Bankrate continually updates the best savings and CD rates in the USA. I've got my cash parked at e-loan (5.75% 18 month CD), HSBC (6.00% savings through April then 5.05%) and Vanguard (5.10% money market). No more than the FDIC max $100,000 per account. Yes, those are dollars, waiting for the right opportunity to move to foreign currencies, more gold, or short stocks.
In these times it's smart to continually monitor who is offering the best rates, always get 5%+, aim for 6%, and make DAMN SURE you only park $100,000 at any one provider, as mainstays like HSBC and Wells Fargo, and especially smaller operations like FirstFed, could go belly up for all you know, with all the subprime craziness and phantom-profit accounting out there.
Caution and prudence are called for I'd say. When everyone, and I mean EVERYONE, thinks the good times can only continue, EVERYONE is a bull, that's the time to be afraid. Very, very, very afraid.
30 comments:
www.presidential.com 4.5% checking & 5.25% savings. Its a real bank & it has no direct risk linked to exotic loans etc. They have reasonable minimums (1.5k & 5k respectively) and maximums for the high interest rate that incentivizes you from exceeding 100k.
treasurydirect.gov
90 day and 180 day T Bills and longer if you want
No fees no commisions
purchase is at discount, thus interest virtually "paid" up front.
No worry of 100K ceiling as backed by Feds
Very liquid
Rates in the 5% range
and most important (to me),
interest exempt from state and local income taxes.
You can also buy them thru a traditional brokerage account.
Currently also closely monitoring the 2 year notes..If I can get in at least 5.25%. (with above benefits), not a bad place to park.
Let's say for kicks that EVERY bank failed and the FDIC pays out up to $100,000 for every single account holder.
Where does that money come from, the printing press?
>> Where does that money come from, the printing press?
You got it. And you'll be getting a worthless $100k to boot.
Additionally, I contend that if such an event occurs, it's going to be the least of your problems.
Keith,
I'm the anon who posted the question that started this discussion. Thanks - I'll be watching this closely.
P.S. I'm still trying to convince my wife that selling the house is a GOOD thing. She's still not convinced. Any suggestions?
anon 2:40
anon, I don't think right now is a good time to sell your house unless you are willing to price aggressively and cut your profits. Most homesellers are stuborn and will chase the price all the down. I think you are a little late.
There was a post awhile back naming the top ~10 banks in RE holdings. Not sure if it was %assets or just $$$, but a good list to avoid. Does someone know where that went?
P.S. I'm still trying to convince my wife that selling the house is a GOOD thing. She's still not convinced. Any suggestions?
February 12, 2007 2:40 PM
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The Chicago Mercantile Exchange has a futures market now where one can purchase insurance against falling real estate prices. Robert J. Shiller, author of Irrational Exuberance, set up the futures markets for the Merc. Visit the Merc's website to get the lowdown (they explain it because it's new and they want the business trading in the contracts.) Google up Shiller and housing futures and Merc and you should get some 3rd party stuff on it too. But it could be the answer you're looking for; a way to protect against falling market values and not sell the home. And it's a whole lot easier to buy and sell than your home, move, etc.
What bank in Hong Kong, Singapore or the Netherlands offers good rates for international accounts? Thanks.
Funny, I had a variable rate CD at eTrade. Still six months to go. Though, it looks like they don't offer it anymore. Think its 5.25% It would be funny if there was a sudden spike in rates..
What bank in Hong Kong, Singapore or the Netherlands offers good rates for international accounts? Thanks
---------------------------------
Obviously, HSBC is one. (the original one in HK, I think)
HSBC = Hong Kong Shanghai Banking Corp.
I've been using their HSBC USA online savings account (at 5.05% APR) for awhile now. No problems so far.
"What bank in Hong Kong, Singapore or the Netherlands offers good rates for international accounts? Thanks."
I'd like to know that too. I want to diversify my risk and not just be exposed to US dollars. Keep in mind the FDIC is not a Governemental institution. They were started by the Fed, but are not part of it. I seriously doubt that if a collapse of the magnitude of the S&L crisis were to happen again you would even see your $100k. Most likely 20-50k of worthless dollars.
I'm still trying to convince my wife that selling the house is a GOOD thing. She's still not convinced. Any suggestions?
+++++++
I'm a woman and here's my suggestion from my particular perspective. My guess is your wife is probably (and mainly) uninformed, so give her some real info, as opposed to just your opinion. Do the research (through RE listings) and the math and show her the figures to prove your points. Also print out some info on the bursting of the housing bubble and the possible collapse of THE WORLD AS WE KNOW IT (TWAWKI) from both the blogs and MSM. Good luck!
Everbank is the way to go: Euro accounts, Gold/Silver accounts, very efficient very good service.
Everbank.com
This is the thing I don't understand: people anticipating a RE crash smugly think they'll be able to head to their banks and get the cash necessary to buy whenever RE prices become a bargain.
Your cash isn't THERE. Your cash has been loaned out and is someone else's DEBT. If THEY can't pay back, YOU can't be paid back. At least some are beginning to make the connection between all the bad mortgages that have been underwritten and a possible impact on bank financials. And a CD is even LESS liquid than your checking account.
As far as FDIC insurance goes, a bank VP informed me they have 99 years to pay you back. (Take a look at the little FDIC booklet you can get from the banks - there's only a vague reference to pay back, something about when practical...) Just think what you're dollar could by worth by then - IF you're around to receive it. A printing press solution seems more likely - but the end result would be the same.
So which banks are sound? You could make an argument that some small banks with great financials and little RE exposure have the best chance. But how can you REALLY tell what the banks are into and how far contagion would run? It might actually be that the few super large mega banks that are always at the root of things like the Mexican peso, South American debt crisis and now the RE bubble are the very ones that will stick around. Because they're deemed too big to fail and will be first in line for a bailout. And that's REALLY what's important. The only ones who stay solvent are the first ones in line. Just like the first ones in on any pyramid scheme.
As far as putting money into foreign accounts - ever heard of repatriation? What makes you think as conditions deteriorate, you'll be able to get it back?
And if there's a real meltdown, a real estate crash like many of you anticipate, what makes you think gold will be 1)accepted as legal tender 2) not subject to windfall profits taxes or 3) simply confiscated?
EVERYTHING, including the price of gold is dependent on the value people jointly agree upon. It seems to me the best outcome is if confidence is not lost and things hang together.
Capitol One money market account is paying 5.20 APY to Costco members. Including a $25 interest credit.
"Where does that money come from, the printing press?"
Ding ding ding.
Got gold?
Vanguard money market? Are you sure it is FDIC insured?
Devestment said: No, in the S&L failure lots of people had millions on deposit and were only paid back 100K. The FDIC was put in place after the great depression to prevent economic melt down
I'm not sure what this has to do with the question. If the every bank failed, an every person got their 'insured' $100K, the money would have to come from the printing press AKA massive deficit spending. The FDIC only has about $45B to insure over $3,000B. 1.5% reserve.
The FDIC was put in place after the great depression for the same reason the TSA was created after 9/11. To create the illusion of safety.
Vanguard money market? Are you sure it is FDIC insured?
That is most likely NOT insured.
Joey makes a good point. In the final stages of the S&L meltdown, obscure institutions in obscure locations were advertising all over the country that they paid higher rates, just to raise cash. They were already insolvent, but they were bidding up the cost of money for the few solvent institutions that would survive.
Scudder used to have a MM fund that invested only in direct obligations of the US Treasury. Is it still around?
The majority of America & Americans have not gotten sucked into the various aspects of this RE bubble so the people predicting system-wide failure are a bit off. My S&L back in the '80's did not lose its moral compass and just switched from FSLIC to FDIC to back its deposits.
The same will happen here, the fast & lose parties will get burned. They will stress the system, but the system will not fail. There will be personal tragedies, some people will have gotten suckered, others will be collateral damage. We will have a mess to clean up & need to reform the system to close the loopholes & hopefully have a healthier system and attitude moving forward into the future.
I remember reading awhile back that the FDIC insurance rules were changed to insure deposits for only $100K per account holder, not per account held. People need to verify this as I cannot remember where I read it. 100K is not a lot of money for a lifetimes work, but even that is too much for the FEDs. I bet that the banks will get billions.
As far as Gold, 1) It is not leagle tender now but it can still be traded just like the Liberty silver dollar, 2) If things do blow up and gold does what it is susposed to do a windall tax of 50% will still leave you way ahead of the game. 3) I don't know about confiscation, but my feeling is that the physical gold market is too small to be bothered with when compared with a $12 trillion GDP and a $50 trillion funding liability shortfall. Besides, would the FEDs legitimize gold with confiscation?
PS, Do you know where your SS money is?
re: anon 7:11
"Your cash isn't THERE. Your cash has been loaned out and is someone else's DEBT. If THEY can't pay back, YOU can't be paid back"
Actually, I don't believe there is a one to one relationship between your cash on deposit and a bank's loans. Your deposit is just the bank's reserve and a typical bank is allowed to lend out about 10 times it's reserve.
A lot of people are under the impression that when I deposit a pile of money in a bank, they take that same pile and lend it to someone else. Actually, my pile stays there and the bank whips up about 9 or 10 times my deposit of imaginary money to lend out. This creates a negative balance for the bank and when they are finally payed back it zero's out their books. The money they make comes from the interest, not the imaginary money. Fractional Reserve Banking, a fascinating subject.
Housing crises is worse than we think for it will trigger onset of the 2nd Great Depression, WDII
(We didn't know the Great War was WWI until WWII came along did we?)
1993 Solar Mortality Theory states
"If your mom was born during a
solar reversal, you're probably
going to die of cancer." Our sun
reverses poles every 11.1yrs when
it emits peak levels of radiation
causing genetic damage in ova eggs.
This leads to a sun-synchronized human race of one solar cycle 22.2
yrs per generation. Since discovery
of CowPox innoculation and Vitamin
Deficiency in 1796, every 3 gener-
ations when 4th arrives you have
aged and newborn, neither working.
This is what precipitates economic
crashes, familys have to adjust-
These times are also when currency
is changed to bolster economy.
The years are 1862,1929,1996.
A solar cycle is 22.2yrs so time
period is 3 x 22.2 = 66.6yrs for
3 generation time between events.
WWII caused a "phase shift" in one
generation of one solar reversal.
So its 66.6 + 11.1 = 77.7yrs since
stk mkt crash of 1929.8 for WDI
Add 77.7 + 1929.8 = 2007.5 where
an event should occur that's just
as significant an event as any that happened in 1929 and 1862.
Now we realize its the RE meltdown
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