try to raise cash? How much demand for U.S. currency will be generated overseas as a result of this same hyperinflation and instability of local currencies? It seems to me these are some MAJOR figures not being included in your calculations. As are defaults on foreign and domestic loans. As unemployment increases along with defaults the ratio of incoming to outgoing cash will decline dramatically. Can someone with banking experience address these concerns?

-- Nikoli Krushev (doomsday@y2000.com), March 08, 1999.

One other point I forgot to bring up. I don't know whether this has any bearing or not but for the last few years my idiot box has been flooded with advertisements from the Auto Industry for super low interest rates on their financing of new cars. This has come to a complete halt over the last two months. I noticed this trend several weeks ago and have been actively looking for these types of commercials, and they are non-existent. Has anyone purshased a new car in the last month? What is the going interest rate? Is it fixed or floating? Is bank financing tightening up on these loans?

-- Nikoli Krushev (doomsday@y2000.com), March 08, 1999.

As to the low interest rates offered by automakers, this is a seasonal phenomena, usually to unload excess inventory. With the current economy, they are having no trouble peddling their wares.

--Lurker

-- Lurker (eye@spy.net), March 08, 1999.



All of you are of the assumption that a family is going to withdraw "only" 3000. to "get by". Those who think the worst case is going to occur is not going to have only 3K in cash on hand. I know familys who are selling vacation homes and drawing it all down in cash, one has over 20k liquid even after all y2k purchases of related goods. Static analysis only works on static people. nuff said.

-- jimmy gonnabuyit (gotitalready@mybank.com), March 08, 1999.

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