Posted on 03/17/2023 10:51:04 PM PDT by delta7
We have a serious problem here. Depositors in a bank are NOT risking their money as an investor in a hedge fund. They expect honesty and stability. If the bank is trading and doubles its money, it belongs to the shareholders – not the depositors. Likewise, a loss belongs to the shareholders and that means 100% of all deposits MUST be covered – PERIOD!
Even Senator Lankford fails to understand that simply because a Chinese national is a depositor it does NOT justify defaulting on them. That would mean that all foreigners should remove their money from the United States. It would also be against the Constitution.
When this nation was formed, we adopted TERRITORIAL JURISDICTION and rejected the monarchy system of jurisdiction. If you killed someone in Paris but you were British, the French would arrest you and could not charge or punish you because you were the “property” of the King of England. They would send you back to your king and explain what you did and it was up to your king to determine what to do.
We adopted TERRITORIAL JURISDICTION whereas if you were British but killed an American, you stood trial in America and they rejected the idea that you were the property of the King of England.
ALL depositors, regardless of their origin, MUST be treated the same as any citizen. You cannot have it both ways. So, sorry. Senator Lankford, you are wrong. We MUST cover even a deposit by Putin or the Communist Party of China. Otherwise, ALL foreign investors should also sell ALL their holdings of US debt – PERIOD!
Yellen has cast doubt on this policy and it is a warning that all banks have this same crisis in the collapse of long-term debt because of this endless pit into which we are throwing money called Ukraine. We stand NOTHING to gain from this insanity. It is nothing more than the personal vindictiveness of the Neocons who have transformed Ukraine into an Anti-Russia spearhead and American foreign policy into the aggressor in the quest for World War III.
All Neocons should be arrested for treason. Only Congress can declare war. This is a proxy war that has not been declared and has no benefit to the American people or even the Ukrainian people who have been forced to flee their homes in this battle to conquer Russia.
All Depositors in Every Bank Must be Made 100% Whole – it is the Shareholders of Banks that Lose in Such Situations
What the Biden Administration has paid Ukraine would have covered all the outstanding Student Loans and even the failed banks! AMERICA FIRST!
“All Depositors in Every Bank Must be Made 100% Whole “
Hold on. The FDIC insurance limit of $250,000 per account (or per beneficiary, in some cases) isn’t exactly a secret. The idea that the Feds must guarantee every bank deposit no matter the size is quite novel and ultimately would encourage risky bank practices by moving a significant amount of risk onto the taxpayers. I remember some banks like Countrywide and Downey Savings 15+ years ago were paying well-above-market interest rates to attract deposits... and then were making crazy, high-risk loans to unqualified or minimally qualified borrowers. As a depositor when Countrywide and Downey were paying 6% on CDs while the big banks were paying 3%, I put my money in Countrywide and Downey but only up to the $250k insurance limit. If the Feds were guaranteeing everything, I might have gone beyond that limit and thus enabling Countrywide and Downey to have more capital to take even greater risks.
“Think about that last figure, senile Joe has thrown away more money into the Ukie black hole instead of using that money to help Americans.”
Well, there’s a REASON he’s sent $100B plus to Ukraine, and that is because Russia, a country that takes 8 months to capture a town of 70,000 people on its borders, will TAKE OVER THE WORLD if we don’t stop them in Ukraine.
...at least according to some of the foreign posters here.
Not if depositors knew beforehand that the insured cap was $250,000.
When you open an account (savings, CD, or checking), it will clearly state on the form that this one account is protected up to $250,000. The bank might offer some private insurance deal for accounts going beyond that, and mention this.
I’ll state also, if you were doing banking business in Europe, you’d have similar protection (for a lesser amount). I think in Germany, it’s 100,000 Euro (roughly $115,000).
In the SVB situation, I think they had a fair number of people who had CDs running....into several million per account. By FDIC long-running understanding, they are supposed to only cover up to $250k. The rest is a loss.
I watched the Yellen Senate hearing yesterday. I’ll just say Yellen is beyond her years (76) and capability on this. About 30-percent of the questions asked...were headlight type, where she acted like Joe Biden and could not offer a realistic answer. I would recommend people go and find clips on YouTube to view.
Suppose someone buys a home for $400,000.
As part of the closing process, a payment of $400,000 is made from one bank account (on behalf of the buyer) to a closing agent. The proceeds of the sale are then paid to the seller.
How does this process get done without exposing 2-3 parties to the risk of losing the money in a bank failure?
Of course, this nasty, old, bloated Land Whale will never lose a penny in any financial crisis that she and the rest of her fellow leftist/globalist/RINO/WEF pigs create. Ugh.
Of coarse the decision will be theirs, who gets it and who don’t. The crime syndicate and their buddies win again
The three USA banks that have crashed were brought down by thousands of depositors suddenly withdrawing their money.
If that is the new definition of "risk," no bank in the entire world is safe!
We can only cover da big ones who donate to our communist cause. All others are screwed. /semi-sarcasm
East Palestine parameters are being used all across the Usurpation. They said before they were installed that they would punish any that opposed them.
They have the money on hand for a few people to withdraw all of their money, but not large numbers of people doing so, especially the larger bank depositors.
When that happens they don't have the money to give people for regular withdrawals. That in turn spooks all depositors that more & more start demanding all of their money also.
That is what is called a run on a bank. Like a fast moving contagion, it quickly spreads to other banks.
In a house sale there is money going out, but there is also money coming in which counter each other. The bank paying out, is receiving that amount from both the buyer's down payment amount, as well as, the lender's loan amount to the buyer. The buyer is also paying the fees to cover the process as part of the closing costs.
Now this is only meant to provide you with a quick example of how they differ, and is in no way meant to be comprehensive explanation. I might also add, that this was not my profession either. 🙂
If anyone sees errors just correct what I might have misspoke about. 🙂
Martin Armstrong gets kinda screwy every once in a while.
Martin must have been off his meds when he wrote this.
Better thought: suppose we didn't have sky high inflation and over a decade of QE and 0% interest inflating housing prices to begin with. Then only the uber rich would have to worry about $400K homes. And people with that kind of money in the bank would be used to splitting it up across banks to stay within the $250K FDIC limit. As it stands now when you buy a home for over $250K, there's nothing to stop you at closing from having part of the money come from one bank and the other part coming from another bank. And that assumes you're paying cash for it. If we're talking about a mortgage being transferred, then IIRC that's not a FDIC insured account anyway. So if you buy my house from me and I still have a mortgage for it, and you're going to have a mortgage, then at closing your bank is sending money to my bank to pay off my old mortgage. Since that's not a checking or savings account, it doesn't matter how much it is in the discussion of being FDIC insured because mortgages aren't FDIC insured anyway IIRC.
But IMHO another simple fix is to set the FDIC insured limit to adjust for inflation like a lot of other dollar-limited regulations (i.e. max contribution limits for 401K's and IRA's). If you recall the FDIC limit was at $100K for a long time and was increased to $250K only through Congress. An inflation adjusted limit would rise with whatever future inflation we experience from government's money printing and overspending ways.
Dear Martin,
Should tax payers pay for insurance on all risks in financial transactions and markets. Obviously, no!
$250,000 is then number we have risen to after 100 years of adjustments. You want to raise it? Go to congress and get them to raise it. 500k might be a good adjustment. But unlimited — get serious.
KC Burke
All depositors everywhere covered?
Even if that were possible and/or legal - which it’s neither - this economic imbecile has piles of $**t in his cranial cavity.
What I was getting at is that the $250,000 limit seems to be really designed for people who keep money in bank accounts for long periods of time -- mainly as cash savings.
The problem is that the $250,000 limit doesn't help nearly as much when you're dealing with large accounts that serve transactional purposes. I used the example of buying a home because it's one that many people can relate to. A more serious problem involves businesses that might be dealing with transactions far in excess of that $250,000 on a much more frequent basis. A business with as few as 50 employees, for example, probably needs at least $250,000 just to process a payroll run every two weeks.
This last example is what really motivated the U.S. Treasury and the Federal Reserve to "backstop" banks like SVB and Signature.
Also, I wanted to clarify that I wasn't referring to holding a mortgage in the home purchase process. I was referring to the simple process of transferring the $400,000 from a buyer to the closing agent to the seller. The mortgage is one of the elements of this transaction, but at some point this $400,000 sale price must change hands from the buyer to the seller -- and it will typically involve at least three banks. In theory, a bank runs the risk of losing anything above the $250,000 FDIC cap even if it holds the money for just 24 hours.
Banking is a utility function that is supposed to be kept safe and firewalled away from speculation. Your friendly GOP team of Gramm-Leach-Bliley broke that wide open in 1999, and now the bill is coming due.
“Yellen Casts Doubt of Covering All Depositors”
Unless they are Democratic donors?
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