Posted on 09/22/2009 7:25:17 AM PDT by SeekAndFind
Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government.
Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.
The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune.
A hallmark of the financial crisis has been the decision by successive administrations over the last year to lend hundreds of billions of taxpayer dollars to large and small banks.
“It’s a nice irony,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics, a consulting company. “Like so much of this crisis, this is an issue that involves the least worst options.”
Bankers and their lobbyists like the idea because it is more attractive than the alternatives: yet another across-the-board emergency assessment on them, or tapping an existing $100 billion credit line to the Treasury.
The Federal Deposit Insurance Corporation, which oversees the fund, is said to be reluctant to use its authority to borrow from the Treasury.
Under the law, the F.D.I.C. would not need permission from the Treasury to tap into a credit line of up to $100 billion. But such a step is said to be unpalatable to Sheila C. Bair, the agency chairwoman whose relations with the Treasury secretary, Timothy F. Geithner, have been strained.
“Sheila Bair would take bamboo shoots under her nails before going to Tim Geithner and the Treasury for help,” said Camden R. Fine, president of the Independent Community Bankers. “She’d do just about anything before going there.”
(Excerpt) Read more at nytimes.com ...
Government bails out banks, banks bail out the government. Circle of Life, and all that.
Already posted. Yes, I have a badge and I like to use it. LOL
Yeah.. I see no potential for terrifying results here...
I thought banks making loans to unqualified borrowers was the thing that got this whole mess started. Why encourage more of that?
They’re going to run out of sources to borrow money from. What happens then?
What happens when the gummint says ‘Sorry, we’re broke, we can’t pay you back”?
Doofuses.
EDIT TO ADD THE MISSING #2
2) They can always BORROW MONEY from the PUBLIC ( Government Bonds ).
“They’re going to run out of sources to borrow money from. What happens then?”
They confiscate more property from the American taxpayer.
Then, after they destroy private wealth and industry..they print more money. It isn’t going to end well.
Well, I was wondering if we were ever going to have a quadrillion dollar deficit ...
Can the banks start appointing czar’s to oversee the government now?
When silver hits the price of gold before the Fed was created LOOK OUT. That will be about 28 per oz.
More like quintillion...
MIDDLE CLASS MUST NOT FAIL, PART 1
http://www.youtube.com/watch?v=nmgwCmBmyKU
MIDDLE CLASS MUST NOT FAIL, PART 2
http://www.youtube.com/watch?v=n0JLFHQiMs4
Being a former examiner, I wonder if examiners would criticize these loans for being bad credit quality after being compelled to make them???
Audit the Fed. Then disolve it. Get rid of ‘reserve’ banking which has been taxing Europe and England since the 1600s and the US since 1912 via inflation. The Federal Reserve is our 4th central bank. They only work for the bankers and politicians at the expense of the people.
It is all going to hell...
I warned about this on here months ago and some smartass banker types told me I was nuts the FDIC CAN’T EVER go bankrupt.
Our country is [blanked]
Our whole economy is a fraud
Collapse is near
This is a band-aid on an amputation
I hope nobody has money in the bank.
They have to cover all monies within the FDIC limit now even if they have to use monopoly money some more...
But then again...
The dollar has to crash for 0bama’s U.N. global currency NWO goals he is doing as I type this- to be met.
quote of the year.
(1)let a bank fail and borrow from other banks to cover the FDIC obligations
(2) have the failed bank merged into or taken over by a non-failed bank
(3) have the Treasury or Fed bail out the bank to keep it from failing ----
(1) is the best of the bad choices. That way the depositors are protected and the bank's bondholders and other creditors are not. That's as it should be, and incentivizes bank bondholders to be careful about what bonds they buy.
this from the folks who would not allow banks to opt out of TARP $$$, and then refused to let them pay it back....
laughable if it were not so evil...
Actually Karen, if you weren't a retard you'd realize it's a supreme demonstration of federal incompetence and inability to properly govern because of over-reach and stupidity.
| Yes, I have a badge and I like to use it. LOL
|
2 is already happening in the city I live in.
So this tells me that 3 not being able to happen is the bottom of the barrel of ideas. Crap has hit the fan times 7.
Peter cant borrow from Paul to pay John with monopoly money.
I guess it is time NOW to get our money out of the banks.
I thought about this....
It is worthless whether it is under the mattress or in the bank...
So we just have to wait for the false messiah and the U.N. to tell us when the Euro/0bama Money conversion kicks in.
Gold is the ticket to those that can afford it. But should we all convert all our money (poor or not) to gold; is the question.
So...should I cash out my savings and checking and start using the under-the-mattress method???
See post 34.
I think they want a run on banks to make NWO happen faster. As nuts as that sounds.
LOL!
Brother, can you spare a few Tril?
This is not good. Not good at all.
Dave Ramsey says gold is a waste of good money. He makes sense with his example of New Orleans after Katrina as a ‘failed economy’. No-one was running around with little bags of gold to buy things. They did however trade goods...like gasoline, water and for the looters..tennis shoes and Heiniken...lol. Bullets will be worth more than gold when it all hits the fan imho.
“Sheila Bair would take bamboo shoots under her nails before going to Tim Geithner and the Treasury for help,”
Excellent point. We are screwed we can’t use gold to buy bread or Lee jeans.
Copper was up now it is worthless...
It is now BIG local news where I live to get on a bus for DC Sept 2-3 to DC. $150.00. Also NEW is ads/radio for guns priced for every budget, cheaper than pawn shops. They say all Americans have a right to bear arms.
Cap & Trade Tax
Healthcare Tax
Confiscation of 401k/retirement money
Confiscation of private property.
It gonna get ugly.
“I warned about this on here months ago and some smartass banker types told me I was nuts the FDIC CAN’T EVER go bankrupt.”
That’s probably technically true. If ever called upon to bail out deposits summing more than they want to spend, the FDIC will simply not pay, or get its money from the Fed, or let the banks fail. In any case, it won’t be that they went bankrupt, so much as they reneged on their promises.
Add the state taxes (goods,cigarettes,beer/soda) democRATS are chunking on to pay for their arts crap and failing budgets (SEE THE LOCAL NEWS IN NC) because they spend and waste money on stupid crap- like artifacts for an art museums, global warming crap and endangered birds and turds
-— and it is going to get REAL UGLY.
The only happy, well fed people will be those on welfare.They MAY have to give up the caddie,steaks,MD 20/20 and 109 inch Direct TV but they will EAT!
DISCLAIMER:That is not a racist comment as that may be me soon.
Already pulled out of the banks months ago....
We leave just enough in there to cover utility bills etc.
Get out of debt as fast as you can, especially any debt that has collateral attached to it.
Stock up on tangibles/dry goods that don’t spoil: ie: toilet paper for example, will make for a good trade with someone that doesn’t have any. Also, bullets....lots and lots of bullets. The .22LR may just become as good as currency. IF not, you get to do alot of target practice and won’t need to buy toilet paper for awhile.
Yeah yeah yeah but eff the po po. it happened.I laugh as I type this don’t take it as an insult.
Move in with a grandmama or granddaddy that remembers the depression.
Where’d you put your cash? A safe?
Just curious...
http://market-ticker.denninger.net/archives/2009/09/22.html
Karl Denninger on this subject (an excerpt):
Let me pose a question to you.
Let’s say you own a $200,000 house free and clear.
Let’s further say that you would like fire insurance. Just in case you are a klutz in the kitchen, for example.
So you sit down and write yourself a fire insurance policy. You promise to pay yourself $200,000 to rebuild your house if it burns to the ground.
You then put your “insurance policy” in the safe and pat yourself on the back - you’re insured!
Now, you want to re-do your kitchen and add a pool, so you go to the bank to get a mortgage to finance those improvements.
The mortgage company would accept your self-written policy as proof of insurance, right?
Oh wait - they’d call that fraud?
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