"You Know The Banking System Is Unsound When..."

I think this is a forum that will lend itself to many links. Here is one I have often found insightful and accurate as well as a sample of the content - the full list in the article is a stark reality:


globaleconomicanalysis.blogspot.com...

Somewhere I heard that the FDIC was planning on increasing premiums paid to it by the banks in an attempt to shore up its shortcomings. This can only put more pressure on an already-failing system, but the alternative is to allow the FDIC to risk defaulting itself.

Most people honestly seem to think the money supply consists of green paper. Only a tiny fraction exists in that form, the rest is composed of numbers inside the various banks' computers. Starred and flagged in the hope more people will realize what's really happening.

TheRedneck

When almost every bank and brokerage is using the same off-balance sheet vehicle that ENRON did to hide losses. Level 3 assetts where bad debt goes to hide.

The FDIC only keeps enough money on hand to insure banks that are endangered of collapsing. Why would we keep a mirror image of all banking deposits in a separate account in the event every bank in the country collapses?

Your deposits would be the least of your worries..

Perhaps because every bank in the country might????

The FDIC surrently has a list of 90 Banks on a "watch list" (they obviously can't publish publicly) to be ready to move on. IndyMac wasn't even on the list. That ought to scare the hey out of you and put into perspective why their lack of funds for potential failures is a REALLY BIG PROBLEM.

What is their criteria????

there are two ways to go about this problem.

either you bail them out, in which case everyone will get the shaft or you promise to pay by the year 2100 or so.

there are pros and cons to both options, but it's imho safe to say that we're all going to pay for letting these loons play monoploy with fiat money. it sucks and if things don't get better soon enough i'll have to buy myself a ton of barter goods or be classified a nonchalant gambler.

reply to post by Relentless

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No ... if every bank in the country collapsed, your 100k dollars would be worth nothing anyways. It would be the least of your worries, I can assure you that.

Which is why the FDIC is not intended as a catastrophic coverage plan .. it's for scrapes and bruises in the economy, whereas multiple major banks failing would be getting hit by a semi truck, and run over by all 18 wheels. No bandaid would fix that.

Indymac was also, albeit large, relatively small in comparison to other bank, like Freddie and Fannie or Bank of America, etc.

I will have to look around to see if they where not on a watch list though.

reply to post by Rockpuck
FDIC may not be a catastrophic insurance plan, but ask the average person on the street and they will tell you it is. I remember it being promoted as such years ago.

That said, you're right about the problem being deeper than a mere $100K. If there is no money, there is nothing left to rebuild with. that is what scares the rebel flag out of me.

TheRedneck

There are known knowns, unknown knowns ,known and unknown by the American people.
one of the unknowns is that the banks are holding in excess of 1.5 T for trillion in loses at this time of which only account for a partial tally of the real losses

to translate this into American

not only will wall street Banks crumble but the stock markets will nose dive big time again. Hose prices will lose another 25%
Businesses will close,layoffs in the magnitude never seen in America will happen
and there is no bailout possible

the truth is that America is headed for deep recession at the minimum and depression is more likely than a recession.

(The OP points out that there is a huge chunk of Cash in uninsured banks)
that will soon be gobbled up
As Americans sleep walk they have no idea what is about to befall them

I believe it is contrived to make way for the NAU
I don't see how the richest nation on Earth could have been so financially
Destroy.

Some Americans will be in utter shock when they realize what is coming down