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Is The FDIC Broke?

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posted on Sep, 18 2008 @ 12:44 PM
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I just read an alarming article



With the "financial storm of the century" hitting financial institutions, many Americans are worried about the safety of their bank deposits. While the FDIC insures individual accounts up to $100,000, the reaction to IndyMac's failure this summer -- lines outside retail branches -- shows Americans have limited faith in the Federal Deposit Insurance Corp., which guarantees individual accounts up to $100,000.


Well, this is all good until you read the rest of the article.



But Americans are justified to be worried, says Nouriel Roubini, of NYU's Stern School and RGE Monitor, who notes there is already a "slow-motion run on retail banks" occurring nationwide.

That "run" could accelerate as people realize the FDIC fund has about $50 billion to "insure" about $1 trillion in assets at the nation's financial institutions, says Roubini. "They're going to run out of money" unless Congress acts soon to recapitalize the FDIC.

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What? The FDIC has $50 bil to back up $1 tril?




posted on Sep, 18 2008 @ 01:13 PM
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They were funded with ~$50 billion and have ~$38 billion left after the 11 bank failures so far this year. (The biggest being IndyMac). $38 billion will probably not be even close to enough to cover the upcoming failures as forclosures continue at record rates and banks struggle with deliquencies. FDIC will probably be bailed out by the Fed using more printed money when they run out.



posted on Oct, 9 2008 @ 10:29 PM
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Is our economy worse than it was during The Great Depression? If not, does it look like we are headed that direction?



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