Posted on 03/04/2009 11:45:13 AM PST by txmissy
WASHINGTON — The head of the Federal Deposit Insurance Corp. has warned that the fund insuring Americans’ bank deposits could be wiped out this year without the money the agency is seeking in new fees from U.S. banks and thrifts.
FDIC Chairman Sheila Bair acknowledged, in a letter to bank CEOs, that the new increased fees and hefty emergency premium the agency voted to levy last week will bring a “significant expense” to banks, especially amid a recession and financial crisis when their earnings are under pressure.
“We also recognize that assessments reduce the funds that banks can lend in their communities to help revitalize the economy,” Bair wrote.
But given the accelerating bank failures that have been depleting the deposit insurance fund, she said, it “could become insolvent this year.”
“Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative,” Bair wrote in the letter dated Monday to the chief executives of the nation’s 8,305 federally insured banks and thrifts.
(Excerpt) Read more at chron.com ...
So if they’re worried FDIC is going broke, that probably means it already is.
I rest my case.
Everyday a guy left work w/a/ wheelbarrow of scrap lumber, the guard checked it and let him go through the gate, . . . turns out he was stealin' wheelbarrows ( which will become known as "Obama wallets").
so...who still trusts the govt? It was the FDIC that caused the s&l crisis after Garn-St Germain upped the limits thus creating moral hazard (see http://www.realclearmarkets.com/articles/2008/10/the_fdic_and_how_soon_we_forge.html)
. Now the limits are even higher. So of course the FDIC is in big trouble.
>> Thanks...that makes me feel better....a little.
I have enough cash in insured accounts that I did some research. I look at FDIC insurance as probably the ONLY part of the bailout that I’ll get any benefit from whatsoever!
Don’t panic about your insured deposits. If you want to worry about something, worry that Bambi will inflate them away to worthlessness. But (IMO) that won’t happen right away. We’ve got a deflationary period to deal with first.
Yeah I am ready to buy stock in Reynolds wrap cause wow this is about the stupidest move I have ever seen by a public official.
The only rational explanation is someone wants the banks to collapse. Why else would you make a statement like this?
Tinfoil Hat Time guys! I think we may have a conspiracy here.
No, I am not kidding.
it had a sign which said it had chosen not to participate in the new fdic program
When you go back, can you ask for an explanation from them?
Have them explain the ‘new program’?
My theory is that you should buy some hard goods you might need now. I was talking with an old man in the country who said he keeps all his money in asafe at his grandmother’s house (she must be one heck of an old lady!) and none in the banks, so that when the banks go, he’ll still have money. Great idea, but the money will probably be worthless too. We talked a bit about how it might be a good idea to get a few things while you can. Well, in addition to all the ammunition you can find...
It's a funding shakedown, but based on reality.
The $250,000 FDIC coverage lasts till the end of the year ONLY....unless they re-up it....don’t buy a big ole CD you can’t get out of by 12/31/09 for over $250K....same for keeping funds in a single bank....I wouldn’t keep over $100K in any one bank, per person.
If this is true, this is disastrous.
Yesterday I started pulling money out of our money market account at our bank. The tiny bit of interest we earn is negligible, and I just like having my cash on hand. I’m going to pull out a little bit every few days until I have it all. I don’t think our bank will go under, but if there’s a severe banking crisis, I just want my money where I can see and touch it.
In a deflation like we have now your cash is king
In an inflation it will lose its value
I can see an implosion/deflation scenario with bank runs and bond defaults and bank holidays but your green FRNs (Federal reserve notes) will not turn to crap. There is very little green cash money compared to the electronic money we have on bank ledgers and other places
Unless we adopt a new currency (unlikely) and the 0bammys put a limit on how much green FRNs you can convert to the new currency. Say a limit of $25,000- $50,000 but who knows?
Put half your cash in a Canadian bank---they are very solid
>> I’ll be biting my nails ‘til it gets here
I’d be biting my nails AFTER it got here.
Want me to help you bury it? I swear I won’t tell anyone where we put it.
I think it means you might need to find a new bank.
"Only the paranoid survive" --- Andy Grove past head of Intel
- Andrew S. Grove - Only the Paranoid Survive
I'm often credited with the motto, "Only the paranoid survive." I have no idea when I first said this, but the fact remains that, when it comes to business, ...
www.intel.com/pressroom/kits/bios/grove/paranoid.htm - 31k - Cached - Similar pages -- Amazon.com: Only the Paranoid Survive: Andrew S. Grove: Books
Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge .... ONLY THE PARANOID SURVIVE provides two powerful observations that will help ...
www.amazon.com/Only-Paranoid-Survive-Andrew-Grove/dp/0385482582 - 252k - Cached - Similar pages -
I’d be biting my nails AFTER it got here.
So, why after?
“Invest in wheelbarrows.”
Wallpapering may come back into vogue...
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