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FDIC Discloses Deposit Insurance Fund Is Now Negative

Tyler Durden's picture




 

In an unprecedented disclosure, the FDIC has highlighted that it expects the DIF reserve ratio to be negative as of September 30. As there are a whopping 48 hours before that deadline, one can safely assume that the DIF is now well into negative territory: as of today depositors have no insurance courtesy of a banking system that has leeched out all the capital of the Federal Deposit Insurance Corporation. Let's pray there is no run on the bank soon.

Pursuant to these requirements, staff estimates that both the Fund balance and the reserve ratio as of September 30, 2009, will be negative. This reflects, in part, an increase in provisioning for anticipated failures. In contrast, cash and marketable securities available to resolve failed institutions remain positive.

Additionally, the FDIC has now raised its expectation for bank failure costs from $70 billion $100 billion. Feel free to expect this number to continue growing.

Staff has also projected the Fund balance and reserve ratio for each quarter over the next several years using the most recently available information on expected failures and loss rates and statistical analyses of trends in CAMELS downgrades, failure rates and loss rates. Staff projects that, over the period 2009 through 2013, the Fund could incur approximately $100 billion in failure costs. Staff projects that most of these costs will occur in 2009 and 2010. Approximately $25 billion of the $100 billion amount has already been incurred in failure costs so far in 2009. Staff projects that most of these costs will occur in 2009 and 2010.

First Mary Schapiro has failed at her task of "regulating" anything on Wall Street, and now Sheila Bair presides over a newly insolvent institution. Chalk one up to Washington's success at "containing" the crisis. Zero Hedge wishes Ms. Bair all the luck in the world in returning the DIF to its statutory minimum requirement of 1.15% of all insured deposits (a shortfall of a mere hundred billion or so). Maybe she can convert the FDIC to a REIT and have Merrill Lynch do a concurrent IPO and follow-on offering (while Goldman raises it to a Conviction Buy which incorporates the firm's expectations for 10% GDP growth in 2010 coupled with projections for $1,000 per barrel of crude)?

FDIC's full memorandum outlining its failure can be found here.

 

 

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Tue, 09/29/2009 - 10:57 | 82361 Assetman
Assetman's picture

Translation:

"We're broke.  But at least we're telling the truth.... today."

Some consolation.

Tue, 09/29/2009 - 11:33 | 82415 TumblingDice
TumblingDice's picture

So thats what they were saying. I got all confused with all the negative and positive numbers and basis points.

This is huge. They might have to tap the Treasury line of credit. But wait the whole $500 billion line is not accessible right now because there is less than $300 billion left on the Treasury's credit line until it runs into the current debt ceiling. This will definitely put pressure on the Congress to raise that ceiling sooner rather than later.

Tue, 09/29/2009 - 13:08 | 82547 TheGoodDoctor
TheGoodDoctor's picture

I had wondered why only one bank failed this past weekend.

Tue, 09/29/2009 - 14:17 | 82629 sondog
sondog's picture

They did loss sharing with the acquiring bank for essentially all the assets. That's how they defer payment until later. But the cost will likely be close to 50% (892 million I think, on 2 billion).

Tue, 09/29/2009 - 15:15 | 82693 Anonymous
Anonymous's picture

ha... i bet there will be no bank failures this friday:) none this matters anyway because we are currently under foreign occupation. can somebody please explain to me why hardin, montana has a private police force whose symbol on their black mercedes vehicles carry the serbian coat of arms? http://www.stevequayle.com/News.alert/09_Photo_of_Day/090929.photo.of.da...

Tue, 09/29/2009 - 17:07 | 82848 glenlloyd
glenlloyd's picture

Ditto on that, one failure was far too meager to be reasonable. I've had an inkling for some time that they were stalling on taking down some institutions because they were approaching the bottom-o-the barrel on the DIF.

Tue, 09/29/2009 - 17:08 | 82850 glenlloyd
glenlloyd's picture

double post

Tue, 09/29/2009 - 15:11 | 82690 Chuck
Chuck's picture

Anyone remember TD's post a few months ago (http://www.zerohedge.com/article/how-world-almost-came-end-2pm-september-18):

On Thursday (Sept 18 [2008]), at 11am the Federal Reserve noticed a tremendous draw-down of money market accounts in the U.S., to the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn't be further panic out there.

So the question remains, if the FDIC is now [visibly] insolvent, how long before this draw-down occurs again? Tomorrow? Tonight? It it happening right now?

Tue, 09/29/2009 - 15:19 | 82698 Gilgamesh
Gilgamesh's picture

Not anytime soon.  Everyone assumes that the FDIC has the full faith and credit of the US behind it, like they assume Fannie and Freddie do now.  Government will never let voters lose their life savings because a bank failed anymore.  FNM and FRE have the implicit guarantee; FDIC has that in spades.

Tue, 09/29/2009 - 16:06 | 82763 Chuck
Chuck's picture

True. Our population is so severely under-educated when it comes to the financial systems that they'll blindly accept anything MSM says is happening or not happening. I guess my question is: Is there a chance that a run on the banks could happen in the next few days over this or am I just misinterpreting the severity of the situation?

Tue, 09/29/2009 - 16:13 | 82770 Anonymous
Anonymous's picture

i believe wells is in the most precarious situation
of the money center banks....i have read on zh
that it has negative equity and tier 1 capital....
but i am not reporting that as a fact....

does anyone have any factual information on wells
fargo equity and tier 1 capital ratios?

citi is also in near meltdown condition as i
understand it....again this is only hearsay from
posters...

Tue, 09/29/2009 - 16:25 | 82788 TumblingDice
TumblingDice's picture

An actual run on deposits by J6P is less likely than an electronic bank run on themselves (which is a pretty amusing concept). It can happen however, if there begins to be serious talk about the solvency of the US government.

For all intents and purposes I consider the government insolvent already, and destined for some form of default, but the public hasn't caught on yet. A heated deliberation over the debt ceiling, which will have to be raised in order to just cover the interest and maturing treasuries; or any public negotiation over Treasury purchases that will have to take place after QE is done might just make people think that the government backing FDIC is not as sound as they thought.

But then again, the banks might be holding "too much capital" as per Dick Bove, so none of this should be a problem.

Tue, 09/29/2009 - 16:59 | 82838 Anonymous
Anonymous's picture

This is the stuff of which panics are made...

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3251493

Tue, 09/29/2009 - 11:01 | 82372 Anonymous
Anonymous's picture

the good news is that all of this debt and need for more will prove how wealthy we are because economies are not like households....i feel some green shoots coming on....

Tue, 09/29/2009 - 15:33 | 82712 Joe Sixpack
Joe Sixpack's picture

Most households don't have a printing press (inkjet printers don't really do the job).

 

Then again, inkjet printers can print IOUs or checks, backed by the full faith and credit of "<insert your name here>".

Tue, 09/29/2009 - 11:06 | 82376 Mos
Mos's picture

"The money's not here..."

http://www.youtube.com/watch?v=_Er69b4HMl8&feature=related

 

If people only knew their hard earned savings are gone forever in all the foreclosed homes and the half finished condo skyrises.

Tue, 09/29/2009 - 11:23 | 82398 TwoJacks
TwoJacks's picture

"Your money's in the Kennedy house"

Tue, 09/29/2009 - 11:08 | 82378 Cursive
Cursive's picture

How is the "fund balance" negative but, "[i]n contrast, cash and marketable securites available to resolve failed institutions remain positive"?  This really is how 4th graders think, write and speak.

Tue, 09/29/2009 - 13:00 | 82544 Anonymous
Anonymous's picture

It's accounting. They've incurred or estimated losses greater than their current cash balance. So yes, there's a few billion dollars in cash laying around but they've already marked losses of a few billion plus one.

Makes sense to me.

Tue, 09/29/2009 - 11:11 | 82379 Anonymous
Anonymous's picture

Maybe she can convert the FDIC to a REIT and have Merrill Lynch do a concurrent IPO and follow-on offering (while Goldman raises it to a Conviction Buy which incorporates the firm's expectations for 10% GDP growth in 2010 coupled with projections for $1,000 per barrel of crude)?

That was funny shit!

Tue, 09/29/2009 - 12:43 | 82521 myny
myny's picture

made my day...

Tue, 09/29/2009 - 11:11 | 82380 Anonymous
Anonymous's picture

Things must be much worse than they are saying for this to be out there today.

And it looks like they want the next 3 years payments upfront this December - that's reassuring.

Medic

Tue, 09/29/2009 - 11:59 | 82465 Cognitive Dissonance
Cognitive Dissonance's picture

Which begs the question, what happens when the $50 Billion + they plan on collecting runs out in 6 months? Do they then collect for years 2013 - 2016?

How do I say this? When news like this no longer shocks me, we are way over the abyss and too numb to notice.

Tue, 09/29/2009 - 12:29 | 82505 Anonymous
Anonymous's picture

CD -

Many of us are comfortably numb - without the heroin.

I don't think the FDIC has a plan for when the next 45 billion runs out. If they did, they would be implementing it today. Their move smacks of despiration.

Tue, 09/29/2009 - 12:37 | 82514 Anonymous
Anonymous's picture

desperation is the english way....

Tue, 09/29/2009 - 14:19 | 82632 sondog
sondog's picture

This comment's over.

Thought I'd something more to say.

Tue, 09/29/2009 - 15:15 | 82694 Medic
Medic's picture

Then I'll see you on the dark side of the moon..... 

Tue, 09/29/2009 - 15:22 | 82703 Anonymous
Anonymous's picture

I like to be here when I can

on the dark side of zh.

Tue, 09/29/2009 - 12:45 | 82527 SWRichmond
SWRichmond's picture

They do seem to be kicking these cans a shorter and shorter distance each time, don't they?

Tue, 09/29/2009 - 16:29 | 82795 TumblingDice
TumblingDice's picture

Cans are so 1980's. But you can break your foot kicking a boulder.

Tue, 09/29/2009 - 14:26 | 82648 economessed
economessed's picture

This is why the phrase "In God We Trust" appears on each note, because there is nobody left to trust who works in the Federal Government.  We're broke, the party is over.

Tue, 09/29/2009 - 11:11 | 82381 pigpen
pigpen's picture

Sheila and Mary, the world would be a better place if honesty, trust and respect were accepted as foundational constructs of any endeavor, be it love, business or life.

Cheers,

Pigpen

Tue, 09/29/2009 - 14:49 | 82668 Anonymous
Anonymous's picture

Sweet pigpen, naive but sweet. I even leaked a tiny tear.

Faith, hope, charity, benevolence, love, compassion, honesty, integrity--those are all attributes of an ancient age and so intangible and incalculable, they can play no part here.

Might as well conjure up biblical ideology, or moral consequence, or all the god-man boogie men.

God is dead: therefore, human accountability and judgment is dead. That leaks over into every action of mankind. There is neither good or evil in this best of all possible worlds. These ideas have no place in our brave new world.

Tue, 09/29/2009 - 15:24 | 82705 Anonymous
Anonymous's picture

only in the minds of the infidel.

Wed, 09/30/2009 - 18:18 | 84348 Anonymous
Anonymous's picture

This reminds me of a story I once heard. Someone had written in a public place the famous quote from Nietzsche, "God is dead" and right below it was written "Nietzsche is dead" signed "God".

Tue, 09/29/2009 - 15:08 | 82687 Anonymous
Anonymous's picture

"... the world would be a better place if honesty, trust and respect were accepted as foundational constructs of any endeavor, be it love, business or life."

this sure would put a lot, if not all, of the lawyers out of work. no games. you give your word and then stand behind it (i.e. it is called responsibility).

Tue, 09/29/2009 - 11:15 | 82385 perpetual-runner-up
perpetual-runner-up's picture

Good thing they have back all that Citi and GE paper...

Tue, 09/29/2009 - 11:19 | 82391 Anonymous
Anonymous's picture

So we're doomed right? Are we doomed yet? I'd like to start the revolution but I'm not sure if we're doomed.

Tue, 09/29/2009 - 12:03 | 82468 Cognitive Dissonance
Cognitive Dissonance's picture

Trust me, no one's starting a revolution until the fall TV season is over. But then baseball season begins and the kids get out of school.........

Maybe sometime around 12-21-12?

Tue, 09/29/2009 - 12:45 | 82526 jerv
jerv's picture

I'm coming over for deerhunting in November, so I suggest you all stay calm until then.

But I can't help thinking... If you pussies had as much guts as the cheese eating surrender monkeys, DC would be filled with heaps of burning tractor tires a long time ago.

Tue, 09/29/2009 - 12:51 | 82535 Anonymous
Anonymous's picture

new york should be smoldering with the bodies
of dead banksters - or more to the point
dead rockefellers and rothschilds

Tue, 09/29/2009 - 14:12 | 82618 Cow
Tue, 09/29/2009 - 11:19 | 82392 matthylland
matthylland's picture

A few of the bank conference calls I listened to a while back talked about the increase expenses from the FDIC (snv comes to mind...maybe stsa also, but not sure on that). Now they are going to be forced to pay 3 years of deposit insurance at once?
What will that do to these bank earnings this coming quarter?

Tue, 09/29/2009 - 11:25 | 82401 Anonymous
Anonymous's picture

It won't affect earnings unduly. The cunning plan is that the banks will hand over the funds up front, but only recognize the charge against earnings on a quarter-by-quarter basis over the relevant three year period.

Result: Banks capital is depleted up-front, but earnings continue on their merry way unaffected by these shenanigans.

Tue, 09/29/2009 - 12:04 | 82473 Cognitive Dissonance
Cognitive Dissonance's picture

God forbid the FDIC upset bank stock prices based upon inflated and unrealistic earnings projections?

Are you out of your mind?

Tue, 09/29/2009 - 12:10 | 82482 Anonymous
Anonymous's picture

absolutely correct....special rules will have
to be created to permit the accounting of
capital ratios since the real capital will
be in the fdic's pocket but that is what modern
accounting is for....

i am sure there is the makings of a swap facility
here....

Tue, 09/29/2009 - 11:19 | 82393 tradertim
tradertim's picture

"The Federal Deposit Insurance Corp. made the projections as its board voted to propose requiring banks to prepay an estimated $45 billion in regular insurance premiums for 2010-2012. The proposal could take effect after a 30-day public comment period."

problem solved. woohooo!!!

of course, expect banking fees to rise dramatically and credit card interest rates to rise to 40% to cover it. that 45 billion will get past on to the consumer one way or the other.

Tue, 09/29/2009 - 11:20 | 82395 KidDynamite
KidDynamite's picture

"Staff’s current projection of $100 billion in failure costs from 2009 through 2013 is higher than staff’s projection in May of $70 billion over the same period. Projected failures have increased due to further deterioration in the condition of insured institutions, as reflected in the increasing number of problem institutions. Asset quality problems among insured institutions are not expected to abate in the near-term."

 

Didn't the FDIC get the memo?  green shoots! the recession is over! everything is better!

 

In fact, the FDIC seems to be just about the only ones telling the truth - of course, you have to actually read the paper to get the truth, which 99% of America won't do.  The TRUTH is that the loss estimates have risen almost 50% since May - while the talking heads are out during the same period proclaiming how everything is better.

Tue, 09/29/2009 - 11:36 | 82426 Green Sharts
Green Sharts's picture

And Chris Whalen projects failure costs of $300-$400 billion versus the $100 billion the FDIC is projecting.

3 years of fees paid in advance by banks is only estimated to be $45 billion.

In October '08, the FDIC was given 5 years to get its reserves back to the minimum of 1.15%.  In February '09 that was increased to 7 years and in May it was increased to 8 years.  But the FDIC's projections of failure costs are up 43% since May and probably still far too low.  So there is no realistic timetable for the FDIC to bring its reserves back to the statutory minimum.

Since the FDIC expects the biggest costs in 2009 and 2010 it figures to blow through the prepaid bank fees for 2010 to 2012 before the end of 2010.  Presumably the only place to go then will be Treasury.  If the FDIC plans to stick to its history of being fully funded by member banks, the banks would ultimately have to pay back all that Treasury borrowing, plus enough to build the FDIC reserves back to 1.15% of insured deposits.  How much would that cripple bank earnings and for how many years?

Tue, 09/29/2009 - 11:48 | 82447 Anonymous
Anonymous's picture

that last paragraph is the essence of the problem....
my guess is that the fdic thinks it can ride out
next year with this confiscation of pulled forward money from its members (and to some degree all i can say
is tant pis) and then go to the treasury and tap
that 500b loc c. 2011 - kick the can....

i think it is considered too politically sensitive
to do that just now when the debt ceiling is
coming up for consideration....

Wed, 09/30/2009 - 18:12 | 84339 Anonymous
Anonymous's picture

Banks are making good money now because of Ben Bernanke’s assault on the dollar. So, the FDIC can more safely jack up the bank fees. However, my big question concerns the printing of money to pay for debt. Zimbabwe did this and their currency collapsed right away. It's amazing that all of our Ivy League educated economic wizards decided to pattern our monetary policy after this banana republic’s monetary policy. Coupled with all of the talk about replacing the dollar as the worlds reserve currency, is it possible that Bernanke’s dollar assault is supposed to collapse our currency??? And, regardless of whether it’s intentional or not, the collapse of the dollar appears to be imminent. Wouldn’t’ this have a terribly bad effect on our economy?

Tue, 09/29/2009 - 11:23 | 82399 Anonymous
Anonymous's picture

The only reason banks are still open is that the FDIC doesn't want to encourage panic. If the fund was actually solvent a lot more banks would have already been closed. Maybe that why Bank Failure Friday has slowed, at least until these prepayments come in and then the FDIC can sell more banks with their standard loss share. Loss share = 80% of the agreed amount then 100% after that.

Tue, 09/29/2009 - 12:37 | 82513 Anonymous
Anonymous's picture

"The only reason banks are still open is that the FDIC doesn't want to encourage panic. If the fund was actually solvent a lot more banks would have already been closed. Maybe that why Bank Failure Friday has slowed, at least until these prepayments come in and then the FDIC can sell more banks with their standard loss share. Loss share = 80% of the agreed amount then 100% after that."

This begs the question: How much MORE are the losses piling up vs. the institutions having been closed down on a timely basis. While the FDIC stalls, waiting for the market to improve, things are getting worse. Has it ocurred to any of the geniuses on Wall Street what will happens once the tax incentives and seasonality gains are gone. Have the numb-nut analysts figured out what will happen if indeed the consumer IS tapped out, and this Holiday season is a bust. How many more businesses go under after a bad Chistmas?

Tue, 09/29/2009 - 11:26 | 82402 Anonymous
Anonymous's picture

Call me...whatever, but, why does all this matter so much. Money does not = happiness, love, friendships, loyalty, family, spirituality, etc. You know, things that...matter. Things we'll think about in our deathbeds. I mean, who the hell, in their deathbed is wondering about FDIC, The Fed, mansions, Ferraris?? Oh world if only people realized the beauty already around us. Anybody wanna join me for a 4 month vacation in India? :)

Tue, 09/29/2009 - 14:45 | 82662 Anonymous
Anonymous's picture

Um, it's hard to be happy when you're unemployed and
can't pay your rent or afford food. Those things are
actually important.

Tue, 09/29/2009 - 19:26 | 83006 Anonymous
Anonymous's picture

Um, I think he's talking about more than sustenance. The content an idea is spoke in...is actually important.

Tue, 09/29/2009 - 11:27 | 82404 koaj
koaj's picture

hooray for black swans

Tue, 09/29/2009 - 11:27 | 82405 Anonymous
Anonymous's picture

There is something fishy here. Back in the late eighties,many more banks failed and a lot more capital was dished out,and never once I read that FDIC is running out of fund. Suffice it to say,there was no TBTF,and when the second largest bank in Mass(bank of new England)failed there was no problem to anybody. I believe there is some sort of a struggle between SB and TG. I belive they are trying to pressure her into something that she is not yielding to,and hence no capital is given to her. Or may be a PR campaign. Banks prepay their insurance,and all of a sudden they are such great compassionate people who are saving my deposit from being gone away?!!!

Tue, 09/29/2009 - 13:59 | 82596 Anonymous
Anonymous's picture

>> many more banks failed and a lot more capital was dished out

That's the problem. It was a lot more banks, but the amounts were a lot lower.

Tue, 09/29/2009 - 11:27 | 82406 Anonymous
Anonymous's picture

Why do comments get reviewed? Do not delete this and answer the question, please.

Tue, 09/29/2009 - 12:48 | 82530 Takingbets
Takingbets's picture

If you would just take the time to create an account instead of bitching about your comments being reviewed it would solve your problem!

Tue, 09/29/2009 - 13:25 | 82565 Anonymous
Anonymous's picture

Answer: because Anonymous is a jerk, and they like irritating him.

Tue, 09/29/2009 - 13:46 | 82585 waterdog
waterdog's picture

and you will not have to sign in or do any math to be an idiot.

Tue, 09/29/2009 - 11:30 | 82409 Anonymous
Anonymous's picture

Wonder what the Overdraft fee will be?

Tue, 09/29/2009 - 11:30 | 82411 Anonymous
Anonymous's picture

We're DOOMED !!! We'll never make it!!

-Smartest Lilliputan on the planet.

Tue, 09/29/2009 - 11:30 | 82412 etrader
etrader's picture

IS the game plan, to force people to move into the "to big to fail" banks as they know the Government will not let them go under? It kills off those pesky regional banks, that take "useful" deposits away from were its needed in the eyes of the "privileged" banks.....

Tue, 09/29/2009 - 11:30 | 82413 Divided States ...
Divided States of America's picture

FDIC to go public in a share offering maybe?

Tue, 09/29/2009 - 11:31 | 82417 bugs_
bugs_'s picture

Lets hope the Treasury doesn't get the idea of allowing

us to pre-pay the next three years of taxes!

Tue, 09/29/2009 - 12:12 | 82484 Anonymous
Anonymous's picture

with another budding milton freidman wunderkind
in the irs, it will happen...but only after
401k accounts have been raided...

Tue, 09/29/2009 - 14:20 | 82633 Cow
Cow's picture

I wish Milton were still alive to save us.

I hope you are not insinuating that Freidman would suggest raiding 401ks, etc.

Tue, 09/29/2009 - 14:42 | 82660 Anonymous
Anonymous's picture

milton was the inventor of the income tax
withholding scheme to help finance ww2....

on the other hand i think that monetarism
is part of the econofraud....so while i doubt
that would recommend raiding 401k he is also
the same one who took us off the gold standard
which is the root of many of our ills....

Tue, 09/29/2009 - 11:38 | 82419 …unexpectedly…
…unexpectedly…'s picture

Although it may feel like it, this is not the first time someone other than the taxpayer is funding a bailout.  The US Government is finally practicing disintermediation.

Tue, 09/29/2009 - 11:51 | 82451 TumblingDice
TumblingDice's picture

True, but only for appearances sake. The taxpayer is always ultimately responsible since any fallout from this private bailout is going to fall on our shoulders.

Tue, 09/29/2009 - 22:15 | 83273 Boop
Boop's picture

Those of us employed enough to pay taxes, of course.  So if you have a job, you will have to pay! (a hahahahahaha)...

Tue, 09/29/2009 - 11:41 | 82435 Anonymous
Anonymous's picture

Why don't they ask the Fed to get back the $500billion they gave to foreign banks and use that to shore up the FDIC?

I mean other than the fact that they don't know who they gave it to, it would be the perfect fix.

Tue, 09/29/2009 - 11:42 | 82436 Anonymous
Anonymous's picture

"I think that the American people would prefer to see an end to policies that look to the federal balance sheet as a remedy to every problem," Bair said. "That is especially the case with an industry that has the resources to deal with the problem."

I don't blame Shela Bair. I think she's done a great job under the circumstances. I blame the political environment that is unwilling to let zombie institutions fail such as C, MER, AIG, FNMA, FRMC (I didn't include BAC because it is unclear they would've gone down if they had not bought Countrywide and forced to buy MER).

Steve LIESman said in the smackdown by Rick Santelli a week ago that "We made the decision long ago not to return to long breadlines after the Great Depression."

WE DID!?? WHEN! WHAT CONGRESSIONAL LAW was issued that stated we would never have failing institutions and falling prices, EVER AGAIN!!???

Tue, 09/29/2009 - 11:43 | 82438 Anonymous
Anonymous's picture

How can this be? after all , Mrs Shila Bair has a degree from Harvard. Her boss larry summers has a degree from Harvard. Her advisor Timmy Geitner has a degree from harvard. And Berhake is Princetonian. These are Americas best and most edumacated peoples. What a travesty.

Tue, 09/29/2009 - 12:18 | 82490 Anonymous
Anonymous's picture

now don't get me started on the corruption, failure,
and uselessness of large swaths of higher
education...

a lot of what we are seeing is the peter principle
in action....with little timmy's peter being
as big as one of sheila's bleep hairs...

Tue, 09/29/2009 - 11:44 | 82441 monmick
monmick's picture

As long as there are no other bank failures, everything will be fine...

Tue, 09/29/2009 - 11:49 | 82448 Whizbang
Whizbang's picture

As long as there are no other bank failures, everything will be fine...

Tee Hee how adorable

Tue, 09/29/2009 - 14:23 | 82637 Cow
Cow's picture

Good.  I hate bank failures.  Let's all be winners, shall we?  A trophy for every boy and girl.

I just want everyone to get along.

Tue, 09/29/2009 - 11:56 | 82461 deadhead
deadhead's picture

President Obama:

Please get rid of Mary Schapiro....now.

Thanks much!

Tue, 09/29/2009 - 12:20 | 82493 Anonymous
Anonymous's picture

deadhead:

fuck you.

fuck you,
rahm

Tue, 09/29/2009 - 13:19 | 82556 deadhead
deadhead's picture

Rahm:

Great to hear from you!

Glad to hear that you and daboyz got everything worked out with those pesky russians. Please let us know when the big day is.

Tue, 09/29/2009 - 13:27 | 82568 Anonymous
Anonymous's picture

deadhead:

when we fuck iran you will know. in the mean time
you leave the fucking to us. we'll fuck you when
it's time....

fuck you,
rahm

Tue, 09/29/2009 - 14:23 | 82636 monmick
monmick's picture

There hasn't been this much phoquing in the White House since the Clinton years...

Tue, 09/29/2009 - 18:48 | 82978 Hephasteus
Hephasteus's picture

Come by our neck of the woods. We love fucking.

http://www.youtube.com/watch?v=2slbO63Qa6g

Wed, 09/30/2009 - 03:04 | 83476 Miles Kendig
Miles Kendig's picture

Fuck you, you fucking fucked up motherfucker!  Go the fuck on fucking half wit and fucking hurry your fucked ass up and fucking move your fucking dead ass back the fuck from wherever the fuck it fucking came the fuck from.  Fucking fuck, Rahm you fuck. At least DH fucking knows who & what the fuck he is you sorry fucking assed motherfucking fuck.

Tue, 09/29/2009 - 11:57 | 82463 Anonymous
Anonymous's picture

Tyler, your sense of humor is darkening.
I love it!

Tue, 09/29/2009 - 12:06 | 82475 Anonymous
Anonymous's picture

To #82438:

Actually Geithner went to Dartmouth undergrad and a masters from John Hopkins.

Summers went to Harvard. Bernanke went to Harvard. Rubin went to Harvard. Bush went to Harvard.

Harvard is overrated.

Tue, 09/29/2009 - 14:53 | 82675 Anonymous
Anonymous's picture

Is Harvard another name for hell, cuz that's where I want them to go.

Wed, 09/30/2009 - 00:24 | 83375 Anonymous
Anonymous's picture

Don't forget Mr. Howell, he went to Harvard. Then he ended up on the same island as Gilligan. Harvard? Whatever. I'm an ale man. Cheers! By the way I pick Ginger.

Tue, 09/29/2009 - 12:06 | 82476 NumisEX
NumisEX's picture

"You can't handle the truth..."

http://www.youtube.com/watch?v=5j2F4VcBmeo

Tue, 09/29/2009 - 12:07 | 82478 lsbumblebee
lsbumblebee's picture

"A gold-coin standard provides the people with direct control over the government's use and abuse of the public purse...When governments or banks issue money or other promises to pay in a manner that raises doubts as to their value as compared with gold, those people entertaining such doubts will demand gold in lieu of...paper money, or bank deposits...The gold-coin standard thus places in the hands of every individual who uses money some power to express his approval or disapproval of the government's management of the people's monetary and fiscal affairs."

-Walter E. Spahr, Monetary Notes (December 1, 1947)

cited in A History of Money and Banking in the United States (pgs.383-384) by Murray N. Rothbard

Tue, 09/29/2009 - 12:20 | 82495 D.O.D.
D.O.D.'s picture

"Don't worry, go back to being a slave, Everything is ok...you are wasting valuable shopping time, everything is O....K....."

"When you die you will wish you would have worked more..."

http://www.youtube.com/watch?v=qAQrsA3m8Bg

Tue, 09/29/2009 - 12:43 | 82518 Anonymous
Anonymous's picture

There's always money in the banana stand.

Tue, 09/29/2009 - 12:46 | 82528 Anonymous
Anonymous's picture

There's always money in the banana stand.

Tue, 09/29/2009 - 12:49 | 82533 Pizza Delivery Man
Pizza Delivery Man's picture

Victory for the bulls

Tue, 09/29/2009 - 12:49 | 82534 Coming Down in ...
Coming Down in Powdery Sparks's picture

There's always money in the banana stand

Tue, 09/29/2009 - 12:53 | 82539 Tomified
Tomified's picture

Mauldin said in "The Hole in the FDIC" that they still haven't paid back the $15 billion they borrowed during the savings and loan crisis.

 

http://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archiv...

Tue, 09/29/2009 - 12:59 | 82543 NHL
NHL's picture

Yet this market is trying to come back. I guess JPM employees can get a little overtime while everyone is standing in the unemployment line.

Tue, 09/29/2009 - 13:18 | 82555 Anonymous
Anonymous's picture

Isn't it a tad ironic how the FDIC article in the WSJ is just above the Ponzi scheme article? "Fast Frank" only took $250mm...

Tue, 09/29/2009 - 13:20 | 82558 Anonymous
Anonymous's picture

Sheesh - calm down. Suze Orman was on TV and said we have nothing to worry about.

Tue, 09/29/2009 - 14:09 | 82611 Anonymous
Anonymous's picture

Our federal government is full of liars and thieves. More and more Americans are realizing this. If the blatantly take $2 trillion from us right in front of our eyes and hand it directly to the criminal banksters, just imagine the shit they do behind our backs. It is nearly certain the Fed is buying up nearly all of the new U.S. debt and effectively monetizing it. It is truly and sad time in America when communist China has more common interests than our own government does.

Tue, 09/29/2009 - 14:10 | 82613 CD
CD's picture

Bit of lighhearted levity:

 

Man sues BofA for "1,784 billion, trillion dollars"

 

http://news.yahoo.com/s/nm/20090925/od_nm/us_chiscolm

Which gives me an idea (likely inane) -- how much does it cost to file a lawsuit, no matter how outlandish? What if scores (millions) of disgruntled account holders at TBTF banks were to follow suit? Would this accomplish anything other than flooding court system with meaningless paper, e.g. would this force the banks to spend money on these? If so, would that achieve any result beyond the need for further subsidy from the taxpayers?

Tue, 09/29/2009 - 14:51 | 82672 Anonymous
Anonymous's picture

You could calculate the likelihood of cash awards through the suit, structure it, create derivatives and an exchange and sell more paper upon meaningless paper.

Call it Bleak House backed barrister bonds.

Wed, 09/30/2009 - 02:26 | 83468 Anonymous
Anonymous's picture

then you could pull several of these TBTF lawsuits indexes into an index. Goldman could control it as an EFT. then of course there have to be shorts to cover the nav. and of course Goldman will by the insurance for the lawsuits if they are dismissed and create a EFT of that. all the while calling the shots and knowing full well that no lawsuits will occur until CNBC touts the new EFT as the patriotic safe bet against bank runs that returns more then your now defunct FDIC insurance backed saving. OMG now I just convinced myself this is a sure bet win-win situation.
Ladies and Gentlemen, our financial crisis is over. our new bubble will be mathematical models of probably outcomes with lawsuit payout potential sliced into many different pieces and computational averaged out, backed with LDS (lawsuit default swaps) just in case something happens.

Tue, 09/29/2009 - 15:36 | 82721 Anonymous
Anonymous's picture

the only problem is one of perception.

they could replace the losses with printed money (and are doing so) and there will not be a problem at all.

the taxpayer will not be on the hook and the budget will be balanced within 5 years.

once the iou's are in the fed's hands, they will be burned and forgotten.

the only problem is "they" are successfully replenishing the "wealth" that was tied up in loans that have gone bad, but they haven't figured out how to pass that wealth on to the people who owed the loans and can't pay them back.

You can't make the lender/investors whole AND let them repossess their collateral.

"They" figured out how to preserve "their" wealth and that of their friends, but are now trying to figure out how to fix the collateral issue.

Tue, 09/29/2009 - 16:19 | 82778 perpetual-runner-up
perpetual-runner-up's picture

That is what is pissing people off...No one can rationally answer the question of "why?"

 

As in:

 

"Why do I still owe my bank the $10k in credit card debt when I have given the banks ostensibly $100k of my money?"....to make it worse, "why are they jacking my rate to 30% when I just gave them a $100k advance on my taxes and I pay on time"

 

 

Tue, 09/29/2009 - 15:39 | 82723 Joe Sixpack
Joe Sixpack's picture

Shouting over at the Bureau of Engraving, "1000 fpm, can't we regear the presses to run 2000 fpm? What is this? Get Barney Frank on the phone, we also need to start making bills about half their current length, and change $100 bills to $500 bills..."

Wed, 09/30/2009 - 11:09 | 82846 Cow
Cow's picture

-

Tue, 09/29/2009 - 17:17 | 82864 glenlloyd
glenlloyd's picture

Unclosed yet insolvent institutions are like the shadow inventory in the housing sector. We're just not going to deal with it right now...

So when the three years up-front fees run out what then? They'll probably go back for another three years of fees....stunning, absolutely stunning.

Tue, 09/29/2009 - 20:16 | 83086 Anonymous
Anonymous's picture

I wonder if there is any possibility the FDIC can collect for 1996-2006 time period when banks didn't pay into the fund because the ABA had congress convinced the FDIC was in just dandy shape with the charts and the 20s they had palmed into everyone's hands.

Tue, 09/29/2009 - 20:55 | 83149 Anonymous
Anonymous's picture

look whats all the fuss about.Just start up the presses.Its that easy.A little added monetary debasement is good for the soul.

Wed, 09/30/2009 - 04:06 | 83485 Anonymous
Anonymous's picture

why the hell we are paying interests on loan that is back up out of thin air. Banks create "imaginary" money on their balance sheet then lend the money to us. Banks do not have real money or reserved fund to lend in the first place. Whyy the hell do I have to pay interests on money that does not exist.

Wed, 09/30/2009 - 14:47 | 84064 Anonymous
Anonymous's picture

FDIC could seek bailout from banks

A naked man who guarantees half naked man a shirt by borrowing from another half naked man while keep himself naked all the time. It's getting absurd every day.

A: I solemnly declare: If you (banks A - Z) screw up (which is true) and lose your shirts I (FDIC) would guarantee that you’ll get a shirt even though I’m running naked myself (FDIC has no money left).

B: How can that happen?

A: I can borrow a shirt from another half naked of you (bank A) and loan it to you (Bank B) while keep myself naked all the time.

B: Why don’t you help Bank B to get shirt from Bank A directly?

A: No. Because I still want people believe me that I’m not naked since I can loan out a shirt (of others).

B: This sounds no better than a Ponzi Scheme.

A: How dare you ask me this kind of questions?

Don’t you know my uncle is (uncle) SAM?

Wed, 09/30/2009 - 19:32 | 84440 Anonymous
Anonymous's picture

Folks keep comparing the failures of the 80's calling them banks when really they were mainly thrift & loans types.
Not commercial Banks like today.

Wed, 09/30/2009 - 19:33 | 84443 Anonymous
Anonymous's picture

Folks keep comparing the failures of the 80's calling them banks when really they were mainly thrift & loans types.
Not commercial Banks like today.

Wed, 09/30/2009 - 19:35 | 84445 Anonymous
Anonymous's picture

Folks keep comparing the failures of the 80's calling them banks when really they were mainly thrift & loans types.
Not commercial Banks like today.

Thu, 10/01/2009 - 18:12 | 85819 Anonymous
Anonymous's picture

MMMmm frustrated! No likey. Nnnnot good. Can't buy gold, too ridiculous. Can't hold paper, too crazy. Can't buy sell or trade a lie, too satanic. FDIC! No need to remember when it fails. It's time for the revelation pillar of fire, know doubt. Oh, that's right, they have the flying pig and Iran Contra, I mean Iran October surprise in the wings.

http://www.youtube.com/watch?v=Y8b9EckGPx0

Fri, 10/02/2009 - 10:26 | 86418 Anonymous
Anonymous's picture

hadenough
stop all buying of phisical
gold. stop, these eletist and parasites from collasping the dollar ,because they are the only ones that are going to own virtually all
the dollars for what ever there worth. they will be worth more than the ones that you have,because you want have to many left.by the time the banks...goverments...and the rest of the parasites have bled you dry.they will then have the money to manipulate gold markets. end results, how low can you... BOW...HOW HIGH CAN YOU JUMP...YES MASTER.AT LEAST THE HONEST PEOPLE, who obtained there gold by honest means will at least hopefully ,make a bob or two,untill the government confinscates.that as well so they can help there poor mates out.it might not be true but just a thought.

Sun, 10/18/2009 - 00:17 | 102503 Anonymous
Anonymous's picture

How did you get past the CAPTCHA...

Thu, 02/24/2011 - 00:48 | 991779 shawnlee
shawnlee's picture

Actually Geithner went to Dartmouth undergrad and a masters from John Hopkins.

Summers went to Harvard. Bernanke went to Harvard. Rubin went to Harvard. Bush went to Harvard.

Harvard is overrated.

silver watches|70-433|E20-001|links of london charm

Tue, 07/12/2011 - 01:29 | 1446830 newdeals2
newdeals2's picture

LEAST THE HONEST PEOPLE, who obtained there gold by honest means will at least hopefully ,make a bob or two,untill the government confinscates.that as well so they can help there poor mates out.it might not be true but just a thought. a+ exam questions \ ase exam questions \ ccda exam questions \ ccent exam questions \ ccia exam questions \ ccie exam questions \ ccip exam questions \ ccna exam questions \ ccna security exam questions \ ccna voice exam questions \ ccna wireless exam questions \ ccnp exam questions

Tue, 08/16/2011 - 00:44 | 1564225 newdeals2
newdeals2's picture

Staff has also projected the Fund balance and reserve ratio for each quarter over the next several years using the most recently available information on expected failures and loss rates and statistical analyses of trends in CAMELS downgrades, failure rates and loss rates. Staff projects that, over the period 2009 through 2013, the Fund could incur approximately $100 billion in failure costs. Staff projects that most of these costs Pass4sure 642-971 | Pass4sure 310-200 | Pass4sure 642-533 | Pass4sure 642-611 | Pass4sure 642-691 | Pass4sure HP0-D08 | Pass4sure 000-118 | 642-457 | Pass4sure 650-568 | Pass4sure 642-731 |

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