Posted: 3/5/2009 8:59:06 AM EDT
| Just heard that the FDIC issued a memo justifying new fees they are imposing on banks by saying that their fund for insuring deposits could dry up in six months with out them. Heard it on the EIB network today. Wouldn't that be terrific. I need more ammo. |
| I read that yesterday on the Drudge Report. If the FDIC becomes insolvent and has no money and that hits the streets. Panic will ensue, Bank Runs will begin, and you will see banks start falling like a house of cards in no time at all. The .gov at that point would probably institute a limit on how much people could withdraw in one day to stop the blood loss. That is a real nightmare scenario. |
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Nothing wrong with charging banks for their insurance, except for the fact that they'll pass that cost on to customers in the form of higher fees. Very few ordinary people would keep money in a bank without FDIC. It WILL be re-capitalized by the .gov to prop up the system. |
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link to article about this.
here's a scary as hell quote from the article: "The fund, which lost $33.5 billion in 2008, was drained by 25 bank failures last year. Sixteen banks have failed so far this year, further straining the fund." |
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Raising the fees can only generate so much money. Raise them too high and the small local banks profits take a hit. I have a call in to a friend at one to let me know of any oddities with the FDIC or anything regarding banking. I don't like the timing and wording of this latest info and suspect something behind the scenes is about to go off. May be insolvent by end of year should probably be read as - we already know we are going to be because xxx bank will wipe us out. |
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FDIC will just go to the Treasury for more funds. This happpened in 1991, they became insolvent due to bank failures and Treasury bailed them out. No big deal. IIRC 124 banks failed that year. is it a big deal if backing the FDIC takes priority over social security, pensions, etc? |
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http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aStwObH5Pyr8
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. “Without these assessments, the deposit insurance fund could become insolvent this year,” Bair wrote in a March 2 letter to the industry. U.S. community banks plan to flood the FDIC with about 5,000 letters in protest of the fees, according to a trade group. “A large number” of bank failures may occur through 2010 because of “rapidly deteriorating economic conditions,” Bair said in the letter. “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.” The FDIC last week approved a one-time “emergency” fee and other assessment increases on the industry to rebuild a fund to repay customers for deposits of as much as $250,000 when a bank fails. The fees, opposed by the industry, may generate $27 billion this year after the fund fell to $18.9 billion in the fourth quarter from $34.6 billion in the previous period, the FDIC said. The fund, which lost $33.5 billion in 2008, was drained by 25 bank failures last year. Sixteen banks have failed so far this year, further straining the fund. Angry Bankers 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. “The FDIC realizes that these assessments are a significant expense, particularly during a financial crisis and recession when bank earnings are under pressure,” Bair wrote. “We did not want to impose large assessments when the industry and economy are struggling. We searched for alternatives but found none better.” The agency, which has released the change for 30 days of public comment, could modify the assessment to shift the burden to the large banks “that caused this train wreck,” Fine said. “Community bankers are feeling like they are paying for the incompetence and greed of Wall Street,” he said. Legal Constraints Bair dismissed that suggestion. “For risk-based assessments, our statute restricts us from discriminating against an institution because of size,” Bair wrote. The deposit insurance fund won’t dry up because the government can get funds from the industry and congressional appropriations, and borrow from the Treasury, Chip MacDonald, a partner specializing in financial services at law firm Jones Day, said today in a telephone interview. “As a depositor, I am not worried in the least,” MacDonald said. “No one is going to let the FDIC go without any money.” Consumers should watch this issue closely, said Edmund Mierzwinski, consumer program director at U.S. PIRG, a Boston- based consumer-watchdog group. “I wouldn’t take their money out of the bank yet,” Mierzwinski said. “If the FDIC is saying that there is this serious problem, then we should all be concerned. I think there is a chance the FDIC is going to have to ask taxpayers for money in the future.” No Taxpayer Funds Bair rejected arguments that the agency should use government aid to rebuild the fund. The FDIC has authority to tap a $30 billion line of credit at the Treasury Department and legislation pending in Congress would boost the amount to $100 billion. “Banks, not taxpayers, are expected to fund the system,” Bair said. Asking for taxpayer support “could paint all banks with the ‘bailout’ brush.” The FDIC “will revise the interim rule, if appropriate, in light of the comments received,” the agency said in a Federal Register notice. |
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Quoted: Quoted: FDIC will just go to the Treasury for more funds. This happpened in 1991, they became insolvent due to bank failures and Treasury bailed them out. No big deal. IIRC 124 banks failed that year. is it a big deal if backing the FDIC takes priority over social security, pensions, etc? this is where the problem lies. they are all intertwined. and with all of the other bailouts and backing going on right now - which was not present in 1991, the treasury would not be able to raise enough money to fund them all in the event of major bank failures. the problem is simply too big and requires money that does not exist. about three months ago, i posted my belief that we had about 90 days. in my mind that was 90 days to get things together and plan for some major financial changes if not worse. i didn't see any way the numbers could work out to any other possibility. i still don't. |
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Raising the fees can only generate so much money. Raise them too high and the small local banks profits take a hit. I have a call in to a friend at one to let me know of any oddities with the FDIC or anything regarding banking. I don't like the timing and wording of this latest info and suspect something behind the scenes is about to go off. May be insolvent by end of year should probably be read as - we already know we are going to be because xxx bank will wipe us out. hell as bad as the stuff that we all see is, i'd hate to imagine what's "behind the scenes". 11% of all mortgages late or in foreclosure 639k jobless claims, for 5th week in a row 89 billion in ARMs set to convert this year interesting site i ran into http://bankimplode.com/ |
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FDIC will just go to the Treasury for more funds. This happpened in 1991, they became insolvent due to bank failures and Treasury bailed them out. No big deal. IIRC 124 banks failed that year. is it a big deal if backing the FDIC takes priority over social security, pensions, etc? Nope, they will just print more money. It all comes from the Imaginary Cash Reserves, turns out that there is as much as you want in there. Money is a strange thing, the more you print, the less you have. |
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FDIC will just go to the Treasury for more funds. This happpened in 1991, they became insolvent due to bank failures and Treasury bailed them out. No big deal. IIRC 124 banks failed that year. is it a big deal if backing the FDIC takes priority over social security, pensions, etc? Nope, they will just print more money. It all comes from the Imaginary Cash Reserves, turns out that there is as much as you want in there. Money is a strange thing, the more you print, the less you have it's worth.  Fixed it for you.
I worry, as was pointed out in another thread, when people are going to decide that the US Govt is a bad investment. When we can no longer sell "bonds" to pay for bailouts, then the game is up. Then we just print our way out of this. Just think, if we have 100% inflation for a few years, then a few trillion dollar deficit won't be too bad. |
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Quoted: Quoted: Raising the fees can only generate so much money. Raise them too high and the small local banks profits take a hit. I have a call in to a friend at one to let me know of any oddities with the FDIC or anything regarding banking. I don't like the timing and wording of this latest info and suspect something behind the scenes is about to go off. May be insolvent by end of year should probably be read as - we already know we are going to be because xxx bank will wipe us out. hell as bad as the stuff that we all see is, i'd hate to imagine what's "behind the scenes". i'm still trying to decide what it means.
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The moral of this story, GET YOUR CASH WHILE YOU CAN.
With all that is happening and all the money being printed and all the banks that will fail. On top of the 700,000 per month losing jobs, all the pork enslavement programs, Obama’s socialism. You have to be an idiot to think we are going to wake up and it will all be better. Cash will be King, if you have it, and if it’s worth something. |
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We might see a new rendition of what FDR did back in 1933.
As Franklin D. Roosevelt was inaugurated as president on March 4, 1933, Americans were in a state of panic. Banks were failing every day, and people clamoured by the thousands to withdraw their money. Ordinarily they might have accepted paper money in the form of gold certificates, but people feared that the government might simply resort to printing worthless money to meet the massive withdrawal requests. They didn't want paper. They wanted gold. Furthermore, people who had gold certificates rushed to redeem them for real gold. In 1933, the U.S. dollar had a very precise definition. The government defined the dollar as 23.22 grains of gold. Since there are 480 grains to a troy ounce, this works out to about $20.67 per troy ounce. This meant that if you had a $20 gold certificate, you could redeem it for roughly 1 troy ounce of gold. Each certificate bore this solemn statement: "This certifies that there have been deposited in the Treasury of the United States Twenty Dollars in Gold Coin payable to the bearer on demand." There are two promises here. First, the gold is there waiting for you. Second, you'll get the gold when you demand it. So in March 1933, thousands of people decided to make the government honour its promise. They quickly found out that the government was lying. Just two days after his inauguration, Roosevelt ordered a "bank holiday" closing all the banks in the country from Monday March 6 through Thursday March 9. He proclaimed that there was a "national emergency" caused by "heavy and unwarranted withdrawals of gold and currency" for the purpose of "hoarding." Of course, "hoarding" simply means people holding on to their own money. Roosevelt called it "hoarding" to make it seem like evil or immature behaviour. It was the typical politician's ploy of blaming the government's woes on the people's vices. On March 9, the Senate passed the Emergency Banking Act after very little debate. This gave the Secretary of the Treasury the power to compel every person and business in the country to relinquish their gold and accept paper currency in exchange. The next day, Friday March 10, Roosevelt issued Executive Order No. 6073, forbidding people from sending gold overseas and forbidding banks from paying out gold. Pretty good for his first week in office. But wait, there's more. On April 5, Roosevelt issued Executive Order No. 6102. This was the order to confiscate everybody's gold. It commanded everybody to deliver their gold and gold certificates to the Federal Reserve bank, where they would be paid in paper money. You could keep up to $100.00 in gold, but anything above that was illegal. Gold had become a controlled substance. Possession was punishable by a fine of up to $10,000 and imprisonment for up to 10 years. Now the only people with a claim to gold in the Treasury were foreigners holding dollars. Since he was on such a roll, Roosevelt decided to rip them off too. On January 31, 1934, Roosevelt issued another Executive Order. Here he declared that the dollar was now only 59.06% of its former gold quantum of 23.22 grains. Now the dollar was only worth 13.71 grains of gold. Look at it from the point of view of one of these hapless foreigners. It used to cost you only $20.67 to get a troy ounce of gold. Now it cost you $35.00. The U.S. government, under the dictatorship of Roosevelt, had just stolen 40% of your money. By burglarizing the rest of the world, Roosevelt made the Great Depression even Greater. It was more Global because he had impoverished millions of foreigners, and it was more Persistent because he had ruined the good credit of the United States. Not bad for his first year in office. Some have suggested that FDR had no choice because if he had allowed the "run" to continue, soon there would be no more gold in the U.S. Treasury to back the gold certificates. But how could that be? Each gold certificate certified that there was a certain amount of gold in the Treasury payable to the bearer on demand. The law decreed that $20.67 would get you one troy ounce of gold, which was just sitting there in the vault waiting for you to "demand" it. In his excellent 1935 book Monetary Mischief, George Robinson claims that these gold reserves really did exist. Maybe so, maybe not. Either way, FDR was not honouring the redemption promise. The U.S. was now running a con game, having printed "gold certificates" that in fact could not be redeemed for gold at all. Imagine if e-gold or GoldMoney suddenly began issuing new digital gold grams without having the real gold grams to match them. That would be theft and counterfeiting. Certainly creating even more fictional gold grams would not be the solution to this problem. FDR engaged in theft and counterfeiting as a solution to a problem caused by theft and counterfeiting. A more honest solution would have been to make good on as many gold redemptions as possible, and then begin a massive liquidation of government assets to purchase gold on the open market until all redemptions were made. To avoid the pricing problems of sudden mass liquidations and mass gold purchases, the government might have offered gold bonds to those who would accept them. These bonds would be payable with interest in gold after a fixed time period. To people immediately demanding their gold, the government would have to tell them to wait, and then proceed quickly to round up enough gold to satisfy the request. I'm sure the people would have preferred to hear "hold on, we're getting your money" than "screw you, we're stealing your money." The sale of government assets would include office buildings, vehicles, huge tracts of land, etc. In other words, my solution would be: take every action to make good on all the gold redemptions. Do not steal the gold. Some have said that FDR's actions were necessary because a default on the redemption of paper currency would bankrupt the country, and not just the government, but all private debts as well. But that's just it––the government DID default on the redemption of paper currency, and it did bankrupt the country by deepening the depression and spreading it worldwide. Sadly, it did not bankrupt the government, only the indentured servants we like to call "citizens." (Brother, can you spare a dime?) I must emphasize that when the government devalued the dollar and confiscated gold, they WERE defaulting on their redemption obligations. They didn't magically skirt the underlying hard reality just because some politicians signed some pieces of paper. Some have said that FDR was faced with a dire national emergency, and did the only thing he knew how to do with the powers that had been granted to his new office. To that I say: FDR was not granted these powers. He had no more legal authority to do what he did than my immigrant grandfather had. But that never stopped a president from doing anything to consolidate and maintain power. As a betrayer of the Constitution, FDR ranks right up there with Lincoln, LBJ and Nixon. Last time we were screwed out of the gold that supposedly backed our currency in one fell swoop. All they need to do this time is go to a "new" dollar with some perverse conversion rate and we are all screwed again. |
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Damn them all, I really wish I could get to my little bitty 401K money instead of watching it evaporate while this goes on. I could make it into something useful... You could take a loan out against it and pay yourself back. Yes, that's what they told me, but I found the idea so completely idiotic I hung up the phone laughing. A loan? Of my own money? To me? From them? The very principle is laughable. I've pretty much written it off. I doubt my job will last much longer, I'll be able to get whatever paltry sum is left at that point. It's a damn shame. It's not much money, but it could have been another house payment or two, perhaps enough to last me until I get something else worked out. Now it will just be a little moving money after they foreclose on me - if I can get it at all. Lesson learned. So many people are wrapped up in following the letter of the law, to the extent they ignore the intent. |
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There's a reason why - even though Obama is saying his administration is bringing 'Transparency' to the workings of the government - the Feds STILL ARE REFUSING TO SHOW WHERE THE HELL ALL THIS MONEY IS GOING!!!
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hell as bad as the stuff that we all see is, i'd hate to imagine what's "behind the scenes".
Raising the fees can only generate so much money. Raise them too high and the small local banks profits take a hit. I have a call in to a friend at one to let me know of any oddities with the FDIC or anything regarding banking. I don't like the timing and wording of this latest info and suspect something behind the scenes is about to go off. May be insolvent by end of year should probably be read as - we already know we are going to be because xxx bank will wipe us out. 11% of all mortgages late or in foreclosure 639k jobless claims, for 5th week in a row 89 billion in ARMs set to convert this year interesting site i ran into http://bankimplode.com/ They're delaying the public release of this information because of two reasons: 1.) They don't know where 100% of it went and whose pockets were lined with it... 2.) They know that once that information IS released to the public there will likely be a massive outrage like nothing ever witnessed before in this nation - and the Government needs to prepare for this monumental public backlash! |