I was listening to NPR on the ride home, and I heard a story about bank failures, in light of the IndyMac collapse. I think it was someone from the FDIC being interviewed – but whoever it was, they pointed out the actual/projected bank failures of the current crisis weren’t on a track that would even approach the S&L crisis of the 1980s.
Two problems came to mind.
1. It seems like our economic projections tend to be crap.
2. One bank failure in 1985 may not equal one bank failure in 2008.
If I recall, we went through a period of banking consolidation a little while back (didn’t we?). If so, banks today may have a lot more assets/deposits than the banks of the 1980s – even controlled for inflation. Wouldn’t it suggest the over all impact of a single bank failure is greater today, and comparisons to the 1980s are meaningless?
I’m doing a bang up job of depressing myself today.