The $250k FDIC insurance "sell"

blackredyellow

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?

FiveB247x

Yes it some respects it is an out of touch topic, but in reality, it is a very important item which needs to be adjusted in order to prevent a potential bank run. Sounds ridiculous but it is a necessary step in practice and also as a reassurance to the citizens of the nation.

inmytree

blackredyellow wrote:

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?

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...

jimed14

don't think this is aimed at too many individuals, but, $100k - $250k isn't that much for small businesses ...

DriftingByTheStorm

Raising this limit is aimed at securing the deposits of banks, in order to AVOID RUNS ON BANKS.

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.

dmitry

Just what we need, banks with less responsibility.

Jammin909

dmitry wrote:

Just what we need, banks with less responsibility.

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.

jbalicki10

You know... If they have 700 billion to burn on the banks... Why not just give the 700 billion to the people instead. I know if I had 100,000 bucks given from the government, I would just pay off my mortgage. Thus the bank would have money to give more loans out... just sayin...

Drowned Out

blackredyellow wrote:

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?

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.

lastexit78

jbalicki10 wrote:

You know... If they have 700 billion to burn on the banks... Why not just give the 700 billion to the people instead. I know if I had 100,000 bucks given from the government, I would just pay off my mortgage. Thus the bank would have money to give more loans out... just sayin...

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.

sweet adeline

jimed14 wrote:

don't think this is aimed at too many individuals, but, $100k - $250k isn't that much for small businesses ...

this is my understanding as well. it was aimed more at small businesses as opposed to individuals.

mammasan

blackredyellow wrote:

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?

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.

DriftingByTheStorm

dmitry wrote:

Just what we need, banks with less responsibility.

Jammin909 wrote:

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.

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?

inmytree

DriftingByTheStorm wrote:

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?

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...

mammasan

DriftingByTheStorm wrote:

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?

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.

DriftingByTheStorm

inmytree wrote:

rewarding bad behavior and not holding people accountable makes no sense to me...

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:

mammasan wrote:

Until the public has that again you will continue to have banks fail.

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.

mammasan

DriftingByTheStorm wrote:

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.

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.

LikeAnOpeningBandForTheSun

DriftingByTheStorm wrote:

, 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.

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

DriftingByTheStorm

MrSmith wrote:

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.

LikeAnOpeningBandForTheSun

DriftingByTheStorm wrote:

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.

i agree basically. the threat of economic breakdown is real but i think the "solutions" proposed so far are just meant to keep things afloat until after election day. i do think the Bush administration tried to slip an economic Patriot Act in at first, but the republicans have already abandoned him and arent trying to scam anyone. at least not more than the democrats.

inmytree

mammasan wrote:

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.

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...