The $250k FDIC insurance "sell"
blackredyellow
Posts: 5,889
Seriously, how out of touch are these legislators? I've had MSNBC on all morning, and every representative and senator that has been on (including Obama and McCain) has been saying how the $250k insurance on savings account was a big deal to get in the new bill and how much that would help taxpayers know that their savings our safe.
Seriously??? I get that the higher limit will help banks maybe have more on hand, but really what average taxpayer has $250,000 in savings?
Seriously??? I get that the higher limit will help banks maybe have more on hand, but really what average taxpayer has $250,000 in savings?
My whole life
was like a picture
of a sunny day
“We can complain because rose bushes have thorns, or rejoice because thorn bushes have roses.”
― Abraham Lincoln
was like a picture
of a sunny day
“We can complain because rose bushes have thorns, or rejoice because thorn bushes have roses.”
― Abraham Lincoln
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Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the government becomes a law-breaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. - Louis Brandeis
yup, they're selling a bag of shit, and we're going to be forced to buy it...
I'll say it, Obama is dead wrong on this...as is McCain...
this is frustrating...
"I don't believe in damn curses. Wake up the damn Bambino and have me face him. Maybe I'll drill him in the ass." --- Pedro Martinez
This is about systemic risk folks.
I keep trying to explain that.
This provision isn't really about saving your 250K in deposits.
It is about providing the markets in general (including the large consumer segment) WITH ASSURANCE.
This is a market calming strategy.
"Hey, all my money is safe. I don't have to pull it out of the bank, thus fucking over the system even more."
That is the point here.
If I opened it now would you not understand?
Exactly. You don't have to work in finance to figure that one out.
Spineless and agreeable Democrats vs the corrupt Republicans. What a wonderful world.
I would guess that most middle class baby-boomers would have at least that much saved for their impending retirements. THEY are the people getting fucked the hardest by this. I would think that they are the ones this is aimed at.
You got me thinking. They say this bailout will cost each American an average of around $2,300. That's counting children and people who don't pay taxes however. If you divided 700 billion by the amount of taxpayers in this country each one of us is paying more like $5,000. Why not just give each American a $5,000 rebate check? Wouldn't that give the economy the kind of boost it needs? Obviously the goverment doesn't have that kind of money because they're asking us for it. But if they did and they have in the past had that kind of surplus where was my $5,000? It just shows you how much our goverment cares about the middle class. They won't give us our money when we need it but they'll take it when they feel the need to give it to someone else. The middle class is essentially subsudizing the wealthy, irresponsible and poor in this country.
this is my understanding as well. it was aimed more at small businesses as opposed to individuals.
I don't know about individual taxpayers but many small business accounts definitely have that much so they will benefit from the increase. I know my father moved some money from his business account into his personal and also opened one in my name and another in my younger brother's name so that all his business money would be insured. What many people don't realize is that the FDIC insurance is per depositor. So if you and your spouse have $200,000 dollars you open one account in your name and one in your spouses name and then put $100,000 in each account. this way all of your money is insured. Also the federal government has something like 20 years to pay you back.
Jesus H. Christ, folks.
Is it that hard to understand?
This attempt to raise the FDIC insured deposit limit is NOT about corrupt Republicans, and the intention is NOT to lower bank liability ...
IT IS ABOUT REDUCING RISK IN THE SYSTEM.
If larger depositors can be assured that their money is GUARANTEED by the Government, there is a BETTER CHANCE THAT THEY WILL NOT PULL THEIR MONEY OUT OF THE BANKS.
THIS REDUCES SYSTEMIC RISK OF BANK FAILURE, AND POTENTIALY REDUCES TAXPAYER LIABILITY.
You need to understand that THIS is the intention at play here.
Yes, it seems paradoxical ... we are increasing Federal\Taxpayer liability in order to REDUCE it ... but that IS what the intention of this legilstaion is aimed at.
It is a market calming approach.
Does that not make sense?
If I opened it now would you not understand?
no, it doesn't make sense...
rewarding bad behavior and not holding people accountable makes no sense to me...
they are holding a gun to our heads and saying "or else"....you know, I want to see the "or else"....because at the end of the day, they've got nothing but fear....screw 'em I say...
I've yet to hear of anyone not being able to make payroll...I've yet to hear about anyone not being able to get credit...
I see this as a correction due to the bursting of the housing bubble...
this is just a band aid...on an shotgun wound...
let this work itself out, without my tax dollars...
The problem is that people are stupid. My girlfriend's branches where closing accounts left and right following the Lehman Brother's bankruptcy and the majority of these accounts where for less than $100,000. Most of the small business customers in her region simply opened different accounts under different depositors and moved their money around to make sure that it was insured. What needs to be done is to restore confidence in our banking institutions. Until the public has that again you will continue to have banks fail.
Well, thats what the Federal Reserve is all about, brotha.
You won't get an argument from me on that.
I just think its laughable to get all up in arms about a predictable result of a system that was built by the bankers for the bankers, with non-market-based government subsidized insurance (FDIC) and bailouts as two of the most important tenants of their scheme.
But suddenly when they implement these practices, its all a bad idea?
Well duh. It was a bad idea to begin with. The very IDEA of FDIC is about NOT HOLDING PEOPLE ACCOUNTABLE. How would you feel about a flat rate government insurance program for Auto Liability? Fuck how risky your driving is, or how many accidents you have, $300 a year and you're set.
See a problem with that?
:cool:
Well, that is what raising the FDIC limit is trying to do.
Look i'm not saying any of this is DESIRABLE.
I'm saying it makes sense from a CONTAINMENT standpoint.
I know what the root cause of this was, hopefully so do you at this point,
the question is how do you want to move forward?
I'm willing to concede that some form of bailout is probably necessary, no matter how much i hate it.
But if you're content to sit and watch the credit crumble, and the economy implode from lack of credit, that's fine by me too.
If the american public would rather join in the mysery created by the large creditors, that's fine. I know they have no idea what "frozen credit markets" really means, and they sure as fuck haven't seen the worst of it.
But fuck it.
Lets get this party started.
I've got my gold.
If I opened it now would you not understand?
As much as i would hate to see a frozen credit market I don't want this bail out to go through. I feel that this is the only way where we will be able to truly rectify the problem. We both know that an economy based on debt is a horrible idea and we need a better foundation. By refusing to bail out the market we can probably, through much heart ache and struggle, establish this. What's the saying "No Pain. No Gain." I personally have nothing against raising the FDIc insurance to $250,000 but I don't think it is necessary.
i've never seen someone run from their precious ideals so fast when their portfolio is on the line.
this is a bad idea. they are grasping at straws
I'm not even drawing a side here.
I'm simply trying to point out the intention.
People are running around calling this a "corrput republican scam" or saying it is intended to bail out bankers.
Its not.
There is a potentially valuable (to abating this crisis) reason for this bill.
I haven't said i agree with it or not.
I'm just saying what it is and isn't.
I don't like seeing people basing decisions on false information.
Thats it.
If I opened it now would you not understand?
they won't freeze credit...that's how they make money...
this whole thing is bullshit...I keep hearing about people not being able to get credit...yet I've not seen one credible sorry other that someone saying it...
this is just like the rush to war....
I just called both of my senators and asked them to vote against this crap...
seriously...I keep hearing "this is a crisis" yet see no evidence....please, if someone can find a credible story that this is a true "crisis"...please point me in that direction...
The entirety of this bill is about one thing: preventing a catastrophic meltdown.
I know that is a catch phrase, and many don't understand it.
And that is too bad, because i'm not going to get in to it all here.
I will say this though,
for those that think this is just some "correction" (and i saw the thread with that title, and i cringed) you need to understand something fundamental:
What is happening right now is the exact same thing as a long term severe narcotic addict going cold turkey. I hear all these chants of "Yeah fuck it. Fuck the addict. Drugs are bad. Just take the drugs away and let him deal with it. Its his fault." ...
What people are not understanding is that our economy is HORRIBLY ADDICTED TO LOOSE CREDIT, and you are asking it to not only quit cold turkey, but go on a diet at the same time. The results WILL BE HORRIBLE WITHDRAWAL, and like with some strong narcotics, possibly DEATH.
This bill isn't supposed to be a "stopgap" or "temporary delay" so much as it is meant to be a sort of Rehab Program.
Maybe the metaphor isn't perfect, but what this bill is hopefully going to do is remove some of the systemic burden in the system, allowing the markets to correct, WITHOUT having the housing market tank abruptly, and have the markets at large go on a death spiral.
If people UNDERSTAND THAT RISK, and are willing to forego a bailout, then fine ... thats great. The American people have more fortitude than i gave them credit for. However, i suspect most don't REALLY understand just HOW BAD the results of not offering Wall Street a lifeline could be for EVERYONE.
This is like dominos in a line folks. The markets fall a few hundred points, and everyone starts selling. Everyone starts selling, the markets fall. The markets fall, and banks are FORCED TO SELL because of margin calls. The markets then drop even farther. The consumer gets the shaft, and is unable to make mrotgage payments, obtain further credit, and loses his job. Millions more houses go on the market. The housing market tanks further. This twists the banks arm some more, causes them immense pain, forces them to sell more. The markets drop further ... repeat ad naseum.
IT IS A BAD SCENARIO.
If you understand that and you are all for not giving a green light to this bail out, then praise the heavens, you are a true blue patriot, willing to risk it all to prove a point.
If you DON'T understand that, it would behoove you to figure it out before you make your decision.
Look, i HATE bailout.
I think the WHOLE GAME IS ROTTEN.
But NOW may NOT be the time to stand on principle.
Maybe we should look for ways to MANAGE THE PAIN, get through this, and THEN HOLD THESE FUCKERS ACCOUNTABLE ... maybe split their banks up in a hundred pieces, and DEFINATELY END THEIR CREDIT PARTY vis a vis the Federal Reserve.
If I opened it now would you not understand?
Its not too hard to find evidence.
Monday saw a massive spike in LIBOR.
Here is another example:
Treasurys soar, credit pipes frozen.
and another:
The credit squeeze: Healthy companies struggle for financing because bank failures have frozen lending
and yet another:
In wake of market plunge, state access to capital markets ‘frozen’
and one more, just to hit the point home:
US venture capitalists struggle due to frozen markets
Starting to see any evidence?
Look, just like this current meltdown didn't happen overnight (remember me screaming about it for almost a year, and being called a bloody fool?) neither will the effects of banks refusing to lend. Actually, it has been pretty immediate. It is just taking a while for YOU to feel it personaly.
But make no mistake, you WILL feel it.
EVERYONE will feel it.
If I opened it now would you not understand?
neither of these articles state that anyone was denied credit....only that it's harder and more costly...
I may have missed it, cause I glanced through...
edit: so the days of easy credit are over....I see that as a good thing...
and the "converse" (not really, just seperate forms of accessing borrowed capital):
and then on the private side:
That's not a loan. Thats a One-To-One Deposit\Withdrawal.
Look man,
i'm not going to argue semantics with you.
This is what it is.
Credit in this country is already noticeably worse.
Its a fact.
And it is economic reality ... not just in this situation; the fundamentals are rooted in basic economic theory.
We have a credit problem right now.
Banks are scared, and therefore won't lend.
Period.
Either we do something about it,
or allow it to further deteriorate.
I'm not going to sit here and make value judgements just to get torn apart,
I will just state facts and let others decide for themselves what is "right" and what is wrong.
If I opened it now would you not understand?
no need to get defensive....I'm am seeking facts...fact is, no one has been unable to get credit...they just had to work harder to get it...BFD...
I say let the banks not lend...that only hurts there bottom line...so that's their choice...
how about this, let's just agree to disagree....
I would just guess they would print more money causing the value of the dollar to go down causing more problems.
But, I don't know how any of this stuff works.
No.
The FDIC will be "broke" in a hurry.
But like you said, the government would run quick as a bunny to get more funds appropriated for it ... as you say, out of thin air.
The point of this increase in the FDIC limit is, ironically, to ensure that the funds DO NOT get used.
They are trying to say, "hey look, it doesn't matter HOW much you have in your account. JUST LEAVE IT THERE, PLEASE!"
Because a run on banks is the LAST thing we need right now.
:(
If I opened it now would you not understand?
It doesn't matter what the legislation is aimed at. If intentions are all that mattered we'd be living in heaven on earth by now. Deposit insurance is a moral hazard which has now been more than doubled.
You've got the king on his knees and you're scared to chop off his head. Hand me the ax.
What are you talking about?
-Reagan