Given the signs that financial institutions are poisoned by rubbish financial voodoo like CDOs and SIVs, at what point will the public look at this situation - with once venerable institutions like Bear Stearns - and start panicing about the safety of the last little bit of equity that they may have left -- after their 401k and stock portfolio have been decimated by a sagging market, after their home's value has been deflated by a collapsing real estate market, and as they hear stories about friends and family around them receiving pink slips?
It seems inevitable now that their will be a run on the banks - that there will be people withdrawing money to hold it in the form of cash. There are already scores of smaller banks across the nation reeling from their contamination by the subprime cancer that spread so rapidly through the system - jeopardizing the liquidity of those people who hold money in them. What remains to be seen is how intense the run on the banks will become before the dust finally settles on Alan Greenspan's glorious legacy.