[countrymomma]

Husband generally handles the bills around here - but when there is a problem the duty falls to me (ie: incorrect phone bills, making sure medical insurance pays what they are suppose to, keeping homeowner's insurance inline - well basically arguing with in-bound call operators and spending hours on hold when necessary)

Anyhow... so many reporters are paying great lipservice to FDIC insured banks - "Hey, don't worry - you're insured!" I started to really worry! When our roof was damaged the insurance adjuster came out a week later and said "no problem, we'll reimburse you such-and-such percent after you replace the roof." We do our repair job & suddenly the insurance company changes the tune. Same goes for health insurance. I can't tell you how many times I've had to fight for weeks to get what we are due.

They are all happy to take your money, but when it comes time to render service then the time table becomes very iffy.

But, I wasn't sure if I was way off because I wasn't sure how this FDIC thing works. I can see that my concerns weren't unfounded.

Thank you very much for the information.

(edited to close a quotation. oops)

[Leanan]

$this->bbcode_second_pass_quote('countrymomma', ' ')Should your local bank go under, how long does it take to get back to "business as usual?" What is the process? Most importantly, how long will those with money in the bank be hanging out, unable to access their money?

[frankthetank]

Can anyone really say what will happen? We are entering unsafe waters here and i trust banks about as much as i trust a used car salesman.

[IslandCrow]

Another question. One of the revisions to the bail out bill is to raise the amount insured from $100 000 to $250 000. The last bank bail outs have hit the FIDC funds hard, so how much sooner will they have to be bailed out themselves?

[BTW the amount of insurance here in Finland is only € 25 000 (US$ 35 000)]

[smallpoxgirl]

$this->bbcode_second_pass_quote('IslandCrow', 'A')nother question. One of the revisions to the bail out bill is to raise the amount insured from $100 000 to $250 000. The last bank bail outs have hit the FIDC funds hard, so how much sooner will they have to be bailed out themselves?

[Delphis]

Not mentioned on this thread is the WM seizure, which curiously took place on a Thursday...very much not business as usual per your comments and common knowledge. It just so happens that the next day they were holding congress' feet to the fire in a "give us $700M or else" CFR bully scheme. My only hope is that the Senate has the gumption to take them to take a long walk on a short pier for good this time and we can get on with this!

Thoughts?

[Heineken]

FDIC works fine if only a handful of banks go bankrupt at any one time. But in the case of a large wave of bankruptcies, you wouldn't get your money ever, or you'd get it only after a long time, or you'd get only part of it. The reason is that FDIC is severely underfunded. It has maybe $50 billion, whereas depositors have many times that amount on deposit.

You'd need the mother of all bailouts. Basically we'd be borrowing money that doesn't exist, on a gigantic scale, to give it to ourselves. God knows what the repercussions of that would be.

[Leanan]

$this->bbcode_second_pass_quote('Delphis', 'N')ot mentioned on this thread is the WM seizure, which curiously took place on a Thursday...very much not business as usual per your comments and common knowledge.

[mattduke]

$this->bbcode_second_pass_quote('', 'T')he FDIC also announced that in the third quarter, the Deposit Insurance Fund (DIF) decreased by 23.5 percent ($10.6 billion) to $34.6 billion (unaudited). The reduction in the DIF was primarily due to an $11.9 billion increase in loss provisions for bank failures, which represents the estimated losses for FDIC-insured institutions that are likely to fail over the next 12 months. Accrued assessment income increased the fund by $881 million. Interest earned, combined with realized and unrealized gains (losses) on securities, added $653 million to the insurance fund.

[smallpoxgirl]

If you look at the FDIC website, there is a white paper about the possibility of DIF (actually BIF before the name change) becoming insolvent. It actually became insolvent around 1990, and they anticipate that even a relatively mild string of bank failures could do it again. Basically the DIF is sized to handle the ordinary bank faillures that happen during normal economic times. It is absolutely not intended to cover an economic catstrophe such as we are now in.

[Tyler_JC]

Fast forward 6 months.

More banks have gone under. They go the way of IndyMac and require FDIC bailouts to protect depositors.

The FDIC's funds are completely exhausted.

You are President Obama.

Make a decision:

1. Let the FDIC fail and destroy all remaining confidence in the American banking system. Americans withdraw their life savings by the billions and more banks fail. This prompts more people to withdraw their money and destroys more banks...2009=1930. Congratulations, America has entered an apocalyptic death spiral.

2. Bailout the FDIC by selling treasury bonds to the Federal Reserve (printing money) and using the funds to make sure the FDIC is still able to meet its obligations.

Which would you do? Which option do you think President Obama will pick?

I'm not worried about the FDIC.

[Jotapay]

It's unbelievable she said this in public. link
$this->bbcode_second_pass_quote('', 'M')arch 4 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said the deposit insurance fund 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.

[smallpoxgirl]

FDIC had a white paper on it's website all the way back in 1999 that said that any unusual spurt of bank failures would probably bankrupt the BIF. FDIC became insolvent in the early 90's from the Savings and Loan crash of the 80's. Really the question is does the BIF get recharged from the banksters like it's supposed to, or do we add this to the bailout tab.

[Fishman]

Mmmm, that smell, that smell of fear and burning rubber and leather as folks run to their banks.

[Prince]

I remember 15 years ago back in 11th grade US history class when we were discussing the ramifications and cause of the Great Depression. One of my classmates made a comment about how the FDIC would prevent this from happening today. Our instructor basically said that for full-scale panic like the GD (or like we have now) would nullify the benefits of the FDIC, since there isn't nearly enough money to protect everyone in a domino collapse like we had then (or now). The FDIC can handle isolated and small collapses, but not catastrophic, widespread panic like we have now. I never really had much faith in the FDIC seriously after that.

The $100k (now $250k) protection is meaningless to most people. Outside of businesses, how many people honestly have $250,000 more in a bank account? Probably < 1%. Hell, I'd bet that < 5% have more than $20,000.

But I do agree with SPG--this will get added to the bailout BS with some other four-letter bullshit acronym that Timmy and Benny will think of.

[Voice_du_More]

Did any of you see that msnbc story, Dodd wants to send over a $500 billion dollar stimulus package to FDIC. Now how is it that we told everyone their bank deposits were safe when we really thought FDIC needed about $500 billion more to cover? I think we are about to enter the single worst six months in American financial history. Hope to God something is left standing when it is over.

GM? GE? Citi? AIG?

It seems now like parallel universes. The MSM and the web is all 'crash is imminent.' But you walk down mainstreet and you here people say things like 'in this market.' and stuff like that but nobody is carrying a sign that says 'The end is near.' Well, except for me, but they clearly think I am completely insane.

If the news that has emmerged in the last few days is true we have

1) unemployment accelerating exponentially with no reason to think the trend is going to slow soon, we could see 14% by summer at this rate, 20% by April, who knows

2) GM is now un saveable. So what happens to the UAW? What happens to the millions of jobs that supply GM? There does not seem to me to be a way forward from a liquidation of GM. now if you talk about a restructure well fine, but that does not solve the problem that people are not buying cars. - 53% YOY, what company can bounce back from that. I mean all of their creditors have to have come after their revenues were greater than 50% what they are now. It's like a freight train barreling down the track and it sudeenly just jumps right off the tracks.

3) The whole financial thing is getting stinkier all the time. Now when I call my bank they always mention that they are 'rock solid.' In fact their new motto is 'rock solid since 1887' or something like that.

4) the Dow(n) Jones, I really do not believe that any of the current living generations will get over the idea that at Dow 14000 it was actually worth less than half that but nobody knew!!!!!!! So tell me, how do you repair the breach of trust? How do you even begin to help the boomers, who are now facing imminent retirement on half of their nest eggs and knowing that it will be almost impossible to sustain entitlements throughout their golden years.

5) There is so much money being dumped into the system, why are we not seeing loans? And we have the two-edged sword gutting us right now. On one sharp edge is the looming hyperinflation from all this stimulus money and the ongoing depletion of oil coupled with the lack of investment through this price collapse, on the other edge we have the possiblity of a capped economy not able to get off oil until oil plunges it into depression to end all depressions.

Folks, two years ago when I first saw on this sit emention of the housing bubble we all wondered if it was real, it seemed sort of too big and ugly to really be anything more than doomer porn. Now we have the facts on the ground saying it is all much much worse than we feared.

Where do we go from here?

[smallpoxgirl]

$this->bbcode_second_pass_quote('Voice_du_More', 'I')t seems now like parallel universes. The MSM and the web is all 'crash is imminent.'

[jasonraymondson]

We go straight to hell in a hand basket. Take everything dime you can find and invest in #10 cans and guns.

[jasonraymondson]

Btw, does anyone know of any companies other than mountain house? All they do is load everything to the hilt with salt. It is no wonder they say it will last 20 years. If you tried to survive on it for more than a couple years, you would be dead in 5, and then who would be around to challange the veracity of their statement.

BTW, the prices are rediculous, so buy for emergency use only.

[seldom_seen]

A half a trillion here, a bazillion over there...

At some point the people who still have jobs are going to wonder if it's worthwhile to toil all day long for federal reserve notes? Why work so hard for something that the banking system can just pull out of their hat?

I think I'm going to request to be paid in something real, metal bullion, rice or 30-06 shells.