FDIC Funds "Dwindling"

[villager]

Source: AP

Federal bank insurance fund dwindling

By MARCY GORDON, AP Business Writer

WASHINGTON - Banks are not the only ones struggling in the growing financial crisis. The fund established to insure their deposits is also feeling the pinch, and the taxpayer may be the lender of last resort.


The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation's largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday.

Treasury has already come to the rescue of several corporate victims of the housing and credit crunches. The government took over mortgage finance companies Fannie Mae and Freddie Mac, and helped finance the sale of investment bank Bear Stearns to J.P. Morgan Chase & Co.

Eleven federally insured banks and thrifts have failed this year, including Pasadena, Calif.-based IndyMac Bank, by far the largest shut down by regulators.

Additional failures of large banks or savings and loans companies seem likely, and that could overwhelm the FDIC's insurance fund, said Brian Bethune, U.S. economist at consulting firm Global Insight.

"We've got a ... retail bank run forming in this country," said Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics.

<snip>


Read more: http://news.yahoo.com/s/ap/20080916/ap_on_bi_ge/bank_deposits_safety

[PSPS]

1. "corporate victims of the housing and credit crunches"

Treasury has already come to the rescue of several corporate victims of the housing and credit crunches.

Good old AP, always sympathetic to the corporate criminals -- they're now victims!

[JerseygirlCT]

8. It's amazing, isn't it?

Like this bad loans and the problems resulting from them just... *happened* to these poor, poor banks.

Don't loan to people who can't pay it back. Don't make loans without sufficient collateral.

I want to know how the American public gets back the money that made a lot of executives rich in order to pay for this...

[krkaufman]

2. Are there not professional engineering licenses, doctor's licenses, etc....

... the set basic standards and codes of conduct? It seems to me that it's high time that similar standards be set for business managers, or at least that they be held accountable when their business decisions result in such utter failure.

[Solly Mack]

3. " could be forced to tap tax dollars " for "corporate victims "

sputtering

[OakCliffDem]

4. I sure McCain is an advocate of bailing out the rich first

The Republican philosophy is that since the wealthy pay for insurance, only the wealthy should collect insurance. You low income people are on your own.

[mia]

5. K & R

:kick:

[Roland99]

6. The Worst Financial Crisis Since the Great Depression - Nouriel Roubini

The Worst Financial Crisis Since the Great Depression
http://www.rgemonitor.com/roubini-monitor/253618/the_worst_financial_crisis_since_the_great_depression

You have to register (free) at the site but it's WELL WORTH IT to read his writing...esp. this one.

WaMu/FDIC is the scary part of all the latest round of failings. Going to be VERY $$$ to the taxpayer (and their offspring and their offspring and....)

[tazkcmo]

7. Fine. Loan them the money

Then charge outrageous interest rates, change the billing cycles, up the rates to even more outrageos rates without notice, of course. In short, treat them the way they have treated us.

[Buenaventura]

9. i should loan the banks money for having lost my money?

fuck 'em

[Festivito]

10. That would make the deficit numbers look big Georgie Porkie.

Better put it off budget, can't have those stupid RepubliCONNED look at figures they would understand!

[bronxiteforever]

11. Kick and R for visibilty

[Supersedeas]

12. nothing to see here -- feed them more perky Bizbos smiling about how confident we should be