A Desperate FDIC Begs Americans To Open Savings Accounts During "America Saves" Week

Tyler Durden's picture

Just in case Americans weren't schizophrenic enough, listening to Obama and CNBC telling them to spend, spend, spend, even if that means maxing out all credit cards (relax, Uncle Sam will take care of that 1,800 day delinquent account by covering 99.999% of principal losses once hyperinflation hits a few quadrillion % per day), here comes the FDIC, with the other side of the coin, imploring "consumers across the nation to  consider
establishing a basic savings account or boosting existing savings."
And with that the insanity that is now the United States of America is laid ba(ir)re for all to see. The question of just how underfunded US banks are if the FDIC has to resort to such fund raising gimmicks is obviously irrelevant. Well, not quite - luckily, the FDIC will come out this week with its quarterly banking update so we can all see how many tens of billions the DIF burned through in the past 3 months.

FOR IMMEDIATE RELEASE
February 22, 2010     Media Contact:
Greg Hernandez (202) 898-6984
Cell: (202) 340-4922
Email: ghernandez@fdic.gov

The Federal Deposit Insurance Corporation (FDIC) is calling upon consumers across the nation during America Saves Week to  consider establishing a basic savings account or boosting existing savings. FDIC Chairman Sheila Bair said, "One fundamental lesson of the financial crisis is that savings can help families withstand sudden changes in their economic well being. Establishing a savings account in a federally insured institution is a great first step to build wealth and begin a savings habit that will last a lifetime."

The personal savings rate rose to 4.6 percent in 2009 from 2.7 percent in 2008, according to the U.S. Department of Commerce. "I am pleased to see that people are saving more of their hard-earned money and building wealth. Having personal savings for an emergency fund or saving for a future expenditure, such as a college education, can make a big difference in avoiding other costly alternatives. I've always been a big advocate of a back-to-basics approach to financial services; it's my hope that Americans' increase in savings is the beginning of a long-term trend," Bair said.

"Money saved by consumers also provides a stable source of funding for investments in the economy that benefit all Americans," said Bair. "In fact, a country with robust savings generally has more capital to fund investments and support economic growth over the long-term. As demonstrated recently, it is harmful to an economy when consumers spend beyond their means, financed by debt that they cannot afford to repay."

To learn more about America Saves Week and about savings-related resources from the FDIC, please visit http://www.fdic.gov/deposit/deposits/savings.html.

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Tripps's picture

I've been hard on Zerohedge recently. I would like to point out the content is getting better again the last few weeks

 

stuff I wouldn't normally see is posted here. FDIC is pathetic....begging people to open up savings accounts for a 1.5% interest rates

 

if they want people in cash....#1 create jobs in this economy

#2- raise the fricking interest rates and people will move assets back to cash! simple stuff here. 

seventree's picture

You actually get 1.5% on a savings account?

Anonymous's picture

where ? My online bank dropped the rate from 1.65 to 1.40 to 1.25 % this month.

Tripps's picture

you're right..sorry. 1.15% with ING

 

i'm getting PORKED to save. that is why its laughable to see this fdic pr blitz

Anonymous's picture

My credit union gives 2.25% on savings. Sweet.

Anonymous's picture

Move to Aus - I get a standard 5.70% in an ING saving account

jmc8888's picture

ING? Might as well as have been in Lehman Bros in 2008.  ING is one of the doomed.  Don't know when, but I'd be prepared to jump out of that sinking ship....well if not soon...before everyone else exits at the same time.  Good luck.  It's like keeping anything above 250k in any of our big failed banks still operating here in the U.S. under the assumption that the worst is behind us.

Even then, I wouldn't count on the broke fdic to pay me out of even that much. 

I have no idea how it works down under, but I know I wouldn't trust ING with any faith they aren't completely mucking everything up.

Plus when you consider the Spain/Brazil Santander RBS troubles that will start striking right at the ING Inter-Alpha group nexus may or may not pop off before Greece, the time for ING to go AIG may be sooner than thought of.  Good luck.

snakeboat's picture

Well, 1.25% is slightly better than watching equities dissolve (soon)...

merehuman's picture

but still losing due to inflation

Anonymous's picture

There's no monetary inflation you ignoramus.

We've got asset bubbles in liquid investments driven by free money given to the elite.

Houses - deflating

Cars - deflating

Electronics - deflating

Clothes - deflating

Need I go on?

All that being said though, interest rates should also be higher. I'd consider saving if the interest rates were higher. For now, I'll stick with mattress bank and trust.

VegasBD's picture

Inflation is the increase in the money supply, not rising asset prices. rising asset prices is a (usually) consequence of inflation.

So im gonna agree with the ignoramus, and say that yea, youre still losing becaues of inflation.

Deflation rears its head when you price assets in gold. But because of the recent inflating of the money supply asset prices are not deflating on par with real money (gold), but holding steady or losing moderately.

Massive inflation does not equal massive asset prices instantly, but in the end it will. Enjoy the ride.

VegasBD's picture

And before everyone argues that debt destruction is making the money supply smaller, you'd be right if the Fed didnt buy it all up and let it sit on the balance sheet. So the 'dollars' are still there.

There is no spoon (deflation).

ghostfaceinvestah's picture

food - inflating

energy - inflating

medical expenses - inflating

All according to the CPI.

So basically the shit you need is going up in prices, and the crap you can no longer afford is going down in price.  Excellent.

tip e. canoe's picture

all the more reasons to grow a ghostface garden

Missing_Link's picture

food - inflating

 

energy - inflating

 

medical expenses - inflating

 

All according to the CPI.

 

So basically the shit you need is going up in prices, and the crap you can no longer afford is going down in price.  Excellent.

^^ This.

There's no inflation or deflation or hyperinflation or stagflation.  There's only this modification of prices -- transflation, if you have to have a 'flation' term for it.

Prices are going lower for the very wealthy and higher for everyone else.

velobabe's picture

i'm dying in here you got to stop with the wit.

strike for return to reality's picture

Will Sheila mail this to the millions of uncounted unemployed who've emptied their savings accounts and run up their credit cards so that they can buy food?

Calling Marie Antoinette, "Where's my cake!"

Coming Down in Powdery Sparks's picture

Don't forget the oh-so-useful educations that are being sold for $40k or $50k per year in private colleges.

snakeboat's picture

Indeed... pondering whether to even send my 9yr old girlie to the ivy towers at this point... maybe a mtn man education is the ticket now

Miyagi_san's picture

As a Mounting man I agree

DosZap's picture

Make sure you have a NEW mattress...................

Or, what happened to Grandma, will get you.You forgot tires............

Also, Grandma, lost 1 Million dollars....for real, Mattress Savings & Loan.

Kids bought her  a new one, cause hers was old, and worn.

Took it to the dump................replaced it w/ a new one.

Sans the 1 mil.

DosZap's picture

Ignoramus 2 here,

NO INFLATION?, you buy gas, or eat?.

CPI at 1.4x12=16.8%....................is that not Inflationary?.

merehuman's picture

Thank you both. I shop. Wallstreet steals

I hope we all see a better day

Anonymous's picture

Prices remaining level amidst massive unemployment and eleveraging = inflation

Mark Beck's picture

Unfortunately, for a good debate on fundementals, inflation versus deflation, we must first define what we mean. However, the traditional use of these operators, in many ways do not apply to what we have today, when extrapolated from their historic norms. Some aspects may apply, but traditional models are broken. So this debate is perhaps a poor use of our time. What is more beneficial is in understanding what we would lossely describe as an economy.

Let me provide a few items:

1) First I would like to say that the actions of the FED are what I would call plausible distractors. That is an action, to fundementally address some economic historical norm, but in reality just a proping up of the banking sector, or some other FED agenda. The striking similarity to many of the FED programs are that success is plausible, but not likely (in terms of overall effects aiding our citizens), and funded from increasing the money supply (pulling aggregate worth into the present) or committing tax revenue (real worth = tax on labor).

Now this could be construde as monetary inflation, yes. However, there are more items in our economic soup.

2) Price manipulation (asset bubble creation or support), under the guise of price stability. Here again we see the FED hide behind the mask of plausibility. As to real estate, what really is their goal (as looked at over the past two years with the GSEs). Price stability as a goal is a misnomer when used to address the free market (self adjusting). For real estate the market should set the price, not the FED, and certainly not the FED at the destruction of our currency.

Is GSE FED action to prevent price deflation on this asset class? Perhaps, but this is a little strange on the surface. Because, really to be responsible, one would have to look at possible outcomes before committing to such massive programs. For example; what happens to price when the FED backs out? How will the MBS securities hold their value when the underlying asset class drops in price, or is there a market to sell these derivatives at or near cost? If not now, when? Maybe the MBS GSE buy is just to, once again, support the banking sector. This time to help de-leverage banking real estate debt.

3) What is really amazing is with all of the money spendt from the FED and the Administration (Treasury), that unemployment has not really been addressed. I also would like to say that, at some point destruction of the working base will diminish, because we simply do not have the possibility of a decline to zero employment. Companies can only lay off so many people before they cannot address their markets, and when this happens will either look for a buyer of file for bankruptcy. So the dynamics of employment go far beyond what is published publically.

And in closing, Fed Mission:

http://www.federalreserve.gov/aboutthefed/mission.htm

Also from within the FED purposes doc,

"The Federal Reserve sets the nation’s monetary policy to promote the objectives of maximum employment, stable prices, and moderate long-term interest rates. The challenge for policy makers is that tensions among the goals can arise in the short run and that information about the economy becomes available only with a lag and may be imperfect."

In the hearings we always here of these admirable objects, but without any accountability, or performance based on "real" FED costs. It must be nice to work where, there is no consequences of failure, and Trillion dollar mistakes are are resolved through destruction of a nations currency and dollar denominated savings.

Mark Beck

hedgeless_horseman's picture

Mark, your three items above go along way to describing prestidigiflation.  Add a little bit more detail regarding the role of the failed fourth estate and you have it nailed.

dark pools of soros's picture

are boobs inflating?  or are they on the downtrend too?

Anonymous's picture

My Oreos, Ho-Hos, Banana Flips, Hershey's Dark Kisses, and Ganache Truffles cost twice as much as they did in January last year so I bought some sugar futures in November and have more than doubled my money.

In chaos there is profit. I love inflation.

SteveNYC's picture

No, it is now less than 1% I keep getting letters from the assholes trying to get my cash back.

"Quick, get in fast 1%APR!!" They want to pay you 1% to have your funds in an insolvent bank. Hahahahhahaa!!

Problem Is's picture

"raise the fricking interest rates and people will move assets back to cash! simple stuff here."

Exactly Tripps!!! +1111.

Nothing price can't fix. Pay a decent interest rate and you may get deposits! That is why Bernank-ster upped the interest paid on Bank Reserves, right? Bobble that head Shelia...

As I learned from ZH commenters... 1.5% interest on constantly devalued Bennie Bernank-ster Bucks means...

Gold Bitches... and I would buy Silver blanks before I would take 1.5% on toilet paper Fed money too, bitches...

I learn so much reading here...

Crodus's picture

This made my stomach turn. The government first had to step in to cover the bad investments with blankets of cash and now they have to propagandize saving in order to cover another inflow of cash for bad investments.

Yes, America, start saving because the banks need to cover your eight neighbors on your street walking away from their houses. Our America has turned into a place of no-responsibility, a place where the leaders want to ignore cause and effect.

strike for return to reality's picture

Maybe FDIC can commission some giant propaganda posters (as from the Soviet era) showing hardworking industrial workers taking their paychecks to the trustworthy bank.

This would go well with some big bronze statues of our esteemed leaders.

Kim Jong-il, welcome to America!

 

ghostfaceinvestah's picture

Are they fucking kidding?

You want to really fuck the banks?  Pay down, or default, on your debt, your choice.  No debt = no banks.

Putting your hard earned wealth into them so they can lend it out over 10X?  No thanks, I will keep my wealth in gold, fuck you very much.

Anonymous's picture

Yes

NO DEBT=NO BANKS

easy, it changes everything,
its the one thing individuals can do

bugs_'s picture

Whip Inflation Now.

deadhead's picture

bugs...very, very good!  I remember that campaign.  wow, brought back a memory.

 

gonna get my cardigan sweater out of moth balls and maybe do some orange barrel.......

PenGun's picture

 A better idea. The little orange barrels were STP and nasty. The OS was straight up LSD 28 I believe.

Cognitive Dissonance's picture

"The Federal Deposit Insurance Corporation (FDIC) is calling upon consumers across the nation during America Saves Week to  consider establishing a basic savings account or boosting existing savings."

What's the problem? Both sides can be happy with this request. America can save for one week and spend the other 51 weeks. Problem solved.

NEXT!

Problem Is's picture

I am a citizen... not a consumer.

Put that bobble head to use and blow me Sheila...
To honor "American Banks Blow Week" of course...

NEXT!

Anonymous's picture

Are those interest bearing accounts ,Bair Bair?

lizzy36's picture

Here is what the FDIC is doing with your money (hint, assume the position):

OneWest bank profit: $1.6 billion As IndyMac, it sold last year for less than that. Investors win, but the FDIC could still lose nearly $11 billion on bad loans that the Pasadena institution made before its sale.

http://www.latimes.com/business/la-fi-onewest20-2010feb20,0,880625.story

On on Friday: OneWest Bank purchased La Jolla Bank’s $3.6 billion in assets, according to the Federal Deposit Insurance Corp. In yesterday’s transaction, OneWest assumed $2.8 billion in deposits and will share losses with the FDIC on $3.31 billion of the assets, the FDIC said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a_StJNEqWrDY&pos=6

 

ghostfaceinvestah's picture

Someone is noticing.

I think they got handed another banks as well.

Oh yeah, here it is.

Pure theft.

http://www.fdic.gov/bank/individual/failed/firstfederal-ca.html

All deposit accounts have been transferred to OneWest Bank, FSB, Pasadena, CA ("assuming institution") and will be available immediately.  On Saturday, December 19, 2009, the former First Federal Bank of California locations will reopen as branches of OneWest Bank, FSB.

dark pools of soros's picture

and lets remind the class that OneWest is a Goldman spawned venture...gobble gobble

 

and not publicly traded..  until they feel like dumping it.. then bring on the IPO and that great track record of hard work!!  massive earnings!!  

MsCreant's picture

Heh, heh, heh, heh...

My evil plan of keeping my money (except the bair minimum) is working.

Suffocate on the vacuum that is the absence of my funds and my brother's and sister's funds.

Starve the beast.

Suffocate the beast.

Money out of TBTF. Money only for bills, put that into credit unions,