Why This Harvard Economist Is Pulling All His Money From Bank Of America

Zerohedge ^ | 1/31/14 | Tyler Durden

[Kartographer]

From Terry Burnham, former Harvard economics professor, author of “Mean Genes” and “Mean Markets and Lizard Brains,” provocative poster on this page and long-time critic of the Federal Reserve, argues that the Fed’s efforts to strengthen America’s banks have perversely weakened them. First posted in PBS.

Is your money safe at the bank? An economist says ‘no’ and withdraws his

Last week I had over $1,000,000 in a checking account at Bank of America. Next week, I will have $10,000.

[Bloody Sam Roberts]

Why the hell would anyone sock $1 million wampum in someone elses steel vault?

Because $1 million is chump change to that person.

[Bloody Sam Roberts]

A couple days ago, the news about bankers in Europe killing themselves...

And the third one this week in WA state. The game is certainly afoot.

[Vendome]

Interesting ....

[Vendome]

I don’t care if you have private jet money
$1 million is never chump change.

In fact, the people I know have private jets value $100 bucks like it means something.

[Jim from C-Town]

That’s pretty good. Is there a minimum? What about over $25k?

[Bloody Sam Roberts]

In fact, the people I know have private jets value $100 bucks like it means something.

And, of course, everyone who is worth that much is the same.

Deal with it. There are people on this planet who consider a megabuck as chump change. They would just as easily wipe their arse with a $100 bill as give it away.

[Vendome]

You would introduce me to your friends.

I got all kinds of ideas for making money.....

[Jim from C-Town]

That’s a lot of scratch for Iowa.

[Vendome]

I can swallow that ...

[Dick Vomer]

Finally, if you think all the major banks are going to melt down at once, you shouldn’t keep all of your money in $$. Get some Euros, some metal, some guns, and a pile of MREs.

that might be what he's doing. he might have divested most or all of his assets and parked it in BOA then decided... gold, lead, silver, coins, land, and foreign assets.

Who knows how much he has but I'm willing to bet that this is a public way of warning some of his colleagues... just like the suicides of the bankers last week.

[TEXOKIE]

bttt

[fatima]

Crazy for checking.Did not read the whole article.Bank of America is playing games with homeowners in the way of promising refinance and they end up in foreclouser-beware-first hand knowledge,-not me.

[coloradan]

So, what fraction of one’s assets should not face exposure to the equities, bond, or real estate markets (and their attending 40-90% devaluations, from time to time)? Or would it be best to have essentially zero cash assets?

[FredZarguna]

If he were in the process of moving performing assets to cash, I would have no problem with his $1M checking account. But note that he doesn't say in the article exactly why he has $1M in checking. And, to be fair, I can't say $1M is a bad number, because I don't know what percentage of his total assets that number represents. I don't know many professors with net worth in the millions -- although I have been out of academia for a long time, and maybe Harvard Business professors are different. All I'll say is that if I had $1M in cash equivalents, it would be in a money market or some other cash equivalent with better than 0 yield.

[Bshaw]

“How much should I listen to someone who keeps $1 million in his checking account when the FDIC insurance limit is half that amount?:

That depends entirely on how many names are on the account. FDIC insures each depositor.

[coloradan]

Do you recall that the money markets froze up in 2008, and can now “float” (i.e. lose money) and that, for 0.1% interest is a ridiculously low price to be paid to be exposed to that risk? Oh, and that nothing from 2008 regarding systemic issues in the financial system, was fixed then? But that instead the problems today are worse?

[bgill]

Prepay the property taxes, ha. Property taxes took my last dime yesterday. Thank goodness for food preps which got us through. Crossing fingers the fan doesn’t get hit before I get restocked.

[bgill]

Not to mention that the FDIC will belly laugh at those who believe their money is safely insured.