FLASH: U.S. weighs backing bank debt, deposits - reports (insuring ALL deposits)

Reuters ^ | 10/10/2008 | Reuters Desk

[Nexus]

SYDNEY, Oct 10 (Reuters) - The U.S. government is weighing guaranteeing billions of dollars in bank debt and temporarily insuring al U.S. bank deposits, in a bid to unfreeze bank lending and staunch massive losses in equity markets, The Wall Street Journal reported on Friday.

The New York Times reported that U.S. and British officials were converging on a similar blueprint to stem financial chaos involving injections of government money into banks in return for ownership stakes and guarantees of repayment for various types of loans.

MORE

http://www.reuters.com/article/marketsNews/idUSSYD37289020081010

U.S. Weighs Backing Bank Debt Removing Deposit Insurance Limits Also on the Table

WASHINGTON OCTOBER 10, 2008 -- The U.S. is weighing two dramatic steps to repair ailing financial markets: guaranteeing billions of dollars in bank debt and temporarily insuring all U.S. bank deposits.

If the two moves come to fruition they would mark the government's most extensive intervention yet in the financial system, as officials ponder increasingly far-reaching measures to stem the sprawling crisis.

MORE

http://online.wsj.com/article/SB122360336021121827.html

[jddqr]

More Socialism for Everyone!!!!!!!!!!

Whee!!!!!!

[Ciexyz]

The end of the world as we know it.

[Constitution Day]

In the immortal words of George Jetson:

"JANE, STOP THIS CRAZY THING!"

[IncPen]

Worse than socialism, it will be instruction to the bankers that there are no consequences.

And that will be the end.

[unspun]

National Suicide

[Eric Blair 2084]

At some point, the central planners will figure out that the market doesn’t like central planners, Socialism or Marxist candidates like Barack Fitzgerald Obama.

The only thing that will turn this around is a unified statement by the EU and the Fed stating that:

BIG GOVERNMENT EGALITARIAN POLICIES THAT ATTEMPTED TO GIVE EASY CREDIT AND LOANS TO HOMELESS PEOPLE WITH NO JOBS OR INCOME AND INCREASE HOME OWNERSHIP WAS A BAD IDEA. WE MEANT WELL, BUT WE LEARNED OUR LESSON AND WILL NEVER TRY TO PULL THIS STUNT AGAIN. SOCIALISM DOESN’T WORK. IT’S BEEN TRIED AND IT HAS FAILED. WE ARE SORRY. IT WON’T HAPPEN AGAIN. WE WILL LET THE FREE MARKET WORK FROM NOW ON.

Than get every left wing liberal to initial it.

[PAR35]

That should knock another 5% off the Dow before the (government) holiday weekend.

[glock rocks]

The U.S. government is weighing guaranteeing billions of dollars in bank debt and temporarily insuring al U.S. bank deposits

"Everything was beautiful, and nothing hurt."

- Kurt Vonnagut

Apparently, the government has decided to protect us from any and all risk.

We no longer have to determine whether we can afford, we can just take what we want... and you, honkey bitch, can pay for it.

[Brad’s Gramma]

I *knew* something like this was coming...I heard someone on the radio a day or so ago...forget who...it was during a newsbreak and said person said “your money SHOULD be insured”. Not IS insured, should be.

Email, glock. Hang on...

[Hound of the Baskervilles]

Is this something brand new or were they already talking about this in the news on Thursday?

[Hound of the Baskervilles]

The U.S. government is weighing guaranteeing billions of dollars in bank debt and temporarily insuring al U.S. bank deposits, in a bid to unfreeze bank lending and staunch massive losses in equity markets, The Wall Street Journal reported on Friday.
*********************

At least they say it’s temporary.

[P-Marlowe]

European banks are guaranteeing every deposit. If the US does not follow suit, most of the very large deposits that are now in American banks will be transferred to Europe. If that happens then a lot more banks in the US will go under.

In this case, I don't think we have a choice, but to do this until the finance crisis eases. This is a protectionist move. It levels the playing field with the rest of the world. It may be stupid, but I suspect that right now it is a necessary evil.

[College Repub]

This could help things a lot and make trillions flow into bank deposits from wealthy individuals

[Revel]

And they were singing.....Bye bye mis-American pie......

[Nexus]

Is this something brand new or were they already talking about this in the news on Thursday?

Talking heads have been discussing it as a possible "next step", but this is the first confirmation that the US government is seriously considering it.

[Arkinsaw]

European banks are guaranteeing every deposit. If the US does not follow suit, most of the very large deposits that are now in American banks will be transferred to Europe. If that happens then a lot more banks in the US will go under.

This is assuming you actually believe that they can guarantee these deposits if it comes down to it.

[P-Marlowe]

This is assuming you actually believe that they can guarantee these deposits if it comes down to it.

Any sovereign country is free to pay off its depositors in Monopoly money. All they need to do is start the printing presses.

[supercat]

Why not provide that the bank deposits must be divided among smaller banks within a certain time frame? Even someone with a billion dollars in the bank should be able to hire a crew to get his assets divided into 10,000 pieces; I’m pretty certain there exist that number of banks and thrifts.

[adlucem]

Far from solving the problem, this will lead to a complete collapse of the U. S. financial system. The FREE market will be gone. Accordingly, its self-regulating mechanisms - especially its intrinsic ability to determine value - will be gone as well. No gold standard. No paper money standard. No money period.

A single lady friend of mine with a nest egg of about $400k asked me recently what I thought she should do with it. She is terrified. I said, "If you really think the whole system is going to crash, the smartest thing you can do is buy massive quantities of cigarettes and toilet paper. At least that way, you'll have something to barter."

Think I was kidding?