Posted by danso 4 hours ago
A good reminder that your emergency fund should be held in cash at a bank, not in shares a brokerage. Not that a glitch like this couldn’t block access to your bank account too, but rather that the process of liquidating and transferring securities is much slower than ACH or Zelle.
This is not merely a theoretical risk. Patelco (a Bay Area credit union with half a million members) got hit with ransomware back in 2024 that disrupted banking services for two weeks.
As a good friend, if I know that you are good for the money, I'd happily spot you even a few tens of thousands for a few days or weeks. (I'm actually more reluctant to do that with some family members, because I might be less likely to get the money back.)
And in a worst case scenario where I can’t access the front half of my savings due to a bank run or other failure, I am only a week or so away from getting access to some part of my savings.
And yeah, looks like that's not a foolproof solution either. 3rd backup option might be needed... :D
That doesn't seem relevant here. The account disappeared due to a data maintenance error; it wasn't extracted via a legitimate transfer to another account, they literally forgot about it.
Only if you consider fiat money that can be printed in arbitrary amounts by Mr. Bernanke's famous printing press to be "something that tangibly exists".
Most of the talk in this discussion is about personal emergencies, like being locked out of your accounts; not about system-wide bank collapses.
There is no one reliable place. You must hedge with diverse custodial and non custodial forms of store of value for best assurance.
When the Silicon Valley Bank collapsed, funds were only inaccessible for 72 hours, and no depositors lost any money [0]. Which is still not ideal, but most people will never experience a bank collapse, and there are plenty of banking activities that will take longer than 72 hours to process in regular circumstances anyways.
[0]: https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Ban...
The bigger question is how much food and medicine is there in the supply chain buffers? If all production was to stop immediately — how many calories are on the continent? How many grams of insulin or penicillin?
In a crisis how will those things be distributed? Will it be based on immediate need or social class?
What’s keeping the system going anyways? Why do ships continue to come with consumer goods from China? Why do farmers send their grain to market?
It’s kind of neat to think about what will happen in this sort of scenario. I wonder how long the data centres will keep running, churning out models that don’t have a market an aren’t quite good enough for AGI.
A glitch prevented her account from being displayed for a few days, then was resolved. Your money, when covered via FDIC/SIPC and federal regulations, doesn’t just “disappear”.
But there was more than likely post mortems and days of meetings over it. Since it sounds it was a edge case upon edge case they didn't plan for.
>When she called on Monday, she received some more clues on what went wrong: Since her account was originally opened with a tax identification number (she was a permanent resident at the time), a system glitch emerged when she recently opened a custodial Roth I.R.A. for her daughter using her own Social Security number. Even though she said she had used her Social Security number at Fidelity for years, it appears her profile and accounts hadn’t been properly merged and updated. A work profile set up by a former employer more than a decade ago with her Social Security number may also have complicated matters. (She said she had never activated or used it.)
Deposit insurance coverage protects depositors against the failure of an insured bank; it does not protect against losses due to theft or fraud, which are addressed by other laws
Pretty much had to physically find it myself. Was the last time I let that happen…
My bank just sends a note that a statement is available, rather than an actual statement.
Which is why all of my accounts mail a physical statement each month. Yes, just about every time I log on they beg me to switch to electronic only, I say no and move along.
> My bank just sends a note that a statement is available, rather than an actual statement.
Yep. If they had implemented it just like the mail, they'd just email me the PDF (encrypted if necessary). But they don't, so I don't ever agree to "go electronic statements".
...and prevented her from having any access to money? That's way more than a glitch, that's essentially a temporary version of theft.
Think about how comfortable you would be with such a "glitch" preventing you from having access to any of the money in your main spending account? One day? One week? A month? How about a year, with court battles?
If you get uncomfortable at a month or a year, remember that the only difference between you and some other people is one of magnitude. Some people can't wait two weeks or even a week for financial institutions to get their shit together and fix their "glitches". This can upend their entire life and needs to be treated with the appropriate seriousness.
If someone else can freeze, deny, censor, or condition your access to your money, then your "ownership" is incomplete, and definitely, not yours.
Never let cash go away. Never.