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Run on Banks, when's it going to happen here?

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Comments

  • Registered Users Posts: 6,723 ✭✭✭kennyb3


    Again no run - a run happens in a matter of days, but as i've said previously there is large scale capital flight

    If you look at boards or askaboutmoney and other such sights in Q3 & Q4 in 2011, this is fairly evident given the queries raised.


  • Registered Users Posts: 559 ✭✭✭Amberman


    I know what you're trying to say about the definition of a classic bank panic and what it looks like, with queues of grannies and taxi drivers getting their 5 grand out, but capital flight is a pre-requisite for a run. Happens every time.

    Smart money always exits first. Runs are caused by the masses...dumb money.


  • Registered Users Posts: 1,234 ✭✭✭Unrealistic


    kennyb3 wrote: »
    Again no run - a run happens in a matter of days, but as i've said previously there is large scale capital flight

    If you look at boards or askaboutmoney and other such sights in Q3 & Q4 in 2011, this is fairly evident given the queries raised.
    It was actually Q4 2010 when we came closest to a run. Take a look at the graph in the post above. That was when the Irish banks started implementing withdrawal restrictions or at least strictly enforcing withdrawal limits that had previously only existed on paper.


  • Registered Users Posts: 559 ✭✭✭Amberman


    Heres an excellent rundown of the actors and scenarios at play in Greece right now.

    If I was Greek, (or had Euros in Portugal, Italy, Spain...or Ireland for that matter) my Euros would be long since moved. Zero upside, potentially huge downside.

    Why risk it? I can't think of a single reason to leave money in the periphery...like a fast growing number of European citizens.

    http://www.zerohedge.com/news/forget-bazookas-here-come-tomahawks-and-howitzers-r-rated-walk-thru-greek-endgame


  • Registered Users Posts: 362 ✭✭RoverZT


    Amberman wrote: »
    Heres an excellent rundown of the actors and scenarios at play in Greece right now.

    If I was Greek, (or had Euros in Portugal, Italy, Spain...or Ireland for that matter) my Euros would be long since moved. Zero upside, potentially huge downside.

    Why risk it? I can't think of a single reason to leave money in the periphery...like a fast growing number of European citizens.

    http://www.zerohedge.com/news/forget-bazookas-here-come-tomahawks-and-howitzers-r-rated-walk-thru-greek-endgame

    What would you transfer it to?

    US dollars?

    Sterling?

    If you had 40k euro in your bank account what would someone do with it?


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  • Registered Users Posts: 559 ✭✭✭Amberman


    Dollars or Norwegian Krona would be my flight to safety picks...gold could get hammered in a Grexit...but you should seek expert advice before you do anything.


  • Registered Users Posts: 28,576 ✭✭✭✭_Kaiser_


    Here's a question then... say I have a loan with AIB and it goes under - what happens to that loan?


  • Registered Users Posts: 559 ✭✭✭Amberman


    Kaiser2000 wrote: »
    Here's a question then... say I have a loan with AIB and it goes under - what happens to that loan?

    The loan book will be sold by the administrators for the highest price they can get to try and return some money to the creditors. You're loan doesn't go to money heaven if thats what you're getting at.


  • Registered Users Posts: 28,576 ✭✭✭✭_Kaiser_


    Amberman wrote: »
    The loan book will be sold by the administrators for the highest price they can get to try and return some money to the creditors. You're loan doesn't go to money heaven if thats what you're getting at.

    No.. that only happens if you owe BILLIONS in this country :(

    As I've posted before though, unlike seemingly a lot of other people I don't believe that my/an individual's personal financial choices should be (made) the responsibility of others, but that answers my question so cheers :)


  • Registered Users Posts: 362 ✭✭RoverZT


    Amberman wrote: »
    Dollars or Norwegian Krona would be my flight to safety picks...gold could get hammered in a Grexit...but you should seek expert advice before you do anything.

    Thanks Amberman

    Any experts here?

    Doesn't Seamus work for a bank?


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  • Registered Users Posts: 559 ✭✭✭Amberman


    Kaiser2000 wrote: »
    No.. that only happens if you owe BILLIONS in this country :(

    As I've posted before though, unlike seemingly a lot of other people I don't believe that my/an individual's personal financial choices should be (made) the responsibility of others, but that answers my question so cheers :)

    They sell the book...all the loans together...not your individual loan. You'll still be responsible for the loan...as they will be sold on en masse by the bankrupt banks administrators.

    This happens every Friday night in the US. Small banks are going bust left and right and the loan and deposit books are being taken over by stronger banks...often at large discounts to intrinsic value, but thats besides the point.


  • Banned (with Prison Access) Posts: 10,087 ✭✭✭✭Dan_Solo


    mike65 wrote: »
    There will only be a run on the banks if enough people are panicked into withdrawing money. Lets try to not be that stupid.
    Ah yes, the confidence thing. If you think things are grand then they really are.
    As was said before, the banks have everybody's money as long as they don't all want it back.


  • Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    Dan_Solo wrote: »
    Ah yes, the confidence thing. If you think things are grand then they really are.
    As was said before, the banks have everybody's money as long as they don't all want it back.

    That is true at all times, which is why confidence is important. If people only withdraw what they usually use, the bank has enough money to cover it - if they all withdraw it at once from exactly the same bank, the bank fails.

    Similarly, a piece of paper or a lump of metal are only worth something as long as people are confident they are.

    cordially,
    Scofflaw


  • Closed Accounts Posts: 4,038 ✭✭✭Nothingbetter2d


    RoverZT wrote: »
    What would you transfer it to?

    US dollars?

    Sterling?

    If you had 40k euro in your bank account what would someone do with it?

    swiss francs,

    canadian dollars (has a stable banking system)


    currencies i wouldn't change to

    us dollar - if the euro goes it will pull the usa into recession again

    uk pound - again if the euro goes the uk too will be fecked.


  • Registered Users Posts: 10,507 ✭✭✭✭dsmythy


    Damn, I have no plan to get my money out quickly. Luckily I've only got about a fiver in there to be worried about.

    What would happen to people receiving and spending weekly cash say, if the punt were to be reintroduced and rapidly devalue? Would their weekly earnings suddenly collapse or would it be irrelevant as the cost of goods and debts would collapse at the same time?


  • Banned (with Prison Access) Posts: 159 ✭✭kermit_the_dog


    swiss francs,

    canadian dollars (has a stable banking system)


    currencies i wouldn't change to

    us dollar - if the euro goes it will pull the usa into recession again

    uk pound - again if the euro goes the uk too will be fecked.


    if the euro were to crash and i dont think it will for a second , the american dollar would be the safest place to be , the american dollar is the ultimate safe haven , why else would it have soared in value this past nine months , its economy is nothing special , the euro was buying 1.45 dollars last august , today it will buy you 1.27 dollars


  • Registered Users Posts: 1,234 ✭✭✭Unrealistic


    dsmythy wrote: »
    Damn, I have no plan to get my money out quickly. Luckily I've only got about a fiver in there to be worried about.

    What would happen to people receiving and spending weekly cash say, if the punt were to be reintroduced and rapidly devalue? Would their weekly earnings suddenly collapse or would it be irrelevant as the cost of goods and debts would collapse at the same time?
    Their weekly earnings would collapse in real terms. The cost of goods that have any imported element (and that includes local agricultural produce that uses imported energy and fertiliser) would rise. What would happen to debts (whether or not they would be redenominated to the new currency or not) would need to be mandated by the government of the day.


  • Registered Users Posts: 6,326 ✭✭✭Farmer Pudsey


    Their weekly earnings would collapse in real terms. The cost of goods that have any imported element (and that includes local agricultural produce that uses imported energy and fertiliser) would rise. What would happen to debts (whether or not they would be redenominated to the new currency or not) would need to be mandated by the government of the day.

    Even though agriculture uses imported oil and fertlizer we export 90% of what we produce in agriculture also the SFP is denominated in euro's so it would be worth more in real terms. Our tourism industry would get the compedtive edge it needs if we got a 20% devaluation compared to France, Germany, Great Britian the US and the Scandanavian countries. Irish people would have no choice but to holiday at home for 2-3 years. Fishing would also get a boost as well as Fish farming.

    And maybe like they did from 1970-1985 well off people from GB and central europe would be back buying houses in the West and South of Ireland again,


  • Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    Even though agriculture uses imported oil and fertlizer we export 90% of what we produce in agriculture also the SFP is denominated in euro's so it would be worth more in real terms.

    Doesn't that make it nearly pointless? The net value added in Irish agriculture is not large, I think - see here, for example.
    Our tourism industry would get the compedtive edge it needs if we got a 20% devaluation compared to France, Germany, Great Britian the US and the Scandanavian countries. Irish people would have no choice but to holiday at home for 2-3 years. Fishing would also get a boost as well as Fish farming.

    All of which doesn't change the fact that people's material quality of life would fall dramatically as the cost of anything imported (and that's a lot) rose.
    And maybe like they did from 1970-1985 well off people from GB and central europe would be back buying houses in the West and South of Ireland again,

    That would be a good thing because...? I'm not saying it's a bad thing, it just seems an odd thing to cite as a positive.

    cordially,
    Scofflaw


  • Registered Users Posts: 1,234 ✭✭✭Unrealistic


    Even though agriculture uses imported oil and fertlizer we export 90% of what we produce in agriculture also the SFP is denominated in euro's so it would be worth more in real terms.
    Rather optimistic to assume the SFP would still exist, especially a Euro denominated one, in a scenario where Ireland had to exit the Euro.


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  • Registered Users Posts: 559 ✭✭✭Amberman


    Scofflaw wrote: »
    All of which doesn't change the fact that people's material quality of life would fall dramatically as the cost of anything imported (and that's a lot) rose.

    This is true. But your statement is incomplete. You neglect to mention the time horizon back to growth which is usually quite short.

    You can have a long, drawn out gradual decline, or a very short sharp declice like the UK when they exited EMU, Iceland when they "defaulted" or ...you can be Greece.

    Its a choice.


  • Registered Users Posts: 559 ✭✭✭Amberman


    Ireland has second largest google search volume for the term "bank run" in the world.

    http://www.zerohedge.com/news/google-shows-why-status-quo-powers-be-should-be-scared-very-scared

    Seems the cat is now out of the bag.


  • Closed Accounts Posts: 1,620 ✭✭✭_AVALANCHE_


    Amberman wrote: »
    Ireland has second largest google search volume for the term "bank run" in the world.

    http://www.zerohedge.com/news/google-shows-why-status-quo-powers-be-should-be-scared-very-scared

    Seems the cat is now out of the bag.
    singapore, united states, canada, india, Australia,

    You could shorten that graph right up and just put in a pic of the world.

    Pointless, no?


  • Registered Users Posts: 559 ✭✭✭Amberman


    Sure...move along, nothing to see here. ;)


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