Wednesday, August 26, 2009

The FDIC Is Going Broke

You don't need paper to print billions of dollars in worthless new "money".

"I think the public should expect the fund to go negative at some point," said Gerard Cassidy, a banking analyst at RBC Capital Markets, which has predicted that up to 1,000 banks — or one in eight — could disappear within three years.
Yahoo/AP.

2 comments:

Old NFO said...

And this is just ONE of many impacts I believe we will see in the coming years...

WV-thruthes

James E. Griffin said...

Well, as of a little bit ago, the FDIC does have the ability to go to the treasury for recapitalization. While things were pretty grim a couple of months ago, so far times are a bit more stable.

Yes, there will continue to be banks failing, with an occasional big bank going down. And as any banker can tell you, it's the small banks that suck the most FDIC resources.

I'm also beginning to be concerned that stable banks big enough to take over the assets of a failed bank are a finite commodity. Then we've got to look overseas. That's gonna be a can of worms.

I'm cautiously optimistic things now are do-able, unless we get another dip of recession.

We're in completely uncharted waters now. If, as I expect, we get another dip, followed by a jobless recovery, then the world of finance gets... interesting.