The FDIC Reserve Is Gone.

The FDIC Reserve Is Gone.

The cash reserves needed for the FDIC to keep paying depositors at failed banks has all been used up. Don't panic (yet anyways), the FDIC has an open credit line to the Treasury Department (uh, that means us tax payers) that will keep the FDIC floating in cash to keep paying out money to Grandma and Grandpa at the failed banks.

You see, the FDIC is supposed to be self maintaining, it charges banks a fee to have their deposits insured. Think of it as the banks paying an insurance premium. That money goes into the FDIC kitty and is used to pay depositors when a bank fails. That is all well and good except when the financial system blows up like it has over the past 2 years.

As of today's quarterly report issued by the FDIC they are now broke, and I mean that in the literal sense.

FDIC deposit insurance fund now -$8.2B v $10.4B last quarter

Yep, they are broke, no money left in the cash drawer. So what now? As long as the FDIC has an open credit line with the Treasury then any bank that fails it will be the taxpayers who reimburse Grandma and Grandpa.

Think of it this way: you have a checking account at (let's pick a name out of the air) #tyBank and they get closed by the FDIC. Your very own money will be reimbursed to you via the FDIC insurance fund, but you will actually be paying yourself back in part because taxpayers will be on the hook to keep the FDIC floating in funds. So in the end you still lose some money.

The is no shortage of bad financial news, is there?

See also: FDIC insurance fund closes quarter $8.2 billion in debt

[edit on 25-11-2009 by loam]

Okay...and on the news this morning, financial experts said the recession is turning now and that the Amercian economy will rise over the next three years.
I am very sorry, but I just can't see that happening.

Holiday season is upon us, and TPTB will do anything, include lie, to try to regain customer confidence. Retailers who depend on holiday sales to survive, will fail if customers don't spend.

When true unemployment is around 20%, and with the dollar tanking- I wouldn't believe anyone who claims the worst is behind us.

Some reports state the worst is yet to come.
Some reports state the worst is behind us.
It really depends who is publishing and providing the reports.

Common sense tells me that it is in the best interest of the world's elite for everyone to panic and not spend a penny on anything. This is what will happen next in loose chronological order.

1) Stock prices will drop.
2) Banks will go bankrupt.
3) Real estate prices plummet.
4) Labor becomes cheap, due to loss of jobs.
5) World's elite buy up above assets at pennies on the dollar.
6) World's elite stimulate economy.
7) Assets that the wealthy acquired for pennies on the dollar have now worth billions.
8) Rinse and Repeat.


We are now in the middle of this process, so obviously you're going to get reports on both side of the fences. It depends with group of the world's elite owns the media outlet.

Has the FDIC ever gone bankrupt before? Or is this the first time? Was it Gerald Celente or webot, made a rpediciton for 3rd week in november, its gunna be real bad economically? someone was right about the 3rd week! but about an economic collpase so far i dont know...

reply to post by loam


Just a month or so ago, the woman in charge of such things for the Gov't told the thousands of Banks in the U.S. that they will be Pre-Paying their FDIC dues to the year 2013.

Of course, as you say in the OP, the FDIC has a 'always open' loan-window from which to fund itself. So, when your bank 'goes under' the funds will will be there to reimburse your account...
but in the future it could take weeks-months-years(perhaps) until you get your money back in-full


ADD:

here's the info & a link, btw it was Sheila Blair with this 'radical' solution

FDIC Expected to Ask Banks to Prepay $36B in Fees -
ABC News

It would be the first time the FDIC has required prepaid insurance fees. Under the plan, banks would have to pay in advance their insurance premiums for 2010-2012, bringing in ...

www.abcnews.go.com...


sorry, i had to nap for a spell



[edit on 25-11-2009 by St Udio]

Originally posted by Raud
Okay...and on the news this morning, financial experts said the recession is turning now and that the Amercian economy will rise over the next three years.
I am very sorry, but I just can't see that happening.

Oh, it's happening. USA is too big to fail, so China will see to it we get back on track. So it's going to be tough times ahead for the GOP, economy on the upswing.. universal health care a success. All their hopes that America crashes have been dashed and they will be further marginalized.

Originally posted by ziggy1706
Has the FDIC ever gone bankrupt before? Or is this the first time?

It happened before in 1992 -> www.finreg21.com...

And another interesting fact is that the dollar hit a new low against the euro today, at this moment 1eur = 1,5029$.

Gold hit a new high today - 1 ounce is now 1180$

It`s not looking good, seems like another bubble is going to burst in the near future. My guess is that it will happen just after the holidays when companies start publishing reports about their final quarter sales...

The Govt. has let the banks not pay in for a long time and keep the profits.
More Coruption. Pull your money and let them fail.

bloomberg.com

By and large, the government's insurance system worked until the 1980s, when thrifts went on a commercial real estate lending binge, triggering a wave of failures and consolidation that lasted from 1984 to 1992.

In 1991, Congress changed the way FDIC premiums were assessed, requiring banks to pay rates based on how well capitalized they were for the risks they faced. As bank failures subsided to less than a dozen a year by 1995, the FDIC's reserves began to swell.

As a result, the agency cut to zero the premiums it charged to the 90 percent of the banks deemed safest. That free ride continued for 10 years.

reply to post by reasonable


Everything you just said .... sounds like wishful thinking,

China doesn't want our debt anymore

GOP seems to be on the rise

and Health care spending hasn't even begun yet

I think you should take some time to get a grip

reply to post by reasonable


Sounds like lots of Kool-Aid to me... I heard similar arguments about the real estate market and sub-prime loans....

Our next colossal mistake on the horizon:

The Gold Bubble and Wiemar-style Trillion-percent Inflation.

[edit on 25-11-2009 by loam]

so has the great capitalist system become now a socialist system....love the irony here dont you.....LOL

[edit on 25-11-2009 by loner007]

reply to post by conspiracyrus


You bordering on fear-mongering.

It doesn't matter if China wants our debt or not. They own it. It is in their best interest to see US through and not go bankrupt.

reply to post by jimmyjohen


Im addressing another poster thank you.... fear mongering? shut it they no longer buy our debt they dont want anymore of it .... you sir should not type so hastily

reply to post by conspiracyrus


Reply hastily?

My post was in context. The point I was trying to make is that even though they don't want anymore of our debt, they still own a huge chunk.

It is in their best interest to see us through so they don't lose out.

That's my point.

Read Reasonable's post and read yours. You were the one out of context. You should stop typing so hastily.

Thank you for your time.

reply to post by jimmyjohen


there's nothing out of context at all about my post ... i say china doesn't want our debt anymore ... they cut their losses they will spend no more on our debt.... so yeah once again you are a bit out of line here

economictimes.indiatimes.com...

[edit on 25-11-2009 by conspiracyrus]

[edit on 25-11-2009 by conspiracyrus]

And that is why they have only closed a little over 100 banks when it should be something like 1,200 more likely 1,500+... they just didn't have the money to do it... so now were stuck with hundreds of what they call Zombie Banks (look it up)... if as their plan goes they get banks to pay all fees thru 2012... then you'll see that huge wave of closures

reply to post by DaddyBare


good speculation... as the FDIC is required to reimburse all depositors, if the banks don't have any money ... and the FDIC doesn't have any money.... the closed bank isnt responsible the FDIC is...
star for you

[edit on 25-11-2009 by conspiracyrus]

[edit on 25-11-2009 by conspiracyrus]

becourse of this the dollar drops dramaticly now?????

Thanks for posting this very interesting scary stuff s+f.It just keeps getting worse and worse