There’s been so many articles lately on the Bank Crisis that it’s difficult to really cover everything so I’ve mainly been trying to concentrate on how the crisis affects the public at large. Specifically it affects the public in three ways:

1: Public outcry or fear. People express anger and resentment at what they perceive to be immoral, poor, or illegal activity; they also fear what they don’t understand.

2: Bank runs and general operational confusion are more common for companies in transition. Banks in this case may lose or misplace customer accounts, not have the money to cover withdrawals or give loans, or they may not be adequately staffed to meet day to day needs.

3: Instability in the marketplace. Often, due to the above factors, stocks may drop in the sector, along with peoples 401Ks, IRA’s, and retirement savings.

With the governments quick decision and sale of Washington Mutual to J.P. Morgan Chase & Co, and the subsequent sale of Wachovia to Citibank or Wellsfargo…a varitable mess at this point…we’re looking at a banking shake up of not just large, but ginormous proportions.

From reading around the web, these last few banks aren’t expected to be the end of the situation, with quite a few smaller banks expected to enter into bankruptcy within the next few years. With the precedent set by WAMU and Wachovia, along with others, the US government has declared a free for all on bank buy outs that began with the bell and could continue for the foreseeable future. As things progress, I’m expecting that we’re going to see a lot of mergers, with larger, more conservative type lenders, gobbling up smaller banks with less conservative practices. Ultimately, this situation could bring a lot of stability to the banking system as a whole, but in the interim, it’s a problem that has a lot of people pulling their hair out in frustration and screaming at their television sets.

I think Donald Trump said it best,There is an expression, “Cash is king.” In bad times, it’s perfectly fine to put your cash in a bank—although return rates are low, they are stable.

Yeah…what he said.