Anybody else hear rumors about bank run next week?

Something about the FDIC admitting it's out of money, or nearly out, in a report next week.

:shrug:

accountant told my sister to not keep money in banks because the FDIC would be insolvent in a week (this was months ago). Basically if the FDIC is insolvent, the gov't is insolvent.

considering we're 10 trillion in debt, it is possible for reasonable people to debate how "solvent" we actually are. Also, there are consequences to declaring more money into existence, for the purpose of keeping them funded.

Anyway, my assumption is that if the FDIC needed money, they'd make that happen and let the dollar take another hit. Not awesome, but clearly better than nuking public confidence in the banking system.

Primarily because its director refuses to actually follow the law and shut down banks before they cause losses to the taxpayer.

But the chances that it itself won't be bailed out are miniscule; if that happened there would be blood in the streets in no time.

I haven't heard anything about this, but I think people need to keep informed.

When Washington Mutual failed last fall, several media outlets reported that the "FDIC
was stretched thin". That was several months ago, and many bank failures ago.

Sheila Behr tried to infuse some cash by raising FDIC insurance fees on banks. The
banks balked and that failed. Then she went to Congress and got additional funds.

I think it's smart to keep an eye on this activity.

Obviously, all of this activity signals that there are problems. We've had many
bank failures and the FDIC doesn't have an unlimited amount of funds. As another
poster mentioned, the government could bail out the FDIC and continue to provide
funds if that does happen.

However--and this is what is crucial for me--who in the hell wants to rely on the
good graces of the Federal Government??'?? Let's say the FDIC runs out of money, and
needs to call on the government to produce the funds necessary to get bank clients
their money back. How long would that take? What if there are other unanticipated
problems?

I'm not advocating bank runs but for Pete's sake--we live in tumultuous times. Protect
yourself and your family. Have a stash of cash at home and don't tell anyone about it.
If there are problems, it may take more than a day, or even a week, to get money returned.
There were several DUers, who said their bank failed and that it took months to get their
money back.

Until the uncertainty has dissipated, it's only prudent to prepare for any eventuality.

A sort of "disaster-capitalism" style power-play. This kind of theory more or less implies that some body of plutocrats is essentially willing to start an end-game, where they are willing to trigger a full-on economic collapse.

I have to say, it's all sort of in "black helicopter" territory, but watching the banksters get rewarded over the last 8 months for essentially cratering the economy, I conclude that the rules aren't exactly being followed any more. I no longer feel quite like I know where to draw the line between "plausible" and "implausible" anymore.

"Treason doth never prosper: what's the reason? Why if it prosper, none dare call it treason."

...off the table.

I could have never imagined people dying of starvation and thirst--and drowning days later in their
own rafters--because it took the Federal Government nearly a week to get basic supplies and rescue to
Katrina victims. Bad things can happen when you rely on the government for your complete survival.

Given the political climate we live in, you'd have to be living in a fool's paradise to not protect
yourself.

I just read "Night" and one thing is true about the human condition. No one wants to believe that
horrible things are happening--even if you get the sense that something is very wrong. It's just so much easier
to rationalize, justify and deny---because it's more comfortable and easier on the mind. I feel like
we're being propagandized, and traumatized into submission--while the powers that be orchestrate the downfall.

I don't think it's "black helicopter" but I understand your point. So much of what has been done by our
government in the past 10 years is all "black helicopter" stuff. We're just growing accustomed to it.

stand between the American people and the dependability of their depository system.

Turn your attention back to the issue we are trying to resolve.

I posted about this days ago. With the last round of bank failures the FDIC officially went bankrupt. However the feds will keep printing cash as needed.

Most at DU failed to understand the economic importance of this of course and few paid attention. Too much worry about Glen Beck and other non-issues.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=6324544

You have to put things in perspective. In 1991, the FDIC fund was in the red for $6.9 Billion. At the time, there were 1430 problem institutions with a total asset base of $837 Billion. Currently, there are 305 troubled institutions with an asset base of $220 Billion. The FDIC fund came back form the -$6.9 Billion in 1991 to top out at $52 Billion in 2007. By March of this year, that had declined to $13 Billion.

http://www.fdic.gov/bank/statistical/stats/2009mar/FDIC.html

I just did calculations from the press releases since 01 Apr and the total costs to the FDIC fund since then are $15.975 Billion. FDIC asked to increase the insurance premiums in the 2nd quarter. I don't know by how much or if it was approved, but they should still be approaching $0 in the fund. President Obama also signed into law a bill in May allowing the FDIC to borrow as much as $500 Billion from the treasury. Earlier in the year, he also increased the insured amount from $100,000 to $250,000. In the end, most people won't be overly affected (except for the inconvenience of changing banking institutions) as few have $250,000 sitting in a bank somewhere.

Sheila Bair, Ben Bernake are among the most obvious of a large army of moles. Who knows who they are getting their marching orders from (Cheney?, Rove?, Paulson?) Big money from Wall St, Insurance Cos, Banks, etc. would certainly bring the system down if they could make a buck out of the collapse.

You just don't know what to believe anymore.