Comments on: For FDIC, a long tunnel and little light

By: Friar Tuck

Friar Tuck — Sat, 29 Aug 2009 15:29:53 +0000

The PPIP program has been redesigned so that only “securitized” loans are covereed, not whole loans. In effect, this means that only big banks will benefit. Must be nice to have low friends in high places. In 2010 and 2011, commercial real estate resets will begin in ernest, and some estimates say upwards of half of the $2 trillion in these will tank, with smaller and medium sized banks disproportionally taking it on the chin. The FDIC isn’t going to be able to deal with this mess, nevermind the Option-A and other mortgage resets beginning next year as well. Oh well.. it’s just my children’s money, right ?

By: Keating Willcox

Keating Willcox — Sat, 29 Aug 2009 15:16:14 +0000

Tough times for the good banks that did their job. They are getting creamed by the FDIC special assessments, so less money to lend. The bad banks are being liquidated too late so the FDIC has to pay too much. Bad planning.

By: dada

dada — Fri, 28 Aug 2009 13:50:47 +0000

It’s all a big farce. What does it mean to replenish FDIC coffers? When the Fed can print money willy-nilly and give it to banks for free, premiums mean nada to most banks. They are just a conduit for funneling money from Fed to FDIC. Just like AIG funneled money from Fed & Treasury to GS and other investment and banking firms on Wall St. Another farce is the cash for clunkers program. The whole damn intervention creates just such farces.

By: Rolfe Winkler

Rolfe Winkler — Fri, 28 Aug 2009 13:18:35 +0000

Andrew….the $736 billion figure for TAG was published as part of the QBP. An FDIC spokesman confirmed that $725 billion is still a good estimate for the increase in insured deposits due to the new $250k limit for individuals.

By: Andrew

Andrew — Fri, 28 Aug 2009 01:41:27 +0000

Your numbers compared to the FDIC numbers of about $7 trillion total deposits as of 6/30/08 make me a little skeptical. I’m NOT saying you’re wrong, and I haven’t done any numbers myself, but 90% insured, even taking into account the unlimited transaction coverage and increase to 250k, seems high.Maybe the $7 trillion I’m using is too low?

By: John McLeod

John McLeod — Fri, 28 Aug 2009 01:34:28 +0000

I had a nasty thought earlier today. Wouldn’t there be a kind of arbitrage going from banks paying lower to banks paying higher interest on CDARS segments? The retail investors would be getting the low interest rate at their home branch (assuming they will usually choose a safe bank), but then what’s to prevent the CDARS segments from seeking the higher interest rates at the riskier shops, with heaven knows who pocketing the difference.Has FDIC got a way to discourage the banks no their “bad” list from gorging on segments? You’d think that would be a horrible Moral Hazard for them.

By: CB

CB — Thu, 27 Aug 2009 21:56:14 +0000

A valuable synopsis with helpful graphics in support. We all need an untangling of all the news (particularly financial) that comes at us every day, a kind of Dummies Guide to What Happened Just Now, and you are doing the detail trawling that brings out the information we need to know. Thanks.