Credit Crunch: NetBank’s Poetic Justice
SO who are the real losers from the sub prime mortgage implosion and the consequent credit crunch?
Well, some good news I think from the USA. At least some of the losers have been people who should have known better and also who no one’s going to lose much sleep over.
As Felix Salmon points out, NetBank has just gone bust. Deposit insurance in the US covers only the first $100,000, so anyone with more than that will have to wait until the whole thing is closed down, the equipment down to the last mousepad sold off and all the debts paid: and then we’ll see if there’s anything left. But who was it that had a large deposit in said bank?
So Colthrust started a subprime lender, sold it, and then used the proceeds to start a company finding leads for other subprime lenders. He also put all his money in NetBank, which promptly went belly-up in the subprime meltdown. There’s some kind of poetic justice there, I think.
Couldn’t happen to a nicer group of people, don’t you think?
October 3rd, 2007 at 9:45 pm
Well looks like I am one of those sad losers. I had all my hard earned earnings - quite a bit more than 100K, in Netbank savings accounts. I was a software engineer in Atlanta and left US since 2000. Since I was no longer in US, I could not open another bank account. I knew it was risky to keep more than 100K but I never expected a bank to fold. I guess I was just naive and stupid. I did not want to ‘take risk’ by investing in stocks, so I thought bank deposits were safe. What do I know ?
“Couldnt happen to a nicer group of people ?” - I find that hard and unnecessarily insulting to someone like me who toiled blood, sweat and tears to get those savings instead of living a lavish lifestyle. Maybe I was stupid, but it wasnt ill gotten gains ! Dont add insult to injury.
October 25th, 2007 at 10:20 am
ouch. Sympathy is due Sir