Mad Money Cramer: FDIC Key to Stop Banking Collapse

[RedEarth]

The Federal Deposit Insurance Corp. needs to increase its guarantee limit right now, Cramer said during Monday’s Stop Trading!, to stop a collapse in banking.

The Mad Money host has said before that the FDIC’s $100,000 deposit insurance might have been suitable for the Great Depression era, but not the 21st century. Cramer’s calling for that limit to be increased to $1 million. He also wants to see corporate accounts, which carry with them much more money, insured for a fee, even if it’s as small as 0.1%.

There’s a “jarring lack of confidence throughout the system,” and Cramer doesn’t want to see the market “destroyed” over the next 72 hours because of today’s vote in Congress. The FDIC, though, despite all the failures we’ve seen recently, does seem to still hold the trust of both the market and the average American.

“So maybe that’s the agency we bank with,” Cramer said, “while we get through this period.”

When asked what his one message to the American people would be, Cramer replied that sometimes you have to vote against the popular perception. Because often that perception is “not knowledgeable or sophisticated.” This is one such case.

“Any sophisticated analysis indicates that we’re about to lose our banking system,” Cramer said, “if not the Western world’s banking system. So just forget about the cutting your nose off to spite your face. We have to do this. We have to do this because we don’t want 20% unemployment, because we do not want a repeat of the Great Depression.”

http://www.cnbc.com/id/26945336

[Fresh_Start]

1. nope $100,000 is reasonable

especially since people can spread their funds out across multiple banks

[Zynx]

5. I don't want people doing that right now all at once.

That would cause chaos throughout the banking system.

[Supersedeas]

2. isn't he just so cute and funny with his obnoxious attempts at humor

[CrownPrinceBandar]

3. Isn't this what J.K. Galbraith proposed?.........

I can't find a linky, but I thought he proposed something along those lines.

[Renew Deal]

4. Doesn't that mean massive insurance cost increases for banks?

And how exactly would that work right now. That's like someone getting a life insurance policy today and the beneficiary killing them tomorrow.

[NNN0LHI]

6. And in other news water is wet

[Bonhomme Richard]

7. Complete CRAP. If someone were smart enough to accumulate...

more than $100,000 they are also smart enough to have spread out the risk. Then again, if you happen to have more money than there are banks to spread it between then I guess you would be worried.

[wtmusic]

8. Making sense - WHEN they fail, we bail depositors out. Not before. nt

[Dr.Phool]

9. Even a stopped clock like Cramer is right every now and then.

The few runs that have occurred have happened because people were draining their deposits in excess of $100,000 from banks. The 100k figure is from back in the '80s. Before that it was only 10k.

Increase the insurance. It's a very small premium anyway.