Tuesday, September 29, 2009

So Who is Ensuring Our Banks Now?

Woke up this morning to hear that the FDIC is broke... the news report was only 15 seconds long - isn't this bigger news?

For 50 years now the FDIC has been toted as the big "solution" the US Government put in place to prevent another Great Depression from ever happening again. Pres. Obama also increased the insurance limit to $250K on accounts, to boister public confidence that our $ is safe in our banks.

Now, after 9 months, the FDIC is out of money, and looking for someone to ensure them! Maybe they can get AIG to back them up?

Here's what they said today: "It's cost the FDIC $14 billion to shut down 50 banks in the last three months... This situation is turning out to be much more expensive in terms of disposing of failed banks than I think anybody had anticipated... Some suggest the FDIC borrow money from healthy banks. Black says it's time for the U.S. Treasury to bail out an FDIC that's flat broke. "

Wow - things are getting bad FAST. Faster than anyone could have expected, right? Are we still expecting the worst to be over in this 'recovery'?

Here's the link - (http://marketplace.publicradio.org/display/web/2009/09/29/am-fdic/)

Maybe we should withdraw and keep some cash in the mattress. That is what saved many during the last Great Depression... but then I'd be called an 'alarmist'.