FDIC-Commissioned Gallup Poll on Y2K and Banking: Statistical Detailsgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Some days ago I started a thread on this Gallup Poll, discussing a few of its general findings and how they related to bank cash reserves, etc. I will now do the "up close, personal, and ugly" version, going into the statistical details that are much more revealing than any general discussion.
My personal opinion, for whatever it is worth, continues to be that the great majority of U.S. banks already have their mission-critical systems fixed; and that of those which don't, almost all will have finished by year's end. But as noted before, the real problem lies in the psychology of the situation, which many banks don't seem to be addressing well.
Although this poll was released on June 2nd, the actual telephone sampling of 2,653 "non-institutionalized" American adults (gee, leaves me out) was conducted during March 1-14, with a sampling error of plus or minus 2.2%. That the sampling occurred back in March is probably good news, assuming that (unlike Gary North) you're not an inveterate foe of the fractional reserve banking system, for it means that there have been a few months since then for people to have changed their minds (hopefully for the better, but maybe not), and we still have some months yet to go. Nonetheless, the situation does not appear good.
Of the respondents, 92% held bank deposits; generally speaking, those holding bank accounts tended to be a bit more optimistic about Y2K than those who didn't. Also, those who had read or heard more about Y2K tended to be somewhat more optimistic than those who hadn't.
Up front, I want to make one crucial correction from my earlier post. While it is indeed true that according to this poll 14% of Americans "definitely or probably" plan to withdraw all of their bank deposits by year's end, I was incorrect in assuming that they would automatically want everything in cash. Apparently most won't, if we compare these numbers with the poll results on projected cash withdrawals. See details below.
Whether because of the way this poll is constructed or because of rampant confusion out there over this whole issue, or both, there seem to be various logical inconsistencies in the data summarized below. But hey, that's not my fault. So here goes with some key statistical details; if you want to double check my work and make sure I didn't become cross-eyed from looking at so many numbers, you may access the poll results at www.fdic.gov/banknews/fils/1999/Y2Ksurveyreport.pdf
Yes, it's in that abominable pdf format (all fed. govt. files are, to conserve space), so you'll need Adobe Acrobat Reader, which you can download for free, to read it. As one pushing for full disclosure on all Y2K information, I applaud the FDIC for posting these results in the first place. It took guts, considering that champagne corks were not popped at the FDIC when these poll results came in.
First, Gallup gave respondents a series of statements and asked to what extent they agreed or disagreed. Note: in this section I have combined the numbers of those who "definitely" or "probably" think a particular unpleasant event will NOT happen.
People will panic and withdraw all their funds. 11% of respondents said this would definitely occur; 36% said it probably would; 15% were unsure; 38% said this event definitely or probably would not occur.
ATMs won't work. 8% said definitely ATMs won't work; 34% said they probably won't work; 20% were unsure; 38% said they definitely or probably would work.
You will temporarily lose access to cash. 8% said this would definitely happen; 36% said it would probably happen; 17% were unsure; 39% said it definitely or probably would not happen.
Checks will bounce. 7% said this definitely would happen; 31% said probably; 21% were unsure; 41% said it definitely or probably would not happen.
Banks will lose track of people's money. 6% said this would definitely happen; 23% said probably; 18% were unsure; 47% said it definitely or probably would not happen.
The banking system will shut down. 5% said this definitely will happen; 17% said it probably would; 16% were unsure; 62% said it definitely or probably would not happen.
People will be able to access others' accounts. 4% said this definitely would happen; 13% said it probably would happen; 18% were unsure; 65% said this definitely or probably would not happen.
In the next section Gallup asked respondents, IF Y2K problems actually do occur, how long do you think such problems will occur at your own bank? (Note that for the purposes of this question, respondents were to assume for the moment that Y2K problems will occur.) Of all respondents, 50% said "a few days"; 31% said "several weeks"; 10% said "several months"; 2% said "over a year"; 7% didn't know.
In the next section, Gallup asked, Will your own bank have its Y2K problems solved by year's end? Of all respondents, 36% said their bank definitely would be ready; 41% said it probably would be ready; 17% were unsure; 5% said it probably would not be ready; 2% said it definitely would not be ready. Note: if there is one happy moment for the FDIC in the Gallup poll results, this is it. Happy but not ecstatic.
In the following section, Gallup asked respondents to consider what behaviors they would engage in because of Y2K:
Confirm bank balances before year's end. 57% said they definitely would do this; 29% said they probably would; 3% were unsure; 5% said they would probably not do this; 4% said they definitely would not do this.
Keep better track of transactions. 51% said they definitely would do this; 27% said they probably would; 2% were unsure; 9% said they probably would not do this; 6% said they definitely would not do this.
Maintain their usual banking routine. 41% said they would definitely do this; 41% said they would probably do this; 6% were unsure; 7% said they probably would not do this; 5% said they definitely would not do this.
Discuss Y2K readiness with their bank before year's end. 30% said they would definitely do this; 29% said they would probably do this; 6% were unsure; 20% said they probably would not do this; 12% said they definitely would not do this. Note: it looks as though the banks are going to have plenty of opportunity to get to know their customers!
Withdraw extra cash. 26% said they definitely would do this; 36% said they probably would do this; 6% were unsure; 17% said they probably would not do this; 15% said they definitely would not do this.
Temporarily stop direct deposit. 9% said they definitely would do this; 10% said they probably would do this; 9% were unsure; 26% said they probably would not do this; 35% said they definitely would not do this.
Pull funds out of other accounts. 6% said they definitely would do this; 6% said they probably would do this; 8% were unsure; 28% said they probably would not do this; 43% said they definitely would not do this.
Withdraw all deposits. 6% said they definitely would do this; 8% said they probably would do this; 5% were unsure; 25% said they probably would not do this; 55% said they definitely would not do this. Note: this is the statistic that I mentioned earlier and which no perturbed the good folks at the FDIC: 14% of respondents said they would "definitely" or "probably" withdraw all their bank deposits before year's end because of Y2K. If you want to see this in the Gallup poll results for yourself, it is at the very bottom of the chart on p. 24. But as noted above, this does not mean the respondents want all their withdrawals in cash; indeed, clearly they don't, if we are to reconcile this result with those in the final section, below.
In the final section, Gallup, having determined from an earlier question that 62% of respondents planned definitely or probably to take extra cash out of the bank, wanted to find out just how much cash they had in mind. But Gallup didn't want to ask dollar amounts, because that would seem "invasive." (Too bad, because now I have no reliable way to run the math on just what these numbers might mean vis-a-vis bank cash reserves.) So instead Gallup framed the question in terms of time intervals: you will take out enough cash to last you for how long? Of all respondents, then, 6% said they would take out enough cash for a long weekend; 12% said they would take out enough cash for 1 week; 9% said they would take out enough for several weeks; 11% said they would take out enough for 1 month; 6% said they would take out enough for several months; 2% said they would take out enough cash for a year or more. In addition, 16% said they didn't know or hadn't thought about how much cash they would take out.
And there you have it, folks. Make of these numbers what you will. I'm getting bleary-eyed and have no further comment, except to note, again, that the good news here is that this sampling was done in March, almost nine months before year's end, and the bad news is that the banks and FDIC obviously have their work cut out for them. Whatever your particular assessment of the actual Y2K problem, and whatever your own plans might be, obviously this is a situation that bears thoughtful monitoring; one hopes that the FDIC and Gallup will provide us with new sampling data at regular, close intervals in the future.
-- Don Florence (firstname.lastname@example.org), July 03, 1999
Always welcome your posts.
It would seem by the stats that 5% have a fixed view of Y2K not unlike many on this forum, problems that will stretch into months or longer.
I wonder when the hundredth monkey will occur. It will be interesting if they do another survey. Of course there may not be enough time for surveys.
-- Brian (email@example.com), July 03, 1999.
Don - the key question they forgot to ask:
Do you believe the government when it says "The y2k problem has been solved, nothing will happen next January that cannot get fixed before Tuesday morning, January 4, 2000."?
If you do not believe the government when it says the problem has been solved, what would it take to convice you the problem has been eliminated, and that you should leave your money in the bank?
-- Robert A. Cook, PE (Kennesaw, GA) (firstname.lastname@example.org), July 03, 1999.
Two other questions they forgot to ask:
Have you already begun to withdraw cash?
If so, how much?
I'd be real curious to see people's responses to those two. It would probably be the best indictator of how many GIs there really are out there.
-- TECH32 (TECH32@NOMAIL.COM), July 03, 1999.
my "polly" husband informed me last nite (two days ago? - it's twighlight hour here
) that he is cashing out his lowball money market account - and converting it to .... CASH.
'bout fell out of my chair. He says the cash will be our mad money until January - at which time he plans to re-invest it.
When I asked him (with beautific smile on face) why on earth he would do that - he figures better safe than sorry.
ah - and today (yesterday???) he brought home a real mower - totally y2k compliant.
Life is looking up.
-- justme (email@example.com), July 03, 1999.
P.S. A minor statistical note. In that first section, where I expressed as one category the numbers of those who thought that a particular unpleasant event (such as bank runs) would NOT occur, I originally wasn't going to bother with those numbers at all, being just concerned with (worried about) the percentages of those who thought such unfortunate things definitely or probably would occur, or who were not sure. While typing in this section, I decided at the last moment to include the "bad event probably or definitely will NOT happen" category, and rather than going back to the blasted pdf file itself, I derived the numbers for this final category by simply subtracting all the other numbers from 100. I thought that Gallup had all the alternatives covered; I forgot that a few folks might simply refuse to answer a given question at all. (This fact dawned on me later when I noticed in other sections that the numbers didn't always add up to one hundred.) So in a few places in that first section, my numbers for the category of those who think a particular bad event definitely or probably will NOT happen, might be a couple percentage points higher than the actual Gallup numbers. Sorry about that; there goes my career as statistician with Gallup. But then I never wanted to be a statistician anyway--those people's days are numbered. (Hey, it's late. You want better jokes, turn on Leno.)
Anyway, I make this explanation in case anybody actually double checked the numbers in that first section and thought that I was "massaging" them to make the results slightly less unpleasant. I wasn't.
-- Don Florence (firstname.lastname@example.org), July 03, 1999.
I'd like to point out that 2,653 'non-institutionalized' American adults surveyed between March 1st and 14th probably didn't have the required information to make an informed judgement one way or the other.
The American people can't possibly make the banks compliant. So lets not equate the opinions of a survey sample with 'the banks will be O.K.'
Besides, if 75% of this sample believes they are probably going to 'temporarily lose access to their cash' How do you suppose they're going to deal with that fact?
-- Lead Mouse in the Wall (email@example.com), July 03, 1999.
I recently signed up for a free email service from a great website. The service is offered by AMG data at www.amgdata.com
They provide a free weekly email which tells you how much money is flowing in and out of the major categories within mutual funds during a given week. They also give historical perspective. My theory in watching this has been that we would eventually see Bubba begin to draw down some cashola for his coffee cup fund.
This may be beginning now. (Bankers and Brokers feel free to cringe at any time).
This week ending 6/30/99
Equities Added $6.1 billion dollars Taxables subtracted $260 million Municipals subtracted $119 million and MONEY MARKET FUNDS SUBTRACTED $23 BILLION DOLLARS!
To put that into perspective, last week money markets added $800 million and last year they subtracted $2.9 billion.
Now either AMG got their decimal place wrong, or Bubba is taking some serious coinage out of the old money fund. Additionally since equity built, we can probably rule this out as the source of Bubbas withdrawal and since Munis and Taxables drew only small amounts, I can only come to the conclusion that Bubba is taking out funds from his cash reserves.
PS-I used to be a liscensed financial planner for American Express/IDS. If I was a planner or broker right now, I'd be looking for a painting job.
-- Gordon Gecko (firstname.lastname@example.org), July 03, 1999.
Gordon and other interested parties,
Here are several weeks worth of MMMF total assets numbers from the OCC:
Total money market mutual fund assets stood at $1.452 trillion for the week ended Wednesday, May 19, 1999.
Total money market mutual fund assets stood at $1.448 trillion for the week ended Wednesday, May 26, 1999.
Total money market mutual fund assets stood at $1.455 trillion for the week ended Wednesday, June 2, 1999.
Total money market mutual fund assets stood at $1.466 trillion for the week ended Wednesday, June 9, 1999.
Total money market mutual fund assets stood at $1.454 trillion for the week ended Wednesday, June 16, 1999.
Total money market mutual fund assets stood at $1.455 trillion for the week ended Wednesday, June 23, 1999.
Total money market mutual fund assets stood at $1.429 trillion for the week ended Wednesday, June 30, 1999.
These can be found at:
which gets updated each week. Note the the numbers to the right of the decimal points are billions of dollars. Also, note that the variations are small percentages of the totals.
The pages from which the above total are taken also break the data down between retail and institutional MMMFs.
-- Jerry B (email@example.com), July 03, 1999.
Ooops; those numbers are from the ICI, not the OCC.
-- Jerry B (firstname.lastname@example.org), July 03, 1999.
One point does not a trend make - however the previous 6 weeks the average was higher at 1.455 trillion: dropping in one week to a lower value of 1.429 (or lower) - if it continues - will definitely be significant.
You tell me what std deviation or accuracy range you want before agreeing that withdrawing billions from a trillion dollar deposit total is important.
-- Robert A. Cook, PE (Kennesaw, GA) (email@example.com), July 06, 1999.