The FDIC Has More Wheat......For Now.

Hey the FDIC (Federal Deposit Insurance Corporation)  just approved a measure that requires banks to prepay it 3 years of insurance in the next 30 days. See the FDIC are the guys who guarantee your deposits at a bank of up to $250,000 per customer. That's up from $100,000 last year. This is to help prevent a run on the bank. So, if your bank is failing and you are afraid your money is gonzo alonzo, you dont have to worry. Your money is safe. Of course, when many of the 95 banks that have failed this year in the U.S. were rumored to be going bust, a bunch of people ran to the bank anyway to get their dough out. I guess they didn't trust the system.

 

So, the FDIC will collect about $45 billion within a month off this prepay rule. Which is nice. Except they wont be borrowing, ahem, collecting from the banks anymore for 3 years. Oh and at the same time the FDIC said they are going to collect this dough, they raised their estimate on what future bank failures will cost them by 2013. It went from $70billion to $100billion. Whats $30 billion more among friends? Oh the FDIC also said they might tap into a $500 billion credit line with the Treasury Department but not today. Maybe tomorrow?

 

I think someone needs to know in the administration that there isn't a blank check to "fix" things.Interest rates going higher y'all. Mark it down.

Comments

[williambanzai7]

You can add FDIC bubble to the list.

[Snoop-Diggity-DANG-Dawg]

Richie,

If I sell you my plastic Timex digital watch for $300,001 dollars, and next week I buy it back for $300,000 dollars, is it really worth 300 grand? Am I any wealthier? Are we better off?

We live in the United States of Ponzi.

[Geoff Emanuel]

Aren't the banks are going to choke on the $45B hold up by the Feds? The time value of money costs to the banks not being able to pay up over 3 years is more than trivial.