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MB, you hit the nail on the head when you said,

Those folks who think the bank has cash enough for all will line up just like the folks did back during the Depression, completely unaware that banks hold even less cash now than they did back then. And they’ll be just as shocked when they can’t get in the door.

I got halfway through an MBA years ago before becoming disgusted with what I was being taught – and just plain quit. I realized I wanted no part of that world – just enough to understand it since I have to live with it. But thinking I needed a career change a few years later, I took the financial end of it and went to work for a large financial planning firm that had probably the best training in the industry at the time (some in the military, particularly those that have lived overseas, used to call that un-named company American Excuse – but that’s another story….). Anyway, after realizing that I was still dealing with a company that subscribed to the worst of the values I learned to detest in the MBA program, I decided to leave that large company, and went to work for a much smaller one that serviced bank customers from inside the branches. I was assigned to a savings and loan. My first day on the job was “Black Monday” (19 October 1987). Needless to say, I did not sell anything – for THREE MONTHS. But two very big things I did learn from that were by observation that very few people “saw” even though it was happening right in front of them while standing in the teller window lines. First, there were the old folks waiting to see the customer service reps so they could get in their safe deposit boxes. That was a long line. But that was AFTER they had already been to the teller window and withdrawn huge amounts of cash – and then took it to their safe deposit boxes (surprisingly enough). I guess they didn’t remember that banks can and do shut down, and they could easily have found themselves unable to even get inside the bank to take the money out of their boxes. A good friend of mine was assistant manager of one of the branches at the time. He confidentially took me inside the safe deposit box vault and, without pointing me to any specific boxes of course, directed my attention to the largest boxes on the bottom (probably one foot square in front). He said I’d flip if I knew how many of those boxes were filled with nothing but bills, front to back, top to bottom.

The other lesson learned was what was happening multiple times every day for a while (remember, this was a true crisis time for S&L’s). Brinks trucks were arriving frequently, bringing truck loads of cash to the bank – giving the “comforting” appearance to all the customers that nothing was wrong, that the bank was FULL of money! Not to worry! Individual customers might happen to see a truck outside, and see guards bringing in money, but everybody’s seen that from time to time. What they didn’t realize was that those few minutes while they were there as a customer, were happening many more times that same day, and the day before, and the day following.

I also remember the gas lines all too well. And I recall a local gas station on 9/12/2001 was selling gas for the generally inflated price that everyone else was selling it for, to an around-the-block line of custoemers — except for those with 1964 and earlier dimes (90% silver). Then a dime could buy a gallon of gas.

Most people alive today don’t have such recollections, or even knowledge OF those circumstances. Therefore, there will be shock beyond belief for so many of them. And because of living in LaLa Land, they’re woefully unprepared. Too big to fail? Hmmmm…. Where are all the S&Ls these days? How about Lehman Brothers or Bear Stearns? And the FDIC or SIPC are going to be able to cover all the losses? If this forum had the capability of animated GIFs, I’d love to end that last question with the little happy face rolling around kicking its feet, laughing hysterically.