Consumers today crowded a small Fountain Valley branch of Countrywide Financial, wedged between a book seller and a Sprint store. The dozen seats were full and some stood around waiting, while others sat on the floor.
An employee announced every few minutes that the wait was at least an hour and asked if anyone wanted water or coffee.
Some folks wanted to take their money. One woman said she simply wanted to talk to someone at the bank. Most were worried that the largest home lender in the nation may not survive.
Speculation has swirled around Countrywide since the lender said on Aug. 9 that it could be hurt by “unprecedented disruptions” in the market to sell loans to Wall Street investors. Then on Thursday it tapped an entire $11.5 billion credit line with 40 banks to keep funding loans.
Clifford Wadsworth, 87, said the run on Countrywide’s deposits today reminded him of banks failing in 1929. But he sees the current credit crunch as the inevitable result of too much loose lending.
Wadsworth, a longtime Santa Ana resident, said he’s taking the money from one of his certificates of deposit that ends today so “in case something happens I got it.” Wadsworth has other CDs he’s leaving with the bank.
LaDonna Wadsworth, his wife, said, “I don’t know if any other companies are doing any better. What do you do with your money? Put it in a can and bury it in the yard?”
Some consumers weren’t worried.
Margaret Mazotta of Huntington Beach said she’s withdrawing money because her certificate of deposit ends today and she negotiated a better rate at her bank.
She said people shouldn’t panic, since deposits are generally guaranteed by the FDIC up to $100,000.
In 1929, stocks went down and investor confidence went with it. The consumers made a run on the banks and we had many years of depression.
In 2007, we have had a stock “correction”, a liquidity crisis, and a loss of investor confidence.
Anything similar here?
Mr. Bernanke is an expert academic on the Great Depression. The next few days and weeks will determine whether he is a genius or whether he is “too little, too late.”
look at how much stock the owners and real players at countrywide have sold off and cashed out. over the last year.
sit back. relax. you have nothing to worry about. honestly. no, im serious. really.