If there were some legit way to gerrymander the ranks of the so-called creditworthy to exclude nonconformists who are otherwise completely creditworthy, that would be a profitable proposition for lenders would it not?
Check these three also if you like stouts:
http://beeradvocate.com/beer/profile/132/1118
http://beeradvocate.com/beer/profile/132/359
http://beeradvocate.com/beer/profile/140/283
Thanks for the recommendation. I'll have to try that Cream Stout if I find it.
WH23 endorses porters:
http://www.anchorbrewing.com/beers/anchorporter.htm
http://beeradvocate.com/beer/profile/113/572
But who really buys corporate bonds to hold anymore? Maybe 20 years ago, but now Interest rates are so low I'm not sure its even worth it anymore from a buyer's point of view. I'm sure good ones exist somewhere, but that's hardly what is pushed on the public day after day after day.
And exec's sure do love paying themselves with options to undercut everyone else.
Stocks only work when there are enough buyers--or their inflated dollars--going in to push the prices up. Otherwise it wouldn't grow very fast like it didn't for the better part of the century. , if that were the case we'd actually have to grow the economy and make for the market to go up. Because America's "money" is basically the debt we owe foreigners, once the debt runs out so does the equity.
I have put all of my saved money in a FDIC-insured bank savings account. I haven't enjoyed all of the crazy gains of the past few years nor have I ripped my hair out over the losses of the past few months.
When I get enough saved up, I will eventually put some of those funds into a CD or something...but I never understood the gamble of playing the stock market.
And, if FDIC goes broke -- almost there -- and your bank goes belly-up?
My bank is USAA
I don't think the govt. would ever ppl lose all their money though. They'd start a world war or just pump it and pump it until we see massive inflation and the value of all our money cut in half or worse. Then interest rates would have to go way back up to balance it out. either that or Armageddon for America.
Then we adopt China's new world reserve currency or some like that and have brenton woods 3 or something.
You need to check the FDIC reserves again.
S. 541 would raise the FDIC's credit line to $100 billion, and allow a temporary $500 billion line of borrowing.
.The FDIC insures deposits at 8,305 ins utions with $13.9 trillion in assets. The 252 lenders on the FDIC’s “problem list” had assets of $159 billion at the end of the fourth quarter, about 1.1 percent of total asserts, an increase from the $116 billion at the end of the third quarter, the agency said on Feb. 26
Reserves are back up this past quarter due to some steep premium increases and as mentioned above the FDIC's borrowing limit will be greatly increased. I'm not worried about my money in my banks.
Then the FDIC will simply levy more costs on the rest of the banking system, through the premiums it charges.
It has already hiked the premium, and cleared the way for government loans to cover losses until it can build up its reserves again.
The FDIC will not go bankrupt.
RG, you can't stand it when your threads move towards the bottom of the page can you?
I could not find this information. How did you?
http://money.cnn.com/2008/08/26/news/economy/FDIC_fund/FDIC to boost insurance fund
With balance on fund that guarantees bank deposits at its lowest level since 1995, FDIC plans to charge riskier banks higher fees to increase reserves.
Hmm.
One could try here:
http://www.fdic.gov/bank/statistical...8dec/FDIC.html
But the data for the last year or three is not in the table.
Here is probably the best place to find such data, it is a link from the CFO's report to the FDIC board:
http://www.fdic.gov/about/strategic/..._08/index.html
With an insurance fund, there are three ways to increase ending surplus/reserves.
Raise premiums, reduce administrative overhead, reduce claim amounts.
There have been enough accounts of the FDIC increasing its premiums to be able to generally say that they are increasing their reserves.
BUT
The funds will probably run out, requiring capital injections in the form of loans from the US govt.
Over time, the FDIC will increase its premiums to cover these extraordinary losses, but suffice it to say that if they are wiped out they were undercharging, and will have to make up for that going forwards.
Look at the little red line in this graph, showing the ending surplus/reserves. Once that hits zero, likely by the end of this quarter, the fund is technically insolvent.
Most recent quarterly results will likely be unavailable for a few weeks. I don't know the precise reporting time-table, but assembling financials is not exactly a quick process.
I can see an educated guess based on announced premium hikes, but no information in any of your links is more recent than 12/31/08. Chumpy said there was a rise in DIF reserves during the last quarter. Was there?
He was probably echoing the press reports that I have seen as well.
Given that their most recent quarterly loss was $16Bn with an accelerating loss trend, and they had $19Bn surplus left at the end of 2008, it is highly likely that they are technically insolvent right now.
The FDIC sinkhole will suck up a lot of loans from the gov't, I would guess. The thing about this is that the FDIC, through its premiums, will charge the remaining banks enough to pay these loans back with interest.
The healthy banks will therefore bear a good chunk of the burden of the failed banks, through their FDIC insurance premiums, biting into their profitability for the foreseeable future.
This conclusion is the exact opposite of what Chumpy led us to believe, but after all it just a speculation. He could be right.
21 or so banks have failed so far this year, but it probably takes awhile to discover the true extent of the losses and book them.
The FDIC plans on putting down about 2 banks a week to my understanding.
They will need money from somewhere.
Good thing is that the government will get some interest on the loans it give the FDIC.
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