Bank Failures = Depression?

[DianaR]

We saw one of the largest banks in the USA - Indymac -, fail about 10 days ago. Anyone with over $100,000.00 in the bank lost their money. Bank failures were a hallmark of The Great Depression in the 1930's, I hope I have the date right.

Regardless of how the government would like to spin this, the only reason most people haven't been wiped out is the presence of FDIC insurance.

Do you think the US government is trying to hide how bad things really are? What do you think the government needs to do to offset the tough times we will grapple with this coming winter?

[CashTalksBSWalks]

I'm not sure. It certainly would be ONE of the reasons for a depression to occur. However after the last impression the government put alot of measures in place to make sure that it never happened like that again.

[flowerhorn]

If more banks or financial institutions call it a day, not only we will have depression but recession as well. Imagine the amount of money that is involved when one of these institutions fail and the number of people it will pull down with it.

[DianaR]

Originally Posted by flowerhorn

If more banks or financial institutions call it a day, not only we will have depression but recession as well. Imagine the amount of money that is involved when one of these institutions fail and the number of people it will pull down with it.

I thought these were two steps in the same process, which is a slowing of gains, with a recession being less severe than a depression.

Am I wrong?

[elvenrunelord]

DianaH as far as I know, no one with over 100k lost any money yet. The fed stepped in and shored the bank up while nationalizing it. Much like i suspect will happen to many banks in the next couple of years

[BrendaMarie]

I definitely think that things are much worse than the US govt wants to let on. Gas prices are ridiculous, food prices are rising and banks are failing. I don't think we're doomed but I definitely think that we're in trouble.