The Banking Industry is the Fartherest Behind

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This comment and analysis by North on the banking industry unmasks the deception perpetrated on the American public. When will tha bank runs start I wonder?

Banking Industry Is the Furthest Behind Comment: The standard media analysis is that the banking industry is the most advanced of all the industries in y2k compliance. This is incorrect. It is the furthest behind.

But haven't the banks spent more money than any other? Probably. Then aren't they the furthest ahead? No. Why not? Here's why.

1. It has the oldest code, except for the U.S. military.

2. It has the most widely distributed code -- from central banks to depositors' accounts -- except for telecommunications.

3. It is an entirely digital industry -- numbers constitute the whole game.

4. The number of zeros in the industry's transactions is enormous, so that small percentage errors with other people's money can bankrupt the institutions that made the error.

5. It is the most international of all industries.

6. Of the banks in 190 "nations," most have done very little and started late.

7. Bad data are transmitted from one compurer through others, which in turn pass along the errors.

8. It is fractionally reserved: vast short-term debt to depositors, secured by illiquid assets.

9. It is dependent for much of its profits on the financial futures markets: more fractional reserves, meaning vast credit issued to the likes of Long-Term Capital Managent.

10. It must settle its inter-bank accounts daily -- no 60-day wiggle room: the threat of cascading cross-defaults.

11. It must have 100% compliance -- Alan Greenspan.

We can sense just how far behind this industry is by the press statements of bankers and politicians. Of no other industry is it said in public that fear could topple it, and therefore that it's the creditors' (depositors') responsibility not to demand payment, as guaranteed by the debtors. No other industry keeps telling clients not to be afraid, not to pull out, not to do irrational things like asking for fulfillment of promises made. No other industry has mobilized the politicians to come to its defense, day after day. The auto industry is silent. The water/sewer industry is silent. Only the electrical power industry comes close to issuing as many public assurances that everything is OK. No other industry uses such stupid arguments to defend itself: "You might get robbed." No other national industry is seriously talking about having to use Chevrolet Suburbans to make deliveries. ("Greenback, greenback -- we deliver!") No other industry has a Web page filled with links to articles with arguments to calm clients' fears about y2k. No other industry tells its clients to substitute something of zero immediate value in a crisis (print-outs of records) for something of high immediate value in a crisis (currency).

If you met two men, each with inner ear problems, each facing problems in maintaining his balance, and one had received an operation that reduced his problem by 50%, you might feel sorry for the other man. But if the first man makes his living as a high wire walker who works without a net, which one would you feel sorry for?

The FDIC is not much of a net. It does not insure banks. It insures depositors, and only in the United States. Who insures the FDIC? The U.S. government. How does the government collect taxes? By check.

It is mid-June. The industry is not compliant. No major money center bank has announced compliance. All the little regional banks have deposits in the money center banks. If they get scared and pull the money back home, this will paralyze the money center banks. When depositors in Peoria take out currency, the effects will be felt in New York City by the end of the business day.

When depositors in Tokyo do the same. . . .

Don't be fooled. The banking industry is the worst prepared of all industries to deal with y2k.

What is your opinion? Here are your options:

1. Bow before the ATM.

2. Use it.

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-- BB (peace2u@bellatlantic.net), June 19, 1999

Answers

I'm sure people will try to discredit this by co-relating this to his whack religious beliefs

-- zoobie (zoobiezoob@yahoo.com), June 19, 1999.

Now calm down everybody. Flint and Hoff are putting their capes on as we speak.

-- a (a@a.a), June 19, 1999.

Are those the two jokers that leap from tall buildings and plummet straight to earth at terminal velocity?

Muuuuhahahahahahahahaha

-- Andy (2000EOD@prodigy.net), June 19, 1999.


QUICK...someone get word to Deckers picnic that CAPTAIN DOUBLESPEAK is needed on the TB2K forum

-- (Robin@batcave.com), June 19, 1999.

#1. Most people in Peoria are not yet concerned enough to pull out much money, and it is far from sure that they ever will be this year regardless of how unwarranted their trust might be.

#2. Bank runs need not be allowed, so they won't be allowed. The government has granted itself virtually complete control should it ever wish to use it. And banks aren't even legally required to release deposits in cash. "You want your money? Fine, here's a cashier's check. Can't cash it anywhere? That's your problem."

The more I dwell on this the less I worry. I expect the finance industry to have major trouble, but not to collapse entirely. To me that would qualify as good news.

My money will be in cash and in a safety deposit box. Yes, I known the possible access problems that means but I prefer the possibility of temporary inaccessibility to the possibility of theft/loss. Call the warning about theft a red herring if you to, and I'll even agree with you - but it still concerns me more than the possibility of not being able to get to my money for a few days/weeks/months.

To me the finance industry is one area where doomers and pollies are equally likely to be wrong. Plenty of people are likely to get screwed to some extent but life will go on.

-- Gus (y2kk@usa.net), June 19, 1999.



Gus,

No scenerio has ever concluded that live would not go on. The question is the number that will and the quality of their journey.

-- Leslie (***@***.net), June 19, 1999.


All good points Gus. How many Americans do you know who keep and operate with cash only? Did you see the lines in Moscow? How many of Moscow's JQP owns guns? If the banks close their doors, what picture are you seeing now? Did you see downtown Denver after the Broncos won the Super-Bowl? Those folks were really, really HAPPY. Try taking off your sun-glasses.

-- Will continue (farming@home.com), June 19, 1999.

bullshit Gus.

-- number six (Iam_not_a_number@hotmail.com), June 19, 1999.

There's one mitigating circumstance-- a riot in winter is hard to sustain. Ask anyone who's ever stood on the curb watching the St. Paul Winter Carnival Parade at -15 F., with a good breeze blowing.

-- Tom Carey (tomcarey@mindspring.com), June 19, 1999.

-- Tom Carey wrote--

"There's one mitigating circumstance-- a riot in winter is hard to sustain. Ask anyone who's ever stood on the curb watching the St. Paul Winter Carnival Parade at -15 F., with a good breeze blowing."

That's why we build fires at elk camp. Suppose those nice folks will be able to locate anything to burn?

-- (cujo@baddog.com), June 19, 1999.



Pastor Brown:

I perceive the bank runs will start when a MAJOR crisis, completely unexpected, will shock the nation. There will be minor crises which will get full play from the media, but the American public will shrug them off with the Not In My Back Yard attitude.

I've encountered this NIMBY attitude when relating the 4 million gallons of raw sewage which were accidentally released in Van Nuys, California. Many were unaware this had even happened. Of those who knew, ironically, some "poo-pooed" the news. They weren't affected, so they didn't care, but they WERE amused.

I believe some MAJOR crisis will eclipse Y2K, and when it happens, those in denial, previously complacent and satisfied with their material wealth, will have REAL FEAR. They WILL panic because if they don't take action, they will starve and perish.

At that time I expect the banks will clamp down severely on cash withdrawals.

-- Randolph (dinosaur@williams-net.com), June 19, 1999.


Randolph has it about right, IMHO. No doubt, crowd control is a part of banking contingency planning...cash restrictions will be used before the banks are threatened...but they will be threatened anyhow by personal and business loan defaults, bad data transfers, etc.

-- Leslie (***@***.net), June 19, 1999.

Gus,

I disagree with your deposit box theory. I tried to convince my mom to withdraw most of her savings in 20's. She compromised, withdrew it in 100's and put it in a deposit box. The nice little lady at the bank assured her that in the event of a crisis she would still have access to it.

So, after banks have digitally failed (which is why you withdrew in the first place right?), you're gonna stroll down to the local branch, past the mob of angry customers that have lost everything, and leisurely extract a few bucks from your box?

LOL

-- Yeah Right (unsafe@deposit.box), June 19, 1999.


Keep in mind that cash itself is just an abstraction. Without a functioning economy behind it, money is just a pile of paper. This has happened before in history (the German hyper-inflation of the 1920s comes to mind), although the threat has never been on a world- wide scale like this. The question of whether your pile of greenbacks is in your closet or in your safe-deposit box may or may not be the most important issue.

-- Paul DiMaria (p_dimaria@hotmail.com), June 19, 1999.

Wake up! For a bank RUN to happen you have to have people that want to take there money out of the bank! Sence nobody knows or cares about Y2K, there will be no bank RUN! You here me?

-- Money (Lost@bank.com), June 19, 1999.


No, I won't be strolling to the bank in a scenario like that. I'm well prepared to live without that cash, or any cash. I'm prepared to live without grocery stores and electricity too. That cash is a part of my preps only for the less major Y2K possibilities. My comfort level is relying on it, not my security. Just because I expect a 7 doesn't mean I'm betting my life on it.

Some of my ideas might be more optimistic than yours, but I can supply myself the 4 necessities (food, water, shelter, heat) without any help from society ever again. Not just myself and my family but plenty of others as needed too. How many of you pessimists can do that?

I shake my head when I read posts from pessimists that talk about water storage, buying food in bulk or bug out bags. If you're pessimistic, why leave yourself vulnerable like that? Are you so addicted to your current lifestyle that you can't change it even in the face of something you believe is so terrible and so likely? There isn't anyone in this country that can't relocate. I'm not recommending that anyone relocate. I relocated because it was easy in my case, I might not have otherwise. If you store water instead of securing a safe and continuous supply; or if you are storing food instead of securing the ability to supply your own indefinitely then you are betting your life that Y2K will be manageable. I am almost positive that it will be, but I'm not betting my life on it. Pessimists should change their minds or change their bets. (No offense meant, especially to the pessimists that are truly prepared - all .001%.)

Will continue: As for riots; there are 4 households and a total of 9 people that live on our "block" of 1 mile per side. We're five miles from the nearest town which is so small you could hide it in our woods. Closest major city is 90 miles away. No chance that we'll see any riots here. Everyone around here has dogs and guns, no looters would last long. If you think there might be riots, what are you doing about it? Are you less prepared than someone who has sunglasses on about this issue?

-- Gus (y2kk@usa.net), June 19, 1999.


Dinosaur,

Well said. A major Wall St. event would cause people to go to cash. I am of the opinion that Americans are too uninformed to understand the risk of fractional reserve banking.

My best guess about bank runs in the U.S. is that they will happen as a result of bank runs in other countries like Japan. If that doesn't happen then I see people going down to the bank before Jan. 1st to take out some money. If enough do that it could turn into a panic.

I agree with Gus. Better to have the goods than cash in an economic meltdown.

-- BB (peace2u@bellatlantic.net), June 19, 1999.


deano,

"Those who say it has to be 100% are just plain stupid. That HAS to be the single most ridiculous statement I have heard for the doomer arguement..."

That must make Alan Greenspan the biggest stoopidest doomer out there, remember what he said about ALL financial entities needing to be 100% compliant, that 99% wouldn't cut it...TO THE SENATE NUMB-NUTS

Bwwwwwwwaaaaaaahahahahahahha

I think you've fallen off your perch my man, you have fallen out of your pram :)

-- Andy (2000EOD@prodigy.net), June 18, 1999.

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Andy:

I'm glad you agree with Greenspan, who also said the bank was the safest place for your money.

So tell us, do you consider Greenspan an unimpeachable source of information, or is he only right when he agrees with you? In which case, why bother citing anyone?

-- Flint (flintc@mindspring.com), June 18, 1999.

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Flint,

Deano said that anybody saying it has to be 100% is stupid. Greenspan said that it has to be 100%.

Therefore Greenspan has to be stupid, according to Deano Andy correctly pointed this out. Please tell me, where did Andy say he agrees with Greenspan?

-- RUOK (RUOK@yesiam.com), June 18, 1999.

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Andy:

I'm glad you agree with Greenspan, who also said the bank was the safest place for your money.

So tell us, do you consider Greenspan an unimpeachable source of information, or is he only right when he agrees with you? In which case, why bother citing anyone?

-- Flint (flintc@mindspring.com), June 18, 1999.

You know damn well I agree with Greenspan that bank compliance must be 100%. I've told you this publicly and privately ad nauseam - yes or no? So why try and put words in my mouth - look at what a previous poster said about your semantics.

When you wire $1000 to your ex in europe you expect $1000 to arrive there, less bank charges and with a correctly calculated exchange rate. That is what I mean by %100. That is what Greenspan means by 100%. There is no way that anything other than total accuracy is acceptable. Banking runs on CONFIDENCE, fiat money is all about CONFIDENCE -

YOU ARE NOT GOING TO BE ******* CONFIDENT ******* IN A SYSTEM OF SYSTEMS THAT IS NOT WORKING WITH TOTAL ACCURACY, WITH DATABASES BEING CORRUPTED BY INVALID DATA EXPONENTIALLY.

COMPRENDE FLINT???

As far as anything else Greenspan may have to say - I suggest you look at the last epic banking thread where I quoted Greenspan extensively, specifically the bit about the US bankers have no real knowlege about how the "rest of the world" is doing with regard to remediation.

NO F#$%ing IDEA!!!!!!!

Geddit???????

-- Andy (2000EOD@prodigy.net), June 18, 1999.

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I understand, Andy. We have no knowledge. We don't know. We cannot tolerate an error rate too much higher than what we experience now (which is not 100% perfect, but we manage). If we can't manage, we'll have problems. We might not be able to manage. We don't know. What we do know of domestic banking is quite positive. You seem to add good domestic news with NO foreign news and get certain global failure. 1+?=0. Neat trick. If you don't know, you make guarantees based on admitted ignorance, "we don't know, *therefore* it will be bad." Well, we'll find out, won't we?

-- Flint (flintc@mindspring.com), June 19, 1999.

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Flint,

I understand, Andy. We have no knowledge.

*** Wrong dude, we have plenty of knowlege, plenty of evidence ***

We don't know. We cannot tolerate an error rate too much higher than what we experience now (which is not 100% perfect, but we manage).

*** Correctimundo. Can't let an error rate slip IN GENERAL COMMERCE by more than a few points. Banking is totally different - it must be 100%. Must be. It is damn close to that now, any errors are detected and fixed immediately by the reconciliation folks in banks worldwide. At rollover they will be stretched beyond their capacity to fix on failure by the sheer tsunami of errors. ***

If we can't manage, we'll have problems. We might not be able to manage. We don't know.

*** Tom and infomagic and north and milne and I would disagree with you. ***

What we do know of domestic banking is quite positive.

*** Positive? Name one compliant money centre bank. Name the dates of testing of all US domestic banks in a simulated test. Positive? Where? ***

You seem to add good domestic news with NO foreign news and get certain global failure.

*** Greenspan said that he had no idea of how the rest of the world is doing. That statement in and of itself is appaling. I've posted the situation in the uk, where the banking watchdog is threatening to shut down major players PRIOR to rollover because they are not ready and will damage compliant banks with their bad data. I've posted news on what the 6 major Canadian banks will be doing to limit their exposure - isolation. I've posted many articles about Japanese banking and the fact there 19 godzilla banks have spent just the same amount of money is Citigroup 9those japanese programmers must be fiendishly clever LOL). a posts regular articles from milne about banking issues worldwide. I've posted articles about latin american bank remediation. And banks in germany, Russia and France too.

None of this news is good. All point to a systemic failure. Don't tell me I haven't taken the foreign AND US situation into account dunderhead ... ***

1+?=0. Neat trick. If you don't know, you make guarantees based on admitted ignorance, "we don't know, *therefore* it will be bad." Well, we'll find out, won't we?

-- Flint (flintc@mindspring.com), June 19, 1999.

Your last statement is puerile in the extreme. Don't put words into my mouth pal. Don't keep telling me I don't know, fool. What do you think I've been researching this past year on banking? I know damn well what the evidence is, I've posted it on this forum regularly, and unlike you I have to come to a conclusion. The only ignorance I see on a daily basis Flint is your wishy-washy view of your little corner of the world. Wake up guy.

The banking system will tank monumentally at rollover. No question. The evidence is all around you if you would open your droopy eyelids Flint.

-- Andy (2000EOD@prodigy.net), June 19, 1999.

I have yet to receive a response from flint to any of his baloney about banking, an area he has NEVER WORKED IN AND DOES NOT UNDERSTAND!!!

-- Andy (2000EOD@prodigy.net), June 19, 1999.


Dear Flint:

Do you know what your problem is Flint?

Your problem Flint is the same problem that every single y2k non- compliant computer will have come 2000, no matter how many millions instructions per second they can process.

I repeat again Flint, your brain is one the finest, well-oiled pieces of electronic equipment in the y2k arena. The problem is that it is y2k non-compliant, thus losing-down-to-earth contact with reality.

Flint, did you read the Basle Committee Report on y2k? It is y2k pertinent of course as we are talking about the Central Bank of the Central Banks of the world, right? You follow me Flint? Maybe Mr. Decker and Mr.Poole can help you out with this one. Forget about Anita and Craig, they just wouldn't have the whatwithal if you know what I mean. Flint, only a moron, a fanatic moron would deny its unequivocal content. And you are no moron of any kind Flint, that's for sure. So HOW ON EARTH FLINT CAN YOU SAY THAT WE 'DON'T KNOW' ABOUT THE REST OF THE WORLD'S BANKING Y2K NON-COMPLIANCE!!!!!!!!!!!!!!!!!!!!!!!!!!

Flint please read the Y2K Committee Report issued by the International Settlements Bank of Basle (published this month so don't even think about arguing it 'old stuff') and please get back to us.

Oh, by the way, as Sam Houston would have said, "only a damn fool" would swallow your analysis of Gary North's reply to 'Dick' Mills. (thread before this one)

Flint, I admire you in many ways. I envy your English and your rhetoric. You have a brilliant brain, but I just can't follow your y2k logic. It just defies common sense.

Take care

Your pal

-- George (jvilches@sminter.com.ar), June 20, 1999.


George:

Common sense is Y2K compliant.

-- Randolph (dinosaur@williams-net.com), June 20, 1999.


So what yall are saying here is the banking industry has always been error free. Always. If it wasn't 100% error free, it would crash and we would all be up shit's creek. Sorry, I don't buy that.

I don't care what Greenspan said. The banking system has always had errors. Every day, lots of them. Having them next year won't be any different. It doesn't have to be 100%.

Do you honestly think it's error free today? 100% error free??

Deano

-- Deano (deano@luvthebeach.com), June 21, 1999.


Deano,

you are as dumb as a rock, moron...

and you call yourself an IT pro...

not a freakin' clue have you???

-- Andy (2000EOD@prodigy.net), June 21, 1999.


This is for rock for brains Deano - luv the beach,

[smip - Flint speaks...]

"We don't know. We cannot tolerate an error rate too much higher than what we experience now (which is not 100% perfect, but we manage).

*** Correctimundo. Can't let an error rate slip IN GENERAL COMMERCE by more than a few points. Banking is totally different - it must be 100%. Must be. It is damn close to that now, any errors are detected and fixed immediately by the reconciliation folks in banks worldwide. At rollover they will be stretched beyond their capacity to fix on failure by the sheer tsunami of errors. ***

You dumb moron Deano.

This is all too COMPLEX for your pea brain.

I pity the end users [read customers] at Fanny Mae - they are in deep do-do with you in charge.

-- Andy (2000EOD@prodigy.net), June 21, 1999.


Andy, you OBVIOUSLY wouldn't know common sense if it bit you in the ass. How do you manage to survive day in and day out?

The boat is leaving buddy........take a hike......

Deano

-- Deano (deano@luvthebeach.com), June 21, 1999.


Common sense tells me that people will withdraw their money because the penalty for doing so is small. Andy,can the U.S. "island" the U.S. banking industry from the world? Do you have a firm idea on this possibility?

-- bud (bud@computersedge.com), June 21, 1999.

North starts out with the assumption/hope that the banks will fail. Then he argues that the banks will fail because they will fail. I could substitute any relevant date for banking rules changes (such as the EURO changeover - which affected every bank in the world that transacts anything with any bank in Europe) and make the same arguement. So it should have failed a dozen times over by now. Y2K is just not fundamentally different from any wide ranging change in the system with a fixed date.

-- Paul Davis (davisp1953@yahoo.com), June 21, 1999.

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