IndyMac’s unnecessary bank run

Panicked depositors withdrew $1.3 billion from IndyMac in 11 days, says Brett Arends in The Wall Street Journal, “buy why?” The FDIC insures up to $100,000 of your deposit or CD, and it makes no sense to keep more than $100,000 in a savings account or CD. “But if you must, here are three alternatives.” You could deposit $100,000 in one bank, then walk across the street and repeat at the next. You could let Promontory Interfinancial do that for you, through its CDARS program. Or you could “keep hundreds of thousands of dollars, uninsured, in a single rickety mortgage bank,” then panic when it teeters on the edge of insolvency. If everyone did option A or B, IndyMac “might not have collapsed.”

A good time for intrepid investors

“Buy low, sell high,” says Irwin Kellner in MarketWatch, how hard is that to remember? Yes, the market is full of “doom and gloom,” and it’s hard to blame people for looking to get out to “preserve whatever money they have made,” but really, now is a good time for some “judicious buying.” That’s how you make money. If that makes you panic, though, just hold on to what you have. The 20 percent drop in stock indexes since October is “roughly twice as much as the decline in corporate profits reported so far,” which means the markets are betting this is going to be a dismal earnings season. But “if earnings are not as bad as expected, the market could bounce higher—and with it your stock.”