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Bank Runs and Bread Lines – FDIC $21 billion in debt

Posted on June 23rd, 2010 Dan

From BSC

Translation:  They don’t have your money, they gave it all away to their cronies in goldman sachs.  Banks too big to fail??  No, what they meant is you’re too small to survive!!

http://wallstreet.blogs.fortune.cnn.com/2010/06/23/fdic-funds-woes-deepen/

“The Federal Deposit Insurance Corp. on Tuesday published the latest bleak prognosis for the fund it runs on behalf of bank depositors. The FDIC added a quarter to its estimate of the time it will take the fund to recover, marking the third time in two years that its so-called restoration plan has gotten stretched.

The FDIC said the fund, which is under water by about $21 billion amid a surge of bank failures, won’t reach its statutory minimum funding level (1.15% of insured deposits) for at least seven years. Even if the economy somehow muddles through the Gulf oil disaster, the still-gathering euro crisis and who knows what else, the FDIC’s estimate puts a full deposit fund recovery off till the first quarter of 2017, all else equal.

But this being regulatory reform season, all else is most definitely not equal. Congress, beseeched by small banks and small businesses alike, is preparing a grabbag of giveaways that will push the FDIC fund’s recovery out an additional two quarters — unless the FDIC again raises the fees paid by insured banks, a step it prefers to avoid with unemployment near 10%.

Or maybe it is just that Congress can’t say no to any proposal that entails spending other people’s money.”

DON’T BE A SUCKER!


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