FDIC - IndyMac Failure to Cost More than Expected

Yep, like we didn't see this coming. Wonder if this is the real number? People must realize the FDIC is not a bottemless pit of insurance. Every bite, every nibble, eats away at the available insurance. What if we exhaust it?

www.reuters.com...

The FDIC also said on Tuesday the decline in the insurance fund's balance caused the reserve ratio to fall to 1.01 percent as of June 30, from 1.19 percent the prior quarter.

Because the reserve ratio -- the fund's balance divided by the insured deposits -- fell below 1.15 percent, the FDIC is forced to develop a restoration plan to replenish the fund.

The FDIC will consider such a plan in early October, it said, which will likely force banks that engage in riskier activities to pay more into the fund than other U.S. banks.

Are they kidding?

Well I believe that right now after the bubble crash many banks and financial institutions has been adamant into engaging in risky ventures that were part of the reason for the bubble crash.

But this is hitting the new housing market and first time buyers hard as many are turned down and the new houses market is becoming stagnat.

Housing Market Key to Economic Recovery .

The willingness and ability of Americans to come back into the housing market over the next few months will determine whether the U.S. economy experiences a mild downturn or the deepest recession in 30 years.

Many economists say that home prices have another 10 percent to fall to bring them into balance with rents and incomes. A fall of that magnitude would elicit a huge sigh of relief from Wall Street and Washington.

But it wouldn't take much - a further clampdown by private lenders or a meltdown at mortgage finance companies Fannie Mae and Freddie Mac - to push home prices down much more severely, perhaps more than 20 percent.

www.economyincrisis.org...