Senate Bill Seeks $500 Billion for FDIC

[girl gone mad]

via http://www.calculatedriskblog.com/2009/03/senate-bill-seeks-500-billion-for-fdic.html">Calculated Risk:

From the WSJ: Bill Seeks $500 Billion for FDIC Fund

Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.
...
The FDIC would be able to borrow as much as $500 billion until the end of 2010 if the FDIC, Fed, Treasury secretary and White House agree such money is warranted.
...
The FDIC's deposit-insurance fund has fallen precipitously with 25 bank failures in 2008 and 16 so far in 2009.

It was just last September that the FDIC disputed a story by David Evans at Bloomberg:

Bloomberg reporter David Evans' piece ("FDIC May Need $150 Billion Bailout as Local Bank Failures Mount," Sept. 25) does a serious disservice to your organization and your readers by painting a skewed picture of the FDIC insurance fund. Let me be clear: The insurance fund is in a strong financial position to weather a significant upsurge in bank failures. The FDIC has all the tools and resources necessary to meet our commitment to insured depositors, which we view as sacred. I do not foresee – as Mr. Evans suggests – that taxpayers may have to foot the bill for a "bailout."

I guess the proposed $500 billion is just a loan and not a bailout.

[marketcrazy1]

1. Hi GGM

I started a thread about this a little while ago. ( like yours better! ) not many seem to give a shit! funny and sad really. DUers will make 250 posts on threads about some idiot doing something stupid but just give a passing glance to threads like this? I dont get it!. anyway thanks for posting...

[notesdev]

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At least the IndyMac scandal is getting some attention. But of course that one company is a drop in the bucket of what's going on here.

That story is about direct falsification, so that's easier to understand and it's more accessible. Most people aren't going to know enough about the implications of borrowing (adding more debt that can't get paid back) money (from whom? Who has that kind of cash to lend us? Are we seriously interested in handing China a lien on private bank deposits?) to pay for insurance, the fact that they're seriously planning for losses on that scale (their previous cap was 10% of the proposed figure) and all that implies.

This represents an expectation of a huge wipeout of wealth in the U.S. It should be a huge story, if it were widely understood what is going on.

[tabatha]

2. Is the treasury not empty yet?

[we can do it]

10. They'll Just Start Printing More If They Haven't Already

[Mojorabbit]

4. This is troubling news. nt

[kysrsoze]

5. This and February sales figures of all auto manufacturers are starting to scare the crap out of me

It appears things are going to get really bad.

[DemReadingDU]

6. So I wonder what big bank are they expecting to take over? n/t

[girl gone mad]

7. That thought crossed my mind, too.. n/t

[Pirate Smile]

8. That is my read too.

[Doctor Cynic]

9. Is it ShittiBank?