<< <i>Meanwhile, no FDIC insured depositor has ever lost a penny and the Dow Jones Industrial Average and S&P 500 are making new all time highs at 3 PM on Monday.
As the bartender said to the horse "what's with the long face?"
How many stocks did you buy on the recommendation of Zero Hedge? >>
The FDIC has never had to deal with the fall out of failed otc interest rate swaps/derivatives on a massive scale. The govt bailed out the failure of the Mortgage Backed securities and Credit Default swaps in 2008-2009. I don't think AIG, BSC, and Lehman were actually banks were they? So there was no need to consider FDIC bailing. Now what if GS, BoA, Citi, MS, JPM, WF, BONY, etc. get into a pinch? There will definitely be failed FDIC accounts on a massive scale. The hundreds of banks that were shuttered in 2007-2014 tended to be smaller size. FDIC could handle that within the confines of the budget. Did the total paid out on those banks even exceed $500 BILL? I don't think so. I linked a list of failed banks below in 2009 during the height of the crisis and that total FDIC payout was <$60 BILL. Peanuts. It's not even on the same scale as AIG/BSC/Lehman. But they have no way of handling $50T-$300T in failed interest rate derivatives. Hence, the topic is not even discussed in polite banking circles. I'm talking about Mega-ton nukes and others are comparing them to M-80's. Yeah, they both go "pop" when you light them off.
The MBS/CDS failures resulted in approx $35-$40 TRILL in bets being covered/payed out/netted out. The actual money hitting the system was on the order of $5-$20 TRILL. The FDIC couldn't have handled that and lucky they didn't have to. The govt's help was definitely needed there. And it will be needed again to bail out the FDIC if the interest rate derivatives blow up. Most people are clueless as to the risk in play. Even the S&L crisis of the 1980's and LTCM bust in the late 1990's were only a few $BILLION. Nothing seen yet by FDIC compares to what a TBTF bank(s) failure could do.
2009 failed bank list....the govt spends $4 BILL per day. $58 BILL in yearly bank losses is a footnote in the annual budget.
$74 BILL? That's nothing....soc security is $866 BILL/yr. A single big bank as listed above would dwarf this entire list. Are we seriously comparing FDIC paying out these mini-banks to the $300 TRILL in derivatives held by the "big 6"? Those guys still carry >10X the risk/size of bets that played out in 2008. I'm sure they'd give anything to net out their current mess with simply a $74 BILL payment.
I do not see what a Dow record has to do with $300 TRILL in derivatives. But there must be a connection there somewhere. More derivatives = more risk = more gamblers = higher stock price???? Let's see how the record Dow holds up for the rest of the year. Things always look best from the mountain top. Didn't we just have one of those tops in mid-September? So how does buying the Dow or S&P here at all time high prices compare to buying gold in late August 2011 at $1900? Any similarities at all? "No one" was "dumb enough" to buy gold at those nose bleed levels following a 12 year run. But, buying the stock market in a similar 11 year run from the 2003 bottom is better? Please explain. Is it of any concern that over the past 3-4 weeks that the SPY ETF has seen very large outflows of selling on strength of $4.4 BILL?
As usual RR u present some great info, interesting how people throw around the word "trillion" like dr evil they have no comprehension whatsoever of the (shoot a word adjective really can't describe it,lol) quantity... All the who, what, why prose is all drivel...
Deja vu? It just occurred to me we had these same debates beginning back in 2004 when the gold and economic thread was first posted on the open forum. Those that said the derivatives would tank the system were called heretics and fools....for approx 4 years I was such a fool. And then it actually happened beginning in mid-2007 as cracks started to appear. In 2008-2009 a mini-crash occurred where nearly all the MBS and approx 50% of the CDS derivatives blew up and were netted/paid out. That was "only" about $35 TRILL notional. Compare that to the $300 TRILL the US banks carry and the $1,114 TRILL the world banks carry ($950 TRILL in interest rate swaps). Don't leave the foreign banks out of the equation as they have a larger risk than the US banks. Will their FDIC's bail them all out? Since all of these banks are interconnected a failure to act overseas, will be seen as a failure to act in the US. It's just dominoes.
Yes, indeed the banks successfully navigated through the 2008-2010 crash of approx 3% of the world's otc derivatives. No downsizing was done in the past 6 yrs so the entire $1.1 Quad is still in play....just like in Sept 2008. The only lesson the TBTF banks learned was that they were too big to fail. Now they also know they are too big to jail. The public thinks there was no crime because no one (except Bernie and Martha) went to jail. The derivatives crash summary is: wrong from 2004-2006, right in 2007-2011, wrong from 2012-2014. When's the next "right" turn due? Deja Vu? Now, of course none of this stuff could ever happen again, right? Of course, if that was true why have discussions between FDIC and BOE in Dec 2012 about systemic failures/protected institutions and also allowing otc derivative bet payouts to take precedence over depositor money? Why alter bankruptcy laws to make it harder for J6P to sidestep debt? Hmmm? Even the FDIC realizes there is substantial risk out there.
<< <i>In a Trillion Dollar plus crisis just where in line do you think the US government will put the FDIC-insured depositors? >>
derryb...Didn't we just go through that same scenario? Hundreds of Banks folded and not one depositor was left out in the cold.
Your Doomsday scenario's are tiring. >>
Because it wasn't allowed to get to the point of bringing in an unprepared and underfunded FDIC, depositors as well as taxpayers got skinned in multiple, other ways - some of which are still in progress.
Hope to see you on the other side of the next crisis.
Natural forces of supply and demand are the best regulators on earth.
All banks are safe until suddenly they are not. Note how quickly public awareness of the last banking crisis developed. Everything was fine in the public's eye until suddenly it was not.
Natural forces of supply and demand are the best regulators on earth.
<< <i>FDIC coverage is per account. In a serous enough banking failure there is a good chance that total value of all accounts could become a factor on the amount of pennies per dollar one would recoup. >>
Which makes sense, but when I look up Fidelity cash mgmt, this doesnt make sense to me.
Fidelity's FDIC Insured Deposit Sweep Program details In utilizing the Program, your uninvested cash balance is swept to a program bank where the deposit is eligible for FDIC insurance. If you have more than $245,000 in uninvested cash in your account, the Program maximizes your eligibility for FDIC insurance by systematically allocating this uninvested cash across multiple program banks. At a minimum, there are generally five banks available to accept customer deposits, making customers eligible for nearly $1,250,000 of FDIC insurance.
Why the need for 1.25m insurance if you could just open additional accounts? >>
It appears you are discussing an investment account with Fidelity that is not eligible for FDIC coverage, not even the cash balance is eligible. To make the cash balance eligible for coverage and as a service to you, Fidelity is "sweeping" it into eligible deposit accounts with up to five FDIC covered banks. >>
To be clear
At, say, BoA you are limited to 250k in total across all accounts in BoA. Opening extra accounts at the same institution does nothing. Adding a spouse does up the total to 500k.
So if fidelity only has access to 5 banks, then you need to add a spouse to make it 2.5mil, otherwise it's 1.25mil. Aaaaaannnnnddddd if you bank at the same 5 banks ... Guess what... The limit is still 250k per bank even though one is through fidelity and another is an account you opened directly through that bank.
Another suggestion is to keep more like 225k per in there so you can accommodate interest without moving money around so often.
In a Trillion Dollar plus crisis just where in line do you think the US government will put the FDIC-insured depositors?
You know the answer to this......Congress will authorize the FED to print $1 trillion. Everyone will get their money. Surely the dollar will be diluted, but you will get you money. However, in such an event, all assets will be worth(less) as we've seen during the last crisis, so the effect of that dollar dilution may or may not result in reduced purchasing power.
<< <i>"They" are not going to "steal" your money. I know this because "we" would not let it happen. Just as "we" did not let lots of things happen in the past. >>
How are you going to prevent that? Vote them out of office only to have another clone take over? Write a petition? 1,000,000 person march? Sit ins?
Why didn't we prevent our jobs from being off-shored (NAFTA)? How did we let Homeland Security become what it is? How did we allow the Patriot Act to become laws? Why did we allow bank otc derivatives to get head of the line privileges over depositor accounts? Student loans are exempted from bankruptcy filings...so are other types of consumer debt....how did we allow that to happen? Whey do corporations get a clean slate in Ch 7/11 and not consumers? How did we allow the 1933 securities laws to be removed during 1999-2001 so derivatives could run amock and banks could make trillions with govt backing? Our liberties are being replaced at the expense of tighter security and loss of privacy. If we couldn't stop any of this "good stuff" from happening why would you think it will be any different as Soc Sec and FDIC guarantees get overhauled or reduced? I would think FDIC will get replaced with a "govt safety net of forced TBond investments." No need to ensure your deposits when they all sit in "safe" and "protected" USTreasuries.
The next big banking crisis will be a one-off event. There won't be any instant replays to save J6P's money. He will be given what the govt decides he needs and nothing more....regardless of current laws or FDIC. The president and govt can institute the 1917 War Powers act to include about anything (insurrections, economic catastrophes and hardships are now considered within the envelope). >>
You know the answers to your questions and I am bewildered by the question about NAFTA. You know Unions with their overzealous demands pushed jobs overseas. Did we not dump tea into the ocean? Did we not kill our brothers?
He will be given what the govt decides he needs and nothing more
<< <i>In a Trillion Dollar plus crisis just where in line do you think the US government will put the FDIC-insured depositors?
You know the answer to this......Congress will authorize the FED to print $1 trillion. Everyone will get their money. Surely the dollar will be diluted, but you will get you money. However, in such an event, all assets will be worth(less) as we've seen during the last crisis, so the effect of that dollar dilution WILL result in reduced purchasing power. >>
There, I fixed it for you^^. There is no maybe to it. We are all being screwed by this rigged system ran by the globalists. The answer to the OP's question is that no bank is safe. Deal with them at your own risk. Only a foolish person would suggest otherwise. You have been warned.
The title goes to "traders" and "manipulators". They may work in banking. They may work in court. They may not work at all doing what they do, aside from profiting illegally.
If there were widespread bank failures the FDIC would have access to unlimited funds from the US Treasury.
More likely, the US Government would take over the failed banks and guarantee all deposits. Remember that in the 2008 crisis there was no limit on FDIC insurance for non interest bearing accounts.
That is why you were getting .01% on your savings account. Large depositors were fully insured as was necessary to prevent a run. That program has since ended as the financial system was restored to health.
Widespread bank failures would be deflationary not inflationary.
<< <i>. . . the financial system was restored to health. >>
there lies the root difference in our thinking. A healthy financial system would not require a zero percent interest rate policy or trillions in liquidity. Health was not restored it was temporarily transferred at a high cost in other areas. The wallpaper is not going to stick for much longer.
Liquidity does not cure insolvency, it only hides it and only for so long. This is why you will see further "injections" by the FED. Look for them to get a new name from the FED marketing department as "QE" is no longer convincing.
Natural forces of supply and demand are the best regulators on earth.
<< <i>If there were widespread bank failures the FDIC would have access to unlimited funds from the US Treasury.
More likely, the US Government would take over the failed banks and guarantee all deposits. Remember that in the 2008 crisis there was no limit on FDIC insurance for non interest bearing accounts.
That is why you were getting .01% on your savings account. Large depositors were fully insured as was necessary to prevent a run. That program has since ended as the financial system was restored to health.
Widespread bank failures would be deflationary not inflationary. >>
Yes widespread failures sort of imply a bank run somewhere , in which case we have bigger problems.
In cyprus this was mostly an issue for businesses . Who else keeps $250,000 in a checking account earning 0% interest? Businesses and folks that had just sold property or were in the process of buying were screaming the loudest. Sell a house and have the proceeds in a locked up account you can't access or being unable to make payroll for your help are huge problems.
Bails of cash tucked away would be a better plan , you would be well positioned for a run if you held paper dollars. If the banks lock up all the electric 1's and 0's are potentially forfeit , which is sort of expected since they are basically imaginary anyway.
<< <i>In a Trillion Dollar plus crisis just where in line do you think the US government will put the FDIC-insured depositors?
You know the answer to this......Congress will authorize the FED to print $1 trillion. Everyone will get their money. Surely the dollar will be diluted, but you will get you money. However, in such an event, all assets will be worth(less) as we've seen during the last crisis, so the effect of that dollar dilution may or may not result in reduced purchasing power. >>
We already had a $TRILLION crisis....except it was more like $10-$15 TRILL....and everyone got paid off (except Lehman). There were hundreds or a thousand creditors around the world who all got paid off. That crisis was manageable, somehow. The failure of otc interest rate derivatives will not be so easy, as it could be 10X to 20X as large a failure. Again, the FDIC, FED, Treasury, and J6P have never seen anything on that scale. It's one of the reasons that the BIS purposely revalued the derivatives at the end of 2008 using a "future value" model (not current value) to list them at $683 BILL instead of $1.14 Quad. That number was just too big to leave out into the public space (ie more questions than answers). I'm not concerned about a tiny $1 TRILL crisis. It's the $100T or $1,000T that should concern our regulators. You can't logically print your way out of that....and not expect massive devaluation of all paper assets. The last crisis stressed 50%+ of the CDS & MBS ($35-$40 TRILL). Stressing 50% of the IR swaps would be $570 TRILL.
We have close to zero % interest rates because: 1) There is little demand for borrowing by the most credit worthy.
2) There is a worldwide deflationary tendency caused by the hangover from the financial crisis and the aging US and European population.
3) Corporations have found it more profitable to cut costs rather than borrow money to expand their businesses.
4) The very wealthy have amassed greater wealth in the past 5 years and cannot find good investment opportunities. Their cash is piling up in an environment where there is little loan demand.
5) Banks and brokers discovered that deposits are very sticky and do not leave even if interest rates are close to zero.
<< <i>We have close to zero % interest rates because: 1) There is little demand for borrowing by the most credit worthy.
2) There is a worldwide deflationary tendency caused by the hangover from the financial crisis and the aging US and European population.
3) Corporations have found it more profitable to cut costs rather than borrow money to expand their businesses.
4) The very wealthy have amassed greater wealth in the past 5 years and cannot find good investment opportunities. Their cash is piling up in an environment where there is little loan demand.
5) Banks and brokers discovered that deposits are very sticky and do not leave even if interest rates are close to zero. >>
In other words, because the FED has not fixed the mess it helped to create.
Natural forces of supply and demand are the best regulators on earth.
[qIn other words, because the FED has not fixed the mess it helped to create. >>
Agreed! The FED failed to properly regulate the banks resulting in the real estate bubble, mortgage insanity and the financial crisis.
The FED cannot fix the mess it helped to create. The FED's monetary policy is mostly helping the stock market rise which creates a trickle down effect as shareowners feel more wealthy and spend. The trickle down is obviously not an efficient way to stimulate the economy.
<< <i>[qIn other words, because the FED has not fixed the mess it helped to create. >>
Agreed! The FED failed to properly regulate the banks resulting in the real estate bubble, mortgage insanity and the financial crisis.
The FED cannot fix the mess it helped to create. The FED's monetary policy is mostly helping the stock market rise which creates a trickle down effect as shareowners feel more wealthy and spend. The trickle down is obviously not an efficient way to stimulate the economy. >>
But it's all better now because the FED is properly regulating the banks? My view is nothing has been fixed so we will be right back where we were in 2008, probably worse since the root causes have been allowed to fester.
Maybe we should try trickle up.
Natural forces of supply and demand are the best regulators on earth.
<< <i>We have close to zero % interest rates because: 1) There is little demand for borrowing by the most credit worthy.
2) There is a worldwide deflationary tendency caused by the hangover from the financial crisis and the aging US and European population.
3) Corporations have found it more profitable to cut costs rather than borrow money to expand their businesses.
4) The very wealthy have amassed greater wealth in the past 5 years and cannot find good investment opportunities. Their cash is piling up in an environment where there is little loan demand.
5) Banks and brokers discovered that deposits are very sticky and do not leave even if interest rates are close to zero. >>
In other words, because the FED has not fixed the mess it helped to create. >>
Oh, the globalists/bankers have 'fixed' the mess alright. The whole thing is fixed, a.k.a., rigged. I know you and other informed posters realize that, but it amazes me that some on this board can be so blind to what is really going on. Some of them think because they are a part of this system that they are so smart and know better. They are doing nothing but fooling themselves.
Comments
This is per account in each differently chartered bank. I was wrong in stating that insurance applies to the aggregate. My mistake.
I knew it would happen.
<< <i>Meanwhile, no FDIC insured depositor has ever lost a penny and the Dow Jones Industrial
Average and S&P 500 are making new all time highs at 3 PM on Monday.
As the bartender said to the horse "what's with the long face?"
How many stocks did you buy on the recommendation of Zero Hedge? >>
The FDIC has never had to deal with the fall out of failed otc interest rate swaps/derivatives on a massive scale. The govt bailed out the failure of the Mortgage Backed securities and Credit Default swaps in 2008-2009. I don't think AIG, BSC, and Lehman were actually banks were they? So there was no need to consider FDIC bailing. Now what if GS, BoA, Citi, MS, JPM, WF, BONY, etc. get into a pinch? There will definitely be failed FDIC accounts on a massive scale. The hundreds of banks that were shuttered in 2007-2014 tended to be smaller size. FDIC could handle that within the confines of the budget. Did the total paid out on those banks even exceed $500 BILL? I don't think so. I linked a list of failed banks below in 2009 during the height of the crisis and that total FDIC payout was <$60 BILL. Peanuts. It's not even on the same scale as AIG/BSC/Lehman. But they have no way of handling $50T-$300T in failed interest rate derivatives. Hence, the topic is not even discussed in polite banking circles. I'm talking about Mega-ton nukes and others are comparing them to M-80's. Yeah, they both go "pop" when you light them off.
The MBS/CDS failures resulted in approx $35-$40 TRILL in bets being covered/payed out/netted out. The actual money hitting the system was on the order of $5-$20 TRILL. The FDIC couldn't have handled that and lucky they didn't have to. The govt's help was definitely needed there. And it will be needed again to bail out the FDIC if the interest rate derivatives blow up. Most people are clueless as to the risk in play. Even the S&L crisis of the 1980's and LTCM bust in the late 1990's were only a few $BILLION. Nothing seen yet by FDIC compares to what a TBTF bank(s) failure could do.
2009 failed bank list....the govt spends $4 BILL per day. $58 BILL in yearly bank losses is a footnote in the annual budget.
This chart shows 481 banks with approx $74 BILL in payouts from 2009-2014
$74 BILL? That's nothing....soc security is $866 BILL/yr. A single big bank as listed above would dwarf this entire list. Are we seriously comparing FDIC paying out these mini-banks to the $300 TRILL in derivatives held by the "big 6"? Those guys still carry >10X the risk/size of bets that played out in 2008. I'm sure they'd give anything to net out their current mess with simply a $74 BILL payment.
I do not see what a Dow record has to do with $300 TRILL in derivatives. But there must be a connection there somewhere. More derivatives = more risk = more gamblers = higher stock price???? Let's see how the record Dow holds up for the rest of the year. Things always look best from the mountain top. Didn't we just have one of those tops in mid-September? So how does buying the Dow or S&P here at all time high prices compare to buying gold in late August 2011 at $1900? Any similarities at all? "No one" was "dumb enough" to buy gold at those nose bleed levels following a 12 year run. But, buying the stock market in a similar 11 year run from the 2003 bottom is better? Please explain. Is it of any concern that over the past 3-4 weeks that the SPY ETF has seen very large outflows of selling on strength of $4.4 BILL?
Yes, indeed the banks successfully navigated through the 2008-2010 crash of approx 3% of the world's otc derivatives. No downsizing was done in the past 6 yrs so the entire $1.1 Quad is still in play....just like in Sept 2008. The only lesson the TBTF banks learned was that they were too big to fail. Now they also know they are too big to jail. The public thinks there was no crime because no one (except Bernie and Martha) went to jail. The derivatives crash summary is: wrong from 2004-2006, right in 2007-2011, wrong from 2012-2014. When's the next "right" turn due? Deja Vu? Now, of course none of this stuff could ever happen again, right? Of course, if that was true why have discussions between FDIC and BOE in Dec 2012 about systemic failures/protected institutions and also allowing otc derivative bet payouts to take precedence over depositor money? Why alter bankruptcy laws to make it harder for J6P to sidestep debt? Hmmm? Even the FDIC realizes there is substantial risk out there.
<< <i>
<< <i>In a Trillion Dollar plus crisis just where in line do you think the US government will put the FDIC-insured depositors? >>
derryb...Didn't we just go through that same scenario? Hundreds of Banks folded and not one depositor was left out in the cold.
Your Doomsday scenario's are tiring. >>
Because it wasn't allowed to get to the point of bringing in an unprepared and underfunded FDIC, depositors as well as taxpayers got skinned in multiple, other ways - some of which are still in progress.
Hope to see you on the other side of the next crisis.
Natural forces of supply and demand are the best regulators on earth.
<< <i>Is it déjà vu all over again?...lol... >>
The causes of the last crisis have not been resolved, only "papered" over...lol...
Natural forces of supply and demand are the best regulators on earth.
<< <i>Is this 250k per account per bank or is this all accounts tied to your social.
This is per account in each differently chartered bank. I was wrong in stating that insurance applies to the aggregate. My mistake. >>
All good
BST Transactions (as the seller): Collectall, GRANDAM, epcjimi1, wondercoin, jmski52, wheathoarder, jay1187, jdsueu, grote15, airplanenut, bigole
Natural forces of supply and demand are the best regulators on earth.
<< <i>
<< <i>
<< <i>FDIC coverage is per account. In a serous enough banking failure there is a good chance that total value of all accounts could become a factor on the amount of pennies per dollar one would recoup. >>
Which makes sense, but when I look up Fidelity cash mgmt, this doesnt make sense to me.
Fidelity's FDIC Insured Deposit Sweep Program details
In utilizing the Program, your uninvested cash balance is swept to a program bank where the deposit is eligible for FDIC insurance. If you have more than $245,000 in uninvested cash in your account, the Program maximizes your eligibility for FDIC insurance by systematically allocating this uninvested cash across multiple program banks. At a minimum, there are generally five banks available to accept customer deposits, making customers eligible for nearly $1,250,000 of FDIC insurance.
Why the need for 1.25m insurance if you could just open additional accounts? >>
It appears you are discussing an investment account with Fidelity that is not eligible for FDIC coverage, not even the cash balance is eligible. To make the cash balance eligible for coverage and as a service to you, Fidelity is "sweeping" it into eligible deposit accounts with up to five FDIC covered banks. >>
To be clear
At, say, BoA you are limited to 250k in total across all accounts in BoA. Opening extra accounts at the same institution does nothing. Adding a spouse does up the total to 500k.
So if fidelity only has access to 5 banks, then you need to add a spouse to make it 2.5mil, otherwise it's 1.25mil. Aaaaaannnnnddddd if you bank at the same 5 banks ... Guess what... The limit is still 250k per bank even though one is through fidelity and another is an account you opened directly through that bank.
Another suggestion is to keep more like 225k per in there so you can accommodate interest without moving money around so often.
You know the answer to this......Congress will authorize the FED to print $1 trillion. Everyone will get their money. Surely the dollar will be diluted, but you will get you money. However, in such an event, all assets will be worth(less) as we've seen during the last crisis, so the effect of that dollar dilution may or may not result in reduced purchasing power.
Knowledge is the enemy of fear
<< <i>
<< <i>"They" are not going to "steal" your money. I know this because "we" would not let it happen. Just as "we" did not let lots of things happen in the past. >>
How are you going to prevent that? Vote them out of office only to have another clone take over? Write a petition? 1,000,000 person march? Sit ins?
Why didn't we prevent our jobs from being off-shored (NAFTA)? How did we let Homeland Security become what it is? How did we allow the Patriot Act to become laws? Why did we allow bank otc derivatives to get head of the line privileges over depositor accounts? Student loans are exempted from bankruptcy filings...so are other types of consumer debt....how did we allow that to happen? Whey do corporations get a clean slate in Ch 7/11 and not consumers? How did we allow the 1933 securities laws to be removed during 1999-2001 so derivatives could run amock and banks could make trillions with govt backing? Our liberties are being replaced at the expense of tighter security and loss of privacy. If we couldn't stop any of this "good stuff" from happening why would you think it will be any different as Soc Sec and FDIC guarantees get overhauled or reduced? I would think FDIC will get replaced with a "govt safety net of forced TBond investments." No need to ensure your deposits when they all sit in "safe" and "protected" USTreasuries.
The next big banking crisis will be a one-off event. There won't be any instant replays to save J6P's money. He will be given what the govt decides he needs and nothing more....regardless of current laws or FDIC. The president and govt can institute the 1917 War Powers act to include about anything (insurrections, economic catastrophes and hardships are now considered within the envelope). >>
You know the answers to your questions and I am bewildered by the question about NAFTA. You know Unions with their overzealous demands pushed jobs overseas. Did we not dump tea into the ocean? Did we not kill our brothers?
He will be given what the govt decides he needs and nothing more
And how do you know this?
Knowledge is the enemy of fear
<< <i>
<< <i>Yes, FDIC is what I meant to write. Damn fat fingers and small phones. >>
Has the FDIC ever had liabilities that exceeded its assets requiring Unka Sam to bail them out. >>
The FDIC will never have liabilities that exceed its assets because it has access to unlimited assets. Read its Charter.
Knowledge is the enemy of fear
<< <i>In a Trillion Dollar plus crisis just where in line do you think the US government will put the FDIC-insured depositors?
You know the answer to this......Congress will authorize the FED to print $1 trillion. Everyone will get their money. Surely the dollar will be diluted, but you will get you money. However, in such an event, all assets will be worth(less) as we've seen during the last crisis, so the effect of that dollar dilution WILL result in reduced purchasing power. >>
There, I fixed it for you^^. There is no maybe to it. We are all being screwed by this rigged system ran by the globalists. The answer to the OP's question is that no bank is safe. Deal with them at your own risk. Only a foolish person would suggest otherwise. You have been warned.
The title goes to "traders" and "manipulators". They may work in banking. They may work in court. They may not work at all doing what they do, aside from profiting illegally.
Knowledge is the enemy of fear
More likely, the US Government would take over the failed banks and guarantee all
deposits. Remember that in the 2008 crisis there was no limit on FDIC insurance for non interest bearing accounts.
That is why you were getting .01% on your savings account. Large depositors were fully insured as was necessary
to prevent a run. That program has since ended as the financial system was restored to health.
Widespread bank failures would be deflationary not inflationary.
<< <i>. . . the financial system was restored to health. >>
there lies the root difference in our thinking. A healthy financial system would not require a zero percent interest rate policy or trillions in liquidity. Health was not restored it was temporarily transferred at a high cost in other areas. The wallpaper is not going to stick for much longer.
Liquidity does not cure insolvency, it only hides it and only for so long. This is why you will see further "injections" by the FED. Look for them to get a new name from the FED marketing department as "QE" is no longer convincing.
Natural forces of supply and demand are the best regulators on earth.
<< <i>If there were widespread bank failures the FDIC would have access to unlimited funds from the US Treasury.
More likely, the US Government would take over the failed banks and guarantee all
deposits. Remember that in the 2008 crisis there was no limit on FDIC insurance for non interest bearing accounts.
That is why you were getting .01% on your savings account. Large depositors were fully insured as was necessary
to prevent a run. That program has since ended as the financial system was restored to health.
Widespread bank failures would be deflationary not inflationary. >>
Yes widespread failures sort of imply a bank run somewhere , in which case we have bigger problems.
In cyprus this was mostly an issue for businesses . Who else keeps $250,000 in a checking account earning 0% interest? Businesses and folks that had just sold property or were in the process of buying were screaming the loudest. Sell a house and have the proceeds in a locked up account you can't access or being unable to make payroll for your help are huge problems.
Bails of cash tucked away would be a better plan , you would be well positioned for a run if you held paper dollars. If the banks lock up all the electric 1's and 0's are potentially forfeit , which is sort of expected since they are basically imaginary anyway.
I wish I had a quarter million in the bank and that my chief concern was the "safety" of the bank and FDIC
Liberty: Parent of Science & Industry
<< <i>In a Trillion Dollar plus crisis just where in line do you think the US government will put the FDIC-insured depositors?
You know the answer to this......Congress will authorize the FED to print $1 trillion. Everyone will get their money. Surely the dollar will be diluted, but you will get you money. However, in such an event, all assets will be worth(less) as we've seen during the last crisis, so the effect of that dollar dilution may or may not result in reduced purchasing power. >>
We already had a $TRILLION crisis....except it was more like $10-$15 TRILL....and everyone got paid off (except Lehman). There were hundreds or a thousand creditors around the world who all got paid off. That crisis was manageable, somehow. The failure of otc interest rate derivatives will not be so easy, as it could be 10X to 20X as large a failure. Again, the FDIC, FED, Treasury, and J6P have never seen anything on that scale. It's one of the reasons that the BIS purposely revalued the derivatives at the end of 2008 using a "future value" model (not current value) to list them at $683 BILL instead of $1.14 Quad. That number was just too big to leave out into the public space (ie more questions than answers). I'm not concerned about a tiny $1 TRILL crisis. It's the $100T or $1,000T that should concern our regulators. You can't logically print your way out of that....and not expect massive devaluation of all paper assets. The last crisis stressed 50%+ of the CDS & MBS ($35-$40 TRILL). Stressing 50% of the IR swaps would be $570 TRILL.
1) There is little demand for borrowing by the most credit worthy.
2) There is a worldwide deflationary tendency caused by the hangover
from the financial crisis and the aging US and European population.
3) Corporations have found it more profitable to cut costs rather than
borrow money to expand their businesses.
4) The very wealthy have amassed greater wealth in the past 5 years
and cannot find good investment opportunities. Their cash is piling up
in an environment where there is little loan demand.
5) Banks and brokers discovered that deposits are very sticky and do
not leave even if interest rates are close to zero.
<< <i>The FDIC will never have liabilities that exceed its assets because it has access to unlimited assets. Read its Charter. >>
Thats scary
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<< <i>"safe"? it's not "safe" to get out of bed in the morning!
I wish I had a quarter million in the bank and that my chief concern was the "safety" of the bank and FDIC >>
As do I. The original question was purely hypothetical unfortunately.
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<< <i>We have close to zero % interest rates because:
1) There is little demand for borrowing by the most credit worthy.
2) There is a worldwide deflationary tendency caused by the hangover
from the financial crisis and the aging US and European population.
3) Corporations have found it more profitable to cut costs rather than
borrow money to expand their businesses.
4) The very wealthy have amassed greater wealth in the past 5 years
and cannot find good investment opportunities. Their cash is piling up
in an environment where there is little loan demand.
5) Banks and brokers discovered that deposits are very sticky and do
not leave even if interest rates are close to zero. >>
In other words, because the FED has not fixed the mess it helped to create.
Natural forces of supply and demand are the best regulators on earth.
Agreed! The FED failed to properly regulate the banks resulting in the real estate bubble,
mortgage insanity and the financial crisis.
The FED cannot fix the mess it helped to create. The FED's monetary policy is mostly helping
the stock market rise which creates a trickle down effect as shareowners feel more wealthy and
spend. The trickle down is obviously not an efficient way to stimulate the economy.
<< <i>[qIn other words, because the FED has not fixed the mess it helped to create.
Agreed! The FED failed to properly regulate the banks resulting in the real estate bubble,
mortgage insanity and the financial crisis.
The FED cannot fix the mess it helped to create. The FED's monetary policy is mostly helping
the stock market rise which creates a trickle down effect as shareowners feel more wealthy and
spend. The trickle down is obviously not an efficient way to stimulate the economy. >>
But it's all better now because the FED is properly regulating the banks? My view is nothing has been fixed so we will be right back where we were in 2008, probably worse since the root causes have been allowed to fester.
Maybe we should try trickle up.
Natural forces of supply and demand are the best regulators on earth.
<< <i>
<< <i>We have close to zero % interest rates because:
1) There is little demand for borrowing by the most credit worthy.
2) There is a worldwide deflationary tendency caused by the hangover
from the financial crisis and the aging US and European population.
3) Corporations have found it more profitable to cut costs rather than
borrow money to expand their businesses.
4) The very wealthy have amassed greater wealth in the past 5 years
and cannot find good investment opportunities. Their cash is piling up
in an environment where there is little loan demand.
5) Banks and brokers discovered that deposits are very sticky and do
not leave even if interest rates are close to zero. >>
In other words, because the FED has not fixed the mess it helped to create.
Oh, the globalists/bankers have 'fixed' the mess alright. The whole thing is fixed, a.k.a., rigged. I know you and other informed posters realize that, but it amazes me that some on this board can be so blind to what is really going on. Some of them think because they are a part of this system that they are so smart and know better. They are doing nothing but fooling themselves.