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Thread: FDIC: Bair Says Insurance Fund Could Be Insolvent This Year

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    Featured Member Vamp's Avatar
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    Default FDIC: Bair Says Insurance Fund Could Be Insolvent This Year

    March 4 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency.

    Smaller banks are outraged over the one-time fee, which could wipe out 50 percent to 100 percent of a bank’s 2009 earnings, Camden Fine, president of the Independent Community Bankers of America, said yesterday in a telephone interview.

    “I’ve never seen emotions like this,” said Fine, adding that he’s received more than 1,000 e-mails and telephone messages from angry bankers.


    http://www.bloomberg.com/apps/news?p...d=alsJZqIFuN3k
    Last edited by Vamp; 03-05-2009 at 05:55 PM.
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    Default Re: FDIC: Bair Says Insurance Fund Could Be Insolvent This Year

    Yep...saw this on Bloomberg yesterday and the media spewed it today.

    I'm afraid the other shoe might very well drop and this would absolutely crush not only bonds,CD,401's,IRA's but the entire system as we know it.

    I'm truly starting to think "they" want it to crash so it can be re-structured under government control.

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    Default Re: FDIC: Bair Says Insurance Fund Could Be Insolvent This Year

    Ultimately, this amounts to fiscally conservative regional / local banks and credit unions being forced to pick up a greater portion of the 'tab' to cover losses by fiscally irresponsible lenders. Like the housing bailout plan, this will wind up further penalizing those who have behaved in a responsible manner. The only difference will be that instead of 'collecting' bailout money in the form of taxes, the FDIC plan will 'collect' bailout money in the form of lowered interest rates on future saving / CD's, and higher interest rates on future loans ( as regional / local banks and credit unions are forced to pass on the increased cost of higher FDIC insurance premiums to their customers).

    However, it this does come to pass it will be good for gold ... which will look even more attractive in a comparison of 0% interest on gold versus 1% interest on say a 1 year CD.

    IMHO the FDIC was never serious about enacting this increase. What they really sought was a huge new line of credit from the US FED. They're extremely likely to get the 1/2 trillion in credit they are asking for too ... since it would represent another significant increase in the total amount of taxpayer dollars (or freshly printed dollars) which can be channeled into US financial institutions. This would also be good for gold !


    In terms of 'restructuring' plans, the proposed huge FED line of credit would essentially do to the FDIC what the proposed changes in SSI tax rates / caps would do to the Social `Security system. It would remove the last vestiges of belief that the FDIC was a 'self-funding' subsystem charging specific amounts to specific people / businesses in exchange for providing specific benefits, and instead confirm the FDIC as just one more branch of a huge central government that is able to 'slosh' taxpayer money in any manner that seems opportune at the moment.

    ~
    Last edited by Melonie; 03-06-2009 at 06:46 AM.

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    Default Re: FDIC: Bair Says Insurance Fund Could Be Insolvent This Year

    Quote Originally Posted by retiredangel View Post
    Yep...saw this on Bloomberg yesterday and the media spewed it today.

    I'm afraid the other shoe might very well drop and this would absolutely crush not only bonds,CD,401's,IRA's but the entire system as we know it.

    I'm truly starting to think "they" want it to crash so it can be re-structured under government control.
    Well, they are talking it down. Just another "problem" the government is "exposing" and offering "solutions" for.

    They took a play out of The Prince. And it's just as Bastiat warned.
    Quote Originally Posted by The Snark View Post
    But then I suppose the sort of people who write this kind of crap generally don't allow their opinions to be tainted by things like "facts" and "reality".
    Distortion becomes somehow pure in its wildness
    The note that began all can also destroy

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    Default Re: FDIC: Bair Says Insurance Fund Could Be Insolvent This Year

    Quote Originally Posted by Melonie View Post
    Ultimately, this amounts to fiscally conservative regional / local banks and credit unions being forced to pick up a greater portion of the 'tab' to cover losses by fiscally irresponsible lenders.

    ~

    Credit Unions and the NCUA does not have the issues banks are having over all. People are actually flocking to credit unions because they feel they are safer then banks right now. In some cases that is true because credit unions generally are very conservative.
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    Default Re: FDIC: Bair Says Insurance Fund Could Be Insolvent This Year

    ^^^ and the sudden increase in credit union deposits is precisely what is causing existing NCUA insurance funding to be considered inadequate !

    You can also count on the fact that if the FDIC is 'converted' into just one more federal gov't agency drawing its funding from the same public trough, that the NCUA will be forced to follow. After all, it appears to be the new 'civic duty' of responsible / conservative individuals and businesses to share their assets to 'help out' their less responsible brethren !!!

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