Which banks are safe to maintain deposits?

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PURPLEHAZE_IHB

PURPLEHAZE_IHB

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I know that there is FDIC insurance for deposits up to 100k. However considering the probability that a lot of banks might face a lengthy liquidity crisis that could result in bankruptcy; which banks might be safer to put your money in? I currently use Bank of America and Wamu.
 
<p>I cannot speak for all banks. I will tell you what we did...</p>

<p>We pulled all cash used as 'float' from BoA and Wells Fargo and placed it in the home safe. We took the 'savings account' over to an HSBC high-interest account and enable bank-to-bank transfers to accounts at WF, BoA, and USBank so that if ANY of the 3 domestic banks fail, we can transfer our savings to one of the others and pull the cash out from a local branch.</p>

<p>I'm also flirting with the idea of opening an account at a Canadian bank, since we live so close to the border, to provide another withdrawal point in case things get so dicey that I don't trust any domestic bank. We went with HSBC because they are global, but not headquartered in the U.S. That may not prove to matter, but it helps me sleep on the weekends.</p>
 
<p>I was indeed being sarcastic to a degree tulip. No bank is really safe, especially in the event of a bank run. </p>

<p>IMO, keep balances under $100K and go with a big bank. Bank of America and Chase would probably the best choices given they've both taken one for the team recently. </p>
 
I have long heard that Farmer's & Merchants was a very conservative bank.



For any bank you are considering, I'd suggest pulling up their financials as filed with the FDIC. You can do so athttp://www2.fdic.gov/idasp/main.asp. These reports also discuss derivative exposure.



If one were to look up Farmer's & Merchants, you would type the bank name in the "Name" box and select CA as the state. From there it will give the CA banks with that name (the one I was talking about is located in Long Beach).
 
<p>i know citibank has been in the news but i would go with them. they are the biggest and if they go down.... then the U.S. dollar won't be worth anything anyways. hahahhaaa plus the arab and the chinese are in for like 10 billion++ dollars. i am sure they will sink more money in to save it. just my two cent.</p>

<p>BofA is also a good bet also. </p>

<p> </p>

<p>my vote would be bofa and citi.</p>

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<p> </p>
 
<p><em><strong>Good point about Citibank - with the interest expressed by international investors, it might be a safer bet</strong></em> </p>

<p>Might want to ask the guy who will lose over a Billion dollars about that idea: <a href="http://www.forbes.com/business/2008/03/17/bear-lewis-cayne-biz-billies-cx_af_0317bankbillies.html">Joe Lewis holds 11.1 million shares of BSC</a> </p>

<p><em>Lewis holds 11.1 million shares of Bear Stearns. He paid about $1.2 billion for the stake. Its value is now $22.2 million. Prior to the Bear Stearns meltdown, Forbes estimated Lewis is the world's 368th-wealthiest person, with a fortune of $3 billion.</em> </p>

<p>My point is: if you are basing the solidity of an instution by international investment in that institution, you need to rethink that. At some point, those investors are going to stop throwing good money after bad. Citi, in particular, has already had to go begging around the world for help to stay afloat. Do you really think a second round of begging will provide fruitful results? International investment didn't keep BSC from tanking and there is no guarantee it will help anyone else.</p>
 
<p>mr. lewis is leverage out to the max.... in his BSC investment. well that is the rumor being floated out there. he can vote against it but i still think the deal will go though.</p>

<p>Citibank is still fundmentally a good company with other product to sell. they have a strong wealth management. BSC well..... when they reached out for help nobody wanted to help them? why is that? probably because they won't disclosure their info and all that bad stuff on their books, or maybe they did disclosured their crappy book and people got scare. graphix posted some numbers on BSC that was worse then new century. </p>

<p> </p>

<p>i am not saying citibank can't go under.... i am just saying if citi goes under we all have alot of problems. </p>

<p> </p>
 
<p>jb,</p>

<p>Maybe we aren't looking at the same info. I know Citigroup has a wide variety of businesses operating under the one roof, but BSC wasn't just invested in RMBS. If they were, JPM wouldn't have bothered offering them anything. While Citi is bigger, it's long term exposure is also bigger due to the same diversification that you laud them for having. First, it took all those SIVs back onto it's books; second, it has a huge exposure to credit card debt; third; the loans they hold on their commercial bank books are a complete unknown as far as performance right now and in the near future, but as they just laid off 185 Home Equity salespeople I think it is safe to assume that part of the business isn't generating much income; fourth, and this is the big one... Citigroup has an investment bank and, much like Bear Stearns, it is vunerable to the same kind of 'bank run' that caused BSC to go under.</p>

<p>I don't have specific information that they are teetering on the brink of failure, but when you have to write down $140 Billion dollars in losses, you don't inspire me to trust you with more money. They are at least as vulnerable as any other bank, and their recent moves lead me to believe that they are desperately trying to avoid BSC's fate, with full co-operation from the the powers-that-be around the globe. I hope that it works out well, but I am not going to recommend people put their own money on the line.</p>
 
<p>I can't fathom someone investing a billion dollars in a company--a 3rd of their net worth--without having an inkling of how bad things could get. Wow. How many billionaires have lost a third of their net worth overnight? Even Marth got tipped off. It's like a Southwest Airlines commercial. "Want to get away?".</p>
 
Nude- are you saying that citibank wrote down 140 billion dollars in losses? cause last i check the total write down for everyone in the industry was around 140 billion total.





All i am saying is if citibank goes under there won't be talk of a domino affect it will be the great depression all over again. the money you put in any bank will probably be worthless. The way i see is that citibank will be the bank of the arabs.





As for taking the SIV onto their books only means that they are able to do it. only strong banks are able to do it. HSBC did it too. As for JPM taking on BS.... i think the fed tap them to do it.... the fed made them an offer that they can't refuse. sorta like the mafia. Just like BofA was tap to take on Countrywide.... Not sure if the deal will go though... maybe it is a show of confidence for the street.





anyways.... that is my recommendation.... and i am putting my money there so...... if it goes down i will be out of luck too. and i will be one piss off motherF. hahahahahaaaa






 
<p>Jb, sorry, I wasn't clear about the $140 Billion... I was referring to the industry as a whole.</p>

<p>Even in the depression, not all banks failed and the dollar was never worthless. It was also the only form of legal tender, and it will remain so if things get to the level of major retail bank failures. I'm not trying to argue with you, just explaining that Citi is not immune to a BSC-style collapse. </p>

<p>The reasons you give for their durability are the same reason I feel they are at risk. Taking those SIVs back onto their balance sheet signifigantly reduced their available reserves because they had to act as a backstop for their funding, they had $33 billion dollars in derivities as of 12/31, they just replaced the head of their investment bank division and fired the entire home equity division in Iowa, they had to go begging for funds to recapitalize, their stock price is in the toilet, and they look like a prime target for anyone who wants to slice and dice them up into pieces for sale. When people look around for banks that might fail due to prolonged stress, Citi is right up there with WaMu, Lehman, and Merril Lynch.</p>

<p>again, I'm not trying to argue, just laying out what I see. Hopefully, it all amounts to nothing.</p>
 
I personally use Wells Fargo and HSBC. If these 2 banks go under, I think the whole banking industry would already be in the gutter and it wouldn't matter if you had deposited with BofA or Wamu. I also keep some $$ in Vanguard Prime Money Market, I don't think they're FDIC insured however.





Last year when I was in Taipei, I was watching TV at my grandparent's house and they showed some farmer crying about losing all his money. He didn't trust banks, so he buried his cash wrapped in plastic bags underground in his yard. But insects or worms got to it and ate everything. So, lessons learned, don't bury your cash.





I do advocate keeping a small (1%-2%) of your assets in precious metals.
 
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