The super-wealthy socialites in Hamptons, New York, have had enough of the financial systems death-defying swings. The banks have lost their trust and they are attempting to withdraw large sums of cash but are getting blocked and limited to a max of $10,000.00!
Let me ask you...
How long do you think a run on the banks can last here in America?
I give it about one week, and something more extreme than we've seen all year will happen.
As the ultra rich Snake Plisken out of the soon-to-be quarantined Manhattan - where at least one bank has are already run out of $100 bills - to fortify themselves against the viral zombie peasant hordes in their impregnable castles in the Hamptons, one thing they're looking to hoard is cash, which has caused some substantial pressure on financial institutions in the area, according to Bloomberg. At least one New Yorker had his $30,000 cash withdrawal request denied at a Chase bank after being told the limit was $10,000. Meanwhile, bank employees said they were waiting on a "shipment of cash" to fulfill other requests that have been made exceeding the $10,000 amount.
Other branches in the area were unable to help in fulfilling the request, with the East Hampton branch reportedly telling the Southampton branch that it had "two massive withdrawal orders" of its own that it was trying to deal with. Of course, this being the same Hamptons where back in 2011 an infamous ATM withdrawal receipt showed a $99.8 million balance, this is hardly surprising.
JP Morgan maintains that there is plenty of cash available and that ATMs remain "well funded". The bank also said that sometimes money is not allowed to be taken out in large amounts due to "security" purposes. Bank of America faced similar demands. A branch in Midtown briefly ran out of $100 bills to meet large withdrawals, including some for as much as $50,000 last week. The ATMs did not run out of cash, the NY Times reported.
The cash grab in the Hamptons speaks not only to the affluence of the area, but the panic over the spread of the novel coronavirus.
The Hamptons looks like a "peak summer Saturday," said one East Hampton shop owner. "Even the lowly IGA, that place was jammed. I was able to buy some toilet paper. It’s a frenzy. It’s a terror of starving to death is what it looks like."
For some, the cash scramble is just what the doctor ordered, so to speak. Charlotte Sasso of Stuart’s Seafood Market in Amagansett said the early shift to the Hamptons is actually good for business and giving fishermen a boost: "Just from one boat yesterday we got a load of fluke, flounder, squid, cod, sea bass, monkfish, whiting."
And of course, Hamptonites are also stocking their liquor cabinets. "People are buying cases instead of a bottle or two,” said the owner of Wines by Morell in East Hampton.
The resulting slowdown across the globe has undercut the price of oil, intensifying pressure on energy producers and likely reducing business investment. And many U.S. companies, especially in the airline and energy industries, are heavily indebted and might have to respond to financial pressures by cutting expenses — including jobs. On Thursday, the S&P 500 dropped more than nine percent - the largest percentage drop since the 'Black Monday' crash of 1987.
A spokesperson for Bank of America said there was only a run on large bills, and customers were able to withdraw smaller notes, including $20 and $50 bills, as normal.
'We don't keep large amounts of cash in big bills in the branches because it's dangerous for our employees and there is low demand,' they stated. $100 bills were replenished at the branch by Friday.
The cash grab appears limited to wealthy New Yorkers with stocks, as the Federal Reserve told The Times that overall demand 'has been within fairly normal levels'. The publication reports that an extra $4 billion in cash was withdrawn by anxious Americans following the terror attack on September 11, 2001. However, nearly two decades on, consumers are less likely to make payments in cash, instead using debit cards and smartphones to complete transactions.