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Monday, July 28, 2008

Give the FDIC a bazooka


I went in to Wachovia bank, and I saw three older couples maneuvering their money around so they would be under the FDIC limit.

So "bazooka" the FDIC.

They burned thru $8 billion the last few weeks, so jack up the amount that they insure. Put it to $500K. At least it will help psychology. Does $100K really do anything anyway?

The banks don't even keep reserves for saving deposits. You're just lending your money to the bank when you deposit it there. So let them back it up.

The FDIC has a "list" of problem banks. Supposedly they have less than $30 billion in assets. There is $2.73 trillion of un-insured deposits in our banking system. If you spook these people, where will all this money go?

And if the FDIC is so sure about what is, and what isn't a problem bank, then keep the 100K insurance only for those "problem" banks.

Any chance of that happening?

Look what happened in Vegas today, when John McCain's son resigned from Silver State Bancorp.

Silver State Bancorp, the Henderson-based holding company for the similarly named bank, reported that Andrew McCain, son of Republican presidential candidate John McCain, resigned today from the boards of directors of the bank and bank holding company.

The company cited “personal reasons” for McCain’s resignation, and a Silver State spokesman declined further comment.

Sheila Bair of the FDIC, last week said the "blogs were a little bit out of control." So look at Silver State Bancorp's asset profile above, courtesy of http://globaleconomicanalysis.blogspot.com/.

What chance does that bank now have of making it?

Blame the bloggers!

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