reply to post by The Change Weenie
If the FDIC took no action under its existing authority to increase its liquidity, the FDIC’s projected liquidity needs would exceed its
liquid assets on hand beginning in the first quarter of 2010. Through 2010 and 2011, liquidity needs could significantly exceed liquid assets
on hand.
The first sentence says that they must act of by the first quarter of 2010 (January -March 2010) they will no longer have enough cash to fund their
projected needs. In other words, broke.
The second sentence is the more frightening one. For one to two years, the FDIC's monetary needs might significantly exceed cash on hand.
Are they expecting a bunch of banking failures? Are these monetary needs ordinary expenses such as payroll or are we talking an expectation of mass
failures bringing about an increase in claims?
The FDIC's not broke. Well on their way but not broke.
They've asked the banks for money which is, somewhat ridiculous if you think about it. You pay me to insure your assets and I need money so I borrow
from you. You need money so you borrow from another person. And so on.
Nobody has any money and what this sounds like is a typical shell game that we've seen recently in the sub prime failure. Crap like this brough
Lehman down. If the banks start failing and the FDIC can't cover, more banks will collapse as people panic and swithc the Bank of Matress.
Wycky's post gives you an indication of how long they expect to be in the hole unless they impose special assessments.
So that's what they'll do. Assess the banks, hitting them up for more money to protect their money.
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